How do you describe the challenges of building a product at scale to your board of directors?

In a recent executive leadership forum, we had a lively and passionate discussion on the perennial Build vs. Buy challenges and either approach’s pros and cons. We swapped stories of how the decisions had driven value within organizations. We equated this question to an analogy of hosting a dinner party. Cooking for a small set of guests (in your social distanced bubble these days) can be invaluable, intimate, and fulfilling. We possess the skills, manage what to serve, and control our guests’ value through food, drinks, topics, interactions, and company. This approach of delivering value to our guests is analogous to the Build option for technology. If we scale this event to a large crowd (say 100 guests), the challenges increase. Sure, we could still cook for a large group and aspire to deliver the same value to our guests, but the question is, “Should we?” Is this our high-value activity- where we want to spend all our time, energy, and resources? Is this the right thing to do? Why not hand over these responsibilities to a partner who has pressure-tested processes, optimized methods, and an established service that delivers the extrinsic results that you seek (Buy) and frees you up to focus on the actual value and aspired business outcome — the purpose of why you are hosting the event. Networking, mingling, making your guests comfortable and happy, and being a good host are what you need to focus on as that is your high-value activity. You can abstract the complexity of organizing and catering for a large event to choosing a service provider (Buy), configuring the menu (customization) based on the venue (integration with existing technologies), and working out countermeasures if menu items run out (adapting to customer behavior and traffic). Can you buy a service that mingles with your guests and entertains them on your behalf? The answer is no. The same applies in the business world — the differentiators you create cannot be bought. You have to build it by creating new software, integrating, and assembling the software you purchased. The differentiators are the competitive advantages you provide to your target audience. Simultaneously, the build process allows you to experiment, prototype, and A/B test the functional capabilities you offer through products or services.

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In a recent executive leadership forum, we had a lively and passionate discussion on the perennial Build vs. Buy challenges and either approach’s pros and cons. We swapped stories of how the decisions had driven value within organizations. We equated this question to an analogy of hosting a dinner party. Cooking for a small set of guests (in your social distanced bubble these days) can be invaluable, intimate, and fulfilling. We possess the skills, manage what to serve, and control our guests’ value through food, drinks, topics, interactions, and company. This approach of delivering value to our guests is analogous to the Build option for technology. If we scale this event to a large crowd (say 100 guests), the challenges increase. Sure, we could still cook for a large group and aspire to deliver the same value to our guests, but the question is, “Should we?” Is this our high-value activity- where we want to spend all our time, energy, and resources? Is this the right thing to do? Why not hand over these responsibilities to a partner who has pressure-tested processes, optimized methods, and an established service that delivers the extrinsic results that you seek (Buy) and frees you up to focus on the actual value and aspired business outcome — the purpose of why you are hosting the event. Networking, mingling, making your guests comfortable and happy, and being a good host are what you need to focus on as that is your high-value activity. You can abstract the complexity of organizing and catering for a large event to choosing a service provider (Buy), configuring the menu (customization) based on the venue (integration with existing technologies), and working out countermeasures if menu items run out (adapting to customer behavior and traffic). Can you buy a service that mingles with your guests and entertains them on your behalf? The answer is no. The same applies in the business world — the differentiators you create cannot be bought. You have to build it by creating new software, integrating, and assembling the software you purchased. The differentiators are the competitive advantages you provide to your target audience. Simultaneously, the build process allows you to experiment, prototype, and A/B test the functional capabilities you offer through products or services.
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