I love working with engineers.
Their brains are naturally wired to solve problems and build solutions.
It’s a perfect fit for people like me who focus on spotting the most relevant problems to be solved.
Yet, I’ve been in trouble in my relationship with engineers. I hurt their pride.
It usually occurred when we planned on developing our products outside our existing team, either by partnering with another developer or buying it altogether.
I got that “Not Invented Here” look with raised eyebrows quite a few times!
Eventually, I improved in enlisting the product teams’ talent to work together on that critical question: should we build, buy, or partner?
Many of us have been there: you’ve spent enormous energy trying to understand your customers’ big hairy problems. You prioritized these problems to be solved per your company’s strategy.
You now need to deliver and start spending cycles discovering the best valuable and usable solution to your customers, while ensuring it’s feasible (can you even do it?) and viable (does it make economic sense?).
So, should you build, buy, or partner to develop that solution?
That decision depends on many factors, but here’s what I’ve learned to consider for each of the scenarios:
Build Scenario
Building in-house is the fastest and most cost-effective way to deliver a product that matches your initial requirements.
However, I’ve seen many in-house-built projects stumble. Our teams engaged enthusiastically in new product development to preserve internal innovation, grossly underestimating the resources and capabilities needed. We’d soon be hitting the wall.
That obsession with building innovation in-house turned out to be a challenge. It had to be continuous to move the needle and bring real competitive advantage. But, it was rarely the case.
It also often required new talent and capabilities to come on board. That took time and money and brought uncertainty that was hard to stomach for our risk-averse top leaders.
In short, building your next product in-house can give you a competitive edge. But you’ll need solid skills, time, money, and a company culture that tolerates failure.
Buy Scenario
When it’s becoming clear that you don’t have the resources or talent to undertake a specific development, acquiring those who have such capabilities can come in handy.
I’ve experienced it was the fastest way to bring the expertise of an already organized and functional team. We’d hit the ground instantly.
But it came at a cost. Not only was it more expensive than trying to elevate our existing team, but it’s also often been a shock for both teams as they all came to the table with their own cultures and ways of doing things—all of it with limited ways to pivot once the acquisition was made.
Partner Scenario
It has been my favorite construct in most situations. In these days of accelerated tech innovation, many highly innovative small firms have the talent and agility to operate fast and smart.
Partnering with these businesses that had the capabilities we lacked proved to be very effective in injecting the needed innovation for our product to stand out.
It could be the fastest of the three scenarios I’ve seen. Although it did not beat in-house development on cost, partnering gave us more flexibility than an acquisition. The consequences of failure were way smaller, and we could pivot out of it effectively. Eventually, if the partnership proved successful, it was a stepping stone for a potential acquisition.
Choosing the right strategy for your next product development can prove challenging. I’ve learned that partnering was a safe and effective way to proceed in organizations lagging on sustained innovation and risk-averse.
But increasingly, we’ve experimented with hybrid approaches where our in-house and some external teams worked together, playing to their respective strengths.
With the right effort coordination, it proved to be the best of both worlds.