“Should we build this or buy it?”
This is one of the most common—and most consequential—questions I help startups answer as a fractional CTO. Get it wrong, and you either waste months building what you could have bought for $99/month, or you pay dearly in limitations, vendor lock-in, and technical debt.
After evaluating hundreds of build-vs-buy decisions across multiple startups, I’ve developed a framework that brings clarity to this question. Let’s walk through it.
Why This Decision Matters More Than You Think
Every engineering hour spent building non-core functionality is an hour not spent building your competitive advantage. But every dependency you take on is a piece of your product you don’t control.
The hidden costs of building:
- Development time (3-5x longer than you think)
- Ongoing maintenance (20-30% of initial dev time, annually)
- Opportunity cost (features you didn’t build)
- Technical debt (shortcuts taken to ship faster)
The hidden costs of buying:
- Integration complexity
- Vendor lock-in
- Feature gaps and workarounds
- Price increases and plan changes
- Loss of control over roadmap
Neither building nor buying is inherently better. The right answer depends on context.
The Framework: 5 Key Dimensions
When evaluating build vs. buy, analyze these five dimensions:
1. Strategic Importance
Ask: Is this functionality core to your competitive advantage?
Build if:
- It’s a differentiator that makes your product unique
- It’s directly tied to your value proposition
- Competitors can’t easily replicate it if you nail it
Buy if:
- It’s table stakes functionality (auth, payments, email)
- Competitors use the same off-the-shelf solutions
- Users don’t care how it works, only that it works
Examples:
| Scenario | Decision | Why |
|---|
| Stripe for payments | Buy | Payments are table stakes, not a differentiator |
| Custom recommendation engine for your ML product | Build | This IS your product—your competitive moat |
| User authentication | Buy (Auth0, Clerk) | Security is hard, liability is high, not a differentiator |
| Analytics dashboard for B2B SaaS | It depends | If insights are your value prop, build. If not, use Mixpanel |
2. Complexity and Expertise
Ask: Do we have (or can we acquire) the expertise to build this well?
Build if:
- Your team has deep expertise in this domain
- The problem aligns with your existing tech stack
- You can build something meaningfully better than alternatives
Buy if:
- The domain requires specialized knowledge you lack
- Building it well requires a dedicated team
- Alternatives are mature and battle-tested
Example: Should you build your own CDP (Customer Data Platform)?
Buy unless you’re Segment.
- CDPs require expertise in data pipelines, identity resolution, and compliance (GDPR, CCPA)
- Segment, Rudderstack, or mParticle have spent years perfecting this
- Building a CDP from scratch is a 12-18 month project for 3-4 engineers
Exception: If you’re building a data product and CDP-like functionality IS your core offering, then yes, build it.
3. Total Cost of Ownership (TCO)
Ask: What will this cost over 3 years—including hidden costs?
Build if:
- Vendor pricing scales poorly with your growth (e.g., per-seat pricing when you’ll have millions of users)
- You’ll need custom features that would require expensive enterprise plans
- TCO of buying exceeds in-house development + maintenance
Buy if:
- Vendor pricing is predictable and affordable
- Development costs exceed 2-3 years of vendor fees
- Maintenance burden of building is high
TCO Calculation Example:
Scenario: Should you build a custom email sending service or use SendGrid?
Build costs:
- Development: 2 engineers × 3 months = $60K
- Infrastructure: $1K/month (servers, IPs, monitoring)
- Maintenance: 20% of dev time annually = $12K/year
- 3-year TCO: $60K + $36K infra + $36K maintenance = $132K
Buy costs (SendGrid):
- Year 1: $200/month = $2.4K
- Year 2 (scaled to 10M emails/month): $1K/month = $12K
- Year 3: $1.5K/month = $18K
- 3-year TCO: $32.4K
Decision: Buy—unless you’re sending 100M+ emails or have unique deliverability needs.
4. Speed to Market
Ask: How quickly do we need this functionality?
Build if:
- You have time to build it right
- The custom solution unlocks significant strategic value
- Off-the-shelf solutions won’t work (see #1 and #2)
Buy if:
- You need it NOW to close deals or meet commitments
- Building it delays your core product roadmap
- Speed to market is more valuable than perfect-fit functionality
Real example: A client needed SSO (Single Sign-On) for an enterprise deal closing in 30 days. Building from scratch would take 8-12 weeks.
Decision: Integrated Auth0 in 5 days. Closed the deal. Later built custom SSO once we had revenue and time.
Principle: Use bought solutions to de-risk and accelerate, then replace with custom builds when strategic value justifies it.
5. Flexibility and Control
Ask: How much control do we need over this functionality?
Build if:
- You need deep customization that vendors won’t support
- Vendor limitations would constrain your product vision
- You need to optimize performance or cost at a level vendors can’t provide
Buy if:
- Vendor capabilities meet 80%+ of your needs
- Customization isn’t critical to your business model
- You’re willing to adapt your requirements to fit the tool
Example: CRM systems
Buy (Salesforce, HubSpot) if:
- You’re using CRM for standard sales workflows
- You don’t need custom data models or workflows
Build if:
- Your business model is so unique that CRMs don’t fit (e.g., marketplace with buyers, sellers, and partners all in one system)
- You need real-time integrations with proprietary data that vendors can’t support
The Decision Matrix
Combine the 5 dimensions into a decision scorecard:
| Dimension | Weight | Build Score | Buy Score |
|---|
| Strategic Importance | 30% | 1-10 | 1-10 |
| Complexity/Expertise | 20% | 1-10 | 1-10 |
| TCO (3 years) | 20% | 1-10 | 1-10 |
| Speed to Market | 15% | 1-10 | 1-10 |
| Flexibility/Control | 15% | 1-10 | 1-10 |
Scoring guide:
- 1-3: Strong case against
- 4-7: Neutral
- 8-10: Strong case for
Weighted score > 7.0? Strong lean toward that option.
Weighted score 5.0-7.0? It’s a judgment call—go with team expertise and intuition.
Common Scenarios: Build or Buy?
Authentication & User Management
Buy (Auth0, Clerk, Firebase Auth)
- Security is hard; vendors have dedicated teams
- Compliance (GDPR, SOC 2) is baked in
- Cost: $0-$200/month for most startups
Build only if:
- You have unique auth requirements (e.g., blockchain-based auth)
- You’re operating in a high-security domain (defense, finance) where vendor solutions won’t pass audit
Analytics & Metrics
Buy (Mixpanel, Amplitude, PostHog)
- Product analytics tools are mature
- Building good analytics UX is surprisingly hard
- Cost: $0-$1K/month for early-stage
Build if:
- You’re building a data/analytics product (then analytics IS your product)
- You have massive scale where vendor pricing breaks (10M+ events/month)
CI/CD & DevOps
Buy (GitHub Actions, CircleCI, Vercel, Railway)
- These tools are commoditized
- Building CI/CD infrastructure is a huge time sink
- Cost: $0-$500/month for small teams
Build only if:
- You have massive scale or unique requirements (Google, Meta-scale)
- You’re a DevOps platform company
Customer Support & Ticketing
Buy (Zendesk, Intercom, Front)
- Support tools are well-established
- Integration with email, chat, and phone is complex
- Cost: $50-$500/month depending on volume
Build if:
- Your support workflow is so unique that tools don’t fit (rare)
- You’re building a support/CRM product yourself
Payments
Buy (Stripe, Braintree)
- PCI compliance is non-negotiable
- International payments, fraud detection, and recurring billing are hard
- Cost: 2.9% + $0.30/transaction (worth every penny)
Build never. Seriously, don’t build payments infrastructure.
Search
Buy (Algolia, Elasticsearch Cloud, Meilisearch)
- Full-text search is deceptively complex
- Relevance tuning, typo tolerance, and performance optimization take years to get right
- Cost: $0-$500/month for most use cases
Build if:
- You have unique ranking requirements (e.g., ML-based personalization)
- You have massive scale and need cost optimization
- Your search is a core differentiator (like Google or Shopify)
Advanced Considerations
Hybrid Approach: Build on Top of Bought
Sometimes the answer is both:
- Buy the infrastructure/platform
- Build custom logic on top
Example: Use Stripe for payment processing, but build custom subscription logic, dunning workflows, and revenue analytics on top.
Why this works:
- Vendor handles the hard/risky stuff (PCI compliance)
- You build differentiation in business logic
- Faster to market than full custom build
The “Buy Now, Build Later” Strategy
Start with a vendor, plan to replace later if:
- Vendor pricing scales poorly with your growth
- You’ve validated the feature and know exactly what you need
- You have engineering capacity to invest
Pitfall: Many companies never get around to replacing. Factor switching costs into your decision.
Red Flags: When NOT to Build
Don’t build if:
- You’re saying “how hard can it be?” (it’s harder)
- You’re building it because it’s “more fun” than using a vendor
- You haven’t researched what’s available to buy
- Your team lacks expertise in that domain
- You’re pre-revenue and pre-product-market fit
Exception: If the build IS your product, then obviously, build it.
Red Flags: When NOT to Buy
Don’t buy if:
- Vendor lock-in will constrain your long-term strategy
- The vendor is a startup that might not survive
- Vendor pricing will explode as you scale (do the math)
- You’ll need extensive customization that vendors won’t support
My Recommendations by Stage
Pre-Seed / Seed Stage (0-10 employees)
Default to buy. Your job is to find product-market fit, not build infrastructure.
Exception: Build your core product/value proposition. Buy everything else.
Series A (10-50 employees)
Buy strategically. Start building non-core functionality if:
- Vendor costs are scaling faster than revenue
- You’ve hit vendor limitations blocking product development
Series B+ (50+ employees)
Build selectively. You have engineering capacity to invest in competitive moats. Build core differentiation; continue buying commodity functionality.
How to Make the Decision
- Score the 5 dimensions using the matrix above
- Calculate 3-year TCO for both build and buy
- Prototype with a vendor to validate it meets needs (most offer free trials)
- Time-box the decision: Don’t spend weeks debating—make the call and move forward
If you’re truly stuck, start with buy. It’s easier to replace a vendor later than to undo a half-finished custom build.
Conclusion
Build vs. buy isn’t about rigid rules—it’s about strategic thinking. The best CTOs I know:
- Default to buy for non-core functionality
- Build where they can create defensible competitive advantage
- Regularly re-evaluate decisions as the company grows
The worst mistake isn’t choosing build or buy—it’s not deciding at all and letting your team spend months building something mediocre when a great vendor solution exists.
If you’re facing a complex build-vs-buy decision and want a sounding board, let’s talk. I help startups navigate these trade-offs every week.
Need help evaluating build vs. buy for your product? Schedule a consultation and let’s map out the right strategy for your stage and goals.
