Whenever you are tackling a new problem and potentially exploring something that is not your traditional business as usual, you will be faced with several different options on how to develop your solution further: You could build it yourself, partner with someone or buy that particular proposition.

This framework will try to bring clarity around the different options available to you and your team. At the end of the day your focus is to solve business problems for your customers and provided you’re able to find a stable solution to do so, the manner in which that problem is solved should be immaterial to your customers.

Who could use this

This tool can be very useful for anyone that is solving a particular problem that is sufficiently important for their actual or future business model.

In short, this tool could be useful by an entrepreneur setting up a new business, as well as a corporation that is seeking new sources of value.

Framework explanation

The underlying rationale is that internal resources are limited and that taking advantage of the specialisation inherent in our economy makes a lot of sense.

To better understand how to evaluate the different options it will be important to think through the below considerations across our three different possibilities:

• When it could make sense
• The challenges
• Capabilities required

For each of the different options - buy, build or partner - we will need to understand when would that option make sense, the overall challenges pursuing that option as well as the requirements needed to be able to go through the plan.

Buy

• When it could make sense:
  • When you have a view on the future industry direction
  • There is a lack of in house expertise
  • Potential for upsell or cross sell
  • Certainty about the solution value Synergies in terms of cost structure
• The challenges (what to avoid):
  • Founders and acquirer different PoV
  • Curtural differences
  • Tech stack differences
• Capabilities required:
  • Experience in mergers
  • Legal understanding of the implications for both parties
  • Integration and transformation management

Build

• When it could make sense
  • Tight integration requirements
  • The solution will keep changing after deployment
  • Proprietary data requirements
  • In house expertise
• The challenges (what to avoid)
  • Coordination between departments
  • Estimation of work required
  • Budget
  • Knowledge (employee) retention
• Capabilities required
  • Product management team
  • Engineering team

Partner

• When it could make sense
  • Diligence for a potential acquisition
  • Temporary demand for a solution
  • The solution is simple but with a complex implementation
  • Ability to compete against more integrated competitors
  • Vertical integration potential
• The challenges (what to avoid)
  • Partnership exclusivity
  • Identical challenges to the build option
• Capabilities required
  • Partnership being managed as a product
  • Headcount to manage the relationship