When to Build vs. Buy: A Practical Checklist for Founders

For early-stage teams, the wrong build-vs-buy call can burn months of runway. This guide gives you a pragmatic, founder-friendly checklist so you can move faster, de-risk delivery, and stay focused on what makes your product unique.

Start with your goal and constraint

• What outcome are you optimizing for—speed, uniqueness, margin, or control?
• What’s the real constraint—budget, headcount, time-to-market, or risk tolerance?

Fast decision checklist (TL;DR)

Choose buy when:

• You need to ship in weeks, not quarters.
• The capability is a commodity (auth, billing, analytics).
• There’s credible SOC 2/ISO 27001 coverage and SLAs you can accept.
• Integration paths (SDK/API/webhook) match your stack.

Choose build when:

• The capability is core differentiation or IP-sensitive.
• You need custom UX/flows the market doesn’t offer.
• Data residency, latency, or on-prem constraints block vendors.
• Vendor risk, lock-in, or pricing makes unit economics brittle.

The decision framework (go deeper)

1) Strategic fit (differentiation vs. commodity)

Ask: Does this capability create defensibility or just table stakes? Rule of thumb: buy the plumbing; build the magic.

2) Time-to-market vs. runway burn

If launch speed is critical (fundraise, enterprise pilot), favor buy. Calculate delay cost: runway burn per month × months of delay.

3) Total cost of ownership (TCO)

Build TCO: engineering (new + maintenance), QA, infra, security, support. Buy TCO: subscription + overages + integration + switching risk. Run a 12–24 month view, not just month one.

4) Integration fit and UX control

Check SDK quality, API coverage, webhooks, rate limits, sandbox, docs. Map how much UI/UX you can own vs. vendor-hosted widgets.

5) Security, compliance, and data boundaries

Verify SOC 2/ISO 27001, data residency, SSO, audit logs, RBAC, DPA terms. If you must own the blast radius (PII, PHI), build or pick an on-prem/self-host path.

6) Reliability and support

SLAs/SLOs, status page history, incident comms, support response times. Ask for enterprise support or escalation paths if you’re revenue-critical.

7) Vendor risk and lock-in

Contract term, export pathways, migration playbook, roadmap transparency. Prefer open standards and data portability; negotiate caps on overage.

8) Economics and pricing shape

Does pricing scale with your revenue drivers, or with your costs? Model best/worst cases: overage risk, tier cliffs, minimums.

9) Team capability and opportunity cost

What else could your team ship if they weren’t building this? If you don’t have in-house expertise, buying is often cheaper and safer.

A practical “build vs. buy” scorecard

Assign 1–5 for each (1 = strongly buy, 5 = strongly build):

• Differentiation/IP sensitivity
• Time-to-market pressure
• UX control needs
• Security/compliance needs
• Reliability/SLA needs
• Vendor lock-in risk tolerance
• Team capacity and expertise
• 24-month TCO advantage

Decision: If average ≤2.5, lean buy. If ≥3.5, lean build. In the middle, pilot a vendor while scoping a minimal internal fallback.

Common scenarios (quick calls)

• Auth, billing, email delivery, observability: usually buy.
• Core product logic, proprietary scoring, unique workflow UX: build.
• File storage/images: buy; keep a thin abstraction to swap later.
• Search/recommendations: prototype with hosted search/reco; consider building if you need deep control over ranking and cost.
• AI features: start with an API; build custom models only when usage and quality justify it.

How to buy well (if you choose buy)

• Pilot in a narrow slice; define acceptance criteria (latency, errors, UX control).
• Negotiate: data export, overage caps, support SLAs, roadmap alignment.
• Implement observability: track latency, error rates, and vendor uptime in your own dashboards.
• Wrap the vendor in an internal interface so you can swap later.

How to build well (if you choose build)

• Start with the smallest valuable version; ship behind a feature flag.
• Invest in docs, observability, tests, and a migration plan from day one.
• Avoid premature scaling; focus on correctness and UX first.
• Timebox: if you miss your timebox, re-open the buy option.

Red flags that tilt to buy

• Your team is new to the domain and security stakes are high.
• You can’t afford multi-month delays before revenue or fundraising.
• Requirements are stable and widely served by vendors.

Red flags that tilt to build

• You need atypical UX/flows the vendor can’t support.
• Strict data residency or on-prem requirements.
• Vendor pricing would break unit economics at scale.

Implementation playbook (3 steps)

1. Decide: run the scorecard, pick build or buy, and document why.
2. De-risk: if buying, pilot with SLAs and observability; if building, timebox and flag-gate.
3. Execute: ship the smallest version, monitor, and revisit the decision quarterly.

Final takeaway

Use the scorecard plus your runway and differentiation lens. Buy the plumbing, build the magic. The right call keeps you shipping faster without mortgaging your roadmap.