Joash Boyton of Acquiry on Why Buying Software Can Beat Building It
I have always thought the build-versus-buy question is framed too narrowly.
A company decides it needs a new product, capability or market position, then someone asks what it would cost to build internally. That number becomes the benchmark for whether an acquisition looks expensive.
The problem is that the cost of building is not just engineering salaries and infrastructure. It is also time, execution risk, customer acquisition, product mistakes, hiring, distribution and the opportunity cost of waiting while the market keeps moving.
Through my work at Acquiry, I spend a lot of time looking at digital businesses from the buyer's side. The more of these situations I see, the more obvious it becomes that buying can be the cheaper option even when the purchase price is materially higher than the estimated cost of building the same thing from scratch.
That is not because M&A is inherently better. It is...
Copyright of this story solely belongs to hackernoon.com. To see the full text click HERE
