Decide go / no-go before buy vs. build

by Jeff Lash

If you want to be a bad product manager, make your decision about whether to buy, build, or partner on a product one in the same with your decision about whether to create the product at all. Maybe the market isn’t particularly attractive, but you can get into it pretty easily by partnering with a company. Or maybe you have a good idea for a product and you think it will be to difficult to build it, so the idea should get “shelved.” After all, you have to figure out how the product will get created at some point, so you might as well figure that out before you decide to go forward with it at all.

If you want to be a good product manager, do not let your buy vs. build vs. partner decision unduly influence your go / no-go decision. Ultimately, the decision about whether to launch a product is a serious one, and the build / buy / partner decision is just one that needs to be taken into consideration.

Unfortunately, sometimes good product ideas can get stopped in their tracks because of a feeling that it will be too hard to build or partner for it, even though truly the investment would be worthwhile. Conversely, bad products can be brought to market because “it would be easy to do” by building or partnering, when the product maybe should not be launched regardless.

Think about when when you are planning a vacation — you usually think first about your destination, and then consider your mode of transportation for getting there. For example, if you live in Maine and want to take a vacation in January to a warmer climate, you would look at your different options for travel — plane, bus, train, car, etc. You would review your options to consider whether there is an affordable one which can fit with your schedule, and that may influence your decision on where specifically to travel, when, and whether you can go at all. However, if you found a bargain on a flight to Alaska, that would be irrelevant since your goal is to go somewhere warmer.

Unfortunately, this is the opposite of what often happens with product development. To build off the travel metaphor, even though a company may want to go to Florida, they find a partner who can get them to Wisconsin easily, so they decide to go there instead, even though that’s really not where they want to (or should) go.

The go / no-go decision for a product should not be made in a vacuum. There should be some consideration about whether the company is able to build the product internally, or whether there is potential for it to be created using a partnership, or whether there is an opportunity to buy a company or technology to enter into the market. Especially with the latter two options, this can definitely help improve speed to market, address areas which are not in the organization’s core competencies, and may present a more favorable cost structure at times.

However, ultimately the go / no-go decision should be based mainly on market-based considerations, such as:

• whether the market conditions are attractive (e.g. size, growth)
• whether there are unresolved problems which the product will address
• whether these problems are urgent and pervasive, and whether there are buyers who are willing to pay to have them resolved (to paraphrase the excellent book Tuned In: Uncover the Extraordinary Opportunities That Lead to Business Breakthroughs)
• whether the product fits the strengths and competencies of the organization
• whether this product could provide the organization with a sustainable competitive advantage

Product managers need to make sure they do not “put the cart before the horse.” Focus on the market need and the buyer problems, and then consider the different options for solving it. Whether you build, buy, or partner could have some influence on your decision, though it should not be the predominant factor.