A number of years ago — I think it was 2008 — I went for a job interview at NorthJersey.com, a popular news website in New Jersey. It was for a web content editor position. I remember sitting down with the managing editor, who also oversaw the print newspaper, The Record. We had a deep conversation about the state of the industry and where it was going in terms of digital — whose predictions were right or wrong, I can’t remember.
I have an idea why I thought about this for the first time in years a couple weeks ago — that managing editor’s name popped up in my LinkedIn feed. I think it’s also because across all industries I’ve worked, we get into this conversation of build or buy.
Build vs. Buy
Build is ideal — you control every aspect of the code and experience. Buy is often more expensive, but you give control to the experts, who will continue to innovate while you’re company is not even close to catching up. That need to keep up also won’t creep into your team’s development queue, freeing them to focus on your own “product.”
What I will say is it’s much more accepted these days. If it wasn’t, GitHub, an open-source repository that anyone can tap into for code, wouldn’t be so popular. Neither would third-party APIs (The New York Times did a great paid post on them) or SDKs. As I teach my students at NYU: think about the early days of e-commerce, when small businesses had trouble selling online because they couldn’t process payments. There’s no way a potential customer would send their credit card details via email, meaning buyers would have to call the store to provide their details — and we think paying on mobile today has friction! Now any business or individual can just sign up for Stripe or PayPal and start collecting revenue in minutes.
For a long time, Winery Passport and Brewery Passport used Parse to power its push notifications. When Parse announced it was shutting down, it hurt. They gave developers a year to get off their platform, but where was I going to go? After speaking to the founder of another popular wine app, they recommended Amazon SNS. I would host on a third-party but manage the code and experience myself — no SDK. It was the best move I could have made, especially considering I now have more control over when and which notifications go out.
Snap Goes Buy Route
The other day it was announced that Snap is going to spend $2b with Google to use their cloud storage solution and another $1b with Amazon. Why is that as opposed to building out their own storage center? Not only would that take a lot of time (one could argue that this buys them time to build their own solution), it would also be costly, cash which they need to have on their balance sheet as they prepare to IPO. Once they do IPO, that will infuse the company with capital to potentially build their own infrastructure, if they choose.
Additionally, Snap is a camera company. They’re not a cloud storage solution. They are leaving the storage space to the experts and focusing on what they know best. And this is precisely what companies forget: unless you’re a technology company, focus on what you know best, or ways to amplify your product or service.
Netflix uses Amazon to host their data. AirBnB and Spotify use them, too. Even Apple, which has their own cloud service, uses a third-party to house a lot of their data. (This very site and all of my apps are hosted on AWS.) This allows these aforementioned companies to focus on entertainment, home sharing and music — not a storage infrastructure. Uber, on the other hand, built theirs from scratch, and have publicly said it’s saved them a lot of money in the long run.
I had coffee with a senior executive with the Google Cloud service a couple weeks ago. He explained that Google’s sales pitch to potential clients is that they’re Google. If they can power some of the world’s most widely used products (seven have more than one billion users), they can power anything, and reliably. I buy that.
I’m not saying build is better than buy, or the other way around. What I’m saying though is that your company needs to remain focused. It needs to know what its primary objectives are and its mission is. If building can’t get you closer to or aligned with those, it must buy. The company, however, must not feel like it is cheating by buying. It must feel efficient.
Post Post: After I wrote this, Wired Magazine wrote a feature on The New York Times. There were some similar thoughts to build vs. buy (not in those exact terms, but are alluded to) in the piece from my collegues.
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