{"id":215716,"date":"2024-04-23T06:23:14","date_gmt":"2024-04-23T09:23:14","guid":{"rendered":"https:\/\/caroli.org\/en\/?p=215716"},"modified":"2024-04-23T06:21:11","modified_gmt":"2024-04-23T09:21:11","slug":"mvp-build-or-buy-decision-making","status":"publish","type":"post","link":"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/","title":{"rendered":"MVP Build or Buy Decision-Making"},"content":{"rendered":"<p>When embarking on a new product venture, one pivotal question often arises early in the process: Should we build or buy our <a href=\"https:\/\/caroli.org\/en\/mvp-minimum-viable-product\/\" target=\"_blank\" rel=\"noopener\">MVP (Minimum Viable Product)?<\/a> While numerous articles discuss how to approach this decision, few address it through the lens of MVP-focused strategy\u2014starting small to progressively achieve your product vision.<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_88 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Sum\u00e1rio<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/#MVP_Build_or_Buy_Learning\" >MVP Build or Buy: Learning<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/#MVP_Build_or_Buy_Time_to_Market\" >MVP Build or Buy: Time to Market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/#MVP_Build_or_Buy_Effort\" >MVP Build or Buy: Effort<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/#MVP_Build_or_Buy_Cost\" >MVP Build or Buy: Cost<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/#MVP_Build_or_Buy_What_if_Success\" >MVP Build or Buy: What if Success<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/#MVP_Build_or_Buy_What_if_Failure\" >MVP Build or Buy: What if Failure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/#MVP_Build_or_Buy_Decision_Matrix\" >MVP Build or Buy: Decision Matrix<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/#MVP_Build_or_Buy_Decision_Matrix_Score_Calculation\" >MVP Build or Buy: Decision Matrix Score Calculation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/#MVP_Build_or_Buy_Excel_Tool_for_Decision_Making\" >MVP Build or Buy: Excel Tool for Decision Making<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/caroli.org\/en\/mvp-build-or-buy-decision-making\/#In_Summary\" >In Summary<\/a><\/li><\/ul><\/nav><\/div>\n\n\n<h1><span class=\"ez-toc-section\" id=\"MVP_Build_or_Buy_Learning\"><\/span>MVP Build or Buy: Learning<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>The primary goal of an MVP is learning. Does an out-of-the-box solution exist that can facilitate this initial learning phase? If not, is it more feasible to build a custom solution or to modify an existing service? Sometimes, a hybrid approach is best, using existing services as a foundation for your MVP.<\/p>\n<h1><span class=\"ez-toc-section\" id=\"MVP_Build_or_Buy_Time_to_Market\"><\/span>MVP Build or Buy: Time to Market<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>Speed is crucial. The faster you can place your MVP in users&#8217; hands, the quicker you can gather feedback. Assess which option\u2014building or buying\u2014will allow you to enter the market more rapidly, even if the initial product is rudimentary.<\/p>\n<h1><span class=\"ez-toc-section\" id=\"MVP_Build_or_Buy_Effort\"><\/span>MVP Build or Buy: Effort<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>Consider the effort involved. A high-effort approach might delay learning and feedback. Evaluate whether building or buying offers a path of lesser resistance and quicker deployment of your MVP.<\/p>\n<h1><span class=\"ez-toc-section\" id=\"MVP_Build_or_Buy_Cost\"><\/span>MVP Build or Buy: Cost<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>Cost considerations are closely tied to effort. Analyze the financial implications of each option. How does the cost of purchasing pre-built solutions compare to the expense of developing in-house?<\/p>\n<h1><span class=\"ez-toc-section\" id=\"MVP_Build_or_Buy_What_if_Success\"><\/span>MVP Build or Buy: What if Success<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>Imagine the best-case scenario: your MVP is a resounding success. Which option allows you to scale swiftly and add features in line with your long-term product vision?<\/p>\n<h1><span class=\"ez-toc-section\" id=\"MVP_Build_or_Buy_What_if_Failure\"><\/span>MVP Build or Buy: What if Failure<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>Conversely, consider the implications of the MVP not meeting expectations. Which option\u2014build or buy\u2014makes it easier to pivot or terminate the project with minimal losses?<\/p>\n<h1><span class=\"ez-toc-section\" id=\"MVP_Build_or_Buy_Decision_Matrix\"><\/span>MVP Build or Buy: Decision Matrix<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>To systematically address these factors, I use a decision matrix that scores each criterion from 1 to 5\u20141 being least favorable, and 5 being most favorable. Stakeholders and researchers should be involved in this scoring process to ensure a well-rounded decision.<\/p>\n<h1><span class=\"ez-toc-section\" id=\"MVP_Build_or_Buy_Decision_Matrix_Score_Calculation\"><\/span>MVP Build or Buy: Decision Matrix Score Calculation<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>To systematically evaluate each option\u2014build, buy or another alternative\u2014we calculate each option score based on the following criterion on a scale from 1 to 5:<\/p>\n<ul>\n<li><strong>Learning<\/strong>: 1 (provides little learning about the product) to 5 (provides crucial learning about the product).<\/li>\n<li><strong>Time to Market<\/strong>: 1 (slows market entry) to 5 (accelerates market entry significantly).<\/li>\n<li><strong>Effort<\/strong>: 1 (requires significant effort) to 5 (requires minimal effort to launch).<\/li>\n<li><strong>Cost<\/strong>: 1 (highly expensive) to 5 (highly economical).<\/li>\n<li><strong>What if Success<\/strong>: 1 (difficult to scale and meet high demand) to 5 (easy to scale and handle success).<\/li>\n<li><strong>What if Failure<\/strong>: 1 (complicated and costly to discontinue) to 5 (easy and inexpensive to wind down).<\/li>\n<\/ul>\n<p>Scores for each criterion are summed to determine the most viable option. The choice with the highest total score is considered the best, as it aligns closely with our strategic and operational goals.<\/p>\n<h1><span class=\"ez-toc-section\" id=\"MVP_Build_or_Buy_Excel_Tool_for_Decision_Making\"><\/span>MVP Build or Buy: <strong>Excel Tool for Decision Making<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>To assist stakeholders in applying this matrix, I have created and used a <a href=\"https:\/\/docs.google.com\/spreadsheets\/d\/1SkAA0Qprg6GuY7iDwrwBabH-6AbXswGeERhb0JPUFsU\/edit?usp=sharing\" target=\"_blank\" rel=\"noopener\">MVP Build or Buy Shared Excel<\/a> tool (open it, then make a copy in order to use it). This shared excel will feature a template where users can input scores for each criterion across different options. The Excel sheet will automatically calculate the total scores, helping to visualize and compare the potential outcomes of the build or buy decision. This hands-on approach ensures that all involved parties can actively participate in the evaluation process, making the decision-making more collaborative and data-driven.<\/p>\n<div id=\"attachment_215719\" style=\"width: 310px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-215719\" class=\"wp-image-215719 size-medium\" src=\"https:\/\/caroli.org\/en\/wp-content\/uploads\/sites\/5\/2024\/04\/mvp-build-or-buy-excel-result-300x181.png\" alt=\"\" width=\"300\" height=\"181\" \/><p id=\"caption-attachment-215719\" class=\"wp-caption-text\">sample MVP build or buy result<\/p><\/div>\n<h1><span class=\"ez-toc-section\" id=\"In_Summary\"><\/span><strong>In Summary<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p>The decision to build or buy an MVP can be highly effective when stakeholders and researchers\u2014who have thoroughly examined both purchasing and building options\u2014are actively involved in the decision-making process. This approach is particularly beneficial for organizations that are committed to leveraging <a href=\"https:\/\/caroli.org\/en\/mvp-minimum-viable-product\/#Types_of_MVP\" target=\"_blank\" rel=\"noopener\">MVP strategies<\/a>.<\/p>\n<p>If your organization&#8217;s goals extend well beyond the <a href=\"https:\/\/caroli.org\/en\/mvp-minimum-viable-product\/\" target=\"_blank\" rel=\"noopener\">MVP<\/a> stage, consider adopting a more comprehensive process (here are a few recommended articles: <a href=\"https:\/\/www.windwardstudios.com\/white-papers\/build-buy-software-development\" target=\"_blank\" rel=\"noopener\">here<\/a>, <a href=\"https:\/\/www.thoughtworks.com\/content\/dam\/thoughtworks\/documents\/e-book\/tw_ebook_build_vs_buy_2022.pdf\" target=\"_blank\" rel=\"noopener\">here<\/a> and <a href=\"https:\/\/www.softkraft.co\/build-vs-buy-software\/\" target=\"_blank\" rel=\"noopener\">here<\/a>) . You should invest more time in broader strategic planning. In such cases, the insights from this article might be less applicable. Additionally, a <a href=\"https:\/\/caroli.org\/en\/lean-inception-4\/\" target=\"_blank\" rel=\"noopener\">Lean Inception workshop<\/a>, designed to align team members on the MVP and broader product goals, may not be as beneficial for teams that want a detailed and final plan.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The &#8220;MVP Build or Buy&#8221; article helps with the crucial decision of whether to develop or purchase software for new ventures, emphasizing rapid validation of business ideas. It outlines key considerations including learning potential, time to market, cost, effort, scalability, and ease of discontinuation. The article introduces a decision matrix and an Excel tool to help stakeholders score and compare options, ensuring that the decision to build or buy aligns with strategic and operational goals. This approach promotes a collaborative and data-driven decision-making process.<\/p>\n","protected":false},"author":1,"featured_media":215719,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[20896],"tags":[20959,1898,574],"inception_activities":[],"colaboradores":[],"class_list":["post-215716","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mvp-en","tag-business-strategy","tag-lean-inception-en","tag-mvp-en"],"_links":{"self":[{"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/posts\/215716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/comments?post=215716"}],"version-history":[{"count":0,"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/posts\/215716\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/media\/215719"}],"wp:attachment":[{"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/media?parent=215716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/categories?post=215716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/tags?post=215716"},{"taxonomy":"inception_activities","embeddable":true,"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/inception_activities?post=215716"},{"taxonomy":"colaboradores","embeddable":true,"href":"https:\/\/caroli.org\/en\/wp-json\/wp\/v2\/colaboradores?post=215716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}