Build vs. Buy; How do I prepare for the objection?

Jason Mathew Product Analyst at CEB TalentNeuron

August 31st, 2015

I've had a couple of conversations with a potential first client, and am now facing the main decision maker: their Head of Internal Innovation. Having taken a look at his LinkedIn profile, I'm anticipating the objection of "why buy from you, if we can build this ourselves?" How should I prepare for this potential push-back?

Here are a couple of things to keep in mind:

1. What I've demoed thus far is my MVP; I'm tempted to say that it's a 'simple' yet powerful offering (which he could say as well), but realize that simplicity is objective.

2. It cost me around $1300 to build; he doesn't need to know that, but I realize that he's just as inclined to offshore development as I was

3. I'm considering offering a one-time fee as a first client, with a life time of FREE updates. My thinking is that in doing so, it would be a more attractive offer to buy, vs. facing future costs of maintaining themselves.

Michael Brill Technology startup exec focused on AI-driven products

August 31st, 2015

1. It's great to be prepared, but 90% of what you think may happen never does.

2. Sell the vision, not your MVP. That is, paint the bigger picture of where you can take them and it'll be clear that it's not something they want or can build themselves.

Matthew Mellor EVP of Innovation at Zelis Healthcare

August 31st, 2015

"I'm sure that like many other companies I talk to, you probably don't have a lot of excess development capacity." (start here, because no one in an IT role wants to send the message that they've got idle developers). "By leveraging our platform, you benefit from [value proposition] and allow your team to stay focused on your core competencies. And as we continue to evolve the feature set, you'll benefit from this long term at no additional cost."

Matthew Mellor EVP of Innovation at Zelis Healthcare

August 31st, 2015

One other thing. NOTHING costs $1,300 to build. :)

Ritesh Dalal Product and Technology Leader | Advisor/Investor

August 31st, 2015

I would suggest you try to argue the case from the other side yourself and you will soon see the pros and cons of each. Then take the cons of buying and see how you can address them. Few points to emphasize would be as follows:

Time to build (opportunity cost and how much they can do if they just use your product)
Tying down dev capacity (as Matthew mentioned)
Expertise (the client is not going to invest as much in solving this problem and evolving the offering as you are)

One of the main issues I have had with buying is that there is always something that needs to be custom built so try to anticipate that and see how you would offer to solve that issue.

Patrina Mack Experts in global commercialization

August 31st, 2015

Lots of good advice. The important thing to remember is you're in the middle of a negotiation and you're already going straight to price in order to win the negotiation. Your prospect most likely knows you're hungry and is using that to his advantage. I agree about selling the vision - have a product roadmap handy to show where you envision taking the product. We've done customer research for a number of clients with enterprise solutions. The resounding theme from their customers is that they expect to see industry best practices baked into the solution. If they do a build themselves they will not gain the benefit of how other customers use your product that you will eventually incorporate as you evolve the product.

Becky Flint Product & Program Executive | Scaffold Consulting

August 31st, 2015

Build vs. Buy:

Speed to market and quality: having a delivery team ready to go, and have done this many times is faster and less risky than hiring a new team or ramping on the area.
Distraction: is building this feature the core business they are in? Do they rather focusing resource and energy on their core business?
Total cost: Due to transient natural of project, hiring a team to build will result in more people than needed to for ongoing enhance/ maintain.

Peter Johnston Businesses are composed of pixels, bytes & atoms. All 3 change constantly. I make that change +ve.

September 2nd, 2015

The clue is in the job title - Head of Internal Innovation.

His job isn't to buy stuff - it is to make stuff happen using his own people.

You have two choices:
1. Walk away - he is playing you to learn how to do this internally.

2. Change this into an "enablement" pitch - helping his people to do this themselves.

There is a further point.

The idea of a "main decision maker" is a twentieth century one, based on sales calls. Sales people didn't want to waste their time on a journey to a client and relied on the single decision maker to spread the word internally. In those days it was easier to communicate within the company than outside - now it is the opposite.

In the modern sales process, if he is really keen on your idea, he will be introducing you to other members of the team online, asking them to examine your proposal from their perspective and contribute to the decision.

If you don't get that openness and wider involvement, it is probable that he is either not confident in you, or taking a flyer on something the company hasn't sanctioned and wants to be certain before putting his neck on the line, asking for funding etc.

The answer - open up the decision team - ask for who would deploy, contribute to the decision etc. And do some background research - find other likely team members online and see their capabilities, what they are working on etc.

Jason Mathew Product Analyst at CEB TalentNeuron

September 10th, 2015

Friends,

By way of update, I had my meeting today with the Head of Internal Innovation. I remained confident, sold the vision of my product, and gauged his feedback. As it turns out, the organization is NOT looking to build a solution themselves, and are open to piloting various solutions to find the best fit.

As Micheal Brill mentioned in the first few responses, "90% of what I thought would happen, didn't happen." Thank you again to everyone for your advice and support! Will continue to keep you updated.

Daniel Marques Director of Application Development at Pragma Securities LLC

August 31st, 2015

You need to acknowledge that yes, their team of software developers are quite capable of building this themselves (which is actually true for almost all software and most developers), but that

1. it will be quicker and cheaper in the long run for them to buy it from you

2. buying this will allowed their team to focus on their core products, i.e. the ones that they get paid for

Tony Joseph ' Building technology around processes, rather than building processes around technology '

August 31st, 2015

Few points that might be useful -

1. Hint your research around the pain area, bring in some stats if you can and how your solution can give them a jump start.

2. Be ready with a presentation that you can send across supporting your solution.

3. Focus on time to deployment, and probably a comparison between buying from you and developing the solution themselves ( using cost, research,time etc as variables )

4. I would suggest not to speak about lifetime free updates, and like Michael said paint the picture for them, sell them your concept. You have to be confident with your offering and believe that you do-not need to throw in freebies to sell your MVP. People will pay for support if they see the value.

From my experience I feel they definitely see something in your MVP that has landed you the meeting with their Head of Innovations, now all you need to do is to show the value in your solution and support it with material that can help the guy make a well informed decision.

Best of luck..!!

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