Build vs. Buy: Should You Build Your MVP from Scratch or Start with a SaaS Template?

Thom Crowe
Jun 19, 2024
Accelerate your SaaS startup's growth by understanding whether to build an MVP from scratch or use SaaS templates. This guide explores the pros and cons of each approach, helping you decide based on your business goals, resources, and market needs. Discover how custom-built MVPs offer control and scalability, while SaaS templates provide quick market entry and cost savings. Evaluate factors like project scope, feature complexity, and in-house capabilities to choose the best strategy. Gain expert insights and essential questions to navigate your MVP development effectively.

When starting a SaaS business you have so many decisions to make and it’s easy to get bogged down in details, delaying your product launch and user adoption.

Starting with an MVP, or Minimum Viable Product, can expedite the development process. An MVP is a basic version of the product that includes only the core features but still provides enough value to customers. This stage is crucial for startups as it enables them to quickly validate their ideas without having to wait for a fully developed product. 

Launching an MVP helps you get critical feedback from early adopters, get data to drive development decisions, and better define your value propositions before investing time and resources into a fully-developed product. You’ve got a couple of options when planning your MVP - you can build it out from scratch or get started with a SaaS template. Let’s look at the pros and cons of both approaches to see how they can help you reach your goals, help you best utilize your resources, and get to market. 

The Ins and Outs of Building an MVP from Scratch

Building an MVP from scratch does offer you  quite a few advantages, like full control and customization of your app, all intellectual property ownership, and potential cost savings as you scale. 

Benefits of Building from Scratch

When you choose in-house development for your tech startup, you can customize and tailor every aspect of your MVP to align with your vision and technical requirements. Customizing everything ensures that the final product really reflects your brand and can be adapted easily as your business grows and evolves. 

Owning all of the IP of your custom built product could be another benefit. You have full rights to your codebase and software architecture, allowing you to modify, license, or sell your custom-built solutions without restrictions. IP ownership can also enhance your business’s valuation, making it more attractive to investors down the road.

Plus, building your own MVP could mean easier scaling and a potential cost benefit as your business grows. And as your user base expands, the initial development costs can be amortized or spread across a larger number of users, potentially reducing the per-unit cost of your product and improving profitability.

Challenges of In-House Development

Just like everything else you do, building a custom MVP from scratch isn’t pain free - these benefits come with trade-offs and challenges. Going this route is going to be a much bigger investment, both financially and time. The development process can also take significantly longer compared to going with a ready-made SaaS template, meaning it’ll take longer to get launched. .

You’re also going to have to allocate more resources to building your MVP - you'll need developers building, project managers overseeing everything, and QA testers to make sure each component works, all of which can strain your already limited resources. In the end, deciding to build an MVP from scratch means you’re going to have to weigh the costs versus benefits against your goals and constraints.

The 5Cs of the Build vs Buy Debate of SaaS Development | Frontegg
Build vs. Buy is a tough decision for startups.

Leveraging SaaS Templates for MVP Development

If you’re looking to launch quickly and getting users and feedback, leveraging a SaaS template for your MVP cuts your development time and costs significantly, a huge benefit for small startups.

Advantages of SaaS Templates

SaaS templates for startups providing pre-built options with integrations and tools needed to launch. These ready-to-use platforms allow for quick market entry, cutting down your time saving your money that would typically beneeded to build software from scratch. These solutions were virtually unheard of, but now are used all the time to help launch and scale companies. 

A lower investment upfront helps keep your runway and your team freed up for things like marketing, customer acquisition, and other needs that arise for your business.

Not to mention, SaaS-based MVPs benefit from continuous support and regular updates from the SaaS provider. This ensures the product remains up-to-date with the latest security patches and feature enhancements. Ongoing support for your template eases the burden on a startup’s internal team, allowing them to focus more on growth and innovation.

Limitations of SaaS Templates

SaaS templates aren’t a silver bullet and may not be right for every startup because they do come  with some potential drawbacks. One of the key challenges is the lack of customization. Ready-made templates offer speed and efficiency, they might limit the uniqueness of your product's features, making it harder to stand out.  

The template builders make some assumptions that you as a builder would have to make. Look at integrations, for example - many SaaS templates come with integrations built in, like payment gateways. Say you buy a template that is built for Stripe payments, but you don’t want to or can’t use Stripe. This will require additional workarounds. 

Cost Considerations in Building vs. Buying an MVP

When deciding between building or buying an MVP, you should take time to run a cost-benefit analysis to determine the best way forward for your product. Part of this should be looking at the short and long-term costs to ensure you’ve got the resources needed for the path you take

Consider things that will affect the costs of your MVP like:

  • Project Scope: The size of your project—whether small, medium, or large—will directly impact the cost of your MVP. Therefore, it’s crucial to define the scope early on to get a fair estimate of the resources needed. Since you are launching an MVP at this point, it’s a good idea to keep the scope smaller, knowing you don’t need to build out your full roadmap, but you need to launch a product that provides benefits to users.

  • Complexity of Features: The complexity of your product’s features will also impact your MVP cost. While MVP development focuses on core features, the complexity of each feature can vary significantly, impacting overall expenses.

  • Design Requirements: Also consider the design of your MVP. A more visually complex and user-friendly product will likely have a higher upfront cost compared to one with a basic, minimalistic design.

  • Technology Stack: The technology stack you choose for your product development can have a big impact on cost. Factors like the programming language or the type of server, each come with their own level of complexity and necessary skill set, impacting overall expenses. SaaS templates likely have a pre-defined tech stack built-in.
It can help to work with in a strategic framework for deciding to build vs buy

Framework for Making the Build vs. Buy Decision

When weighing whether to build a product from scratch or use a SaaS template, using a structured decision framework in your planning process can help you make an informed decision that aligns with what you’re trying to accomplish and what limitations you face.

Decision-Making Tools for Strategic Planning

To help with strategic decision-making, you can employ try decision-making tools that help in MVP planning. Tools like these can help you in evaluating core aspects of your product development process, like what are your in-house capabilities, what are the market needs for a solution like yours, what are your budget constraints, and how much time do you have to build before launching?

Your Build or Buy Criteria

To help in choosing a build versus buy solution, ask yourself questions like:

Market Needs

  • Does your target market require a unique solution that can only be offered by a complex, custom solution?
  • Are there existing solutions that solve your customers’ pain points?
  • Could you use a SaaS template and customize it enough to meet market demands and launch your product?

In-House Capabilities

  • Do you have the technical experience to build out a custom solution? Do you have a team available with those skills?
  • Do you have resources available for ongoing maintenance of a custom-built MVP?
  • What is the opportunity cost of focusing your time or your team’s time away from other aspects of your business to focus on building an MVP?

Budgeting for Startups

  • What’s your initial budget for building out an MVP? How does that compare to the costs of both options?
  • Do you see any advantages to either buying or building based on your current funding?
  • Can you launch an MVP based on a SaaS template to start generating revenue that you could then use to build more bespoke and custom aspects of your product?

Time Constraints

  • How important is it for you to get your MVP to market quickly? Is it important to develop and ship quickly to get to market before the competition?
  • What is your estimated timeline for building a custom solution versus configuring a SaaS template?
  • Are there competitive pressures influencing your time-to-market?

Essential Questions for MVP Development

Consider these essential questions:

  • Can we use an existing SaaS template to quickly validate our MVP with minimal effort?
  • Do we require full control over the product’s functionalities and user experience that only building from scratch can provide?
  • How will each option impact our strategic planning and long-term business goals?

Evaluating In-House Resources

Whatever option you go with, continuously assess your strengths and limitations and the strengths and limitations of your team.  Do  you or your team have the necessary skills and experience internally or if you would need to acquire additional external resources. This evaluation can significantly influence the build or buy decision.

By carefully analyzing these questions and criteria - startups can make strategic decisions that optimize the development process, ensuring a successful MVP launch and they can make decisions that waste time and money, potentially leading to a product and company failure.

Expert Insights on the Build vs. Buy Decision

In the podcast episode“The Build vs. Buy Software Debate: Tips from Startup Engineering Leaders,” on The Pair Program, Tim Winkler and Mike Gruen bring on guests Mike Garrett and Ian Lotinsky and offer valuable insights for startups grappling with the build versus buy decision. Seriously, if you’re still torn, check out the episode - it has great insights. 

One thing they really emphasize is that the decision is not always binary; it’s about finding the right balance between building or buying components, and what works for you.

According to Garrett, when evaluating a product or company’s portfolio, it’s often about determining what to buy and what to build. This approach ensures they allocate their scarce resources, considering not just financial aspect of things but opportunity costs as well. Something he said that really stood out was, “It’s usually not entirely buy versus build. It’s usually what are we buying and what are we building? So that we’re strategic in our scarcest resource.”

For Kent McDonald, project manager at Iowa State University, buying is the more practical solution unless it's absolutely necessary to build in order to gain a competitive advantage. He tells us that, “Unless your process is essential for building a competitive advantage, it makes little sense to build your own software. On the other hand, don’t buy software off the shelf to enable a process that you use to differentiate yourself for your competitors. If you buy off the shelf software to enable a differentiating activity you’re inherently throwing your competitive example away.”

Navigating Your MVP Development: Final Thoughts

When looking at whether to build or buy software solutions, you need to consider a few key factors to guide your decision-making process. 

First off, thinking about  the strategic importance of the process the software supports. If it's crucial for a competitive differentiation, building might be a better choice. However, for non-core processes, buying can save significant time and resources. 

You should also consider the economic impact, including opportunity costs like what quicker development and deployment would be against the investment required for custom development. 

Finally, remember that it's not an all-or-nothing choice. A hybrid approach can often provide the best balance of flexibility and efficiency. You could buy a template for the frontend side of your product and for integrations like payments or email.

Final Thoughts

To wrap up, you really need to thoroughly evaluate your business’s specific needs and long-term goals when deciding between building and buying software. Consider the strategic importance, economic impact, and potential benefits of each approach. By carefully analyzing these factors, you can make a more informed decision that aligns with your company's objectives and resource constraints.

Try Dome
If you’re looking to get your MVP to market quickly, getting customers using your product, gathering feedback, and generating revenue, Dome is a great place to start. Think of us like your strategic partner in your SaaS journey. We have prebuilt SaaS templates that are ready to go out-of-the-box with integrations that we’ve evaluated and used. Plus, with one-click, you can deploy your template to Dome and have it live in seconds. With Dome, your MVP can be ready in hours, not weeks. What are you waiting for? Launch today.

Futher readings:

https://www.forbes.com/sites/forbestechcouncil/2021/06/11/three-challenges-ai-saas-startups-must-overcome/?sh=58466b214bed

https://www.myhatchpad.com/insight/build-vs-buy-the-pair-program-ep01/

https://www.linkedin.com/pulse/how-decide-when-build-buy-software-kent-j-mcdonald-pzpyc/

https://www.contentbeta.com/saas-growth-3-simple-case-study-examples-to-inspire-you/

https://infostride.com/cost-to-build-an-mvp/

https://verycreatives.com/blog/cost-to-build-mvp

https://www.ishir.com/blog/110513/build-vs-buy-software-analysis-which-is-right-for-your-business-in-2024.htm

https://www.luzmo.com/blog/build-vs-buy-software

https://vadimkravcenko.com/shorts/build-vs-buy-vs-nocode/

https://www.servicenow.com/community/in-other-news/why-buy-when-you-can-build-a-k-a-what-would-tim-quot-the-tool/ba-p/2275988



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