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

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.


26 Replies

Matthew Mellor
2
0
Matthew Mellor Advisor
CEO of Strenuus
"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
2
0
Matthew Mellor Advisor
CEO of Strenuus

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

Daniel Marques
0
0
Daniel Marques Advisor
Director of Application Development at Pragma Securities LLC
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
Michael Brill
5
0
Michael Brill Entrepreneur
Technology startup exec focused on AI-driven products
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.
Ritesh Dalal
1
0
Ritesh Dalal Entrepreneur
Product and Technology Leader | Advisor/Investor
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:

  1. Time to build (opportunity cost and how much they can do if they just use your product)
  2. Tying down dev capacity (as Matthew mentioned)
  3. 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.
Tony Joseph
0
0
Tony Joseph Advisor
' Building technology around processes, rather than building processes around technology '
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..!!
Patrina Mack
1
0
Patrina Mack Advisor
Experts in global commercialization
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.
Vijay Goel, MD
0
0
Vijay Goel, MD Entrepreneur • Advisor
Founder Chefalytics, Co-owner Bite Catering Couture, Independent consultant (ex-McKinsey)
A compelling vision should matter more than price. Corporate partners should also want you to innovate in a way that they get more than they pay for due to other customers also finding development. You need to tell a better story on why they should invest in what you're doing with their budget rather than greate a user that will never be a paying customer.
Richard Harris
0
0
Richard Harris Entrepreneur • Advisor
Top 25 Inside Sales Leader, Public Speaker, 40 Most Inspiring Leader, Sales Trainer, Start-Up Advisor, SalesHacker
Since it sounds like you are in the middle of building the product yourself you may be at a disadvantage. Traditionally in Saas here is how I sell in the Build vs Buy.

The image to paint is one of an iceberg. The iceberg shows that the bulk is actually hidden under water. It's the same for Saas

Above the surface you see things like the solution, the service, etc. However it's what is below the surface where real costs live. What I have seen work often is to make the prospect understand all the costs of the build that live below the surface. I try to put real dollar costs.

Things like

  • Servers
  • Redundancy
  • Debugging
  • Maintenance
  • Adding new features
  • Opportunity costs associated with their own developers spending any time on these things as opposed to their core business.
  • The value of the opportunity costs of what they could have built (if they were to be building something to sell).
You should be able to come up with others and then associate real $. Show them the dollar signs and they will cringe.

You biggest challenge is if you customer is an engineer by design. If that's the case they will most likely think they can do it better than you. Or they will think they can do it faster and cheaper and live with a solution that only meets 75% of what you can do.

Remind them that faster and cheaper does not equal better.

Cheers!



William Sarine
0
0
William Sarine Advisor
VP, Business Development
Selling is really the process of helping your prospect to buy better. I usually like to engender a conversation to identify the benefits and liabilities of each alternative. If my solution is not the best choice the I have to examine why and make corrections.
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