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Understanding When to Build Tech and When Not to Build Tech

Understanding When to Build Tech and When Not to Build Tech

Dalip is co-founder and COO of Revive Real Estate, a PropTech providing pre-sale renovations to maximize home value.

In the iconic movie "Field of Dreams," Kevin Costner's character is driven by a whispering voice, "If you build it, they will come." A simple, yet profound message spurs the creation of something against all odds and logic.

Yet when deciding to build new tech, you must avoid the “Field of Dreams” fallacy. You can’t just build tech and expect people to come flocking.

The decision to build or not to build requires a strategic approach that balances effort, impact, and the potential cost of getting it wrong.

The Three Acts of Tech's Lifecycle

Just like a movie, the lifecycle of technology has three distinct acts: creation, adoption, and maintenance. Surprisingly, the building part is arguably the easiest part of all. The hardest part is the adoption.

The real work begins when you try to get humans to like – and use – your technology.Once you have the adoption, how do you maintain your users and what value can you deliver that drives them to keep coming back?

People often get lost in the building of tech. Before embarking on any tech project, you must assess the effort required for each act. How much time, money, and resources will it take to build, promote, and maintain the technology? Again, never underestimate the importance of adoption – even the most brilliant tech is useless if no one uses it.

Consider How You Will Build: Outsource In-House?

If you don't have an in-house engineering team, outsourcing can be a viable option. Tapping into the global talent pool allows you to build an MVP team quickly. However, outsourcing often takes longer. The process requires more iterations and code reviews, which can increase costs.

When outsourcing, you need to be prepared for a longer timeline and more intensive collaboration. Extra time will be needed to ensure the final product meets your expectations. Know that delays can lead to missed opportunities and increased expenses.

Building tech in-house gives you more control over the process, but it comes with its own set of challenges. The cost of getting it wrong is much higher when you have your own team of engineers. You are paying their salaries and benefits – not just a project or hourly rate. You need to be more precise and accurate with every step of the build.

If you choose to build in-house, you must be prepared to invest heavily in your team. This means hiring the right talent, providing ongoing training and support, and fostering a culture of innovation and collaboration. While the upfront costs may be higher, the long-term benefits of having a dedicated in-house team can be substantial.

Assessing Effort vs. Impact

When deciding whether to build tech, you must consider the level of effort required and the potential impact on your business. Some projects, like AI development, require the highest effort, while others may be less demanding.

Focus on two primary factors: revenue and customer satisfaction. For example, if you are building tech to help build your business, will the new tech generate more leads, reduce human capital, or both?

You need to prioritize projects based on their impact and effort required. Low to medium impact projects with low to mid-size efforts can often be the sweet spot.

The Hidden Cost of Failure

As your company grows, so does the cost of getting it wrong. When you're a small startup with little revenue and a small community, the cost of failure is minimal. You can afford to make mistakes and try again. But as your company scales, the stakes get higher.

Remember, building tech is just the beginning. The real work starts with driving adoption and maintaining user engagement. Many ideas are denied not because they can't be built but because generating the necessary support for adoption is unfeasible.

Building With Purpose

Building technology for the sake of building is like constructing a baseball diamond in a cornfield – it might be an impressive feat, but it doesn't guarantee success.

In the end, building technology is not about following whispers in a cornfield. It's about making informed decisions that propel your startup forward. By understanding when to build and when not to build, you can create technology that not only impresses but also delivers meaningful results.

So, before you start building new tech, make sure you understand the effort, impact, and the potential cost of getting it wrong, so you can see it through successfully to the final scene.

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