I love this comment because it articulates a dynamic that I think is often overlooked much better than I could. I might even go a step farther and suggest that anything that is core to your business flywheel should be built and not bought (in general).
Mostly because you don't want pricing to act as a disincentive to exercising the flywheel.
Even for built systems the cost of ownership and maintenance will grow as the system grows. Take the logging example above and say you're using the Elastic Stack. Things are going pretty well and usage is increasing. Over time your system grows and logging is now present in all of your applications. You've seen your logging rate go from 100 logs/s, to 1,000 logs/s, to 10,000 logs/s and now are encroaching the 100,000 logs/s rate. Over time the amount it cost to host your ES cluster has surely gone up. You probably went from a single node cluster when developing the solution, to a multi-node cluster, to now a hot-warm-cold cluster with several more nodes than you originally had. You also have a dedicated team making sure your in-house logging solution is working and stable. The cost of ownership and maintenance of this system is real. Not only do you need to pay for the huge clusters you'll likely have a dedicated team supporting it. Most people I've talked to in the industry don't like maintaining their in-house logging solutions and would gladly pay for one if it wasn't for the fact that it was too expensive to switch then. Because you need specialized people that know this logging solution it's also hard to hire for this role when the person currently maintaining this system eventually leaves (because he doesn't want to do this anymore). At the end of the day it's cheaper to pay for a logging solution even if it's in the hundreds of thousands of dollars a year than it is to build your own.
> “anything that is core to your business flywheel”
The mechanisms by which your product is marketed, sold and distributed are core to your business flywheel. For example, if you’re a B2B Saas, distribution is often way more important than the product itself.
So by the “core to our flywheel” standard you need to build your own email marketing software, your own version of salesforce CRM, your own analytics tool for triggering marketing funnels, etc.
That’s just hilarious. As someone who runs a business, I wouldn’t spend a single minute of engineering resources on anything that we don’t sell directly to a customer.
I’d go even further and say if you have less than 5000 employees, ALWAYS buy. Never build.
Hmmm, this is an interesting take, but I think you are expanding the scope of "core to _your_ business" a bit much. Product marketing, sales, and distribution are shared between _all_ businesses so unless you are a marketing, sales, or distribution company I (personally) wouldn't consider them part of the core business flywheel.
For example, let's pretend I have a fictional company that sells a web server. Marketing, sales, and distribution are all important parts of my business, but my "Core" business is the web server software. If I am looking to build reinforcing feedback loops that give me an advantage over time (flywheels) it's my opinion that you shouldn't be looking to build them (at least initially) in marketing, sales, or distribution.
Mostly because you don't want pricing to act as a disincentive to exercising the flywheel.