After 15+ years of software development, one of the hottest questions I encounter is: Can I develop in-house software for my specific business? The short answer is "Yes," but when I talk to them about cost, no one wants to continue with their project anymore. This article will explain why you should not develop your own software and how much it will cost you.
In 2016, I met with an old friend who had been running a SaaS business for 5 years. He said, "If I could go back, I would not have started this business." I was surprised because I looked at his business and thought it was profitable. "I didn't know that SaaS would cost us more than 30 million baht (equivalent to around $1 million) to build this software," he answered. "It took about 3 years to make a small profit in the first year, and I don't know when my investment will return." This sentence shocked me and paralyzed me every time I thought about it. When I calculated, he was right.
Too often, when I meet new entrepreneurs who want me to make their own business software, I tell them that the cost should start at around 1-1.5 million baht (equivalent to around $33k-$50k). Everyone is surprised. Some don't believe me and show me the cost on freelance websites like fiverr.com
, which only costs $2,000. Trust me, that software has been built to itch you every day, and you will need to invest more than you planned.
Let me explain the reasons behind entrepreneurs who want to build their own software, so you can understand why you should not build your own.
Own Software Can Have More Control!
Yes! Everybody wants to control their own destiny, right? But why does a noodle factory need to build its own noodle machine? It doesn't make sense. Business management software is just a tool. When your business doesn't fit into SaaS software, there are two reasons behind it: you are using the wrong SaaS and need to change software, or your operation is not standardized, and you need to change your operation.
And trust me, SaaS wants customers to tell them how they use their product. If you try the product and it seems to fit your business, talk to them first! In my company, any change is free. I really love feedback from real customers. Don't hesitate to ask me; I will change anything until it fits your business.
Own Software Can Keep Secrets!
Have you read the news about leaked information from companies that has been sold on the black market? If you read that, you will find that almost all leaked information came from third-party companies that used in-house software or government contractors. When you hire someone to build your software, one of the neglected features is security. So, it doesn't surprise me how leaked information comes from this way. But compared to SaaS, every SaaS company is aware of this issue since day 1 of development. We test the security policy rigorously and don't let any small weak points be leaked.
Own Software Can Lower Costs!
Are you a user of Facebook, any social media, any app, or any website? Take a look at what it looked like five years ago. It's really different from today. Software products are not like physical products. When you produce something like handmade soap, it's hard to change because you need to produce it, ship it, place it on the shelf, and it takes time to change. But for software, if you want to change something like the color of the button, the developer can do it with just a few clicks, and in the next few minutes, it can be published to the production server. This fact makes software products different from physical products. So, building great software needs a lot of changes, from building new features to making changes to some text. No one knows which change will impact the user, but it needs a continuous changing process like waterfall development, sprint, dev ops, build-measure-learn. That's the reason behind the cost of software development.
If you build your own software, you need to hire someone to do it because you are not a software company. The software building process will stop one day, but from my experience, it stops since day 1 of operation. For SaaS, it's a continuous process of software development. You pay only a couple of dollars to use it, but the features also increase along the day.
Trust me, don't do it on your own if you are not a big enough company. Software will cost you more than you think, or it will curse you if you stop developing and let it be. It's normal for software to expire or become unusable due to changes in the real-world business.