Penny wise, pound foolish

Recently the CEO of a startup asked me for advice on a decision she was about to make on a software purchase, aka a cash commitment. Her company had launched beta product and the commercial release is right around the corner. Market awareness is ramping up and they have a lot of inbound sales activity. A nice problem for any startup.

The CEO is doing her best to maximize resources and maintain capital efficiency, knowing that a rainy day fund is important because not everything goes according to plan. But with the company's momentum, efficiently is becoming more difficult to realize and a lack of systems exposes the problems further. The company doesn't have the platforms to support scale. She is having a mental debate on using internal resources to build a basic solution on open source to patch the holes or buy a commercial platform that can scale as the company grows.

Reallocate development resources with no cash outlay or spend cash today? There are many commercial options that come in different shapes and size across all price ranges. Most importantly, most of them are up and running in hours with minimal customization. Open source is amazing…a free, complete solution that is ‘good enough’ to meet requirements and which can be customized to specific needs. But open source require a developer time to implement and maintain. For her that means pulling a developer from the product to operational systems.

Don't be penny wise and pound foolish. Go commercial. Most if not all business software today is feature rich, yet easy to use for quick implementation, and most importantly it's priced economically for small companies to grow into it. Keep the team on the important tasks, and outsource the rest. Always money well spent.