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Build vs. Buy

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Build vs. Buy

by
kqr
, published 2023-01-27
Tags:

  * learning
  * management
  * meta_programming
  * design

I don't remember where I read it, but it's stuck with me because it
was such a Columbus egg1[ ]^1 An idea that seems obvious only once
you've had it explained to you.. This is how to reason about the
build-versus-buy decision2[ ]^2 In case you're unfamiliar, this
decision is about whether you should design your own component or use
an existing third-party one. In particular, don't take "buy"
literally - it could mean using an open source alternative.:

High cost, tightly integrated, and difficult to design? Build, don't
buy. Everything else? Buy.

That's it.

Reasoning

If a component is high cost, tightly integrated with the rest of the
system, and difficult to design, then we need to become experts on
that component in order to properly evaluate suppliers and make a
good purchasing decision. Alternatively, if a component is a major
part of the value we're providing, then we also need to become
experts to safely buy it.

How does one become an expert at anything? By doing it! In other
words, even if we want to buy one of these difficult components, we
need to design it ourselves first, and try it out in production, and
maintain it for a bit, so that we understand everything that goes
into it. But if we've already designed it and started to maintain it,
we may just as well continue to use it and develop it.

The reason we want to buy as much as possible is that an organisation
has a limited capacity for expertise, so we don't want to have to
become experts on things that don't make up a competitive advantage.3
[ ]^3 I believe the popular Choose Boring Technology essay also talks
about this, but calls it "a limited supply of innovation tokens". I
think "capacity for expertise" says more about what actually happens.

Skunk Works

The Lockheed Skunk Works under Kelly Johnson were masters at
optimising using this rule. Whenever they designed a new aircraft,
they first focused on what the main selling point was going to be.
For the F-117, they wanted a plane that was invisible on radar. Then
they found out a way to satisfy this requirement in the lab; in the
case of the F-117, they built wooden prototypes until they were
happy. With the main selling point, there usually comes a primary
challenge. The F-117 had a very weird shape, which made in-flight
stability a concern. Skunk Works then found cheap ways to work at
that, which for the F-117 meant building computers to stabilise the
plane, and literally pushing wooden models of it off of the roof of
the lab to test. To recap:

  * Skunk Works invented something to fulfill the main selling point.
  * They also invented something to alleviate the primary challenge
    that comes out of satisfying the main selling point.

For everything else, they refused to invent anything new. Everything
else was built with off-the-shelf parts. This made it possible for
them to meet tight deadlines, the development process itself was very
cheap, and reliability and repairability was mostly inherited from
tried-and-true components.

Sometimes, however, that process leads to funny conclusions. The
SR-714[ ]^4 Or rather, it's cia-owned predecessor, the A-12 had one
main selling point: speed. It was going to outrun bullets and
missiles, and that was really the main thing it was built for. The
primary challenge that comes with speed is heat. And heat affects
everything on the plane.

So with the SR-71, instead of buying most parts, and building one or
two critical parts, they ended up in-house designing and
manufacturing every single part5[ ]^5 Except for the engines. with
specialised tooling and everything. It's a natural consequence of the
build-versus-buy rule, but it's perhaps not immediately obviously so,
because rarely does that rule lead to buying everything.

Feel free to show your support by buying me a coffee, iff you want
to.
Or send me an email. Emails show nearly as much support as coffee.

Shoutout to my amazing wife   without whose support I would never
make it past the first sentence. 

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