Build, Buy or Partner?

It’s the age-old question faced by every financial technology creator that’s ever existed. When it comes time to add functionality to the product, do you build it yourself, buy a company that already does it, or partner with a company that specializes in it (whatever it may happen to be).

There is no “one size fits all” answer to this question. We’ve probably all seen companies that build everything in-house because that’s the cheapest route (or it’s believed to be the cheapest route) and others that go on an acquisition spree in order to build a financial technology empire. But what really matters – what’s really the only thing that matters – is what approach is going to benefit the customer the most. And looked at that way, it’s clear that the answer to the question is going to change from situation to situation.

How do we approach this at Tyfone?

Let’s start by getting the buy option out of the way first. At Tyfone, we have no current interest in building a financial technology empire, nor will we in the foreseeable future. We subscribe more to the Orville Redenbacher principle: Do one thing and do it better than anyone. The more products you add under one corporate umbrella, the harder it becomes to maintain a consistent company culture and that, in turn, makes it harder to deliver a consistent customer experience. In short, when a company gets hooked on acquisitions, it’s often the customer that suffers the most. That’s just not for us.

That means at Tyfone, it really comes down to build or partner. First we have to ask, can we build it. Do we have the expertise and is it a natural extension of our existing product line? Beyond that, however, we must also ask, should we build it? Can we build it so well that every client will be satisfied? Or is it the type of thing where customers will expect a wide range of choices?

Billpay is a good example. Even if we could create our own billpay product, should we? Take a look around and you’ll see that there are plenty of pure-play billpay companies out there. And for the most part, they all seem to be thriving. From that, one can surmise that different institutions are looking for different things in their billpay providers. In other words, even if we could create our own billpay product, it’s highly unlikely that we’d even come close to satisfying every customer. Billpay is an area where financial institutions expect options. That’s why we’ve partnered with the leading billpay providers instead of building our own. As they say, no point reinventing the wheel.

What will drive the build/buy/partner decision in the future? Other companies may see things differently, but at Tyfone our top priority will always be what makes most sense for our customers.

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