We have heard it hundreds (if not thousands) of times:
“But I simply need to bill my subscribers $xx/month. Why shouldn’t I just build my own logic on top of [insert gateway name]?” Although we can make a compelling argument, it doesn’t always win over prospects.
Luckily, we hear back from many 2-3 months later with….“I wish we would have gone with Chargify from the beginning.”
Below, we’ll shed some light on the great buy vs. build debate. But first, it’s important to understand the reality of the question. Managing offers, reliable billing, and subscription lifecycle management is complex, creating an iceberg effect for companies that decide to tackle it on their own. Initially, businesses only see a few basic requirements, but later realize there is much more hidden below the surface as it relates to the ongoing creation and maintenance of custom code.
Nick Sonnenberg, Co-Founder of Leverage, explained that “Chargify has a wide variety of capabilities you don’t know you need until you need them, such as dealing with expired credit cards by notifying the client automatically. It allows us to upgrade, downgrade, or cancel a client’s subscription easily. There’s a self-service page, which allows clients to update information on their own. It provides metrics month-over-month on critical data such as the number of customers, revenue, and lifetime client value.”
Looking back at their own experiences, Sonnenberg has this advice for new subscription-based startups: “Start with Stripe + Chargify. You’ll save time and money in the long run.”
The real question is no longer as simple as “buy vs. build,” but instead…should you buy a best-of-breed solution (such as Chargify) to manage your offers, billing, and subscribers, or build your own logic on top of a payment gateway + buy various third parties tools to manage the subscription lifecycle + integrate everything together + maintain custom billing code and integrations?
In this post we dive into understanding the billing iceberg effect and what to consider when determining if you should build or buy your recurring billing solution. Let’s take a closer look at what you should factor in when deciding which route is best for your own company…
Time Is Money: Focus On Your Core Competencies
Billing may not be one of the most exhilarating parts of your company, but it is one of the most important parts of your business…it is how you get paid.
Time is money (especially in the SaaS world), and whether you’re an early stage startup or an established business, development resources are almost always at a premium.
Using precious development resources to build and maintain your own recurring billing code, and all the complexities that arise, 1. costs money and 2. slows down momentum by taking resources away that could be focused on building a better product and serving your customers more effectively.
And let’s be honest, your developers signed on with your company to build features for your core product(s). They aren’t usually stoked to be building and maintaining the less glamourous subscription billing and management tools.
When you take a step back and think about everything involved with managing your price plans, experimenting with offer optimization, accurately billing your subscribers, managing their subscriptions, accessing reliable analytics, and much more, the list gets long.
For companies who build their own billing integration, they ultimately invest substantial resources in ongoing development work and an arsenal of various third party tools to keep up with their growing needs.
Earth Class Mail CEO Doug Breaker uses a chart, similar to the one below, to help employees understand “if it isn’t critical and strategic, we shouldn’t be writing code for it.”
