The Build vs. Buy Equation

Updated: Feb 25

If you’re wondering what your business might be worth to an acquirer, there is a simple

calculation you can use.


Let’s call it “The Build vs. Buy Equation”.




At some point, every acquirer does the math and calculates how much it would cost to recreate what you’ve built. If an acquirer figures they could buy your business for less than they would spend on both the hard and soft costs of re-deploying their employees to build a

competitive product, then they will be inclined to acquire yours. If they think it would be less

costly to create it themselves, they are likely to choose to compete instead.


The key to ensuring that what you have is difficult to replicate is focusing on a single product

or service and building on your competitive point of differentiation. When you create a

product that is unique and pour all of your resources into continuing to differentiate it from

the pack, you can dictate terms, because re-creating your business becomes harder the

more you focus on one thing.


The worst strategy is to offer a wide range of services and products only loosely differentiated from others on the market. Any acquirer will rightly assume they can set up shop to compete with you by simply undercutting your prices for a period of time and driving you out of business.


C-Labs Focuses On Building An Irresistible Product

Chris Muench started C-Labs in 2008 to go after the burgeoning opportunities presented by

the Internet-of-Things (IOT). He began by writing custom software applications that allowed

one machine to talk to another. In 2014, he got the industrial giant TRUMPF International to