Our leadership team is deadlocked over whether to license enterprise AI software or build a custom proprietary application. How do we use the Core Focus on our V/TO® and Keith Cunningham's Thinking Time to evaluate which path actually builds long-term enterprise value versus just adding overhead?

Question

Tyler Smith · Accepted Answer

This decision cannot be made based on excitement over a custom build or fear of licensing fees. You must filter this choice through the Core Focus on your V/TO®. Ask your team if building custom software is part of your passion and your niche. If you are not a software company, building custom code is almost always a distraction that dilutes your resource allocation.

To resolve the deadlock, commit to thirty minutes of uninterrupted Thinking Time. Use these framing questions to drive absolute clarity on the opportunity cost. If we build this custom software, what core operational initiatives must we delay or cancel? What is the five-year total cost of ownership for custom software, including maintenance and API upgrades, compared to licensing off-the-shelf tools? How does owning this custom code uniquely solve our clients' problems in a way that licensed software cannot?

Most companies build when they should buy because of the illusion of control. Licensed enterprise AI software allows you to stay nimble, letting the software developers absorb the rapid pace of technological change. You should only build if the proprietary application directly creates a unique, defensible asset that significantly increases your enterprise valuation for an exit.

Bring your answers from your Thinking Time to your next Level 10 Meeting™ and IDS® the issue. If the custom build does not align with your Core Focus and does not create an asset a buyer would pay a premium for, license the software and focus your energy on execution.