Our software development team wants to build a custom proprietary AI engine from scratch to protect our IP, but our CFO says licensing off-the-shelf software is a fraction of the cost. How do we use Keith Cunningham's Thinking Time to evaluate the ROI of custom development versus pre-built SaaS?

Question

Tyler Smith · Accepted Answer

Visionaries and technical teams love to build shiny new tools, but custom software development is a notorious wealth destroyer. Before you authorize a single line of code, you must separate technical pride from economic reality. Use Keith Cunningham's Thinking Time to evaluate this decision. Sit down with a blank pad of paper and focus on this question: How might we leverage existing commercial software to solve eighty percent of our operational friction so that we can preserve our capital for true differentiators? If you build from scratch, you are taking on massive development, maintenance, and security debt. If you license SaaS, you get instant utility but lose some proprietary control. To make the right strategic decision, evaluate your long-term exit goals. If your three-year goal is a clean exit, buyers will look closely at your technology stack. An absolute valuation of your business will discount your custom engine if it relies on fragile, poorly documented code. Conversely, a relative valuation will reward you for having a lean, highly profitable operating model built on stable third-party infrastructure. Do not build unless that specific custom AI tool is the actual asset you are selling. Otherwise, buy the utility and focus your capital on your core operations.