Build vs Buy: When to Use an API Instead

"We could build that ourselves."

Every developer has said it. And sometimes it's true. But sometimes "building it ourselves" turns into three months of work that a $20/month API would have solved in an afternoon.

The build vs. buy decision is deceptively simple. Most teams get it wrong by either over-building or over-buying. Here's how to get it right.

The Real Question

It's not "can we build this?" — of course you can. Given enough time and resources, a good engineering team can build almost anything.

The real question is: should we spend our limited time and resources building this, or should we spend them on something else?

That's an opportunity cost question, not a technical one.

When to Build

Building makes sense when the capability is core to your business or when nothing on the market fits your specific needs.

It's your competitive advantage

If you're a fintech company and fraud detection is what differentiates you, building your own fraud models makes sense. That's your moat. You want to own it, iterate on it, and keep competitors from having the same capabilities.

But if fraud detection is table stakes for your business (you need it, but it's not what makes you special), buying lets you match competitors without the investment.

Ask: Would a competitor using the same API have an equal product? If yes, maybe you need to build. If no, buy.

Nothing exists that fits

Sometimes your requirements are genuinely unique. Maybe you need:

• Industry-specific logic that no general API handles
• Integration with proprietary internal systems
• Performance characteristics no off-the-shelf solution provides
• Compliance requirements that third parties can't meet

In these cases, building is the only option. Just be honest about whether your requirements are truly unique or just feel that way.

You have deep domain expertise

If your team has spent years mastering a problem space, you might build something better than what's available. Your email validator might catch edge cases that others miss because you've seen them all.

But domain expertise in your core product doesn't mean domain expertise in every adjacent feature. A great payments company doesn't necessarily build great PDF generators.

Long-term cost clearly favors building

At extreme scale, API costs can exceed the cost of building and maintaining your own solution. If you're making millions of API calls per day, the math might favor in-house.

But do the math carefully. Include engineering salaries, infrastructure costs, ongoing maintenance, and the opportunity cost of those engineers not working on your core product.

When to Buy

Buying (using APIs) makes sense when the capability is commoditized, when your team lacks expertise, or when speed matters more than control.

It's solved and commoditized

Email validation. Currency conversion. IP geolocation. QR code generation. These problems have been solved thousands of times. There's no competitive advantage in solving them again.

Unless you have a specific reason your solution needs to be different, use what exists. Your email validator doesn't need to be unique — it just needs to work.

Speed to market matters

Building takes time. An API call works today.

If you're testing a new feature and need to validate the idea before investing heavily, an API gets you there faster. You can always build later if the feature proves valuable and the API becomes a bottleneck.

Startups especially should bias toward buying. Your runway is limited. Spend it on what only you can build.

Your team lacks expertise

Building an IP geolocation system requires maintaining geographic databases, handling edge cases for VPNs and proxies, and keeping data fresh as IPs get reassigned.

If nobody on your team has done this before, you'll spend weeks learning what providers already know. And you'll probably miss edge cases they've already solved.

Maintenance cost is hidden

Building is not a one-time cost. Every feature you build requires:

• Bug fixes when edge cases appear
• Updates when dependencies change
• Infrastructure monitoring and scaling
• Documentation for future developers
• On-call responsibility when it breaks

APIs externalize this maintenance. Someone else handles the 2 AM pages, the dependency updates, the infrastructure scaling. You just make requests.

The Hidden Costs of Building

Teams underestimate build costs because they focus on initial development and forget ongoing costs.

Initial development — the obvious part. Design, implement, test, deploy. This is what estimates usually cover.

Infrastructure — servers, databases, monitoring, backups. Even "serverless" has costs and complexity.

Edge cases — your initial solution handles 80% of cases. The remaining 20% takes 80% of the total effort. Unicode handling. Timezone bugs. Rate limiting. Connection pooling. Retry logic.

Maintenance — dependency updates, security patches, performance optimization, scaling. This never ends.

Opportunity cost — your engineers working on email validation are not working on your product. What features didn't ship because you built commodity infrastructure?

Knowledge risk — when the engineer who built it leaves, who maintains it? Tribal knowledge is a liability.

The Hidden Costs of Buying

APIs aren't free either. Beyond the direct costs, consider:

Dependency risk — if the provider has an outage, so do you. If they shut down, you scramble.

Pricing changes — today's affordable API can become expensive when they "adjust pricing for enterprise customers."

Integration overhead — even good APIs require code to integrate. Error handling, retries, caching, monitoring.

Lock-in — the longer you use an API, the harder it is to switch. Data formats become entrenched. Replacement means rewriting.

Privacy concerns — data you send to an API is data leaving your control. For sensitive information, this matters.

A Decision Framework

Walk through these questions:

Count the points. If it's close, bias toward buying initially and consider building later.

The Hybrid Approach

You don't have to choose one or the other. Many teams:

1. Start with an API to validate the feature works
2. Build in-house if the feature becomes critical and the API becomes a bottleneck or cost center
3. Keep using the API for non-critical paths or as a fallback

This approach minimizes initial investment while preserving the option to build later with more information.

What About API Aggregators?

Platforms like APIVerve sit in the middle. You're "buying" access to {{api.count}} APIs, but through a unified interface.

Benefits over individual APIs:

• One vendor relationship instead of many
• Consistent authentication and response formats
• Single billing relationship
• Easier to swap individual APIs without code changes

Benefits over building:

• Same as any API — no maintenance, no infrastructure, instant access

This is the "buy" choice with reduced vendor fragmentation.

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Every feature you build is a feature you maintain forever. Every API you use is a dependency you don't fully control.

There's no universal right answer. But there's almost always a right answer for your specific situation, team, and stage of company.

Most teams err on the side of building too much. They overestimate their unique needs and underestimate maintenance costs.

When in doubt, buy first. Build later if needed. Ship today.

Check out the API catalog to see what's available, or get a free key and start building.

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Originally published at APIVerve Blog