To build or to buy?
To build or to buy? When looking to build trust in the telehealth sector, Amazon decided building its own company with Amazon Care wasn’t worth it. So, it closed Amazon Care and bid on AI/big data player Signify Health instead.
Why? To put it simply Amazon decided it couldn’t accumulate the trust necessary for successful healthcare services through building its own company. Instead, it needed to acquire something which already had a good reputation. Even when it failed in its attempt to buy, with CVS beating it to the finish line, Amazon still decided to close down its in-house telehealth solution.
The benefits of acquiring don’t just apply to trust and telehealth. At the recent insurance conference in Prague, one provider told HBI the benefits also extend to scaling and efficiency. You may spend a long time building up piece by piece, spending a lot of capital in the hopes you’ll eventually have the service solution of your dreams. In the meantime the market will probably grow at a much faster pace than you and leave you in the dust. Or you can buy it ready made with people who have knowledge of systems on the inside.
Of course, there are crucial considerations. The company needs to have synergies with yours as you’ll eventually need to integrate. This is true when buying any business in the same sector as yours. And, of course, the quality of the asset in-and-of-itself has to always be properly assessed.
But in terms of oven-ready scale, nothing beats buying.
We would welcome your thoughts on this story. Email your views to Joe Quiruga or call 0207 183 3779.
