Strong fit: a well-defined, highly specialised capability gap

The best fit is a buyer who knows exactly what's missing and can't easily get it.

Usually it's a technical capability the roadmap or strategy depends on: a niche engineering discipline, a regulated workflow, or a layer of the product that has to work with your stack and your customers from day one. You can describe the inputs, the outputs and what "done" looks like. What you can't do is find a company on the market that matches it, or hire a team fast enough to build it yourself. It might even be a lump of technology (technical term) that makes perfect sense in your architecture, but would never live standalone outside of it.

The hiring challenge in some fields can be a very real motivator. Cybersecurity, for example, is an area we've worked in where this is the case. ISC2 put the global cybersecurity workforce gap at 4.8 million unfilled roles in 2024, with 65 to 67% of organisations reporting unfilled security positions. When people are that scarce, the few startups that have them are expensive to buy, and an in-house hiring plan competes for the same candidates as everyone else.

A Made-to-Order Startup deals with both problems. The specification sets the target, so the team is recruited for that one capability and the architecture is chosen to fit your environment. Integration is part of the brief from the start, rather than a project you inherit after completion.

Signs you're here: you can write the requirements down in a page or two, the edges and the gap are sharp and deep, and the main risk is building it well rather than whether anyone wants it.

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Strong fit: a competitive-response build

The second case starts with someone else's move. A competitor ships a product, buys a company or opens a front you now need to cover.

Here the destination is already visible. You can point at what exists and say, "we need our, better, version of that, built for our customers and our platform." That's a specification, even before anyone has written it down.

The usual options tend to disappoint. The obvious acquisition targets may already be taken, priced up because every buyer in the sector saw the same move, or tied to the competitor you're responding to. An internal build often starts late and stays late, because it's staffed from teams with other commitments - potentially delaying what might also be other critical elements of the roadmap.

With XLIO, a dedicated team is recruited for that one job, against KPIs you've agreed, with the price and the route to ownership fixed before work starts. Your competitor has already shown there's demand. What's left is execution and timing, which is the part we're set up to handle.

Signs you're here: you can name the move you're responding to, and your customers or sales teams are already asking about it.

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Poor fit: when you need discovery, a market bet or a founder

What makes the model so compelling when there's a strong fit also makes it the wrong tool in these three situations.

You want to find out whether a market exists

If the real question is whether there's a market and what it wants, a fixed specification gets in the way. Discovery means changing direction when customers surprise you, and sometimes dropping the original idea altogether. More than that an active marketing campiagn and hard fought sales funnel of early prospects and wins that show a clear path to repeat significant revenue is as important in the acquisition as the MVP the engineers deliver.

A Made-to-Order Startup is built to hit a target agreed up front and measured against KPIs. It will hit that target whether or not the target was right. Of course, that's not to say tweaks and changes in the Made to Order model can't be made along the way - but wholesale re-designs are not what this is all about. And the burn rate of early sales and marketing expense, or conversely revenue from first customer wins won't be factored into your acquisition price - because there won't be any in the Made to Order model.

If you can't yet describe what success looks like, a partnership, a pilot or a minority stake that lets you learn alongside the market may serve you better.

You're placing an open-ended bet

Some strategic moves are deliberately loose: a position in an emerging category where nobody yet knows what the winning product looks like. Those bets pay off through range, by backing several options and seeing which one works. A Made-to-Order Startup is one company, built for one buyer, to one specification.

Venture studios are sometimes a good option in this scenario. The 2022 Global Startup Studio Network report found that 72% of studio-built startups reach a Series A, against 42% for traditional startups. That model suits finding out which bet wins. Ours suits the point after that, when you know what you want to own.

You want a founder-led story

Sometimes the thing a buyer is paying for is the founder: their conviction, their network and their account of why the company had to exist. That story can shape culture and recruiting, how customers and investors read the deal, helping to redefine your own brand into the bargain.

A Made-to-Order Startup has a strong founding team, recruited for the build and with real equity in the outcome. Its reason to exist, though, is your specification. If a founder's own story is a large part of the value you're after, buy a company that already has one.

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A five-question fit test

Before you talk to us, run through these. Mostly "yes" points towards a Made-to-Order Startup. Mostly "no" points elsewhere.

  1. Can we describe the capability we need in concrete, measurable terms?
  2. Could we agree KPIs that would prove it has been delivered?
  3. Is the main risk execution, rather than demand, revenue or customer acquisition?
  4. Are suitable targets on the market scarce, overpriced or a poor fit?
  5. Are we buying a capability, rather than a founder, a narrative or a set of options?

If you answered "no" to three or more, we'll probably tell you the same thing in our first conversation, along with what might work better.

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Picking the right tool for the job

Made-to-Order Startups don't replace M&A, venture investment or in-house R&D. They're built for one kind of problem: a technical capability that you can define, need to own, and can't readily find or build.

When that's your situation, we should talk. When it isn't, the most useful thing we can do is say so early.

Our process page walks through how a build runs from specification to acquisition. If you have a capability gap you can describe, get in touch and we'll tell you straight whether ordering a startup is the right call.

Sources: ISC2's 2024 Cybersecurity Workforce Study on the global talent gap; the 2022 Global Startup Studio Network report, via Bundl, on venture studio performance; quotes on XLIO's model from our own FAQ.