Or how to get your digital product ready because you don’t have a tech cofunder.
You and your friends have an idea ready about a digital product or service that will revolutionise the world. You have been working for a long time on it, you have done your homework and you know your market, your competitors, and your competitive advantage. You are digital-native, but you don’t really know how to create apps. So you need help in getting the tech details sorted-out to bring your idea to life.
When you are not a tech-savvy entrepreneur, you might face two options:
- Find a co-founder who can code. Said co-founder is lured into your project by being called the CTO of your startup to oversee tech and product development.
- Outsource your tech development by hiring a developer, without the promise of any C-role on your startup. That can be someone you know who can code, by posting a job-ad or hiring a software factory to do the coding.
Both options come with their pros and cons, like everything in life.
Getting a CTO co-founder
Since you, and your other partners in crime if you are not flying solo, do not know about tech, you go out to find someone to become the CTO and start developing.
This new person, now the CTO of your startup, is new to your idea and your values. That person was brought because of the coding abilities needed to pursue the project.
The CTO owns a big chunk of the equity of your company and maybe can be earning a salary, draining your finances. In theory, there is nothing wrong with that. But in practice, there could be two huge problems:
- A good coder is not necessarily a good CTO, this is known as Peter Principle.
- Your CTO does not share the values or objective of your idea.
The CTO is a complicated position. Roles in tech do not necessarily scale up like in other areas of a company. The CTO has to manage, make tough decisions, hire/fire people, and oversee all the technical infrastructure. At the end of the day, it is about management. The CTO does not need to be a top developer, security expert, infrastructure engineer or so many other roles. For a non-tech person, all those titles may be interchangeable. But they are not; probably just someone who is still in University or fresh out of it can do a bit of everything because the content was just learned but not yet mastered. The CTO needs to understand the technology, be part of the conversation with all disciplines, know the trends and the pitfalls of different technologies and interact with the other players in your startup. You can check Wegner Vogel, Amazon CTO, description of the different roles of the position. From my perspective, the best guide about it.
So, when your startup is successful, your CTO might be doing the right things and can scale and grow up to meet the new trends and needs of your product and market. Lucky you! But most likely this will not happen, and you will need a new CTO, and now you will have the resources to get you a proper one. But that means you have to negotiate with your old CTO. You might lose your equity, or money that you need to grow or a friend and gain a headache.
On the other hand, maybe you got lucky and got the right CTO for a brand new startup. But that person does not share any of your values. You and your friends were working on your idea for a while, and now you have a new partner who instead of pushing with you, seems to be pulling on a different direction. Again, you will need to get rid of that person, and that might cost you money or set you back. You will go back to step one looking for tech co-founders.
But maybe you are thinking, I don’t have the resources to hire a developer, so I need to offer equity and the CTO position to bring the code to life. Well, my advice here would be, offer equity, but not the CTO position. Hell, besides deciding who is calling the shots, do not offer any C-roles until later.
Insourcing or Outsourcing Tech
So you are considering bringing a tech person to the team not as CTO, but just in charge of coding what you need.
That person will need direction and instructions to make sure whatever is being developed meets your needs, the needs of your users, and it can scale.
Assuming you don’t have the expertise, as we have done in this article so far, this again becomes a challenging aspect. You are becoming by defacto the CTO and the CPO. Besides, having just one developer might not be sustainable to launch your idea, you might need to get one or two more just to launch off the ground. They might be freelancing for you, but after a while, depending on which country you are located, they might be your employees.
Again, you can get lucky and hire someone who can do that and you have the chops to get going as a CTO, CPO and all the other roles you are doing like finding investors, growing your market, and finding the right employees for your company.
If one of your original founders is tech-savvy, that person can oversee the T and the P of those roles. But if not, you are again facing the danger of having now employees but not a real product that is helping you grow.
You have the money, so you get in touch with a Software Factory to do your product. Since you said in LinkedIn that you are the co-founder or founder of a startup, you got plenty of emails of companies offering you services from Poland, India, Ukraine, etc. You have plenty to chose from and get your tech going. But if you check their prices, they charge you by the hour with fees that are not really as cheap as they claim to be. They might not be based in Berlin, but they charge you as if they were.
Besides they are not as cheap as they claim they are… you also need to tell them what to do! Which brings you back to the same problem, you need to able to have a tech or product conversation with them so that they can help you get your MVP ready to launch and give value.
Your Product/Tech “co-founder as a service”: MaaS
You have a third option. Find someone to help you have that conversation with developers. Even if you decide that outsourcing to a software factory is for you, you need a partner to guide them and make sure they deliver.
If you have the network, get a friend to fill that position. Not equity, just a salary to have the conversation. That still might create problems. Your friend might be the best one, but maybe there is no match with the developers or software factory.
If you have the resources, you can approach BCG or Mckinsey and they become your product/tech partners. They work with you and then they leave after the MVP launch helping you transition. It is not cheap, and it might not even deliver the value you want, because they have like 100 other clients at the same time.
Or, get MezcalDigital. We are like your friend who is joining as a co-founder, but we come with a software factory integrated. We know about product, UX & Tech. We work with your budget, you need to dilute your equity (but if you want to, we are open to that too!). We define clear objectives and deliverables, we don’t charge you by the hour or the number of people we pretend to have. We work to make sure your MVP delivers the value that you need.
Is this MaaS the same as a software factory? No, imagine that MaaS is like your wedding planner, while the software factory is the baker or the florist. The wedding planner makes sure your wedding happens as you expect. We do the same, but for your business. And aren’t business ideas and startups more important than weddings? ;)
You might be just launching your brand new startup, exploring or a side product. We are your partners so you can focus.
MezcalDigital, based in Berlin, will work you as product owner ensuring that your business values and your users’ needs are being implemented into a digital product that delivers value to all stockholders.
Nodeport works using Scrum and ensuring total transparency and fairness. Together, we are constantly delivering value to your startup idea and helping you consolidate and grow your company.
Final Take Away
Even if you don’t hire us to deliver your MVP, let us leave you with this conclusions:
- Don’t make your programmer co-founder the CTO of your startup. Call that person the tech-cofounder, and once you have the resources look for the right CTO.
- If you have a tech-founder, make sure “product” is also part of the lingo,
- If you don’t have someone in your team that can have a tech/product conversation. Find one. Otherwise, you will end up buying things you don’t need from independent developers or software factories. We recommend ourselves, we can have the conversation and do the tech, but hey! you are free to shop around.