Part III: Should I hire a CTO?
When is it the right hire?
Part III of Advice for Non-Technical Founders
Note: For the purpose of this section I’m considering the role of Chief Technology Officer as synonymous with Chief Science Officer, Chief Medical Officers, Chief Information Officer, and Chief Security Officer because these roles likely represent the executive responsible for the primary intellectual property your venture is building.
In the previous sections, we discussed the need to secure top-tier technical talent. While that sounds obvious, too often non-technical founders think this must mean a CTO. In fact, frequently accelerators and incubators recommend non-technical founders hire a CTO immediately, but I’m not sure this is always great advice. So, should you hire a CTO?
I think the answer to this question is a little more nuanced than it might seem and we will break it down into 3 sections:
- Do I need a CTO?
- Do I need a CTO now?
- How do I groom a CTO?
Here is a simple set of criteria for determining whether or not you need a CTO:
- Is your company selling enterprise software?
- Is your company building a product in a highly regulated or highly scientific industry?
- Is your company dealing with a complex data set?
If the answer to all of those questions is no then ask do I need a CTO now? And consider the following:
- Are you currently having problems scaling your product?
- Are you trying to raise an equity round of $1m or more?
- Have you built/inherited/purchased a piece of technology that is a hot mess?
If the answers to these questions are also no then feel comfortable that you can skip the CTO role, save your equity, then reread Part II, and treat your tech lead well.
But what if you answered yes? How do I go about hiring a CTO? After working through this question with several companies, the best advice I can give is to never hire a CTO, but groom a CTO.
How to groom a CTO.
Technical leads may become CTOs but, my advice is that you make this a process, not a given. In Part II we talked about creating a 3-month contract-to-perm relationship.
You will want to spend these 3 months evaluating this candidate so you can make the following assessment:
Are they CTO material? Has this candidate bought into your vision? Have they helped you shape your vision? Do your personalities mesh? Have they delivered meaningful results over the past 3 months? Can you count on them in a pinch? If so, trigger the conversion to full-time employee and plan a path to CTO.
Grooming a CTO helps establish trust and credibility. It’s a process, it should take time. All of that being said, I do believe there are few exceptions when I think hiring a CTO directly, and quickly, is appropriate for a startup.
Exception 1: You are working in a highly regulated or scientific industry like healthcare or finance. Technical expertise in complicated industries is an area where you may have to formally hire a CTO in order to have credibility with customers or investors. If you don’t have this type person as part of your founding team it will be very difficult to raise money or vet your idea. In this case, skipping the grooming process is possible, especially for the right candidate.
Exception 2: You hit the trifecta. You find someone who meets the following 3 criteria:
- They know your industry and vertical. Preferably they have built or sold products in this space
- They share your vision
- They come recommended by a trusted first-hand reference
This exception is driven predominately by #3. Who is vouching for this person? Can you vouch for them?
In summary, for non-technical founders, the immediate concern is to secure technical talent, not necessarily to hire a CTO. With a few exceptions, seek to groom a CTO, not to hire a CTO. If an investor or incubator/accelerator insist on CTO as a requirement, an appropriate response is to have a strong technical lead on a path to CTO.
These are just my thoughts and I’d love to hear all opinions on the topic. What has worked for you? What hasn’t?
Cheers,
Mike
@msengbusch1
