CTO as a Service
For the last five years I have been developing IT products together with the Apparat team for customers from Russia, Ukraine and the UK. We create high-quality applications that connect people and solve real problems: from finance to medicine.
This article is an assumption about how custom development agencies may change in the near future.
Current Problems of Development Agencies
In 2019, I spoke with more than 50 founders of various mobile startups. They always have the same story. They start with freelancers, but then move on to agencies. They do not feel any difference between them except the style of communication and prices. This appears because agencies and freelancers have similar goals.
If a freelancer wants to finish a project and get a good feedback, the agency wants to fulfill the terms of the contract and get a new item in the portfolio (this allows to attract new customers).
Agencies as well as freelancers do not consider your product as their own, and this is a key problem of mobile/web /IT development in 2010–2020.
In the future, well known to us agencies will change the approach to work towards CaaS
CaaS (CTO as a Service) is a service that offers the “rent” of a technical director to young startups. The technical director will be engaged in only one project, and his fee will depend on this project (for example, the technical director may receive a share of the company’s net profit in addition to his salary). This will happen as a natural reaction to the solution of a single problem. In addition to the obvious solution to the problem of customer attitude to the product, startups are likely to receive economic benefits (CTO will base on the budget and needs of the startup).
Another obvious advantage that CaaS era will bring is that the CTO who came to your project will most likely have his own base of proven, talented developers, designers and marketers in advance. Sometimes exactly such CTOs will present your product to investors. Because it’s their product, too. They believe in it.
Why do agencies need this? Because the sales issue will start to disappear. If an agency working with CaaS is often forced to accept new clients in most cases this will only mean that their CTO does not cope with his main task.
Why will CaaS change products?
When the “rented” CTO will work in your project, we will move from the agency-client relationship to the CEO-CTO relationship. We will move from the legal entities-individuals relationship to the person-person relationship. At least, such relations are analyzed by a completely different section of sociology.
Problems of CaaS
Selectivity of agencies. Agencies working with CaaS will become much more aware of the choice of clients. Maybe agencies will reject customers just as often as investors reject to startups in the money. That’s because the growth of the agency will directly depend on the success of the client’s project.
Lack of staff. Agencies working with CaaS will have to create new education methods for preparing future CTOs. With CaaS, the more CTOs are in the agency and the better they work — the more the agency can earn.
Staff turnover. If CTO does a great job, sooner or later he will be faced with the question of the need for an agency in this process. Companies offering CaaS should create an answer to this question in advance.
Where to get CaaS now?
I am absolutely sure that CaaS will become one of the main approaches to custom development by 2025. However, you can get your CTO by searching “CTO as a service” in Google or by writing to firstname.lastname@example.org.
LinkedIn is one of the best ways to get a technical director for your project right now. You will definitely find CTO who will consider your product as his own there. It remains only to agree on remote work and hourly pay.
Some interesting links:
Any questions or feedback? Contact via Telegram: @morgachev