Do I need to hire a CTO for my new startup?
When new tech start-ups seek funding they are asked to present their team. There is an assumption they need a CTO on the team from day one. It may be a mistake to hire a CTO this early. Here is why.
There are three parts to this;
- What does a CTO do?
- What problems am I trying to solve?
- Is now the right time to hire a CTO
What does a CTO do?
A CTO is an executive team member representing the technical community of an organisation. They’ll help advocate for the technical agenda in strategy discussions and help attract great talent. They’ll manage budgets, coach senior technical leaders and manage the technical capability of an organisation. This will encompass processes, architecture, and most importantly people and culture.
Digging deeper you can find different flavours of CTO, and in the real world CTOs tend to be a mix of these flavours, and not just play to one archetype.
Four common CTO patterns are
- CTO as the Chief Innovator
- CTO as the Operations Leader
- CTO as the Delivery Manager
- CTO as the Executive
The chief innovator is the idealised version of the role, wearing a lab coat, travelling the world and investigating new technologies; their role is to discover new opportunities and to invent new capabilities that can then be sold on the the market.
The operations leader is a role that pushes the platform agenda; let’s make sure we are scalable, that our infrastructure is reliable, data is secure, and that we are optimising our use of technology holistically. In this role they will often have their own roadmap or backlog of improvements that aim to clear impediments to future growth and to improve the outcomes within the context of what you already do as a business.
The delivery manager leads a community of practices that together get product out the door to customers. There is some innovation in this role as each new product is an opportunity to reflect on the opportunities the world is presenting, and to check whether it is time to innovate. But at the same time the relentless need to get new product out the door limits scope for deep innovation.
The CTO as executive is a different beast again. Larger, more complex organisations have multiple agendas and often the nexus of those agendas is the technology organisation. In this content the CTO needs to manage politics and spend time helping shape the organisation’s strategy to best leverage the capabilities of the technology organisation. Often it involves a good dose of transformation. It is a job that involves investigating agendas, analysing the opportunities against an often uncertain strategy, and influencing to encourage an optimum outcome for the business.
What problems am I trying to solve?
When you are an early stage startup you can often feel a pressure to recruit a CTO as your first or maybe second technical hire. You may trade some equity for a lower salary so you can afford the expertise you anticipate you’ll need. It seems like it will lift a burden from your shoulders as you can now delegate the technical agenda.
It may not be the right move.
What you are doing as an early stage startup is exploring. You are trying a series of experiments to validate your product hypothesis. When you find your product idea is a good one, you will then need to discover whether the market is commercially viable, scalable and whether you have the right mix of features and user experience to make it worthwhile for you to tackle it. There is a lot of exploration at this stage.
Kent Beck has been doing the speaking rounds lately describing a new version of the well known S curve.
New startups live in exploration mode when they start. Only after you find the right product market fit, will you scale it up, and follow through to the cash cow years.
At the early stage you are in exploration mode. The things we listed as the role of a CTO are often not yet the main concerns of the team.
And even though you may intimately know the problem space, there is still a lot to explore — the right user experience, the pricing model, what features bundled together make the best impact and so on.
Depending on your product idea you may or may not need CTO level technical leadership at this stage.
If your idea is a high tech proposition; perhaps a new innovation in how machine learning and AR can solve autonomous surgery on Mars, it might be good to start with a super senior tech team leader. You may need to be inventing new technologies to enable your product to come to life, and in this scenario a top gun CTO makes sense.
On the other hand, if you are migrating paper and email processes to a Saas platform, or building an ecommerce platform, it’s a well trodden path and the level of innovation is more about the way the product is configured for the users that the technology.
A strong software developer that can have a view on how to build your product, while rolling their sleeves up and getting work done by be a way better choice for your technology leadership.
Simon Wardley’s model helps think about what kind of approach you should take in this space, and what kind of technical leadership you should be hiring.
Is the work novel? Are you inventing things? Are you building things? Is it a known territory? Or should you be buying or renting a service.
So, start with the problem you are trying to solve.
Is now the right time to hire a CTO
One last thing to consider; as your organisation matures the roles will also evolve. If you hire a CTO to lead a development team of three, will they be the right person to be CTO in two or three years when your fast growing business has a development team of 50 or 300?
No doubt that tech team leader you want today will be a great all rounder, but will they thrive when focusing on regulatory compliance, tax and budgets? Make room for growth on multiple fronts.