As a founder, you’ve poured your heart and soul into building your startup.
I know how difficult it can be, as I have been there working with founders since day one.
You’ve navigated the challenges to secure funding, assembling a team, and refining your product ideas. You’ve been looking for the missing link between technology and where you know the company needs to get to.
So you have decided to look for a Chief Technology Officer to help you bridge the gap.
You considered using recruiters to find a CTO for you, as the default path. They certainly have ways to test developers, but they lack expert knowledge to tell a good CTO from the bad ones. As I’ve argued before, a good developer doesn’t necessarily make a good CTO. Then again, a solid technical basis is core for a good CTO.
Let’s say, there are 5 CTO candidates in front of you. What criteria are you basing your decision on?
- Between unfamiliar jargon and technical concepts, how would you assess a candidate’s true capabilities?
- Do you need a full time CTO or just a part time commitment CTO?
- On top of that, there is a huge price range, from £150/hour to £500/hour. How much should you offer?
- Is “ex-Google” a qualification that highlights relevance to your early-stage problems?
- And so on…
What Will You Learn From This Guide:
I write this guide hoping it will help CEOs or founders decide the best course for finding your next technology leader. I will spend some more time covering everything regarding hiring a CTO.
After this post, you will learn:
- What makes a successful CTO?
- What is the difference between CTO, interim CTO, fractional CTO (fCTO), and advisory CTO
- Which type of CTO engagement is the best for your startup?
- Where and how to find a good CTO (fCTO)?
- How much does a CTO cost, and how to negotiate the payment?
Highly recommended to read this article until the end, as this is one of the rare one tailored for CEOs like you.
What Makes A Successful CTO?
The role of a CTO is quite different from that of a lead engineer. A lead engineer is focused on writing code, alone or with a small team. A CTO is focused on ensuring that what is being built is right for the business. And while there is huge overlap between those two roles early on, they require different skills.
The ideal CTO:
- explains a technical concept in a few simple words to a non-technical person
- aligns technology strategy with rest of your executive team, and explains how technology adds to the company goals
- is experienced in technology but also has a broad perspective on legal, compliance, finance, human resources, and fundraising topics.
- thinks about ROI and business outcomes when setting a path for the team
- has a proven track record of leading small and larger technology teams, and knows the pitfalls of growth
- has the technical gravitas from experience in architecting scalable systems, and solving challenges
- has delivered products to market and knows how to scale cost effectively, and timely
As you can see, a good CTO can be a game-changer for your startup if you already have a leading engineer.
By bringing strategic vision, technical expertise, and executive experience to the table, they can help you navigate the challenges of short and long term success.
What Is NOT A Qualified CTO?
Not all CTOs are created equal.
It’s crucial to recognize the warning signs of an unqualified CTO. Be wary of candidates who:
- Speaks in technical jargon without being able to explain concepts in your language
- Lacks experience in aligning technology with broader business strategies
- Has a narrow focus on coding and development, without considering legal, compliance, finance, and HR implications
- Can’t provide clear metrics to measure the ROI of your technology investments
- Has limited experience in scaling products and teams effectively
- Struggles to communicate and collaborate with non-technical stakeholders
Remember, a CTO is not just someone to manage your technology or take care of technical challenges. They should be a strategic partner and a fixer who can guide your startup through the complexities of growth and help you achieve long-term success.
How Does A CTO Work With You?
The diagram above sets out the options for engaging with a CTO.
The traditional full time employee CTO is engaged full time, exclusively for an indefinite period. If on the other hand you have a full time need but only to achieve a certain outcome (like say, find a replacement CTO or deliver an integration post merger) you have the traditional interim CTO role.
A similar distinction exists on the part time side.
A fractional CTO is with you for the journey, providing broad leadership to your engineering team. They also spend time on running your technology team, the processes and the people
Whereas an advisory CTO will help you navigate specific bridges. For instance, you would hire an advisor to help you hire your next CTO, or to provide you with a big picture strategy, or go through a restructuring of your team, or help you select a third party, and run an RFP process. All of this needs the experience of a CTO, but has a specific outcome or timeline associated.
The part-time model allows early-stage startups to access top-tier tech executives without the hefty price tag of a full-time executive at that level.
Read more about our fractional CTO guide.
The key distinction between these different engagement models is if you have specific goals in mind, or rather want a leader. Also depending on the scope and size, take guidance on the need for their full time availability and exclusivity.
Contrary to general understanding, you do not need to know about technology in depth to find a good CTO suitable for your startup.
You only need to be clear on two things:
- Knowing where you are today
- Knowing where you would like to end up in 6-12 months.
Here are some questions to help you frame that:
- What is the specific challenge your startup faces? Funding, growth, hiring, building faster, … ?
- Do you need help with product, technology, legal, finance, compliance, human resources? Which aspect is the most urgent to you?
- What is your 6 months and 12 months goal for the company?
- How do you measure the success of resolving your challenges?
If you don’t have a clear answer to those questions, it’s probably a good time to do a quick technology health check.
Learn more about a technology health check.
The Signs Of A Matching CTO:
A standout CTO candidate will ask insightful questions about your business, challenge your assumptions, and propose creative solutions. But more than anything, they should realize it’s about enabling the business rather than specific technology.
If you spend 5 minutes pitching your startup, you should next look for feedback and questions like:
- How do you currently measure your technology’s success?
- What is your biggest challenge when working with your technology team?
- What is your short and long term business goal?
- When is your next fundraising and how much do you plan on raising, how would you allocate the funds afterwards?
- And so on…
The ways I (or your candidate) ask those questions, will be clear enough to you so that you should:
- Have no problem understanding a word I said
- Feel like I understand your startup vision and goal
- Have eureka moments in our chats, like “Hmm… I’ve never thought about this…”
You Don’t Know What You Don’t Know.
While the signs above are all good signs, you likely have no real way to judge whether a potential CTO is actually good at leading your technology team. I know what I said earlier that you don’t need to have in-depth technical knowledge. I still stand by this statement.
However, having an expert assist you on this process will only make things easier and more assuring for you.
To illustrate this point, think of it this way: Trying to hire a CTO without having technical expertise is like a patient trying to assess a surgeon’s skills without a medical background.
You as a patient must rely either on another surgeon to assess the surgeon you are hiring, or to trust a surgeon’s ability to explain procedures clearly, demonstrate a track record of successful outcomes.
Again, it’s important to note that having a deep understanding of your own startup and a clear vision of your goal goes a long way. Before you begin your search, take the time to reflect on your startup’s specific challenges and goals. Ask yourself the following questions:
- What are the most pressing issues facing my startup?
- Do I need help with product development, technology strategy, legal compliance, or other areas?
- What do I want my CTO to achieve in the next 6 to 12 months?
- How will I measure the success of my CTO?
Then you’ll be better equipped to identify the right CTO for your needs, even if you lack technical expertise.
Don’t look for where they worked, but what they have achieved.
I want to specifically highlight this risk: making a wrong hire based on superficial assessments.
Being an ex-Google or ex-Facebook employee is not a good measurement of a candidate’s suitability. In fact, I’ve seen plenty of CEOs fall into this trap and end up having to hire a completely different profile after just one year.
It’s easy to be swayed by a candidate’s impressive resume or charismatic personality. However, these qualities don’t necessarily translate into the specific skills and experience your startup needs to succeed.
To mitigate this risk, focus on finding a CTO who:
- Can clearly explain technical concepts in terms you understand
- Demonstrates experience in aligning technology with business goals
- Can provide concrete examples of their impact in previous roles
Don’t hesitate to ask for references and case studies that showcase their ability to drive results.
How Much Does a CTO Cost?
Hiring a CTO is a significant investment for your startup.
The table below allows you to compare the salary differences between a full-time CTO and a fractional or advisory CTO (when considering only cash incentives).
Not sure what skills each stage of CTO should possess? This article will help you.
More and more founders are considering hiring a fractional or advisory CTO due to the cost-effective nature of these arrangements. Still don’t know under what circumstances should you consider a part time CTO? This article covers everything you need to know about a fractional CTO.
Negotiate the compensation terms with your CTO
Don’t shy away from negotiating an arrangement that works for both of you. Just make sure you take into account your CTO’s experience, the scope of their engagement, and your startup’s financial resources.
As you want transparency from your CTO, ensure that you do the same. Start your conversation with transparency and a willingness to find a mutually beneficial solution.
Be clear about your budget constraints and the specific outcomes you expect from your CTO. At the same time, be open to their perspective on what constitutes fair compensation for their expertise and the value they’ll bring to your startup.
Addressing the fear of setting remuneration for your future CTO:
It is absolutely natural for you to feel some uncertainty when it comes to setting compensation for a role as critical as a CTO.
However, remember that your CTO is likely experienced in negotiating their own compensation. Regardless of whether you hire them or not, a CTO who has a general interest in seeing you succeed won’t leave you hanging.
Final Thoughts
Finding the right CTO for your startup can be a daunting task, especially if you lack a technical background.
By taking a strategic and informed approach to your search, you can avoid the pitfalls of relying solely on recruiters and find the perfect fit for your startup’s needs.
Want to know more about how I work with founders like you?
Schedule a 30-minute chat now.
