There’s a common assumption that every new tech start-up needs a Chief Technology Officer (CTO). Often, this isn’t the case.
Many start-up founders lack a Computer Science background. They’re smart business people who’ve identified a gap in the market. But with tech at the core of their new business, they believe a CTO should be in place from the outset.This can cause problems over time, leaving the business with a skills mismatch and an early drain on its salary budget.
Having helped scale, countless technology teams, we know when you need a CTO – and when you don’t.
What is a CTO?
CTO can be a hard role to define. Responsibilities can vary depending on the shape and size of the business.
Many mistakenly recruit a technical genius as CTO. But when they lack sufficient leadership experience, the outcome is poor.
A CTO is a visionary. It’s a business management role first and a technical role second. CTOs shouldn’t be hands-on more than 10% of the time – even in the smallest organisation. Effective CTOs typically have over 15 years of experience. They’ve worked their way up before experiencing managerial and director roles. CTOs must present to the board regularly to discuss technical progress, challenges, and resolutions. They’re confident business leaders, unlike many technical geniuses.
What happens when you hire a CTO too early?
As you form your startup, you might not be clear on how your product will evolve. You’re still creating and building your vision. You might not have paying customers yet. Bringing a CTO in at this point is problematic. Most likely you’ll need someone who is comfortable being hands-on, rolling up their sleeves and writing code. But this isn’t necessarily what a seasoned CTO does.
If you hire a ‘junior’ CTO, they may not have sufficient technical leadership and the vision to take your product where you want it to go. And that causes a big problem as you scale. Unable to grow into the role fast enough, you’ll end up wanting to recruit someone above your initial CTO with senior leadership experience. But they’re already at the top – they’re the CTO!
So, what should you do instead?
Hire the role you need at the time. Save the CTO title for when you need that skillset. You might therefore hire a Director of Engineering, or even a VP of Engineering first. This leaves you the scope to add seniority when you’re ready for it.
Can a founder be CTO?
In most circumstances, founders shouldn’t take the CTO title simply to fill the void. Most are visionaries or product orientated without a deep technical background. Should a founder have technical expertise in addition to their vision, you have an exception to the rule.
But as the business grows, even a founder might wish to hand over the CTO role to someone with significant high-level experience.
When’s the right time to hire a CTO?
There’s no set formula to determine the perfect time to hire a CTO. Every business is different. At Talent Seed, we ask many questions before advising whether your business is ready for this visionary role.
Quite often, we recommend recruiting talent below the CTO level. Matching the skills you need can save money too. A seasoned CTO’s salary can be anywhere from $350,000+ while a VP of Engineering commands around $250,000+. This is important when your business is in its infancy.
How big is your team and how will it grow in 12 months?
We often talk to businesses with a team of five, looking to hire another five in the coming months. They don’t need a CTO. Other businesses tell us they’ve been outsourcing tech to create an MVP before raising money. Now they’re bringing it in-house. They don’t need a CTO.
What are you expecting from a CTO?
The role is visionary and strategic. Understand whether you need this yet.
Some tell us they’re looking for someone to oversee their engineering and system design whilst helping with team growth. They don’t need a CTO.
What are your growth expectations?
Huge growth plans don’t necessarily prompt a CTO need today.
Some businesses tell us they’re small now but have an ambitious roadmap to develop in other countries and scale dramatically within five years. They don’t need a CTO right now, though.
If not a CTO, then who?
Too many startups don’t appreciate the diversity of tech roles that sit below a CTO. By establishing your skill needs at a point in time, you can recruit more appropriate roles, leaving the potential to build your senior tech team as you need it.
Review the following hierarchy of technical roles and see which skillsets resonate with your current business needs.
- A confident visionary and strategic executive role, they report to the board. Unlikely to be hands-on, this is a business management position. They’ll have around 15 years’ technical experience and be the public face of the company’s technology.
VP of Engineering
- They oversee the entire function or a section of the technology platform. Working closely with the executive team and reporting to the CTO, they are industry and business experts with around 12 years of experience. VPs will manage directors and managers whilst also involved in technical and product strategy. At most, they will do a small amount of coding.
Director of Engineering
- They manage several engineering managers when you have more teams in action. With around 10 years of experience (at least five years managing teams) they also contribute to research and development, plus low-level systems architecture discussions. Some businesses might have a Senior Director of Engineering too, allowing for career progression and division of responsibilities.
- Responsible for a tech team of five to ten people, this is the first role for a software engineer who chooses a managerial career path over a technical one. They still spend around ~ 60% of their time coding whilst using the remaining 40% to manage their team. Some businesses might also appoint Senior Engineering Managers. They’re responsible for three or four teams of engineers whilst still having a hand in coding.
Finding your perfect CTO
There will come a time in your business journey when you really do need a CTO in place.
You might be referred to someone via a business contact or VC. Think carefully about the skills you need in this person before pursuing that route.
Often, businesses are unsure what they need from a CTO and that’s where we can help.
The Talent Seed team has worked on the other side of the fence. We all played our part in rapidly scaling the tech team at Careen from a handful to hundreds.
We deeply understand how this works and what to expect from every technical role. We also have first-hand experience with every challenge you might face.
Our collaboration starts with a conversation. We qualify what you need so you can scope your recruitment effectively as you grow. This strategic approach helps your budgeting and avoids knee-jerk reactions when you feel overwhelmed.
When it comes to your CTO, we help you find someone with the right skills and culture to fit into your business seamlessly. In this way, you’re far more likely to choose a perfect fit who adds true value as you scale and evolve.
Tech roles that work for you
There’s a wide variety of tech roles to consider, but at the end of the day, they’re just titles. It’s far more important to get clear on the skills you require at different growth stages of your business and recruit a structure that works for you.
This skills-first approach also works for non-tech functions such as finance and HR. Every department has a role hierarchy to help you structure your skills.
Should you want to discuss your tech or non-tech recruitment needs, please get in touch and we’ll happily help you find the best way forward.