If technology is at the core of your startup, you need a technical visionary who will take your project to the top — a Chief Technology Officer (CTO). This isn’t a mere employee but rather one of the key stakeholders who either makes your solution flourish or hinders its development.
A CTO is a professional who is well aware of the latest tech trends, the overall market landscape, and competitors’ activities. What’s more, this visionary is objective-focused, innovative, and knows how to build a solution at the intersection of advanced technologies and market demands. The responsibilities aren’t limited to theory: a CTO has both the strong tech background and the leadership skills to become the captain of the development team and guide it to the goal.
Talent, deep professional expertise, vision, persistence — these are just some of the things to look for when choosing the right person to hire. In this article, we will explain the importance of a CTO and what to pay attention to when recruiting one.
Who is a CTO?
A CTO is a C-level executive responsible for the technological side of company development. Depending on the company’s specifics, a CTO manages software or hardware development, or both, and develops a technological business strategy. While CTOs aren’t always involved in tech-related operational issues, their primary duties include:
Developing a Compelling Technology Strategy and Vision
Generating technological strategies that will help achieve business objectives and let the company stay ahead of competitors is the CTO’s utmost responsibility. Besides a clear vision and enthusiasm, the C-level executive should be able to communicate the defined goals and roadmap to a team in a way that evokes passion.
Building the Product Development Processes
A CTO is the one who controls the achievement of business goals by implementing tech solutions. In other words, their job is to translate a business objective into a technical plan and ensure there are enough resources to achieve it. The tech leader should not only control the implementation and ensure the results align with the current trends and the ultimate goal, but also share the workload with the team if necessary.
A CTO of a modern early-stage startup needs to be well versed in DevOps and quality assurance (QA). As startups can initially hire a limited number of people, CTOs may be filling some of those roles.
Constantly Seeking Innovation
Research and development are integral to the CTO's position. A technical evangelist should be able to spot emerging trends, prove their worth to all stakeholders, and find ways to build cutting-edge solutions. However, the main focus is to improve a product with innovation and meet market demands through technologies.
Hiring Key Engineers and Technical Managers
People skills are a must since a CTO should build a strong team consisting of skilled developers, designers, DevOps and QA engineers, and competent decision-makers who can lead a team in the short term.
The CTO has the most dynamic and far-reaching key performance indicators (KPIs) out of all C-level managers. Gartner states that the KPIs range from tech-related ones, like maintaining security issues or product and service innovation, to more business-specific metrics, including revenue and return on investments (ROI). The CTO’s KPIs can differ greatly from one company to another. For instance, a product-focused CTO is likely to measure cost savings, customer engagement, and delivery. On the other hand, one driving business development will be assessed in terms of sales and company growth.
What is the Difference Between a CTO and CIO?
A CTO is sometimes referred to as the Chief Information Officer (CIO), but the two roles are different. While a CTO’s primary duties revolve around external customers, tech trends, and product engineering, a CIO is responsible for internal users, core systems and infrastructure, and business automation. To better understand the difference, check out the table below:
|CTO for IT||CIO|
|Designing||Implementing and operating|
|Externally and mission-focused||Internally and customer-focused|
|Future business needs||Immediate business needs|
|Manages learning process||Manages execution process|
|Unknown customers||Known customers|
|Long-term planning||Short-term planning|
|Focus on unanticipated successes||Focus on unanticipated failures|
|Emerging technologies||Proven technologies|
|Prototypes and disruptive innovation||Projects and sustaining innovation|
Is a CTO a Must, or Which Startups Can Do Without a Chief Technology Officer?
From the job title, it’s clear that a CTO is a must for companies relying on technology. And technology is everywhere. Even if you plan to design sneakers, you will still need to build an IT infrastructure to effectively manage production, employees, and distribution channels. The good news is that you can do without a CTO at the initial, so-called “garage,” stages of business development. While you are only testing hypotheses and investigating the market by releasing a small volume of products, a CTO won’t drive any significant business effect by optimizing and digitizing your initial business processes. If you’ve already defined a successful product formula that the market seeks, then a CTO will definitely help to scale your business.
If you are a tech startup and your product is an IT solution, a CTO is most likely already a part of your team and one of your co-founders. What should you do if that’s not the case? We explain below.
How Can a CTO Help a Startup at Different Stages?
Whether you are just starting your project or continuing it, a CTO can help you solve different problems:
Being acquainted with the latest trends and technological advancement, a CTO is the right specialist to assess an idea’s viability and define the right tech stack for its development.
A CTO can find the right team or do the coding alone when developing a minimum viable product (MVP). During this stage, the expert will make sure everything goes according to plan, including performance, timing, etc.
Read also: Full Guide on How to Build an MVP
After the MVP release, the CTO is primarily responsible for expanding existing functionality, adding new features, and improving the overall user experience. Moreover, at this stage, the CTO must manage the growing development team and set up an effective workflow.
During this phase, the main focus is on retaining existing users and increasing market share. That’s why a CTO monitors the market to ensure the company stays on top of tech trends and outperforms its competitors. The CTO’s responsibilities here primarily focus on management.
We are Founders of a Tech Startup. But We aren’t Technical Specialists. Are We Doomed?
If you have already spent two years and all your FFF (friends, family, and fools) investments to develop your product with freelancers or an outsourcing agency, the chances that you have problems are high. You can test initial hypotheses, launch an MVP, collect metrics, and experience a couple of pivots without technical expertise on board. Developing an in-house team or building long-term relationships with an outsourcing company without a CTO will be a mistake, though. In-house IT specialists require an experienced IT leader who will be able to set up and manage their teamwork. By developing a product with an outsourcing company without a CTO, you risk getting a black box that may do what you expect but may conceal technical risks that will become apparent sooner or later.
Where to Find a CTO?
You should be ready to spend quite a lot of time before you find an ideal CTO. You never know where the right candidate is, so we advise trying all the options:
Don’t underestimate the power of social media. If you already have a wide professional network on Twitter or LinkedIn, you can make a post and ask people to share it.
Hackathons and Professional Conferences
Such events usually gather like-minded people that aim to make a technological breakthrough.
Business Incubators and Accelerators
Startup incubators like Y Combinator or 500 Startups don’t only pave the way to investors. They are also a great place to find interested people with the right expertise. However, it may take you a while to get in the door.
You can always look for tech experts on sites like Upwork, Freelancer, or Toptal. The ultimate plus is that you can find candidate ratings and real reviews there. But you should keep in mind that working with a CTO requires a long-term perspective and full commitment, while freelancers sometimes leave without warning or work on several projects at the same time.
You can search for talent on Glassdoor or Indeed, specifying the location if remote work isn’t viable or desired. This is a good option to find a CTO since such sites aggregate resumes from numerous sources.
You can either post a vacancy and wait for applications or search for talent yourself. A large network isn’t a must, and a premium account has features allowing you to complete the task faster.
The cooler the CTO, the higher the salary. Depending on your current development stage, be ready to offer a CTO a fair share of options (if you already have sales or investments) or an equity share equal to other founders (if you are just starting). Whatever investment rounds await you in the future, you won’t regret diluting equity in favor of a CTO.
Prepare yourself for competition. The same as venture investors do, CTOs carefully choose a startup to “invest” years of their lives. Choose an appropriate approach, prepare a pitch, and be ready to prove the promise of your project. Before believing in an idea, a potential CTO should understand it and see it with their own eyes. You have a lot to face together, so look for a like-minded partner that shares your values.
We Have a Talented Senior Developer in a Team. Can They Become a CTO?
This is a rather frequent case which is often acceptable. Lack of professional experience as a CTO will be compensated by engagement, fantastic awareness of the product’s technical details, and well-established social connections with other team members. Let’s look for a candidate for the CTO position inside your team, answering some simple questions:
- You need a quick tech-related consultation. Which developer will you turn to?
- Conduct one-to-one meetings with a team of developers. Who do they consider the most proficient and whose advice do they heed?
- Imagine you are to choose a company’s CEO, but you can only select from the developers. Who will it be?
If someone is featured in the answers to all three questions, take a closer look at them. Seek advice not only from the most expert developers in the company but also look at those who are a delight to be around and who will give a clear and full answer. Your new CTO must be respected by the team they will manage. And the team should perceive them both as a boss and as a great technical expert.
However, don’t completely rely on internal resources; a CTO takes a lot of time to mature. According to the STNEXT CTO Survey 2020, most often, a current CTO was previously a Software Developer or Tech Lead. On average, they took on at least two different roles before transitioning to CTO.
What Alternatives are There to Having a CTO?
If you’re looking for a CTO and are unwilling to spend half a year on the search, partnering with a tech agency is an option. An experienced team of professionals will become your fully-fledged technical partner that considers all your business needs and invests not only effort but also people into your development.
By partnering with a tech agency, you get access to a wide pool of tech specialists along with a strong tech leader acting as an external CTO. You’ll be working with a professional who has the broad industry experience and has successfully completed many projects. This option is quite popular among startups since it’s often even more time- and cost-effective than looking for a CTO.
We work as an outsourced technology partner with a number of startups. And for all of them, this is exactly what they were looking for. To understand this idea better, check our client testimonials on Clutch.
What Makes a Good CTO?
Here is a list of skills and traits to look for when choosing a CTO:
A good CTO is an experienced tech specialist who evolved up to a Senior Developer or Tech Lead and hasn’t stopped there. The specialist constantly expands their knowledge base, which allows them to make successful tech-related decisions.
Communication and Leadership Skills
Leadership experience is as important for a CTO as hard skills and broad technical knowledge. You don’t expect a CTO to code but to know how to make your team write beautiful, easy-to-support code based on modern technologies that fit the product's objectives.
Project and Team Management Skills
A CTO is the one responsible for project development. That’s why the specialist must be excellent at project and time management. They should know how to allocate resources to achieve the desired results on time.
A CTO should have passion for your project. This burning flame will drive them to new achievements and help them to not give up even if everything goes wrong. Remember, they are the captain of your ship. That’s why they should be as enthusiastic about reaching the final destination as you are. Otherwise, you are investing in the living Titanic.
I am a CEO, and I Believe Myself to Be Proficient Enough in Technology to Take a CTO Role When Necessary. Let’s Save Money.
No, you won’t save any. It’s great that you have an understanding of IT and technology. It will greatly help your business. But don’t take your personal resources as never ending. You will have to pay for your involvement in development team meetings with your absence from other important meetings or tasks. Regular extra work may temporarily create an illusion that you can manage to combine two managerial positions at the same time. In reality, though, you will pay with reduced efficiency, lower decision-making quality, and inevitable burnout. You will become your company’s bottleneck, hindering its development and losing precious time.
Tech startups can’t do without a qualified CTO. It’s a specialist role with a wide range of responsibilities — from hiring a dev team to maintaining operational issues. That’s why you need a professional with a strong technical background along with managerial and communication skills. Finding a CTO is a critical business decision, so make sure you make the right decision.