Does Your Startup Really Need A CTO?

The answer is muddled, especially if you don’t know what a CTO really does…

Having C-level executive titles in your early growth startup can feel pretty great. Yep, we have a CEO CIO, COO and even a CTO. We’ve got all the three letter acronyms you can think of! It might feel special but is it really true? Is your CTO really fulfilling the duties of a CTO or is it a flashy title? Don’t have a CTO? Thinking of finding someone? Do you even know really what to get?

What Exactly Is A Chief Technical Officer?

According to Investopedia, “A chief technology officer (CTO) is the executive in charge of an organization’s technological needs as well as its research and development (R&D). Also known as a chief technical officer, this individual examines the short- and long-term needs of an organization and utilizes capital to make investments designed to help the organization reach its objectives.”

The other thing to note about this role is that the level of thought and action this individual takes also depends on the size and maturity of the organization. For example, if a business is just forming, the CTO might decide what technical vendors to choose for computers, the website, their cloud vendor, etc. If a business is a mature multi-million dollar powerhouse, the CTO might decide what partners to do business with based on a long term five year product projection plan.

Ultimately, it’s the Chief Technical Officer’s job to make the technical decisions that will fulfill the short-term needs of an organization as well as fulfill the needs of an ideal future. The decisions will drive policies and procedures for an organization’s R&D (Research and Development) as well as the technical platforms, tools and procedures used throughout the rest of the organization.

A mature organization may have many technical objectives going on in parallel. There could be multiple R&D projects, new partnerships to define and many long-term goals to keep track of. As such, the Chief Technology Officer will have plenty to do daily.

What A CTO Is Not

You’ve started building the next big social network and you’ve got your best friend with you in your garage. He’s huddled in the corner, programming the initial version of the product. He’s pulling all-nighters to scramble and makes product decisions on his own. He might work with a handful of other developer who are either hired or outsourced contractors.

Sorry, but your friend is not the CTO. And you’re doing him a disservice if you’ve given him that title.

A Chief Technical Officer is not an implementer. She decides the tools, the platform, the procedures that will be used by teams. She’ll evaluate the short-term and long-term milestones a business needs to hit and determine the resources needed to get there from a technical perspective. The CTO plans for the outcome and manages their team members on execution.

Your friend is executing. And right now, it sounds like your friend is executing without a plan and just winging it on a daily basis. However, your friend can be groomed into a great Director or VP of Engineering, a person who oversees daily technology work and takes strategic advice from an experienced technology leader. That’s where your CTO comes in.

So Do You Need A CTO Or Not?

Any startup in early stage launch or growth mode needs a technical foundation and plan. These organizations often require a technical leader to:

1. Evaluate technology platforms, teams and their processes and, if needed, implement necessary changes
2. Identify an appropriate technology architecture that aligns with business strategy
3. Hire the technical management team which can include a VP of Engineering
4. Allocate budgets for technical solutions across the organization
5. Determine the appropriate information security policies and procedures that the organization needs to follow (if the organization does not have a dedicated Security Officer)
6. Orchestrate the R&D management teams to create and improve on product

There’s other tasks that can be assigned to the CTO but the question really boils down to if it’s a full-time position or not. Usually, having a Technical Advisor or part-time CTO consultant is enough to satisfy the decision making that needs to happen when an organization is still in it’s infancy.

The average salary of a CTO reported in 2020 by PayScale is $159,000. That can be a significant cost to hire. You might consider going over the appropriate CTO tasks with your founders and see if someone in the team can satisfy these requirements. However, a great CTO is an experienced CTO. The value a Chief Technical Officer brings to the table is from their past experiences and their exposure in the industry. They can make decisions based on their past experiences. If your founding team doesn’t have experience in the tasks of a Chief Technical Officer, it’s incredibly risky to have someone learn as they go.

What Other Options Do I Have?

As mentioned, your friend would benefit greatly from having periodic advice from an experienced technologist. As your organization is forming or growing, it’s imperative to have consistent review and planning that is influenced by someone who has the experience and the objectives of the organization in mind. You can absolutely find this in a Technical Advisor or a CTO consultant.

A Technical Advisor would provide periodic check-ins with the management team to listen to current objectives and provide guidance. They may or not may not make the decisions but help to direct the organization on how to make the best technical decisions needed for their organization. In fact, sometimes if an organization has a Chief Technical Officer, they may still have a Technical Advisor to provide additional support and guidance.

For example, my typical engagement as a Technical Advisor requires my client company to meet with me for two hours a week. During that time we go over immediate needs and there will most likely be action items and homework planned. These are focused on guiding the client on making the best technical decisions on their own through learned processes and resources. In early stage startups, I’ll assist in guidance when it comes to creating the initial technical foundation architecture and development decisions and might even assist in the initial technical hiring. If you’re interested in talking to me about such an engagement, you can always book a time to talk to me about your needs.

For organizations that might need more involvement, a fractional CTO might be suitable. This is an individual that may be involved as much as ten to twenty hours a week and cost a fraction of the price of a full time CTO. This might be needed when your organization starts to have a fair amount of people and more high level management and orchestration is needed. I usually see this need in organizations that are past launch mode and are now growing and incorporating more people into their teams.

Want my advice? First bring on a Technical Advisor. The Technical Advisor will help your pre-launch startup make smart technical decisions to give you a strong foundation. As you begin to grow, the Technical Advisor can help you determine if you need to bring on someone with the duties of a Chief Technical Officer on a part-time or full-time level.

You’ve got this.