According to Business Insider, 87% of the unicorn—$1 billion-worth—startups focus on software. We have Uber, Instagram, Amazon, Twitter, Airbnb, and tons of other successes. They all are digital products.
Now, what if you also have a billion-worth idea of a future software startup but lack tech skills? There are two options: find a tech co-founder or a CTO.
But finding a co-founder takes time and a decent amount of technical co-founder equity (up to 50%) you may not want to share.
The way out? Take a closer look at CTOs—people responsible for translating a business vision into a tech solution.
In this guide, I’m explaining how a good CTO can help your software startup and when it’s the right time to look for them. And review a few popular hiring options (and hiring costs!).
Table of Contents
What Is a Startup CTO Responsible For?
Let’s talk about Uber.
The company wouldn’t be that successful if it didn’t solve long-standing user problems like long waiting times and high prices. Uber made it possible by using a ton of smart algorithms in their apps. These algorithms connect drivers with riders, calculate the price, and even future demand for drivers.
If you have no superior tech background, building an app that complex would be too hard. And Uber was a pioneer.
A few more examples:
A CTO is not just a senior programmer with 5+ years of experience. These people have a combination of a tech and business background. They know how to build and manage a team, which strategy to choose for development, and how to put efficient programming processes in place.
What skills should a good CTO have? They often include:
- Know all nuances of the software development process
- Have fantastic programming and QA skills
- As well as project/team management skills
- Communication, mentorship, and leadership skills
Here’s what a startup CTO can be responsible for:
#1. Control Minimal Viable Product (MVP) Development
An MVP includes only must-have features that solve users’ problems. If you’re making a photo-editing app, features like ‘Upload a photo,’ ‘Crop and rotate,’ or various filters are much-haves.
That is done to test the market without spending a ton on the initial product when nobody knows how things will turn out.
If the MVP turns out to be successful, other features are developed after getting the user feedback.
When working on an MVP, CTOs make critical decisions about the technologies and control the development process. Sometimes they even take the role of a programmer, filling the staff gap. That’s why your CTO should be one hell of a programmer.
#2. Manage the Development Team
Recruitment, onboarding, and staff management can be more challenging than it seems. It’s the CTO’s job to establish good hiring, interview candidates, make sure they’re good enough to work for your startup. And ensure that the mentoring process in your company works the way it should.
#3. Take the Role of a QA Department
A few or at least one quality assurance engineer is a dream that came true for a startup. Usually, it doesn’t as the founders don’t have enough resources to spend on a QA team.
That’s why testing and bug-fixing sometimes falls on the CTO’s shoulders and the shoulders of their developers.
#4. Handle DevOps Tasks
If QA engineers are rare in startups, DevOps are unicorns. CTO’s take care of all DevOps tasks until the startup can afford dedicated specialists.
The pool of tasks is usually connected with domain names management, SSL, configuring servers, and maintaining databases.
When Is the Right Time to Hire a CTO?
In a perfect world, you launch a startup together with a tech co-founder. But people with business and tech backgrounds often have other things to do. Like create their own startup or work somewhere in Google and get an excellent salary.
So if you’re not living in a perfect world, here are four main scenarios when you should consider finding a CTO for your startup:
There’s a Huge Pile of Unsolved Tech Tasks
Looks like you’ve taken on more than you can carry. Or some unforeseen circumstances led to all these problems.
Hiring a CTO may be a good option here. They’ll help you solve tasks and unload the staff by organizing a more effective workflow or a faster hiring process.
You’re Going Through a Global Tech Upgrade
There will be this moment when you realize that outdated tech stack or solutions show your company down. For example, you want to migrate your iOS app from Objective-C to more up-to-date Swift. Or you move a desktop solution to the web to make it more accessible.
An experienced CTO will help you with migrating the existing product to up-to-date solutions without data losses.
Your Development Team Need a Strong Leader
CTO not only manages developers and coordinates the work of different offices. It’s a person who has a clear vision of the product’s development process.
Sometimes the clear long-term vision is something that a startup doesn’t have, but stakeholders would love to see.
How do you hire a good CTO? There are a few ways to motivate them to work on your startup:
- Offer equity. Not every CTO will work for equity in a no-name startup. Your ideas should be very detailed and really promising to catch their attention, and you’d better offer them some money—at least enough to cover the rent and groceries.
- Offer salary. In this case, you should have enough money to cover the average CTO’s salary in your country. In the US, for example, it’s about ~$165,164 per year.
- Launch a startup without a CTO. You need to gather an outstanding development team to make it work. This path is slippery, especially if you have no tech background to manage the team properly.
If you can’t afford a CTO for now, try to launch your startup anyway. When it comes to startups, time matters: if you don’t release a feature today, some other company may present a similar solution tomorrow.
If you have long-time plans, a solid idea, and a few users willing to pay you, it’s better to start sooner than not.
Where to Look for a CTO? (Costs Included!)
Here I’m focusing on three popular options and the pros & cons of each:
Let’s start with freelancers.
These days hiring all kinds of IT freelancers is a common practice. For example, on Upwork or Fiverr you’ll find everyone you need:
- iOS/Android devs
- Front-end and back-end web devs
- QA engineers
- UI/UX designers
- DevOps, etc.
The rates are much lower compared to in-house teams or outsourced staff. The question is, “Is it a good idea to hire a freelancer for such a high-level position?”
Cooperating with the CTO requires a long-time perspective, while freelancers often work on a few projects simultaneously.
Of course, it makes sense if you’re working with this freelancer for a few years and know they’re dedicated to your project. Or if they worked with your acquaintances and you can ask them for references.
Another drawback is that it’s hard to test freelancer’s skills if you’re a non-tech person. Then should consider hiring a tech consultant for the interview.
Outsourcing is a combination of more or less sufficient reliability and affordable prices. Plus, you get lots of options as you can hire a CTO from any country or company that provides this service.
If you’re lucky (or spent a fair amount of time researching and interviewing), you can get an excellent value for less money.
It’s a more convenient option compared to looking for a freelancer with decent tech & business skills. You just need to pick the company that provides CTO as a service.
In case you don’t want the world to know which company gives you a hand with tech-related tasks, you can sign NDA and cooperation agreement. Most vendors offer that from the very beginning.
As for the drawbacks, make sure your CTO speaks English well and knows how to deal with time zones. Or your startup will get stuck because of endless meetings arrangement.
Probably the best option, but only in case you have enough money to afford a cool specialist- for example, when your product already brings stable income and you want to expand it.
That’s it! There are enough options to find and hire a CTO: the cheapest one is probably working with a freelancer. The most reliable ones? Outsourced or in-house CTOs.
One more tip: as you’re focusing on software startups, some tech knowledge is still required.
You may not know how to write apps in Kotlin or dive deep into the ReactJS framework. But at least you should know how the software development process goes, what your app or website is made of, and so on.
That’ll make it easier to pitch your vision to investors, even you do have a CTO around.
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