When Your Startup Should Hire a CTO (and When You Shouldn’t)

Here is the good news for all the non-technical founders and leaders out there: not every software startup needs a Chief Technology Officer from day one (or even day 500).  And let’s be honest, unless the CTO is part of the founding team, a qualified CTO – aka a person who can lead a team of 50+ engineers and has done so already – will not want to be the CTO of a startup with a handful of engineers on the payroll and thus you probably can’t recruit her anyway.

This then begs the all-important question of when you know the time is right to hire a CTO.

Answering that question depends on the product you are selling and the environment in which you operate.  Here are the three main scenarios to consider:

1). If You Are a B2B (Business to Business) Company With a Highly Technical Product…

…then hire a CTO early in the company’s lifecycle.  This is because products that are highly technical (like an enterprise software platform) are usually sold to a customer’s CIO or CTO; as  a result, every major customer deal will need a technical heavyweight at the executive level that can sell the technical vision of your company to customers and explain to them how your tech fits into their existing ecosystem of products (of which there are usually many).

Or said another way, the primary job of a CTO at this type of startup is really to be the Chief Technical Sales Officer and act as the “CIO Whisperer”: assure the customer CIO/CTO that the tech works, it can scale, and that a technical executive is a phone call away at all times.  And even if you don’t have a ton of engineers for the CTO to manage at this stage, you will likely still be able to recruit someone for this role since they will be attracted by the chance to make a huge impact on the financial growth of the company.

2). If You Are a B2C (Business to Consumer) Company That Is Explosively Scaling Out of the Gates…

…then also look to hire a CTO relatively early in the journey.  (And P.S. if you are scaling aggressively from the start due to insatiable demand for your product then stop reading this article and go buy a lottery ticket since fortune is smiling upon you.)  The reason for the early hire is that the primary job of a CTO at this type of company is really to be the Chief Technical Scalability Officer: she has to figure out how to quickly support millions – and then billions – of users with 99.99% uptime and no loss of fidelity.  More junior folks are unlikely to have the experience or knowledge needed to be able to put the right people and processes in place to effectively handle this type of exponential growth.

3). If You Are a B2B or B2C Company That Is Neither of the Above (Which Is Most of Us!)…

…only bring on a CTO when you need to manage a larger team.  Here’s the typical playbook for growing the team organically from the ground up:

  • After a handful of developers are hired, start with a tech lead for the team and give this person the chance to exhibit their management abilities.
  • As you add another team due to your continued growth, bring on another tech lead and provide her with the same opportunity to shine.
  • Once you reach about three teams, add a director level position to oversee the tech leads.
  • At roughly four or more teams, now is the time to bring on a CTO to oversee the growth and solidify internal processes.

By the way, if you aren’t sure how to hire that person, bring on an advisor who will help interview for that role (it’s well worth the money).

So in sum, CTOs are an invaluable part of any great software company but – just like Roger Federer’s backhand – timing is everything.  Bringing on a CTO for a team that won’t scale fast could be a waste of valuable resources and invite internal turmoil, but bringing on a CTO for all the right reasons usually battle-hardens your platform and adds jet fuel to your growth.

Need more information about CTOs and how to scale teams effectively?  We are always here to help at info@turnkey-labs.com –drop us a line!

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