5 Things Entrepreneurs, Investors, and Recruiters Should Know About CTOs
I have been in the CTO position for about ten years.
By now, I have a pretty clear understanding of what a CTO is, what makes a CTO successful, and what doesn’t.
However, even now, I notice that this role is one of the most misunderstood in the field of technology.
To some extent, this may be due to the emergence of so-called “startup CTOs”, positions that seem to have been introduced by venture capitalists and actually represent a technical leader for startups in the early stages.
Let’s try to clear things up by answering five of the most frequently asked questions about the role of a CTO.
1. What is the main task of a CTO?
Short answer:
The primary job of a CTO is to ensure that a company’s technology strategy serves its business strategy. – Eric Ries.
Long answer:
Clearly, CTO is a role in business, even though it is at the intersection of business and technology.
This is an important point, so let’s do a thorough analysis of the goals a CTO should pursue:
Business goals
Aligning technology and business strategy by being an intermediary between business and development.
Increase economic efficiency by predicting several years ahead, taking into account the total cost of ownership (TCO).
Reducing employee turnover by creating and maintaining a technical culture in which everyone can fulfill themselves. While it could be argued that this is the responsibility of the line managers, a closer look reveals that the reasons people leave can range from getting a better offer to being frustrated with outdated technology, technical debt, lack of vision, etc. This is where a good CTO can Slowly make necessary improvements that are valued by the team. In cases where previously they may have felt misunderstood or interrupted.
Development of intellectual property and value creation. The CTO should always think about value growth. This will lead to more informed decision making, adequate use of outsourcing (you don’t create intellectual property if all technical tasks are outsourced).
Finding an 80/20 balance. Find a balance between what the business needs and what requires the most effort to achieve the best result for the company.
Technological goals
Responsible for making technological decisions, including architectural, development or outsourcing decisions, etc.
Continuous improvement of technologies, development processes, tools and infrastructure.
Creation and support of innovation culture. Keep up with new technologies that can be useful to the organization.
Assistance in the recruitment of technical staff.
Control over the total cost of ownership (Total Cost of Ownership, TCO).
Software management: compliance, security, technical debt control, etc.
2. Can a CTO act as an operations manager?
Short answer: no.
Long answer:
It is important to note that the CTO’s role is 100% strategic. Looking at the above goals, it can be clearly seen that none of them can be achieved from the position of an operations manager: you cannot see the forest for the trees.
As a CTO, you don’t work within established boundaries because your job is to learn and push those boundaries.
Engineering managers, as well as heads of development departments, are operational heads. As a CTO, you may come up with ideas that may conflict with their operational goals. This is absolutely normal, since you, as a CTO, are watching from the sidelines, looking for what can be improved. The friction caused by these conflicting positions is natural and should lead to healthy discussions.
Now you also understand why a CTO can’t take on operational management tasks: a conflict of interest.
3. Should CTOs write code?
Short answer: Yes, but only PoC (Proof of Concept) and prototypes.
Long answer:
Usually the CTO does not do development. Instead, he develops a strategy in which development can flourish.
Obviously, tech leaders need to have a technology background. In fact, having experience as a lead developer and architect gives you a huge advantage as a CTO.
This helps you get along with the developers.
This allows you to read their code and demonstrate best practices.
This allows you to quickly create concepts (PoC) and prototypes to show the direction of development when introducing new technologies or services.
While the CTO can sometimes write code (and probably still does it well), why shouldn’t they do development?
Do you want an answer? Hold Five:
Operational goals conflict with strategic ones. We have already seen this. Operations always wins because of commercial pressure. If the CTO is actively involved in programming, this will inevitably lead to the fact that he will have to neglect the strategy.
The task immersion that many experienced developers feel is counter to strategic thinking. It occupies your brain, at the expense of losing the sense of time and interest in other aspects. Relationships can suffer because of this. Good strategic decision making, unconventional thinking, the ability to see things in perspective are all lost when we are immersed in a task.
Being a top manager and being a developer colleague at the same time is an unhealthy situation due to conflicts of interest.
It is extremely costly for a CTO to complete development. The reality is that the last 10% of software development efforts take up 90% of the time.
A sustainable growth strategy is about letting development teams develop, rather than doing it yourself.
4. Can a developer grow to CTO?
Short answer: yes, but he must be prepared for a sudden change in activity.
Long answer:
In fact, I personally believe that developers and architects cannot easily move into the role of CTO in the same company. This has less to do with their potential for growth than with the dynamics of teams, especially small ones. Many times I’ve seen the consequences when “one of the guys” got promoted and suddenly got more responsibility. People are people, what can I say…
In my personal experience, it is extremely important for the CTO to stop being part of the operational side. Experienced developers are extremely important in a busy development environment, so there is a big gap both for the company and for the person who leaves this role. I personally know people who were not ready for such a change at the time of their promotion.
In the end: everyone is unhappy!
Again based on my experience, it is best to start with a new company (or as a consultant).
CTO is a strategic business role. Seeing the business perspective is very different from diving into development.
On top of that, there are so many things a CTO needs to know about (and be responsible for) that many developers find boring: ISO certification, GDPR requirements, salaries, security, cloud costs, etc. Be careful with your wishes…
5. Do startups need CTOs?
Short answer: yes, but not always.
Long answer:
One of the dangers for many startups is that they get carried away with operational work. The entire startup model is based on improvisation and the use of emerging opportunities, and there is almost always a lack of experience in technology and strategy.
It would help them to have an experienced CTO. A person who has repeatedly created SaaS products, is familiar with modern cloud practices, is able to form teams and optimize development processes, etc.
And who pays attention to the strategy that goes beyond the release.
However, there are two big problems:
Budget: Startups usually don’t have the money to afford an experienced leader, and giving away some equity to cut costs is not the right move until the value of the project is proven. As a result: CTOs are rarely available, even for late-stage startups.
Scarcity: Experienced CTOs are among the most hard-to-find talent pools. Ask any recruiter or talent hunter who has tried to find such talent.
It was only a matter of time before these real problems led to the emergence of the part-time consultant role: experienced CTOs, who have worked in many start-ups and large-scale projects, help out on an advisory basis.
Some people will say that you should never hire an outside consultant as your CTO.
I understand their point of view. I am well aware of what it means to have a consultant for what is said to be the second most important role in the company (after the CEO). In addition, it is desirable to have someone who invests himself in the company completely.
Of course, I cannot speak for all consultants, but I have a set of rules that I follow when providing my services:
I make it clear that I am a temporary solution to fill the gap.
I encourage learning from my experience showing what a CTO should do.
I’m always trying to help people see a broader perspective, help businesses understand technology, and help tech people understand business.
I keep a record of every step, so the inevitable handover includes a full log of what I did and why.
I don’t usually accept a mandate. This means that I have to get approval from all stakeholders for every decision I make. It takes longer, but pays off in terms of transparency (and encourages learning).
If necessary, I help in the selection of a permanent CTO. Most of the time, being already a “semi-in-house” employee, I know what type of CTO is best suited.
