A Chief Technology Officer (CTO) is essential for startup, offering technical expertise, strategic vision, and innovation, guiding product development and hiring and overseeing technical teams.
In simple terms, without a good CTO, a company can struggle to grow.
Finding the right fit can be a challenging task in early-stage startups – where the product-market fit may not yet be proven, and financial stability uncertain. Couple this with limited resources and tech’s current talent shortage, tapping into the CTO-aaS landscape can offer up a host of advantages. This is particularly true for startups with non-technical founders like Snapchat, YouTube, and Lyft who successfully utilised CTO-aaS to stay ahead of the innovation curve.
To understand if CTO-aaS aligns with your early stage startup’s unique needs and goals, you need to consider the pros and cons.
Benefits of CTO-aaS
● Time to market
The speed at which you can access technical leadership is often
much quicker than the time required to hire a permanent CTO, allowing you to move fast and seize market opportunities.
● Variety of choices
Opting for CTO-aaS offers a broader pool of candidates to
choose from. This variety can help you find a CTO with the specific expertise and skills that align with your immediate startup’s needs.
● Cost savings
If executed correctly, it can result in substantial cost savings,
particularly when addressing immediate technical needs. And you can avoid the expenses associated with a permanent hire, which as well as salary, often include benefits and equity.
● Alignment with strategy
CTO-aaS can align well with your startup’s strategy, especially if you have a clear understanding of why and for how long you require this
technical expertise. It offers flexibility in adapting to changing business needs.
● Support for product ownership
For startups where the ‘product ownership’ team
remains an integral part of the company’s core functions, it can be a great option, providing guidance while maintaining control over the product.
Disadvantages of a CTO-aaS
● Less passion
CTO-aaS may not always deliver the same level of passionate
commitment, emotional attachment and dedication that you would expect from a permanent CTO or your very own cofounder in the role.
● You can’t “outsource” your startup’s primary function
If your startup’s core revolves around unique technology that is integral to your value proposition, outsourcing this function to a CTO-aaS may not be a sustainable choice. Core technology functions should remain in-house for greater control and innovation.
● Potential effect on long-term strategy
If your startup succeeds and grows, there will likely come a point where you need a permanent CTO to provide ongoing strategic leadership. Relying on CTO-aaS for an extended period can delay this
crucial decision, potentially affecting long-term strategy and stability.
Is CTO-aaS the right choice for you?
In order to identify if and when CTO-aaS aligns with a business’ needs and goals, there are two key considerations:
First, what is the precise issue the startup is encountering? Is it a lack of technical management, a lack of vision, or a risk of having to re-engineer the product in the near future (for example in 6-12 months)? Defining the problem is crucial because it directly influences the range of potential solutions, of which CTO-aaS is just one among many.
Next, it’s important to recognise that the ‘one size fits all’ approach doesn’t work in talent management, especially when it comes to addressing tech-related challenges in a startup.
Each startup has a unique set of problems, and the appropriateness of CTO-aaS depends on the specific problem at hand.
Choosing the right CTO-aaS provider
Once your startup’s situation and needs are clearly defined, it’s time to research vendors; what CTO-aaS might give you, and under what terms.
Selecting your CTO
As well as looking at speed of implementation, potential risks, and associated costs, it’s crucial that the CTO-aaS provider is a personal fit
for the startup. While they may be an external resource, culture and values should align. Startups often face unexpected challenges, so the chosen provider must also demonstrate an ability to adapt to both current issues and those likely to arise in the future.
It’s also a good idea to prioritise your startup’s issues – based on timings – and then communicate this problem list with shortlisted CTO-aaS vendors. By challenging them to answer how they would address your problems, you can then make a choice based on their
proposed solutions, expertise, and alignment with your startup’s goals.
Implementing your CTO-aaS
Once you’ve made your decision, the following step-by-step approach will help you integrate CTO-aaS into your startup’s strategy effectively:
Step 1: Ensure you have well-defined targets and adherence to deadlines
Even if their role primarily involves supervising the team, this activity should have specific targets, such as team velocity or aligning team growth with the startup’s business goals.
Step 2: Openly discuss your onboarding expectations, concerns, and any perceived risks
Share your plans and hopes for the collaboration, emphasising how it will contribute to the startup’s growth and innovation.
Step 3: Have the chosen vendor develop a role integration plan
Trust their expertise, as they likely have executed similar processes multiple times in the past, and adapt this plan to your startup’s specific needs.
Step 4: Adjust the integration plan based on stakeholder feedback
Ensure that the plan aligns with the company’s overall goals and strategies.
Step 5: Include early deliverables in the integration plan
These deliverables serve as tangible indicators to validate the correctness of your choice and the vendor’s ability to address the startup’s challenges effectively.
Step 6: Gradually increase the scale of the deliverables.
Hand over more responsibilities to the vendor, allowing them to take on a more substantial role in addressing your startup’s technical challenges.
Step 7. Regularly assess progress and results
Don’t hesitate to challenge the vendor. Unlike an employee, a vendor’s role is to solve problems, and you should ensure that they are effectively doing so, seeking improvement where necessary.
Step 8. Clearly define how the collaboration may end
This should cover both positive and negative reasons. Establish mutual obligations and exit strategies, ensuring that the startup’s interests are protected.
Whether you’re considering, selecting, integrating or exiting a CTO-aaS arrangement, ensure effective communication and collaboration throughout. While it’s not a one-size-fits-all solution, with open lines and careful consideration of challenges and goals, CTO-aaS can be a highly valuable resource, accelerating growth and innovation in the fast-moving world of startups.
As the Founder and CEO of Mobilunity, Cyril is passionate about people, discovery and innovation. He has dedicated his career to creating innovative products, providing high level software development, and building professional teams that specialize in providing customers with the tools they need to be successful.