What Does a CTO do in a Startup?

Start-ups love their TLA’s – Three Letter Acronyms, and having a CTO is no different.

If your CFO (Chief Financial Officer) looks after all things financial, CMO (Chief Marketing Office) is Marketing focus, a CTO’s focus is on all things technology. This is different to making technical decisions. A great CTO will take responsibility for the 3 main levels – the day to day, the short term (weeks or month) and ultimately longer term (months & years). They understand the business’ customers, their pain points, and the best way to use technology for the business to thrive and grow.

What makes a good start-up CTO

What is at stake?

Start-ups are different to a small business and very different to a large corporate. A big distinction is “time to execute”. That is, the length of time it takes to “get something done”. A common example I often give is, if you’re working in a corporate, and your project is late. Say you missed your deadline by 4 months. That wouldn’t look good, at worst there would be some serious restructuring. At best, there would be some self reflection and lessons learnt.

A Start-up just cannot afford that type of delay. If the situation was seriously that bad, you’d have a long hard look at your current staff and would reduce where possible. It possible you would reduce staff anywhere from 10% – 80%.

A good CTO understands what is at stake.

Know how to sell

Being comfortable and knowing how to sell is an essential skill of a CTO. Generally a senior developer / architect has minimal (if any) experience selling

Experience, not Qualifications

If you have two exact candidates, Qualifications are a way of separating one from another. Generally speaking they are of little relevance. For example, I’ve never seen a business ask for an MBA (Masters of Business)

Experience is far more valuable. Where have you done this before? What went well? What were the surprises?

What are the 4 main responsibilities of a CTO?

Represent the company

There are times when you are the face of the company. It might be in a meeting or presentation, it could be on a support forum or social media, or it could be via the telephone for customer support.

The CTO will take the responsibility for the situation and make it right. Offer a refund – maybe? Free training – possible? Upsell / cross sell – absolutely!

While you’ll never speak on behalf of the board or the CEO, you do have a strong understanding of their expectations and behaviours. If you aren’t prepared to take on this accountability, then you’re not ready (yet) to be a CTO.

Technical vision

Where are we today? Where are we tomorrow and where will we be in months / years time? The technical vision is knowing a clear direction on how the product / service is being developed, and how this meets the customers needs.

The last point is crucial and is often overlooked by developers & software architects. Rarely is it “the best” solution. More often, its the most effective that can be delivered on budget and on time.

Manage the team

Do you need a Web Developer? Designer? QA? Software Architect? Mobile Developer?

Developer vs QA

A great CTO understands what is required right now, and in the future. They understand what motivates a developer and how that is different to a QA / Tester.

What about a job / position description? Monitoring performance? Are your staff doing a great / poor job? How do you know? How do they know?

Its more than knowing what is expected. Its about how the team functions, how are issues raised & resolved.

Operations support

What if I told you - I have found a workaround?

A great CTO is the calm head in a storm. While you hope the impact is minimal, outages do happen. How do you respond?

Do you panic? Or are you calm? How do you communicate with stakeholders? Is it an email or a phone call?

The ability to quickly diagnose what is going on, what you’re going to do about it and how you communicate this is essential.

Product development / roadmap

Sometimes referred to as a Technical Product Manager, this aspect of the role is managing the output. What features are to be delivered this month / next month? What is the testing or QA process? How thorough (or not?) is the testing?

If the product road maps says feature XYZ will be available in Month XX, what if you were to add 2x developers? How (if at all) would that impact the timeline?

CEO / Marketing / Sales will pepper you with these sorts of questions continually. A great CTO is prepared and expecting these types of conversations

Challenges of a CTO

You’ll hear a lot of people talk about “hiring” or “managing” talent as as challenge. That hasn’t been my experience. If you are clear and transparent on what decisions you are making and why you’ve made them, most people may not like you – but they certainly will respect you.

If you need some tips on accountability and holding your team accountable, I have another article where I go into a lot more detail on Accountability and How to have an Accountability Conversation.

For me, I found the biggest challenge is to walk the fine line. Of course, you want to push out product / features as quick as possible, you want to delight, encourage and inspire your internal & external stakeholders.

But you can’t make everyone happy and more often than not, you’re going to make most people unhappy.

There are times where you need to be the bearer of bad news and tough questions. Is the product going to be late? Why? Why do you think you’ll be able to fix it? What is different now, than before?

How much does a CTO make?

Team size has a significant impact on salary. For start-ups, expect to pay about +20% more than your most senior architect / developer.

At the time of writing, if you’re paying <$130k for your CTO, you have a BARGIN!

CTO Course / Accreditation

There’s always someone trying to sell their training or accreditation. I’ve never EVER seen any value in this. The only exception is with the cloud providers. Being certified in Amazon and/or Azure can’t hurt. For more details see: Amazon Certification or Azure Certification.

How do you hire a great CTO for your bootstrapped start-up?

If your start-up is cash strapped, but you’re looking for a CTO, here’s a few tips:

Be really clear – what’s in it for them?

Sure you have an AMAZING idea! And its going to transform the world – right? So why should someone work for you? What’s your offer?

You can phrase it another way – Say I agree to work with you. And I’m looking for the base line – $130,000. When will I get paid?

Consider all options

This one is often overlooked. Would part time / casual / contract work? What about a mixture of part cash and part equity?

What happens if things go pear-shaped?

Failing to plan is planning to fail
I’m pretty sure Benjamin Franklin was the first to say this, but you get the idea…

Of course you hope things go well. Of course we all want success. But what if they don’t?

Who gets what?

Do you own everything? Is it split 50/50? The answer doesn’t really matter, but have the conversation up front.

And then what?

Again, I have seen this many times. At least initially, you have a huge body of work to do. In 6 / 9 / 12 months time, hopefully this has been completed. And then what? Are they out of a job? Has the team grown significantly?

If you expect your CTO to have honest, real conversations with the team, you need to be prepared to have the same level of honesty with YOUR team.


Christian Payne is a technologist and entrepreneur with a passion for innovation. He has over 20 years of experience in engineering and product development across enterprise and consumer sectors. He has experience at both small start-ups and enterprise level generating +$2M per month. When he's not hard at work on his latest project, he spends his time involved in Men’s Support Groups, Leadership training and Mentoring.

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