When cto and ceo leave the startup

CTO of my company is leaving and I've been proposed to replace him.

I've been in this company for a year, I think I have the technical and team management background to handle the job. The CEO and myself have a good, friendly and transparent relationship. But I've spent the past 10 years working for traditional companies and I have a lack of knowledge in business management. Still I'm willing to learn!

They raised a seed round last year.

I don't know what's the best way to get started the discussion, what questions ask, how much equity ask, should I bring cash to the table, what are the risks joining a startup at this stage.

Any tips, suggestions or even books/articles/blogs to decide whether or not it's a good idea to start this adventure?

When building a startup, you have many options for software development. Whether you hire a team of developers, outsource to an agency, or find a CTO. 

While all of these options are viable, if you find a CTO with the right tech expertise, you’ll have gained a key player to help you succeed. But remember, if you pick the wrong CTO you won’t survive long – you may not even make it to launch.

I bet you keep hearing that “Finding your dream CTO is not easy”. It’s true; it takes a lot of time and commitment. That’s why many founders spend years looking for the perfect person for the job, myself included. 

When I first started founding startups, I experienced the hurdles of finding a CTO first-hand. Over the last 14 years, I have built many projects. It took me more than 30 months and more than 300 headaches before I found the right guy for the job.

But when I found him, he nailed it. And he kept on nailing it. 

Usually, the conflict is: You want to start building your MVP as soon as possible, so you might feel tempted to commit to the first decent option you find. On the other hand, you know this is one of the most crucial decisions you will make as a non-tech founder.

There are certain traits to look out for as you try to find a CTO. Many wannabe CTOs will display the same characteristics. This includes overpromising and underdelivering on a massive scale – but more on that later. 

I’ve taken my experience building six startups, advising dozens and working with many startup founders at Altar.io, and identified the vital qualities every CTO should embody.

But first, I want to give you a quick overview of the responsibilities of a Startup CTO: 

Your CTO will lead the development department of your startup. They will set the technical direction for your product development – from creating a strategic plan to identifying the tools needed to execute that plan. 

As your startup grows, your CTO will continue this process. They will be looking ahead, keeping up to date with tech trends in your industry to adapt your startup’s technical direction to stay at the cutting edge. 

They may also code in the early stages of your startup, but it’s important to point out that a CTO is much more than a developer.

Therefore, before we get to the list, it’s important to point out that all of these qualities are vital. The fact is, your Robin needs to have it all, not a few or most, all.

What To Look For In A CTO

Passion

Your Robin should be more passionate about your idea than you are – or at least come a close second. 

To be sure you’ve found your CTO remember: Passion is an essential trait highly correlated with the tenacity needed to traverse the dark alleys of the startup journey. Every startup faces hurdles. Unless you find a CTO that has a passion for your company; during the storms, you will be navigating the challenges alone. 

Before I move on, it’s essential to understand the market dynamics. We are currently in reversed HR dynamics as it pertains to finding CTOs and developers: the talent picks the company – not the other way round. This is due to more demand than supply. For example, last year for every five developer job postings, only one was filled.

So, if you find a CTO who’s good at what they do, chances are they’re already in a job, earning well. 

For example, a typical CTO salary in the US is between $204,957 and $285,891 per annum (as of April 2020 – before bonuses & benefits). 

Given this, you get my perspective when I say:

Your CTO will most likely be taking a considerable salary; working on a project they enjoy. You will be asking them to drop all of that for your early-stage idea. It’s what you have to do. But there is no way they’re going to give up a lucrative job for your startup unless they’re genuinely passionate about your idea, I mean obsessed-passionate (otherwise they’re just crazy or faking it). 

It’s even harder to find someone at the right time who will drop their lucrative position and work just for sweat equity, no salary. As this founder experienced first-hand: 

I spent six months trying to find a technical co-founder. The closest I got was Tom. He wasn’t a CTO but had the 5 years of experience I was told a co-founder needed. He was very busy, when I asked him to leave his job if I secured investment, he had second thoughts. Whilst he wasn’t a CTO on $244k, even the average developer salaries often are too good to give up!

Dudley Gould

Founder & CEO Audapio

My advice: 

• Be sceptical about a seemingly good candidate that doesn’t put up a good struggle to leave his position and join your crew – he may be overstating his worth. 
• Be prepared that it’s going to take time to find a CTO with this level of passion; the odds are slim, but not impossible.

Responsibility

Passion is great but can make people blind. Make sure Robin is still sober enough to make responsible decisions.

With great power comes great responsibility. It’s important to find a CTO that is a responsible professional before onboarding them as your partner in crime. 

Test your potential CTO by asking for a simple deliverable. It should be something not too complicated, and you should give them a feasible time frame (again, if you are not sure on this ask an unbiased techie friend). It could be a piece of a technical challenge, but it could as well be a roadmap, budget estimate, etc.

If they don’t deliver, it’s a huge red flag. It brings into question the trust you can give them with your business – from both a responsibility and commitment perspective.

Tech Expertise

Make sure you’re talking to a real Robin; you may find an inexperienced guy behind that mask.

You will find many wannabe CTOs. Your CTO must have the depth of knowledge to make the right technical decisions for your startup. This requires evaluation. Of course, if you don’t have a technical background, you think, “Ok, but how do I evaluate the tech expertise”, don’t worry I have a precise way to deal with that (which I will go into later).  

Remember the importance of this point: if your CTO lacks expertise, it can lead to bleeding ‘technical debt’ – such as incorrect or substandard code and unwise technology choices – to name but two.

You should find a CTO who is, at the very least, as good at their job as you are at yours. You should be equals, working in different disciplines, towards the same goal.

Study your potential CTO’s portfolio and ask an unbiased expert (who is exempt from your search) to validate the quality of their previous work.

Benchmark: Ask your candidate to elaborate their tech rationale on technologies, architecture and infrastructure. Alongside this, ask a software development agency to do the same thing. Some agencies will give you their insights on which technologies, architecture and infrastructure you should follow at a lead stage – without any cost.

Commitment 

Can you imagine a part-time Robin? Me neither!

You and your CTO will face many hurdles together on the road to success; if they don’t fully commit, your success will get further and further out of reach.

As I’ve talked about in a previous article, there is nothing worse than “getting married” to a CTO or technical co-founder who’s not fully committed. You will end up living in the “mistress syndrome”.  This occurs when your CTO has another full-time job and ends up treating you and your startup as a “side-gig”. This will result in you committing to your company more than them – creating an imbalance in your relationship that is harmful. 

You should find a CTO that is prepared to commit as much as you.

You should coordinate with your CTO and make sure you agree on the business’ milestones: The deadlines on the creation and delivery of your MVP, product iterations, etc. It’s essential to reach common ground before you plan the wedding!

Communication & Alignment

You and your Robin should agree on a plan before taking justice to the streets; you don’t want to face the Joker unprepared.

You will spend many hours working directly with your CTO. So it’s crucial that you first like the person you onboard. 

It’s important that you share similar values and you are able to trust this person with your money, ideas & business. It really will become a “business marriage”. 

None of this is possible unless the CTO you onboard is communicative. More than hard technical skills, they need to have the soft skills required to communicate easily with both technical and non-technical people on your team. 

If you think you’ve found a CTO you can be open and communicative with, the next step is to align your expectations. 

You should agree on: 

• Product & company roadmap
• Co-founder equity split & salaries 
• Work culture

You will both be responsible for balancing the needs of the business, technology and even product; now and as your team grows. Therefore the overall paths you both envision for your startup have to coexist. By no means will you agree on everything 100% of the time, which is why it’s essential to have those lines of communication open.

Conversely, you don’t want someone who “sweats the small stuff”; when you and your CTO discuss every minute detail. I like to call this an “atomic relationship”. In my experience, it will result in using all of your energy and time discussing the wrong topics, taking attention from those that do. 

Related: 7 Traits to Consider if You Want to Find the Perfect Co-founder

Discuss all the mentioned points (Product/Company roadmap, Equity split & salaries and Work culture) before you make any kind of commitment.

As in any relationship, be ready to discuss contentious points and, at times, prepare to compromise. Don’t waste your time with someone who gets stuck in unnecessary details. As much as we would all like to admit, myself included, that energy is infinite, it is not.

From the product and business reasoning to streamlining your MVP to the most important features, our team of product experts and ex-startup founders can help you bring your vision to life.

LET'S TALK

Leadership Skills

It’s important that Robin leaves the Batcave and can assemble a league of citizens to help clean up Gotham.

There are many archetypes of developers, and a few stereotypes to boot. One of the most popular being that they share a disposition for sitting alone in their “cave” accompanied exclusively by seven monitors, a coffee machine, half a dozen red bull and very little light. 

For developers, these archetypes are ok; your CTO, however, is a different thing entirely. You need to find a CTO that can strategically build, grow and lead the technical team in-line with the company’s goals. 

Excellent leadership skills are vital if they’re going to inspire and motivate your technical team. You could have the best technical talent on the planet but, as with most things, if the leadership isn’t there, the team will be ineffective.

Keep in mind that great developers don’t always make great CTOs. There is a famous occurrence in IT teams where, through promotion, you lose a great developer and gain an awful boss.

You need to know if your potential partner has the soft skills to be a great leader. 

Ask them about the skills they want in their team. If they only reply with hard skills and machine-related soft skills, treat it as a red flag. Someone that only looks at hard skills will never be a good leader. The right leader knows that:

• People are at the centre.
• Healthy communication is vital for a healthy team.
• Wrong communication skills will undermine your team’s performance.
• If your potential CTO only focuses on technical skills, they will never be a good boss.

Management Skills 

Robin has to commit to results, but if he makes promises he can’t keep, your credibility will be at stake. 

Equally as important as leadership skills are management skills. What I mean by this is your CTO’s capability to evaluate the timeframe and effort needed to build your product. Most developers are very, and when I say very, I mean very optimistic, about the time it takes to build a product. 

In my life, I’ve seen crazy things like projects taking 500% the estimated time and cost. You must find a  CTO who is realistic, or you will end up with considerable deviations in deliverables as you build the product – resulting in an increased time to market and unexpected costs. 

This allows you to discover your potential partner’s ability to forecast time to build; as well as their ability to spot the critical points. These are the points in the web development cycle where it’s more likely to “hit an iceberg”. Talented CTOs and developers should, almost instinctively, identify these critical points.

Ask your candidate to estimate the time to build, without bringing the idea of “critical points” to their attention.

Alongside this, ask a software development agency to do the same thing. Most agencies worth their salt will offer this service in the form of a free quote or similar – Altar.io included.

There are two red flags to look out for here:

• The first is if the agency spots the critical points and your potential CTO doesn’t.
• The second is if your potential CTO’s time has more than 50% difference from that of the agency. Anything up to 50% is acceptable as it’s not an exact science.

If they fail this small test, it could point to much more substantial time management issues; as well as pointing to a lack of experience.

Where To Find A CTO For Your Startup

The dark streets of Gotham can get lonely without a partner in justice.

It’s essential to find a CTO with the above qualities, but it’s also crucial to look in the right places. 

There are two paths to looking for a CTO, the:

• Offline approach
• Online approach

Offline

For the former, you will see many suggestions to attend as many tech meetups as possible. You should pick your meetups wisely. If you go to every meetup with the word tech or startup in it, you will waste valuable time and energy. 

It’s better to pick meetups based on your niche and industry (for the sake of energy and time management).

As a non-tech founder, you need to be careful when talking to potential CTOs. As with developers, they will often drop buzzwords and jargon into the conversation, making them look like geniuses. You must have enough tech knowledge to translate the industry language.

There are also some online platforms dedicated to connecting entrepreneurs and tech professionals, here are a few to get you started: 

I see these sources as a way to grow your network, but as any other online community, you can get easily lost with the amount of content and opportunities. 

Try this approach if you couldn’t find the right person in the offline world (or if a global pandemic hits).

I would recommend limiting your time on this research (a reasonable 15 days max). Otherwise, you might fall into the infinite net-abyss.

Alternatives To Finding a CTO For Your Startup

You may not have found your Robin yet, but don’t worry; there are other superheroes out there who can help you serve Justice.

As you’ve followed, it’s fair to say it ain’t gonna be easy to find a CTO.  

There are many successful startups, however, that build their products before onboarding a CTO. You can fully outsource your MVP to an agency, for example. 

Or you could try to find a “CTO as a service” where you bring on an experienced freelancer to act as your CTO. This method will give you more time to find a CTO that is right for you.

Get straight to the point, jargon-free advice from a tech expert that has been building award-winning Startups for the past 10 years.

LET'S TALK

They will give you precious help on strategy. As well as helping you build and manage your team. 

Honestly, both outsourcing software development and CTO as a service are viable options to consider. As I’m sure, you’re aware, time to market matters. If you lose momentum, waiting for the perfect CTO, you risk a competitor taking your place on the market.

Despite its challenges, finding the dream CTO is by far the most idyllic option as you build your startup. While there is no formula to find a CTO,  there are specific steps you can take to put yourself in a position to succeed:

• Tap into your network to try and get a warm introduction. 
• Find someone as passionate about the project as you are.
• Check they don’t become “passion-blind” and is responsible enough to take charge of your startup’s tech decisions. 
• Make sure they have the right expertise for your startup.
• Ensure they’re committed to the project – and aren’t treating you as a “mistress” to their real job.
• Align your expectations; make sure you like them and can trust them.
• Don’t just hire a great developer, hire a great leader. 
• Make sure they’re realistic in terms of how long it will take to build the product and that they can identify the critical points.

If you can’t find a CTO for your startup, don’t panic. There are plenty of startups out there who didn’t start with a CTO. Consider: 

Finally, don’t rush into a marriage with a CTO. Finding a CTO is a critical business decision, and you need to be sure you’ve picked the right person – I hope this article has given you some clarity on the process. 

Good luck!