5 reasons not to hire a full-time CTO for your startup
Discover why a part-time or fractional CTO is often better suited for startups. The 5 reasons explained in detail.
Introduction
You don't need to hire a full-time CTO to build your product. What you need is someone who will help you plan, build and launch your product and new features quickly, so you can get customer feedback.
CTOs are generally not operational. They advise and develop strategies. It's rare in a startup to need 5 days a week of advice and strategy. Not surprisingly, it's common to hear CTOs employed by startups feeling "bored and expensive" after a few months.
This is not good for your startup. Here are the 5 reasons why you don't need a full-time CTO:
1. Time, or rather its lack
Either you're ready to start, or you've already started building your product. In both scenarios, time to market is crucial. Every delay means opening the door to a competitor.
Recruitment takes time. Recruiting a full-time CTO takes a lot of time. It could take months before finding someone suitable for the position. You can't rush this.
What if you could invest the same time in building the product, talking to customers, improving user acquisition, or building relationships with investors?
2. It's not a good investment
Hiring a full-time CTO represents a significant expense. Salary, equity, and sharing company leadership. In most startups, the ROI of a full-time CTO is not justified.
You can launch an exceptional product, with a fraction of the costs, without distributing equity. This means more money to invest in sales, marketing, and equity to attract future key employees.
3. You don't have a technology problem
Unless you've found your product-market fit and are ready to scale, you don't have a technology problem.
You still don't need to support hundreds of thousands of customers. What you need is to have a stable technology stack capable of quickly validating new ideas.
4. You don't know how technology will make the difference
It's difficult to know what competitive advantages technology could bring. Even if you have the perfect business model in hand.
Is it an AI solution? Is it heavily dependent on data science? Is it based on managing multiple engineering teams across the world? Hiring a full-time CTO without understanding your company's technological needs means you're limiting your future growth. You might hire someone who doesn't match your company's needs. Worse still, you might hire someone who fails to help you find your company's competitive advantage.
5. It's negative for the company
Startup CTOs typically come from highly technical roles (Senior Developers, Lead Developers, Head of Engineering). They progressed in their careers because they were good at coding. They're not used to thinking about what's most important for the business.
It's common to see startup CTOs spend 6 months building features, non-essential to the business, that are available for $30/month in a third-party tool.
Areas such as payment processing, e-commerce, CRM, authentication, content management, emails, SMS, push notifications, A/B testing, to name just a few, are commodities today. You should avoid spending time building them and instead use ready-made alternatives. This allows companies to focus on their core business rather than reinventing the wheel.
The Alternative: The Fractional CTO
Perhaps you're wondering: "but what's the alternative?" I'm glad you asked.
The alternative is to:
- Hire someone who is available to start supporting you next week
- Work on technical issues when there is demand, rather than having an expensive and inactive role
- Help you build a pragmatic and cost-effective technology stack
- Focus on bringing value to the business and customers from day one
These are the characteristics of the "Fractional CTO" role.
A "Fractional CTO" is a solution for companies that need part-time technical support.
This allows companies to get CTO expertise at a fraction of the cost of a full-time salary.