In the early 2000's street racing had a pop-culture moment thanks to the movie The Fast and the Furious. The movie features a number of heavily modified cars (boy, was that sentence an understatement). Almost all of the cars had one of the same primary features - a giant rear spoiler.
Shortly after the movie came out, so did the spoilers. Cars everywhere had them installed, undoubtedly inspired by Vin Diesel and co. In some cases those giant rear spoilers do actually serve a purpose beyond looking sick - something about airflow and downforce - but nothing your Toyota Camry will ever actually need.
Understanding what will make your car (or business) go, and what's just there for looks is important. That's especially true when you're just starting out. At a startup, every decision matters and impacts the viability of your business, so it's important to separate the shiny spoiler from the engine.
After almost a decade of working with tech companies big and small, we've become something of a body shop ourselves. And from what we've seen, a CTO is the giant rear spoiler of startup executives. Sure, in some really specific cases having one might make sense (more on that later) but most of the time they're just for looks.
Why hiring a startup CTO (usually) doesn't make sense
Just to say it plainly, we're not anti-CTO in general. We just don't think they're usually the right fit for early-stage startups. And there are two main reasons for that.
Skills mismatch
In most cases, a CTO is more strategy focused, and less execution focused. They're responsible for setting the long term vision and linking technical work to larger business goals. In the later stages of a company those things matter a lot. But when you're just getting started the primary focus tends to be getting something off the ground and showing some level of product-market fit.
Does that involve some level of strategy? Certainly. But it's not the main concern. In those early days a beautiful tech stack takes the back seat to getting stuff done. To do that you need someone who knows how to execute and take a project from A to B. That type of hands-on work isn't in a typical CTO's job description.
Lack of buy in
Once someone's reached the c-suite, chances are it's been quite some time since they've been in the weeds. Sure, maybe they wrote some lines of code in their day, but now they're a little out of touch with the challenges of maintaining and adding incremental features to a complex application. Some engineers might take issue taking orders from someone who doesn't seem to know the ropes.
Since there's so much to do at an early-stage company, any hiccups can prove incredibly problematic. And if people are constantly second guessing a leader's choices, it can severely limit productivity and lower team morale leading to things like increased turnover and longer lead times to complete projects.
Is there an alternative?
So, if not a CTO, where should you look for technical leadership? Based on what we've seen inside startups, the most successful teams are led by a Head,VP, or Director of Engineering.
Engineering leaders generally have a skillset focused on project execution. They know how to budget for things, how to hire, who to hire, and how to plan the steps needed to complete a technical project. These folks are typically former engineers who have first-hand experience building technical projects, as well as managing them. They've built and led engineering teams, along with the processes and culture to build scalable, complex applications.
Hiring a CTO isn't a title problem, so much as it can be a function problem. Your company might need a CTO in place to signal a level of technical maturity to investors, but you'll be better off if that person operates like a senior engineering leader and has recent experience in a similar role.
When should a company hire a CTO?
Just like there are specific scenarios where a giant rear spoiler makes sense (street racing in Tokyo, for example), there are also times when a CTO does. First, if you're past a certain size. It can vary some, but if you're not above $20 million a year in revenue, you probably don't need a CTO. Up until that point you're simply in "make mode." Once you're past that stage and have good proof-of-concept, then having someone set the long term technical vision gets more important.
A CTO can also be key if you're in a highly regulated industry. Navigating complex privacy requirements or legal restrictions will be much easier with a senior technical leader who's done it before. If your senior engineering leader has industry-specific experience, even better. But it could make sense to find a CTO who can focus on handling these issues with a level of experience.
Moving forward
A CTO might seem like a must-have for your startup, but most of the time it's not.
Make sure you're taking the time to think through exactly what you need from a technical leader based on your company stage and industry. The right full-time hire (especially a senior leader) can make or break the success of your product.
Pete Whiting is the Head of Growth and Client Service at The Gnar Company, where he leads business development, marketing, and client service activities to help companies build high-quality custom software. With over a decade of experience at the firm, Pete specializes in driving revenue growth and ensuring high utilization of development teams through strategic go-to-market and product marketing initiatives.
Prior to joining The Gnar Company, Pete held executive roles in operations and marketing at firms such as Dispatch and MeYou Health. He also spent five years at Vistaprint, where he served as Director of Product Marketing and Strategy for the Asia Pacific region, accelerating annual revenue and gross profit growth through data-driven planning and multi-channel marketing. Pete’s career began in engineering and management consulting, including seven years at Deloitte Consulting leading growth strategy and post-merger integration for global industrial and high-tech clients. He holds an MBA with honors from UCLA Anderson and both a Master’s and Bachelor’s degree in Materials Science and Engineering from Brown University.
