Startup Mistakes: Hiring a full-stack developer as CTO

Some startups hire a full-stack developer for the CTO position, because they do not have the budget for an experienced CTO. There is a belief that in the early stages a developer can take over the CTO position, and learn as they go along. There are several reasons for this. On the one hand, many startups start with very little money, which makes it impossible to pay the salary of an experienced CTO. On the other hand, there is a lack of knowledge about the responsibilities and value of a CTO.

A CTO is thought of as the person in charge of developing the product, which is why it is believed that he or she can be replaced by a developer. However, the main responsibility of the CTO is not the construction of the product, but the definition of the technology strategy and the configuration of the team that makes that product a reality. For this, the CTO has to:

Start with a good understanding of the business, the vision and the goals you want to achieve. Without this understanding, it is difficult to design and build the right product.
Actively participate in the definition and design of the product. Participate in meetings with potential customers and users. Help define the minimum viable product, avoiding wasting scarce resources building things you don’t need.
Estimate and manage the Total Cost of Ownership. Take into account not only the cost of development, but also the costs of evolution, operations, support, trainings, etc…
Choose the right technology stack for the product you want to build.
Ensure compliance with existing laws, rules and regulations. E.g. Intellectual property, GDPR, ISOs, etc..
Design the engineering team and recruit the necessary profiles to start product development.
Consider and propose the outsourcing of certain tasks and responsibilities to complement in-house capabilities.
Decide on the methodology or framework for project management.
Lay the foundations of the company’s technical culture. Define the values, principles and best practices of the engineering team.
Optional: Participate in the development of the MVP. This is the most misunderstood responsibility for a CTO. It is generally thought to be their main function, however as those of us who are programmers know, programming is a job that almost always eats up a large part of your time, energy and focus. And if the CTO does it, it will be at the expense of the strategy. It’s like putting the captain of a boat to row, sooner or later the boat will take a random direction.

If you have hired a full-stack developer and put him as CTO you run the risk of:

Ignoring the importance of having a strategy or putting it on the back burner, prioritising programming over strategy.
Build a product that does not fit the business problem you want to solve.
Define an MVP that is too large and costly to develop, which will delay your time-to-market unnecessarily, reducing your chances of pivoting and succeeding,
Choose the latest stack that has been released, which promises a lot, but has very little community. This decision can limit your ability to hire developers, and this is one of the most critical points for scaling up.
Not taking into account the Total Cost of Ownership or only taking into account the development cost. In certain situations this can have a major impact on the viability of the business model.
Making mistakes in the recruitment of the first team members. This is quite critical, because in initial teams the weight of each person is great. If one person does not fit in, the impact is great and it must be detected and corrected as soon as possible.
Not considering outsourcing or doing it inappropriately. For example: outsourcing core responsibilities, choosing suppliers incorrectly (e.g. the cheapest on paper) or not properly defining the details of the collaboration.
Choosing a sub-optimal way of planning and organising work.
Not giving importance to company culture, which can lead to a ‘bad’ culture that has implications for how things are done, the quality of the product or how people feel. Changing a ‘bad’ culture is very complex and can become critical to a company’s success.

Still, getting an experienced CTO for an early stage startup is not easy. Unless you are lucky enough to have the CTO as one of the founders, you will need good funding to pay a high salary plus a portion of the equity. But not only that, you will have to convince him to leave his current company to bet on a startup that is being created and by simple statistics is very likely to fail.

Against this backdrop, it seems that there are not many alternatives, but the truth is that in recent years Fractional/Interim CTOs have appeared who work as freelancers and offer their previous experience as a service to other start-ups. In the United States and the UK they have been in existence for several years now and are gaining popularity (as can be seen in the Google Trends graph). But in EU it seems that we still have work to do, although in the last year I have been observing on LinkedIn how the first Fractional CTOs are appearing, me among them :).

If you are currently a startup, I think it is interesting to consider the alternative of hiring an interim CTO to work part-time in your startup. They can help you in the early stages, defining the technology strategy and supporting you in building the MVP and validating it with the market. Once your startup has found its niche and moved to the next level, this interim CTO can help you look for a full-time CTO.

If you are interested in this, you can contact me here.