- Jul 11, 2023
- 14 min read
Do you need the best CTO for your startup? Tips on where and how you can find one if you are a non coder.
For a tech startup to succeed, two factors are vital – efficient management and technical prowess. In other words, you need to create a high-quality product and carve out a niche for it in the market. Hence, if you are a business person, you need a tech leader to join your team.
In this article, we will discuss how to hire a CTO for a startup, detailing effective CTO recruitment strategies and interviewing approaches. We will also describe the peculiarities of CTO compensation, onboarding and retention.
Why Hire a CTO for a Startup?
Any tech startup needs a CTO. If your startup is in its early stages and you are unsure whether you need a full-time tech executive, you can hire a fractional CTO – an expert who will work part-time on your project, covering all your current needs. Here are 4 main reasons why having a CTO is crucial for tech startups:
1. Technical leadership
A CTO is one of the key startup leadership roles. They explain to the team what the product should look like and how to create it. Upon outlining the product development plan, they overlook the development, providing support and making necessary adjustments.
2. Product quality and scalability
With a qualified CTO, you can be sure that the quality of the product’s technical execution is high, meaning the code is clean and the architecture allows for future updates. Depending on your needs, the product can have high uptime and processing speed, multiple data backups, strict security protocols, etc.
Read Softkit’s Volvo case study to learn how we ensured 99.99999% software uptime.
3. Keeping an eye on the competition and tech innovations
The CTO role in a startup includes keeping an eye on your competition and closely following tech trends to ensure product relevance. If new tech emerges able to hurt or accelerate your business growth, they will let you know.
4. Building a strong development team
A CTO can efficiently conduct technical interviews with prospective candidates determining the level of their proficiency in the relevant technologies.
Challenges Faced by Non-Coders when Hiring a Startup CTO
Non-coders encounter two serious challenges when recruiting a CTO:
Difficulty finding suitable candidates
Often, the biggest challenge is finding suitable candidates. Experienced tech visionaries and leaders are scarce. At the same time, the CTO job market is full of startups and joining one is risky. Why would such a qualified person opt for your startup instead of a team lead role in Siemens or Shell? Why wouldn’t they choose your competitor? For these reasons, simply posting a job ad on Indeed or LinkedIn might not work.
Keep reading for a list of efficient startup CTO recruitment strategies in the following sections.
Assessing candidates’ skills is complicated and frustrating
Do you have a seemingly suitable CTO candidate? That is great! Now you must ensure they meet all the right startup CTO qualifications. However, figuring out the proper assessment criteria and understanding whether the candidate corresponds to them is difficult for non-coders. To help you navigate the CTO recruitment process, we created this article – the ultimate guide to hiring a CTO for a startup.
CTO Responsibilities: Understanding the Role of a CTO
The type and stage of your startup will determine your CTO assessment criteria. Let’s take a closer look at the primary CTO job responsibilities and how they differ for early-stage vs. high-growth startups.
An overview of CTO roles & responsibilities
– A CTO as a business leader
CTOs join other executives to communicate with investors and business partners. They explain the tech side of the project and learn the stakeholders’ perspectives.
– A CTO as a strategic advisor
CTOs co-create the product development strategy, ensuring that the updates align with the company’s business goals. They also oversee the budget of the IT department and monitor its performance.
– A CTO as a technical expert
CTOs choose project tech stacks, create technology roadmaps and ensure that the product is secure, reliable, and scalable. Moreover, a CTO supervises IT infrastructure maintenance, advises departments on tech to facilitate operations, and prevents data leaks and breaches.
– A CTO as a team builder
As mentioned, a CTO can help you build an efficient development team. They will conduct tech interviews, making sure that each software engineer is qualified for their position.
– A CTO as a problem solver
Issues are inevitable. What matters is how your company reacts to them. A good CTO acts swiftly, resolving the problem, mitigating its consequences, analyzing why it happened and taking measures to prevent similar issues from reoccurring.
– A CTO as a change agent
CTOs constantly pursue new tech opportunities to improve the company’s product or business processes. They also collect feedback from stakeholders and make necessary advancements.
– A CTO as a risk taker
CTOs and other executives assess risks faced by the company. They mitigate possible consequences of existing perils. Moreover, they manage the risks which are an inevitable by-product of implementing change and innovation.
CTO for early-stage vs. high-growth startups
The functions performed by CTOs differ depending on the stage of the startup:
A CTO for early-stage startups
When hiring a CTO for early-stage startups, look for someone to test your business idea in the market. They should be able to use minimal resources to create an MVP, collect feedback from early adopters and make necessary adjustments.
A good CTO for an early-stage startup knows what third-party tools they can use to make the development process faster and cheaper. They can help you probe, improve or even completely reinvent the product based on the market response.
You may not need a full-time CTO at this stage of startup development. Consider hiring a fractional (part-time) CTO for your business.
A CTO for high-growth startups
The role of a CTO for high-growth startups is different. At this point, executives know the main trajectory of the product and business development. They understand who their target customers and users are. The CTO and the CEO now create the product roadmap and define the company strategy. The CTO develops stricter security mechanisms and leads the team through all the software development lifecycles.
Identifying the Right CTO Candidates
Before we discuss where to look for a potential CTO, let us discuss how to recognize the right person when you meet them. Here are 3 tips for identifying the right CTO for your startup:
1. Remember what CTO skills and qualities matter
There are several aspects to heed when writing the CTO job description and assessing potential candidates:
- Startup experience
Tech startups are distinguished by a unique set of challenges that well-established companies do not face. Awareness of potential hindrances helps CTOs react to issues faster.
- Comprehensive tech knowledge and expertise
CTOs must have a broad knowledge of all technologies and a deep understanding of languages, frameworks, libraries, and other tech required for your product.
A good CTO must be versatile and able to choose the best tool for each task.
- Leadership and communication skills
CTOs must lead the team through challenges, being supportive and inspirational. Moreover, they must clearly articulate their ideas and thoughts to stakeholders, including their subordinates, executives, and investors.
- Their passion
Why is the candidate interested in your startup? Do they believe in its future success? A person passionate about their work will put in maximum effort to ensure company success. Look for a visionary, but ensure that their vision of the company’s future coincides with yours.
Consider CTO’s role in business growth
The goal of any startup is to evolve into a thriving company with a valuable, in-demand product and a loyal customer base. To achieve this goal, companies must constantly advance their product, evolve their business strategy and innovate. Your CTO will be directly involved in these processes.
– Participating in business strategy development
A business strategy includes a company’s objectives and an outline of steps required to achieve those. For example, to become a market leader, a startup might need to expand its reach, create brand awareness, increase customer satisfaction, etc. All executives participate in business strategy development and CTO’s contribution carries a lot of weight in tech startups.
– Supervising product development
Product development in tech startups is the domain of the CTO and CPO (Chief Product Officer). The executives align product strategy with the company’s business strategy. For instance, they research what new product features are needed to achieve the startup’s short and long-term goals.
– Innovation management
Finally, let’s talk about innovation management. CTOs control the entire cycle of implementing tech innovations, from brainstorming and ideation to evaluation, prioritization and realization.
Research technology road-mapping
Technology roadmaps, also known as IT roadmaps, are visualization tools detailing the anticipated development of a tech product. This is a high-level document that guides tech teams.
A tech roadmap should include the main tasks, objectives and a timeframe. Such roadmaps are living documents that are continually updated. Understanding how technology roadmaps are created will come in handy when interviewing candidates.
Startup CTO Hiring: Best Practices & Insights
In general, CTO hiring best practices include using effective recruitment strategies, preparing interview questions in advance and tailoring your compensation offer to attract a suitable candidate. Let us discuss each of these aspects in detail.
Efficient CTO recruitment strategies
So, where can you find a CTO? There are several prominent CTO hiring strategies to consider:
– Visiting thematic events and building your network
Visit various conferences and seminars where you can meet like-minded people. Particularly valuable are events dedicated to your industry or niche. For instance, if you want to build a real estate platform powered by Big Data and AI, pay close attention to various events dedicated to real estate tech, AI, ML and Big Data.
Even if you don’t meet the right person immediately, spread the word about your startup. Perhaps, your new acquaintances will introduce you to your new CTO later. The cherry on top – you can also meet potential investors at such events.
– Consider lead developers from similar companies
A senior developer with leadership experience can make a superb CTO. This approach benefits both parties – you receive a skilled expert eager to work with you for reasonable compensation and a developer moves up a career ladder.
– Search thematic websites
Try searching thematic web resources, like Founders Nation, СoFoundersLab and various co-founding threads on Slack, Discord app, and Reddit.
– Use professional services
IT service companies often employ CTO-level experts available to join any project. Thus, Softkit has several specialists who can become your fractional CTO under the staff augmentation model. This approach has several benefits:
- Hiring speed – a CTO can join your company within weeks, not months;
- Quality – Softkit’s experts have an excellent track record of bringing evolving startups into successful enterprises. You can find examples later in the article.
- Excellent value-for-money ratio – you receive a highly experienced executive for a reasonable price;
Pro tip: hire tech advisors before a CTO
If your startup is in the ideation stage, you might not need to hire a CTO immediately. Hiring a tech advisor first lets you learn what technologies are relevant for your startup. Moreover, you can hire a managed development team to build a prototype or an MVP of your product. You can use those to pitch the startup idea to early investors.
Read or article IT Staff Augmentation vs. Managed Services to learn which service model is best for your business.
CTO interviewing: insights & tips
When preparing CTO interview questions, remember that you need to assess their technical proficiency, startup leadership and soft skills. Moreover, you must ensure they share your values and are passionate about your idea.
Tip #1:Start with small talk and tell about yourself
Start an interview with some chit-chat to set a light and friendly mood. Then tell briefly about yourself and your startup.
Tips #2: Ask the candidate to tell you a bit about themselves
This question will allow the person to spotlight the most relevant parts of their career, provide context and shed light on their aspirations and motivation.
Tips #3: Ascertain their management style
How does a person assign tasks among team members? What are their actions if someone struggles with their task? What do they do if someone excels beyond expectations? Do they encourage initiative? What would their reaction be if a subordinate offered constructive criticism? You can ask for some examples of the candidate’s past behavior. Analyze their answers and determine whether this person is a good cultural fit for your company.
Here you can also discuss what tools the candidate prefers for team collaboration, task management, technology road-mapping, etc.
Tip #4: Determine their approach to challenges
At some point, something will go wrong. Ask what challenges they faced in the past and how they acted.
Tip #5: Discuss their vision of your company’s future
The person should have at least some general idea of the business’s direction. It is ok if their opinions differ from yours as long as they remain flexible.
Tip # 6 Be ready for questions
Be ready to answer many questions, from explaining your business model and plans for the future to discussing company needs and your preferences.
For more examples of helpful interview questions, including sample technical tasks, read our article, The Ultimate Guide to Identifying the Perfect Developer.
CTO compensation and equity
To attract the best talent, consider what salary and benefits you can offer your CTO.
Average CTO salaries worldwide
Different resources put an average gross CTO salary in the US in 2023 between 174 and 310k USD per year. In Europe, however, the numbers are slightly different: 237k USD for Germany, 246k USD for the UK and 195k USD for France. For Australia and Japan, this number is around 234 thousand USD. These are base salaries. They do not include the cost of CTO benefits, like paid vacation, healthcare insurance, retirement plans or stock options. Benefits, on average, can cost a company around 91k USD in the US, about 27k USD in the UK and Germany and approximately 20k USD in Australia.
Average startup CTO compensation
The average salaries of startup CTOs, however, are typically lower than various nationwide numbers. Research of 200 startups has shown that depending on the stage of the startup and its industry, the CTO salary varies between 118 and 250k USD. The lowest number is attributed to CTOs of hardware startups. For e-commerce, the average is 138k. For SaaS, it is 141k and for healthcare – 150k.
At the same time, the salary of a CTO after seed funding averages 142k USD. After a series A round, it is around 174k USD and after series B – 250k USD.
CTO equity compensation
Sometimes aside from salary and benefits, CTOs receive equity. In general, equity is the value of the company’s assets minus its liabilities.
The amount of equity can vary significantly. The first question to ask yourself is whether you are looking for a CTO as an employee or a co-founder. All startup co-founders typically receive around the same equity and salary. The amount of equity received by CTO employees tends to be much lower. Often, it is somewhere between 1.5 and 3%.
Another factor is the stage of your startup and the amount of money raised. The more people invest in your startup, the more diluted the equity held by founders and initial investors becomes.
Let us discuss equity compensation for non-founding CTOs. According to Comparably, CTOs in startups that raised under 1 million USD either don’t receive equity (23% of respondents) or receive 10%+ equity (21% of respondents). In startups that raised between 1 to 3 million, most CTOs (24%) receive 5%+ equity compensation. Companies that raised 3 to 10 million and 10 to 30 million in funding tend to offer CTOs 4%+ and 2%+ equity correspondingly. CTOs at companies with more than 30 million raised typically receive 1.5% equity.
Founding CTOs, on the other hand, typically receive 40%+ equity in companies with under 1 million raised. As the company grows and more money is raised, the percentage of equity a founder holds can get closer to 5%+.
The third factor is whether you can offer the CTO candidate a market-value salary. If not, you can offer more equity to compensate for the difference and entice the person to join your team.
CTO Onboarding & Management
Proper onboarding and management can help your new CTO be more efficient and avoid obstacles.
5 tips for onboarding a new CTO
There are several things to keep in mind when setting your new CTO on the right track to success:
1. Prepare your team
Talk to your employees and tell them about the new CTO. Explain why you are excited for this person to join your team. Give your employees an overview of the CTO’s strengths and personality traits and ask them to be welcoming and kind.
2. Share insights
Tell your new CTO more about your employees and corporate culture. Are there any peculiar traditions or inside jokes they should be aware of? Tell them if someone from their team has a disability and give advice on making work practices inclusive for everyone.
3. Give them time to adjust
Refrain from demanding your new CTO make any important decisions straight away. At first, they would need some time to adjust and learn your company and product better.
You can also arrange team-building activities to help your CTO adjust.
4. Discuss the company’s business strategy
Discuss with your new CTO growth strategies for the company. Explain the what, why, how and when of your business goals. Ask for their insights, like what is the best way to achieve an objective or what timeframes are feasible. Do they have any suggestions or objections?
5. Arrange a meeting with stakeholders
A CTO must understand clearly who the stakeholders are and what they expect. Hence, you can arrange a meeting to introduce your new CTO to high-impact, high-interest stakeholders like other executives or investors.
CTO retention strategies
Once you have found a great CTO, the goal is to ensure they stay with the company as long as possible.
1. Help them build a strong team of lead developers
It is critical for a CTO to have other strong tech leaders to rely on. Otherwise, they would have to do more work themselves instead of delegating it. Working that much can lead to fast burnout.
2. Ensure that they have enough free time
To remain productive, your CTO, like any other employee, should have enough time for their hobbies and personal life. Make sure they are using their vacation days.
3. Their work must be meaningful and opinions valued
To remain motivated, a CTO must understand that the company stakeholders, including other executives, value their work, initiatives and insights.
Their work must be meaningful. If a CTO feels they don’t impact the company’s future, they will look for other opportunities.
4. Provide support
If CTO struggles, a CEO can offer their support. For example, sometimes executives are challenged by investors, demanding to cut operational costs or abandon a project. In such a case, a CEO can help the CTO make their case for why the spendings are necessary for the company’s future.
5. Offer them equity
Usually, the more equity a person has, the more invested they are in the company’s success. You can offer your CTO some equity as a reward for their achievements.
CTO mentorship and leadership development
Mentoring is one of the key tasks of a CTO. As mentioned, with a strong team of lead developers, a CTO can successfully delegate tasks. It is essential as the company grows and tech tasks become more sizable and diverse.
Furthermore, CTO mentoring subordinates is integral to a company’s CTO succession planning. If a CTO leaves, your company should not start to fall apart. Your best-case scenario should be having someone on your development team ready to step in and fill the role. In the worst-case scenario, your team should be able to keep up the workflow until you find a replacement. Hence, CTO mentorship must be ongoing to ensure knowledge transfer and company growth.
CTO leadership development is equally vital for the startup’s success. A CTO should master the ability to inspire teammates, champion stakeholder interests and pioneer innovation.
However, true technical leadership does not necessarily mean chasing every new hype tech. It lies in the ability to recognize opportunities and find optimal tech solutions for your business needs.
Consider Softkit Your Trusted Partner
Softkit provides fractional CTO service under the staff augmentation model. We have experts with 10+ years of tech leadership experience. They are passionate about innovation and have excellent communication and organizational skills.
Softkit will be honored to help you steer your startup to prosperity, just as we have done this for other companies countless times before.
Our startup success stories
The Softkit team has been prolific at ensuring that our clients reach their business goals. Here are several examples of startups that we have led to success over the years:
Softkit actively participated in the inception of a comprehensive real estate platform powered by AI and Big Data.
In less than 4 years, our client has transformed from an 8-person project into a multimillion corporation with 150k+ active users.
Being the company’s tech partner, we were advising executives on new features and steering the company through the challenges of the pandemic. Read our case study to learn more.
The Softkit team implemented several new features and product enhancements for our client. This increased the company’s conversion rate fivefold! At the same time, customer satisfaction grew by 80%.
Many world-renowned companies, including Cisco Meraki, Digital Ocean, Finastra and Salesloft, started using our software. And in 2021, the startup was acquired by Stripe.
This is an ambitious startup revolutionizing the use of Big Data in marketing. The Softkit team has enhanced the product’s algorithms and added multiple new features.
Now this startup is flourishing – many successful companies, including Crowdcube and Crowdfunder, have joined its ever-growing client list. Moreover, last year our client received 400k GBP in funding from a British investment fund called Mercia.
AI-powered hiring platform
This Danish startup makes recruiting faster and more impartial. Softkit has helped our client to create their product, and we have been the company’s trusted tech partner ever since.
In four years of its existence, the recruiting platform has attracted the attention of giants such as Siemens, Orsted, Just Eat and Danish Crown.
Meet our star experts who will be glad to join your team as fractional CTOs:
Roman is highly thorough with everything he does. He can create complex software architectures from the ground up, painstakingly analyzing every aspect to predict the outcomes of each decision.
Furthermore, Roman has a rare ability to communicate even the most complex ideas and concepts succinctly and clearly. This skill and high emotional intelligence make him an effective communicator and a fantastic mentor.
Vladimir has vast experience designing systems from scratch, managing software development life cycles, deploying cloud systems and being a Scrum master of several teams simultaneously. He understands how to create systems that are easy for businesses and their users to navigate.
Furthermore, Vladimir is an excellent choice for anyone aiming to build a strong development team. In his free time, he teaches the growing generation of Java developers, which makes him an even better mentor for his teammates. He also has extensive experience interviewing developers of different seniority levels, from juniors to team leads.
Vladimir loves tech and is motivated by a desire to create outstanding solutions.
Contact us to learn more about our experts
To find a suitable CTO for your startup, search relevant webpages, look for like-minded people at tech conferences, consider recruiting tech leads from similar companies or use staff augmentation services. Remember that the perfect CTO combines tech prowess, solid leadership skills, genuine interest in your company and the ability to mentor and inspire their subordinates.
The CTO selection process can feel daunting for non-codes, but don’t be discouraged – your effort will pay off. And once you have found the right person, they will support you in transforming your startup into a thriving, profitable business.
1. Does your startup need a CTO?
If it is a tech startup, you will definitely need a CTO at some point. Early-stage startups can hire a fractional CTO – an expert executive who will work part-time on your project.
2. When is the right time for a startup to hire a CTO?
You can hire a CTO when ready to build an MVP and test your business idea with market validation.
3. How to find the perfect CTO for your startup?
Look for people with experience in tech leadership roles. Moreover, they should be good mentors and communicators.
4. What questions to ask a CTO in an interview?
You can ask them about their experience in leadership roles, their approach to challenges, why they are interested in your company and how they see its future.
5. What should a startup CTO do?
A startup CTO ensures that a company’s tech goals align with its business goals. They determine the tech stack for the product, optimize the tech side of business processes, ensure cyber security, communicate with stakeholders and more.
6. What is a startup CTO salary?
The average CTO salary can be between 170k to 310k USD per year, depending on the country, the startup stage, the industry and other factors.
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