How to Hire a CTO For a Start-Up? (Complete Guide)

For a new company venturing into the software development industry, handling all the technical aspects can become challenging. It’s about scaling your development effort from scratch, and without enough experience, things could fall apart quite quickly. Plus, the burn rate will rise exponentially if your product doesn’t meet customer demands. 

For this reason, it becomes essential for a start-up to hire a CTO, considering the experience and technical expertise they hold. A CTO ascertains that your product development is on time, follows budgets, meets deadlines, and manages technical debt effectively.

As per the 2020 Global CTO Survey, 51% of respondents said they joined a new company/start-up as their CTO.

Wondering how to hire a CTO for a start-up? Here’s a comprehensive guide that’ll help you recruit the perfect CTO for your start-up and jump-start your development effort in the correct direction.

We’ve also mentioned information for start-ups that cannot find a CTO who matches their expectations and seek alternative options, like CTO outsourcing. By the end of the post, you’ll be able to differentiate between a perfect CTO and a CTO that fits best in your start-up. 

So, without further ado, let’s get started.

Who’s a CTO?

CTO or Chief Technical Officer is an individual holding vast technical knowledge and leadership expertise. CTO helps bring the business and tech goals together. They guide the usage or creation of technology in the most cost-effective manner and help the business achieve its goals faster.

Criteria to Consider When Hiring a CTO

How to hire a CTO depends on knowing what exactly makes the candidate the perfect choice for the job. Listed below are a few essential qualities you should consider when you look for CTO for hire.

Tech Expertise

In your how to hire a CTO for a start-up journey, you should consider the tech expertise seriously. It’s one of the most important qualities you should look for when you hire or rent a CTO. A CTO is an individual who ensures software quality and someone you can rely on for technical issues. In the initial months of a few start-ups, the CTO is the one who creates the first software solution version. 

Business Acumen

The CTO needs to have business acumen as well. All decisions that the CTO makes must be effective from the business viewpoint. The professional needs to know the ins and outs of business and understand how the software product can best meet business needs.

Cope Up With Evolving Technologies

With time, technologies are also evolving constantly. Hence, to keep pace with the new developments, the CTO needs to be a quick learner. The CTO should try the latest technologies constantly. That applies to hardware, operating systems, languages, software development techniques, QA procedures and project architecture. 

Long Term Vision

The CTO’s job does not involve micromanaging; they are required to think big. They need to have an understanding of where you are going with the product and how it will help grow your company. 

Must Be a Team Player

The CTOs are not lone workers; they have a team to back their work. Hence, while exploring how to hire a CTO for a start-up, you need to consider the candidate’s people skills. The person should be able to communicate well not just with their tech team but with other employees too.

How to Hire the CTO for a Start-Up more Effectively?

In this section, we’ll discuss how to hire a CTO for a start-up more accurately, successfully and effectively. 

Don’t just find one; win one!

As discussed above, CTOs are likely to work in established firms with steady revenue. Hence, finding just an efficient CTO for hire won’t be enough. You will have to fight and win them. As you’re a start-up, offering high salaries wouldn’t be feasible. So, you will have to look for other ways and techniques to win their trust.

The key here is to get them attracted to what you’re doing. Discuss the interesting obstacles they’ll have to conquer, what they’ll get to learn, and the issues they’ll have to tackle. It’ll be much better if you’re working with advanced technologies.

It’s also extremely significant to go for logic over emotions. While exploring how to hire a CTO, you should keep in mind that you need to convince the CTO that there’s a future for your start-up and that everything will be fine. Show ready plans and numbers over one colossal ideal with uncertain boundaries. 

Lay down your requirements clearly

Your how to hire a CTO journey will not begin if you don’t set clear requirements for the CTO. Having clear requirements narrows the number of candidates majorly. You’ll invest less time reviewing CVs that don’t align with your expectations. Moreover, you won’t have to interview people who don’t have the right expertise in your sector. 

Begin with technical competence. Define your product: whether it’s a mobile app, website, VR, etc. Depending on that, look for all technologies that might be utilized in the software project and make a list. Ensure that you mention your sector in your requirements, as industry-centric CTOs are more likely to create informed solutions. 

They’ll better know what design, tech, and features are utilized in your sector. Therefore, they’re faster to onboard as well as find solutions. 

Additionally, don’t forget to make a list of personality attributes. As discussed earlier, CTOs work in coordination with the investors, owners, and teams. Hence, it’s important to rent a CTO who’s cordial to work along and can communicate with the teams as well as possible. 

As the Chief Technology Officer needs to stay up-to-date, finding someone who’s always keen to learn is also imperative. 

Below is a summary of a few most searched skill sets in a CTO:

• Passionate about research
• Quick learner
• Great leader
• Big picture thinker, having business acumen
• Great communicator
• Independent decision maker
• Good mentor/coach
• Risk taker
• Creative
• Persistent

Make purpose-based recruitment

It’s crucial to consider not just the experience and skills but also if the person fits well within the business goals and company purpose. Ensure you ask about the purpose and goals of the CTO candidates to determine if they match with yours. 

If the goals differ, there’s a high possibility that significant misunderstandings will crop up later. An individual working for distinct purposes will seek distinct tactics and solutions. Their priorities would be distinct. And that might lead to major delays, work disruption, or even product failure. 

Map out the list of skills you’re looking for

An ideal CTO is someone who has a perfect blend of soft skills and technical skills. We are not just looking for how good this individual can code. Hence, before interviewing any CTO candidate, you must map a list of skill sets you’re looking for in the CTO.

Create 1:1 mapping, with every skill set mapping to an interview step. This implies, at what time in the interview will you particularly ‘test’ if the candidate possesses the skill? Mapping is a great way to evaluate the candidates’ skills and determine if they match your needs.

Emphasize integrity, motivation, and culture fit

Interview the candidates for integrity and motivation first, knowledge and experience second. Also, never undermine the significance of cultural fit, especially for the CTO. This is an individual you will be working intimately with and entrusting your ‘big business idea’ to. Hence, ensure they fit well with your business work culture.

Make an offer they cannot turn down

You need to decide what you’re willing and able to offer. Though you might not be in a position to offer a package the candidate can receive from an established firm, you could offer the candidate equity in your company. That can help them feel more personally invested in your company and deliver the best results.

However, stay prepared for answering any questions that they might have on the available bonuses and benefits. Also, conduct enough research on common equity-centric packages and compensation.

If possible, try to make your offer to the candidate in person. After all, CTO is a crucial role, and you have put ample effort into the hiring process since day one. Hence, ascertain that you complete the process properly with a well-thought-of and personal offer you’re confident about.

Now that you know how to hire a CTO for a start-up, let’s understand when is the right time to recruit a CTO.

When to Hire a CTO for a Start-Up?

Several factors influence your decision of whether it’s time to consider a CTO for hire for your start-up. An ideal option is to find CTO if you require a top-level tech expert to handle your software product.

Here are a few factors that highlight when you should consider CTO for hire.

You do not have ample technical expertise

To remain in harmony with your software development team, you’ll need technical knowledge. Without technical know-how, you will face challenges during software development. Hence, considering how to hire a CTO becomes crucial.

You wish to have a digital transformation

If the technologies or practices you’re currently using affect productivity, it’s time to upgrade. However, a massive technology update could be difficult. A CTO can help make this transformation easy and keep your start-up updated. You must follow new trends to provide the best end-user experience. So, the expertise of a CTO is needed here. 

You want to grow your company

Another major reason for considering how to hire a CTO is your company’s growth. You already have steady revenue and a successful product, but you wish to push your company forward and grow your business. A CTO can guide you through the tech transformation process smoothly. 

For instance, if the company growth implies more user-base, the CTO can help alter the project’s architecture so it can take the load. If it is about revamping old software, the CTO guides the team in making the transformation as easy as possible.

You require a dev team leader

The CTO can assist you in managing and mentoring your dev team. Having expertise in software product development, the chief technology officer can share the expertise with other team members. Moreover, a CTO can help your business grow immensely in the tech field.

Where to Find a Good CTO?

The chances of finding a CTO for hire among managers, CEOs, or business owners, as CTOs are individuals who’re more likely involved in the technical community. It’s where they receive their knowledge and experience about the latest trends from, after all. 

So then, how to hire a CTO?

Tech Hiring Platforms

Tech professionals hardly engage with the universal hiring platforms. Fortunately, there are several tech-centric ones. You could post to various job platforms and grab the attention of passionate and interested candidates. Also, that would let you reach a wider pool of talent. 

But, as mentioned earlier, it’s important to set clear requirements, as hiring will result in eternal suffering with boundless candidates otherwise. A few popular websites to rent a CTO are Indie Hackers, Angel.co, etc.

Tech Events

Tech events such as meetups, conferences, and hackathons are a great way to find and rent a CTO. You can learn about their expertise and personal attributes without scheduling an interview. Depending on your discussion with them, the way they treat others in the tech community, and take part in workshops, you can judge their social skill sets. 

If they participate in events as speakers or actively participate in discussions, you might also get a better idea about their expertise and interests. It’s also an ideal way to meet candidates face-to-face. As most tech candidates, particularly the top-tier candidates, are passive, it’ll be better to go and find a CTO the traditional way.

Significant Online Forums

The CTOs are more likely to be active on Discord threads, Slack channels, and subreddits. By joining the communities on such platforms, you can find CTO with similar interests, learn about their skills, and identify their logic patterns.

Freelance CTO

The freelance style of working is quite popular nowadays. There are a plethora of freelancers out there, so finding one isn’t difficult. Besides, they charge less compared to the other options available to hire CTO. Plus, you don’t need to pay for the freelancers’ taxes, vacations, and sick days.

But despite these benefits, freelancing is not a great option for finding a CTO expert. CTO is a job that needs long-term commitment and cooperation, and freelancers might likely leave the project mid-way without completing it. Moreover, evaluating the candidates’ skills and knowledge can get quite complex if you are not a tech expert.

Hire an in-house CTO

Hiring a CTO in-house can be ideal if you have already launched the product, and it gets you some good investment options and revenue. An in-house CTO is entirely involved in the software project and takes a keen interest in the end result. Plus, you can discuss and communicate issues freely with the in-house CTO without any delays.

However, this CTO hiring option can be expensive due to additional expenses such as office rent, tax payments, etc. Besides, hiring an experienced and skilled CTO in-house is generally a time-consuming process.

Cost to Hire a CTO

The cost to hire CTO varies as per the size and stage of the start-up. For instance, if you’re just starting your company using minimal funding, you will likely want someone more affordable. Typically, the annual salary of a CTO ranges between $34,000 and $334,000. Hence, it is preferable to wait till your start-up has established itself before you hire a CTO.

Also Read – How to Estimate Custom Software Development Costs for Your Projects?

Alternate Ways to Finding a CTO

Are you still struggling with how to hire a CTO chief technology officer, or is money a little too tight? Fortunately, there exist alternative options to fill the CTO’s position. 

Be both a CEO and a CTO

If your project doesn’t really require top-level tech, you don’t need to invest your money and time in hiring someone. In reality, CTO themselves wouldn’t prefer joining a start-up if the project isn’t challenging enough to get involved in.

It might not be easy to do so and will need research and consultation on your part. However, it comes with certain advantages as well. You’ll not have to invest time in sharing each detail with the CTO, and there’ll not be trust issues or NDAs involved. Besides, you’ll get an opportunity to better analyze your tech decisions or product.

Consider Experienced Developers

Usually, seniors acquire a business outlook over time, apprehend how to reduce risks and enhance business processes. Hence, you can think about hiring them as your CTO during the early phase.

Post the early and technical phase, you can think of hiring someone who’s less techie. After some time, the CTO’s role becomes more about managing the business processes and doesn’t need too many technical skills. 

Hence, if an experienced and skilled CTO doesn’t wish to work on your project for a long time, you can simply offer the early phase and release them after that.

Think of Outsourcing

If your project is highly-technical, but your budget is low, and you can’t fill in two positions together, consider CTO outsourcing. It has several benefits for a start-up. For instance, you get a broader talent pool, and the charges in several places are lower than in Europe or the US. You get to cut down the budget further while recruiting remote CTO. 

However, you will have to determine how to effectively work with the remote CTO and handle cultural barriers. But CTO outsourcing is an option that shouldn’t be avoided, especially if you’re a start-up.

Overview on Hiring a CTO (Duties, Skills, Types, Challenges & Things To Avoid)

What are the Major Duties and Responsibilities of a CTO?

The duties of the CTO vary depending on the goals and size of the start-up. However, here are some of the major and most common responsibilities that a CTO fulfills:

Preparing the product’s architecture

The product’s architecture is similar to a skeleton that’ll be layered further. Software products generally have a business side, a developer’s side, and a user’s side. The first one ensures that the remaining two work cordially sans any issues. 

A product wouldn’t work properly without thoughtful and planned architecture. The CTO generally is the person who develops the product’s architecture. The more challenging the software product development is, the more the CTO works hard on architecture planning.

Developing tech strategy

The tech strategy is what further defines the responsibilities, goals, budget planning, etc. It would help to understand what the business aims to attain and what resources it needs for it. When you rent a CTO, it becomes that professional’s duty to look after creating such a tech strategy. They even ensure that the team leads, investors, and owners understand and know the strategy.

Developing the roadmap

The tech strategy has a more comprehensive version to it, i.e., the roadmap. It encapsulates not just what you’re trying to achieve but also the steps to do it. The roadmap has tasks and a deadline which later ensures better organization, monitoring, communication and quick delivery.  

Only when the CTO develops and shares the roadmap can the developers begin work on the project.

Managing the tech team

The CTO must create collaboration, support team spirit, monitor if the employees follow the roadmap, and optimize work if needed. Besides, they analyze the team members’ work, guide them whenever needed, and submit progress reports to the stakeholders and CEO.

Keeping track of the latest market trends

To make efficient decisions, the CTO must stay updated with the latest market trends. They’re the people who better understand what technology would soon become outdated and needs to be ignored. They hold the expertise on the user’s needs and core industry trends.

If they don’t do ample research, they’re likely to produce dangerous solutions that would cost the business millions to fix.

What Skills to Look for in A CTO?

Before you hire a CTO, it’s important to ensure your candidate has the required skill sets and can manage the job well. The perfect CTO candidate will possess an array of skills and backgrounds to aid your company in achieving success. Those include:

• Should have been a high-level employee or a CTO in a former company.
• Should have established one company at least as its founding member.
• Should have experience in a particular kind of business: B2C/consumer apps, B2B/enterprise software, SaaS, manufacturing, social/mobile apps, etc.
• Should be fervent about establishing new firms from scratch.
• Should know about data center and cloud infrastructure management.
• Should possess knowledge about different technologies, especially those used by firms with existing products.
• Should know how to lead and mentor the development staff.
• Should be comfortable wearing multiple hats.
• Should have a little experience in the similar or same business domain.

What are the Different Types of CTOs?

As per Gartner, there exist four major types of CTO personas you should know about. These personas will further help you understand what role the CTO plays in a company and how to hire a CTO that aligns with your vision. 

CTO as the IT CEO

The duties of a CTO as the IT CEO include:

• Ensuring that external and internal sources work and perform in sync with the company objectives.
• Assisting the development team to meet deadlines.
• Purchasing and procuring IT as well as vendor management. 

CTO as the Leader of Digital Business

The duties of the CTO as the digital business lead include:

• Monitoring the latest technology trends.
• Keeping a tab on what technologies you can use.
• Determining how the competitors are leveraging technology.

CTO as the Business Enabler

The duties of the CTO as the business enabler include:

• Making decisions related to long-term investment in technology.
• Ensuring risk assessment gets done around the selected technology.
• Leading the software team while ascertaining collaborative efforts.
• Validating if the technology is operating well and in line with the business goals.

CTO as the IT-Innovator

The duties of the CTO as the IT Innovator include:

• Modernizing infrastructure and adopting the latest cloud technologies.
• Acting as a tech innovation leader in Agile-inspired software teams.
• Guiding and leading the software development team.

Why is Finding a Good CTO Challenging?

Why should you need to know how to hire a CTO? CTOs are those people who don’t just care about creating a product and handling tasks. They also look at work from the business viewpoint and try to get the most out of the teams and tasks. They understand what factors are important and what would cost the company a lot without bringing any ROI.

Unlike the CEOs, the CTOs are active during discussions, process control, and development phase. They’ll know if the developers are doing a poor job or slacking. They’re also quick to notice minor or major issues with the software and discover a solution. And lastly, they’re leaders capable of creating a team that’ll be passionate and dedicated.

However, start-ups often find it challenging to hire a CTO that fits the bill. The process of how to hire front-end developers is not the same as how to hire a CTO chief technology officer. 

It takes profuse time, and business owners might still not find CTO that aligns with their vision. But why is that the case?

High Salary

A CTO is a unicorn who knows technology and entrepreneurship extremely well. Their duties are very crucial for the success of the business. Their decisions could either make or break the entire software project. Moreover, you require tremendous experience to work with technology and patience to stay updated if you wish to be a good CTO. 

For this reason, such professionals put forth a high salary demand. For instance, the average CTO salary in the United States is $220,354. Usually, start-ups have a small budget and cannot afford to hire CTO for the long term. 

Trust issues

The CTO will have a detailed knowledge of your product and business and maintain contact with each team member or investor. Hence, start-ups are sometimes conscious and hesitant when they hire CTO. They invest a lot of time not just evaluating the skill set of the to-be CTO but also their credibility and trustworthiness. 

Perfect personality

It’s challenging and expensive to change a CTO midway and look for a new CTO for hire. Hence, start-ups make an effort to rent a CTO that blends well with their existing team, is approved by the stakeholders and CEO, and wouldn’t leave the project mid-way. 

They are individuals with whom teams and owners will spend most of their time, so they need to have a good, easy-to-blend personality. 

Limited professionals

A CTO has an extremely responsible job, and not several people are prepared for it. For instance, not several developers wish to be a CTO due to additional skills like organization, communication, and leadership needed. Hence, there aren’t many CTOs available out there, making how to hire a CTO an even more challenging task.

You are likely to find CTO who might be ready to manage your software project during their free time. However, Software development Outsourcing is also an effective approach but cannot be completed in a day or two. The initial development year requires immense dedication and 12-13 working hours per day. And no CTO worldwide has such an amount of ‘free time.’

Lack of interest in working for a start-up

Start-ups don’t have a lot to offer initially, and you may never know if your hard work will eventually pay off. Hence, most CTOs opt to work in established companies and have ample offers to select from. Large enterprises always pay higher and provide various benefits, like a bonus, incentives, etc.

How to Avoid Hiring the Wrong CTO?

The price for hiring the wrong CTO, especially for an important position, could be extensive. If you make a bad hire, it will not just result in you losing a lot of money but also may lead to unexpected consequences. That could range from undesired repercussions on your contract issues and project architecture. 

Therefore, to avoid making hiring mistakes, here are a few principles we advise you to follow:

Don’t rush while hiring

You will not be saving your precious time if you recruit the wrong individual. Making a wrong hiring or CTO outsourcing decision will not only be a waste of your time but also your money and efforts. Hence, create a proper list of candidates so you can compare them to find the perfect fit. 

Define the duties you are hiring for accurately

Before you begin interviewing, ensure you and the candidates know the duties you expect them to fulfill as a CTO. That will not just save you time but also help you sort the ones who are not the right fit.

Stay open to divergent candidates

Limiting yourself to seeking a CTO for hire who’s just as you expected does not imply that you will find the perfect employee. Even though you have envisioned your ideal candidate a certain way, you should be open to diverse ones too. Try to meet at least two or three outsiders. People who don’t come from your industry or those with a distinct working style.

How do you decide on CTO Outsourcing?

The real question here is to ask at what phase your start-up is currently and what your tech requirements are. Many start-ups don’t require a full-time, experienced CTO. Instead, they need someone who can handle the software development team and the SDLC and make long- and short-term tech strategies. 

You have the choice of CTO outsourcing right in the beginning. That’s when there may not be any particular structure in place, and getting a working software product is all that matters. During this stage, all you’re seeking is someone who can manage the dev team and ascertain that all the features work effectively.

The individual should also be able to deal with the stakeholders and ensure the company’s long and short-term goals are met. This is generally done amid the product’s beta testing phase and during fund sourcing. Your specific project needs and budget would be the deciding factor for CTO outsourcing or hiring a CTO full-time.

Also Read – DevOps Outsourcing: How It Works, Benefits, Challenges & Strategy

Take some time to analyze your project requirements and what responsibilities the CTO would fulfill. Determine if someone coming once a week or just when it’s required would be the perfect choice to manage these duties. Then, consider how much you’re willing to spend on the services. If you have a tight budget that cannot accommodate a full-time CTO, you may have to choose CTO outsourcing.

Truth be told, CTO outsourcing makes a great interim solution that’ll meet all your requirements before you can afford a CTO full-time. Once it’s time to scale your business up, you can think of recruiting a permanent CTO who smoothens things, creates a good working structure, and manages the dev team.

Harikrishna Kundariya

CEO, eSparkBiz

Harikrishna Kundariya, a marketer, developer, IoT, chatbot and blockchain savvy, designer, co-founder, Director of eSparkBiz @Software Development Company where you can Hire Software Developers. His 12+ experience enables him to provide digital solutions to new start-ups based on Web app development.

Frequently Asked Questions

1. How much does it cost to hire a CTO?

   The cost of hiring a CTO greatly influences how to hire a CTO for a start-up process. The compensation depends upon the stage and size of the start-up. Until their Series B funding stage, most start-ups will try to lower bonus/salary (say $200,000 to $250,000 a year) in return for greater equity.

   In the later stage, the bonus/salary will be greater (say $300,000 to $450,000 a year); however, the equity would be less. But everything said, the ultimate aim is to hire CTO that suits your requirements before you discuss numbers. That's the only way you can expect an ROI, irrespective of the cost.

2. How do I hire a CTO?

   It can be not easy to hire a CTO for your start-up, especially when you do not have technical expertise. Here are some tips that can guide you to find CTO that meets your requirements:

   • Check the communication skills.
   • Go through the work experience.
   • Have a look at the candidates' social networking handles.

   If you want to recruit a CTO for short terms, you can consider CTO outsourcing from a reliable company like eSparkBiz. We provide effective IT consultation through our highly experienced senior experts.

3. When should I hire a CTO?

   It would help if you considered CTO outsourcing or hiring when:

   • You do have ample technical expertise.
   • You want a leader for your dev team.
   • You wish to have a digital transformation.
   • You want to push your firm and grow further.
4. What does a CTO actually do?

   CTO examines your company's short- and long-term needs and invests in the latest technology to redesign the old technology and meet those needs. That way, your organization can achieve internal goals and develop products that provide value and meet customer demands.

   If you still have any queries related to CTO outsourcing or the responsibilities of a CTO, feel free to contact us.

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