Friday, January 31, 2014

If you need a CTO, clap your hands

A great many startups are looking for CTOs, and I've seen quite a few stuck for several months without progress because of that, so I thought I'd share a little something to help them.

Why you really need a CTO

Oftentimes, people ask me to be their CTO thinking I'll be coding for free for some months before I can confirm that they can execute on the business end.

Other than being a not-very-interesting proposition, what terrifies me is the complete disregard for their startup's real needs.

What's missing in a startup that has no CTO is not a free coder, it's the insight required to provide the business with:
  • feasibility assessments
  • cost estimates for different plans
  • insights into technology to uncover better options
  • the best technology choice for the business objective
  • skill assessments to select the best coders
  • IT project management to ensure the execution of the plans
  • and so much more.
Many startups that picked their CTO as "just a free coder" have the wrong CTO when it comes to the above points, which are critical factors in terms of product quality.

Additionally, skilled professionals such as myself are not really interested in working for cheap on somebody else's idea, not only because the current market values our skills quite a bit, but also because every creator out there has a lot of ideas of his own.

So what's the plan ?

First, you need that CTO - advisor, that guy who's going to give you a chance at going in the right direction product-wise.
You will find that a lot of highly skilled professionals will be more interested by the real CTO role than the free coder proposition, and it will be easy to negotiate that for less equity than the old-style CTO-freecoder package.

Second, you must accept that the product you're going to base your whole business on may cost you some cash, just like a lot of your marketing will.

I usually price top quality v1.0's between €15K and  €25K, which I bundle with a "Backend as a Service" proposition that lets you run your startup without tech guys until it starts making money and further versions can be considered.

It may sound expensive, but it's actually really cheap, and you most likely have 15% equity that you can find investors for, who will have the conviction that you can at least deliver your product, given the track record of the company you've contracted to build it (me, for example).

It's also important to reserve a bit more cash than that, as you'll inevitably order "not exactly what you need", and you must be able to get a v1.1 out before you run out of budget.

Either way, good luck.