How Startup Founders Succeed Without a Technical Co-Founder
If you’re a non-technical startup founder, you’ve probably been told that you need a technical co-founder to help you make tech decisions.
But a trustworthy co-founder expects either equal equity in exchange for their dedication, or a hefty salary.
Unfortunately, when your business is starting out, you don’t have the cash or track record to promise high pay or valuable equity.
But guess what? You don’t need to.
Because most successful startup founders are solo founders.
If we look at the data, it’s clear that having a co-founder isn’t a prerequisite for success. Of over 6,100 startups that have had successful exits, we can see that more than 52% of them were founded by a solo founder:
More than half of startups with successful exits were founded by a solo founder. Source: CrunchBase
How do solo founders like these attract the tech talent they need to grow their startups, without breaking the bank?
They hire a part-time Virtual CTO
A part-time Virtual CTO is a technology consultant that is available “on-demand”, to help non-coding founders tackle technical issues without the need for long term commitments, high salaries, or equity.
A Virtual CTO is also known as an Interim CTO, a Fractional CTO, or even a “CTO as a Service”. These job titles all emphasize the temporary nature of the position.
Virtual CTOs are typically hired for short 12 to 24 month engagements to help you get your startup off the ground, or for on-going part-time work to assist with less frequent technical challenges.
This type of arrangement is perfect for cash poor solo founders, since you can harness all of the expertise, capability, and guidance of a full-time CTO or technical co-founder, but without sinking cash or a percentage of your business into a permanent employee.
Advantages of a Virtual CTO
Besides the cost savings, what are the other advantages of a Virtual CTO over hiring a full-time CTO or technical co-founder?
- You get on-demand technical leadership and guidance.
As history shows, startups with non-technical founders succeed when they hire a CTO early on. Hiring a Virtual CTO is an easy, cost-effective way to supplement your knowledge and experience, and to ensure that your product is built correctly.
- It’s easy on your cash flow.
Hire a part-time CTO when you can afford it, and for only as long as you need. In the ever-changing world of startups, this sort of flexibility is a huge advantage.
- You’re more likely to get funding.
Most investors won’t consider giving you funds if you don’t have an experienced CTO on board. Including a Virtual CTO in your pitch deck will instantly increase your chances of getting funded.
- They will protect you from being ripped off.
If you’re working with a freelance developer, development agency, or software vendor, the advice they give you will always be in their best interests, since they want you to keep paying them. Because a Virtual CTO is paid per engagement and is separate from the development team, they can be your advocate and trusted advisor, preventing you from being taken advantage of.
- There is less risk.
You’re not completely dependent on a full-time employee that may or may not deliver, and you don’t need to enter into a risky business relationship with a co-founder you don’t know very well. You can fire a Virtual CTO at any time if things aren’t working out.
- Your location doesn’t matter.
Unless you’re living in a tech hub like Silicon Valley, statistically, the best technical help isn’t located near you. By hiring a CTO that works remotely, you can harness the best technical talent, no matter where you’re located in the world.
Disadvantages of a Virtual CTO
It’s not all roses and sunshine. What are the disadvantages of a Virtual CTO?
They’re only a temporary solution.
Once your startup takes off, your business will need the attention of a full-time CTO.
Workaround: Check if your Virtual CTO would consider going full-time once you can provide them with the right amount of pay or equity. This is also a good way to try out a potential full-time CTO before committing.
They’re probably not going to do any coding.
In the early stages of a startup, your company should be focusing on developing your core product or service. Having an experienced technical advisor on hand to ensure development is done properly can be extremely valuable, but they should not be the person doing the actual coding. The Virtual CTO’s function is to develop the high-level technical strategy for your startup, and to assist you until you can afford a permanent technical leader. Their job isn’t to code the product for you.
Workaround: Initially, this can seem like a show-stopper for a cash-strapped startup. But having the technical leadership of an experienced professional will allow you to hire a lower cost developer or development team to do the actual coding. They can focus on building the product for you, with the guidance and leadership of the CTO. This saves you money, and ensures you end up with a product that works properly. And hiring the same lower cost developer or team without the technical leadership of a CTO is just a recipe for disaster.
They need to rediscover your business at the start of every engagement.
If you’re working with a Virtual CTO off and on, and the time between engagements is especially long, it’s easy for them to forget the details of how your business works.
Workaround: Keep in touch with your Virtual CTO between engagements, and update them on your progress regularly. This will allow them to quickly get back up to speed on the next engagement.
Long projects can get expensive.
If you have a problem that requires a long period of work from the Virtual CTO, the costs can end up being the same as a full-time CTO, or more! For example, if the CTO needs to mentor you or your staff regularly, or perform daily code reviews on a growing codebase.
Workaround: See if your Virtual CTO would consider only working on the problem 2-3 hours each day, in exchange for a lower daily or weekly rate. Then they can perform the required work, but you still aren’t paying a full-time salary.
There’s more to consider than just the pros and cons
At this point, you might be thinking that a Virtual CTO sounds pretty great.
But before you rush out and hire one, there are a few things you should consider first:
Are you at the right stage to work with one?
Businesses at certain stages of development can make the best use of a Virtual CTO’s services. If your business falls into one of the following categories, consider a Virtual CTO:
- You’re a new company just getting started, and you need advice on how to proceed.
You’re still adapting and learning about your market, but you know that you need to build software to solve your problems. Consult with a part-time CTO to figure out what to do from a strategic level, but enlist a lower cost developer to implement the technical solution your CTO recommends.
- You have a partially developed solution, but are having trouble getting a developer to stick with you.
Maybe you’re having trouble communicating your technical needs with your developers in a way that they understand. Enlist a Virtual CTO to help you come up with feature specifications and instructions that developers can use to implement solutions.
- You have a working platform, but it’s buggy.
Get a second opinion and code review from a Virtual CTO, and figure out how to fix your problems properly.
- You’ve lost your CTO.
A Virtual CTO can step in until you find someone you click with to take over.
- You’re thinking of buying a software company.
As part of your due diligence, have a Virtual CTO audit the new codebase.
How to find a good Virtual CTO
If you already have some full-time CTOs in your professional network, ask them if they would consider small engagements with you from time to time, to help you solve your problems.
Emphasize that that you will pay them their normal rate, but make it clear that you’re on a tight budget and are looking for specific and short engagements, from time to time, when you can afford them.
What if you don’t know any CTOs?
I’ve been a professional CTO for over 13 years. I work exclusively with startup founders and CEOs, so I know the problems that they face.
In fact, I've recently written a free guide to help you avoid the #1 mistake non-technical founders make when building a platform startup.
Before hiring a Virtual CTO, make sure you've solved this issue first!