Great ideas for new software products often don’t start with technical visionaries.
When you look at the composition of a typical board of directors for startups, they are made up of CEOs, CFOs and investors. They are the types of people that bring a wealth of experience to the table, with a vast amount of specific expertise, but that does not often include deep technical proficiency. Founders are usually visionaries in the field driven by a problem or inefficiency they experience when stepping into the customer’s shoes.
Well-known examples of tech start-ups built by non-technical founders include AirBnB (Brian Chesky was a designer), Pandora (Tim Westergren was a sound engineer and musician), Pinterest (Evan Sharp was studying architecture and history) and even what are today legendary enterprise companies, like Oracle (Larry Ellison was in sales). While all of these companies ultimately brought on CTOs, it was these founders’ understanding and vision around filling a market need that propelled them forward in the early days.
The Challenge Facing Non-Technical Founders
Dilution of equity or control
One of the primary reasons that early-stage companies such as the above don’t bring a CTO in from the start is because they don’t want to dilute their equity or lose control of their vision. However, eventually, they will reach a stage in their journey where they don’t have the right technical resources to scale up and have problems attracting the top talent. When a company is not a recognized brand, it is difficult to compete with enterprise organizations for technology experts, especially when it doesn’t appear that there is a clear leadership in place for the development team.
Finding time to learn new skills
Moreover, founders need to wear many different hats and have incredibly fast-paced roles, making it challenging for them to find the time to educate themselves on the technology dependencies of the business. While ideally a founder should learn the basics of technology, strong business acumen and an ability to communicate with customers are critical skills to understanding the path to profitability. In addition, these visionaries tend to be highly effective leaders and recognize the value that collaboration and high-performing teams deliver to their business.
Profitability
Ultimately, all founders, technical and non-technical, are bound by the bottom line and must deliver returns. Early on, it can be pressure simply to make payroll and in later stages the focus shifts to growing revenue and profitability. Regardless, founders are accountable for results and need to understand the key components to growing a successful business.
The Non-Technical Founder as Product Manager
One of the top reasons startups fail is a lack of market need for the product or service or not understanding the customer. The deep market knowledge that non-technical founders instill in a business is critical to their early success. The role of product manager often naturally falls to them in the early days, which includes defining the Minimum Viable Product (MVP) and validating market fit.
For example, Melody McCloskey is the founder of StyleSeat, an online appointment management system for stylists and the largest marketplace in the beauty services industry. She is a non-technical innovator with a background in product and PR and shares a passion with her co-founder, Dan Levine, for making solutions that appeal to the beauty industry. For McCloskey, speed and decision-making skills count for much more than technical ability. Her exceptional product management skills have brought the company further forward than any coding or technology could do.
So even if you are a product manager extradonnaire, what should non-technical founders be thinking about to assess their need for a CTO? Let’s take a closer look.
Filling the Gaps Before You are Ready for a CTO
One of the biggest mistakes a non-technical founder can make is hiring a CTO before working on their commercial and product strategies. Those plans will inform the technology strategy and whoever you employ to develop and fulfill it. Unless you can clearly identify the value that a CTO brings to the business right away, you probably shouldn’t be hiring one. In the early days, investing in a product manager role and a couple key developer resources could be sufficient for building the Minimum Viable Product (MVP), rather than needing someone to fulfil the responsibilities of a CTO.
Here are some steps that a non-technical founder can take as they evolve the business and determine what’s needed from a technical leadership and team perspective:
Defining the product strategy
The passion and market experience of a non-technical founder that drove them to start the company is typically the best starting point. Develop a plan that paints a clear picture of the value your product will bring to the market, how it is different from competitors and how it will complement other market offerings, including those of strategic partners.
Leveraging your domain expertise in the market
The non-technical founder understands what the customer needs and should use that knowledge to test and retest in the market until they get it right. You should be testing whether your solution is worthy of developing a MVP through relevant stakeholder insights and feedback.
Understanding the need for a CTO
If your business is at a point where it may need technical knowledge and resources to scale up, you might be ready to hire a CTO. The first step is to understand what a CTO does and how that role can fill your talent gaps or develop your product. If you have 1-2 key technical resources in place, they could step up to the position, but they don’t always have the necessary lateral thinking ability.
Finding the right technology partner
Regardless of what stage of growth you are in, the right technology partner can fill in gaps as the business transforms. That’s why it’s critical to find a partner who fully understands and supports your vision and can develop the overall strategy. Look for partners with a deep-bench of talent, who will work with you to build out your short and long-term resource plans and closely align to your culture and values. And avoid traditional, siloed outsourcing models of yesterday that don’t provide the flexibility to participate in today’s modern, agile software development models. Work with someone you trust to find technical partners and take the time to interview, review portfolios and speak to clients.
When is it Time to Hire a CTO?
You’ve made it so far without a CTO, but how do you know when it’s time to bring on this key resource? There are many reasons to hire a CTO, but here are a couple of key factors to consider:
Complexity of technology
Product engineering is challenging or you are highly dependent on “bleeding edge” technology (such as Artificial Intelligence, Blockchain, Virtual Reality) to succeed.
Difficulty in defining the roadmap
The process for gathering and prioritizing requirements is unclear or incomplete. You need help in implementing best practices and leadership in managing customer, sales and executive team requests.
Need to Scale
If you are dependent on a couple of key resources, the team may struggle to evolve the product to the next level. Or perhaps you need to expand into new markets and need to ensure the product can keep pace. This will draw the attention of investors and boards, who may recommend bringing on a CTO or finding the right partner to fill the gap.
CTOs or a strategic partner will typically oversee software development, in-house and commercial software, and digital transformation. They often act as lead technical engineer and bring deep experience to their roles. They should also be a trusted advisor and partner to the non-technical founder and be committed to bringing their vision to life.
Summary
Building a technical startup without a CTO is well within the realms of possibility. Non-technical founders with the right passion and drive can bring tremendous value and passion to the business. The key is knowing when to bring in the right technical leadership resources that will accelerate you to the next stage of growth.