Before we understand the importance of a Chief Technology Officer (CTO), we must first define what the role is and what their day-to-day tasks are within a company. The growth of the online world, and the vast array of new technologies that come with that, have created somewhat of a business boom over the past three decades.
It stands to reason that the more businesses there are, the more Chief Technology Officers are needed to assist those businesses. Any successful modern-day technology business needs someone who can grow products, build an efficient workforce, and choose the best technology stack. That is where the CTO comes in.
However, there is one problem that faces a number of technology businesses, particularly start-ups. They have a need for a CTO but do not necessarily have the budget to afford one. Hiring an in-house CTO to work in the building day in and day out requires a competitive annual salary for a senior role – something not many start-ups can afford right away. So, how can you get all the benefits of a CTO while saving money? Fractional CTOs.
A fractional CTO is a Chief Technology Officer who provides expertise on a temporary basis, rather than being tied into a contract as a full-time in-house employee. This is essentially like a part-time freelance CTO. Start-ups who require CTO knowledge, experience, and expertise, may not always have the capital to afford such a resource. In fact, start-ups with limited budgets would be naïve to splash a huge percentage of their funding on a full-time CTO. The truth is, during the early growth phase of a start-up technology business, you may not even require a full-time CTO.
Strategic technological leadership is imperative for any technology start-up in the early days. Whether a business is going to succeed, or fail is often decided within those early weeks and months, so setting yourself up on the right path is vital. A lot of businesses initially ask their fractional CTOs to concentrate on technology strategy. This involves discussing the overall long-term and short-term goals of the business, before allowing the CTO to design a technological plan that aligns with those aims. The plan often revolves around creating a path map, making choices relating to technical infrastructure and architecture, and choosing the best technology stack for the individual business. This is so important for young businesses to ensure they are not simply walking blind from day one.
Once the overarching plan is in place, it is the role of a fractional Chief Technology Officer to provide technical leadership. The development team should look towards the CTO for guidance as the business grows while maintaining the most efficient and effective technology and practices at every step of the way. You can think of the CTO as the captain of your technology ship.
Fractional CTOs can also often help with recruitment, ensuring that the best employees are hired with the perfect technology knowledge to carry out the pre-determined plan. This basically involves using their CTO knowledge and experience to highlight the best people for the job. Every business is different, and therefore the recruitment process is often very individualized. Once the new recruits are hired, the CTO also assists with technical management.
The fractional CTO should also be working closely with the in-house product team to ensure that everything is on the right track. Not only should the product be fitting the design brief, but it should also be perfectly aligned with the overall plan for the business, while generating happy customers. Because happy customers are repeat customers.
The final key role of a CTO is to serve as a communication hub for the technology side of the company. It is their job to keep all the relevant teams informed at every turn. A lack of communication is the enemy of progress, after all. The fractional Chief Technology Officer should be meeting with the company execs and the CEO in order to streamline the vision for the business, ensuring that everyone is on the same page.
While an in-house CTO would work with the team every single working day and would be 100% committed to that business and only that business, the same cannot be said for fractional CTOs. If you only pay for a part-time CTO, you obviously only get them part-time. Fractional CTOs usually work on a per-project basis or work contract to contract. This is the perfect compromise between the requirements of the business and the finances of the business. Gaining access to seasoned leadership and expertise can be way beyond the reach of the average start-up, but fractional services bring those services back within reach.
That being said, as a business grows, the customer base increases and the technology needs to expand, there may eventually be a natural movement from a fractional CTO to an in-house CTO. This gives the business a more hands-on and permanent face behind the technology planning and leadership. Having experienced a fractional CTO may make the process of hiring a full-time CTO far easier though, as the business has come to understand the requirements and expectations associated with the role.
Of course, there are a number of pros and cons of using a fractional CTO vs a standard CTO, and these pros and cons can change over time depending on what stage the start-up is in. Something that may be a pro in the early days may be less of a positive as the business grows, for example, or vice versa. We will explore the pros and cons of fractional CTOs for start-ups and investors in future articles.
