When Should a Company Hire Their First CTO?

Hiring a c-level tech leader is a major milestone for any organisation and sets the tone for a tech-led strategy for everyone from the top down. But when is the right time to start your CTO (Chief Technology Officer) recruitment drive, and how’s the best way to go about this?

Firstly though, before we delve into the details of this post, here’s a link that explains the roles and responsibilities of chief technology officer. Becoming aware of the daily and strategic duties of this senior leader will help you to recognise the need for investment in this area. If you are on the cusp of initiating your recruitment drive for a CTO, you’ll need a reliable starting block for building your first CTO job description, use this resource to deepen your understanding for the role, as well as browse available CTO job listings for inspiration and take note of the typical salaries offered to ensure the hire is within your staffing budget.

OK, here goes.

Recruiting a Chief Technology Officer (CTO) is a significant milestone in the development of any company. Yet, it can also be an expensive one, fraught with difficulties and hurdles if not handled correctly.

With senior and experienced tech professionals becoming increasingly scarce and priced at a premium, not to mention, with many start-up founders and SME owners coming from non-technical backgrounds, finding a dedicated CTO can prove challenging. Communicating your technical needs and developing a personnel specification might seem like a daunting task, let alone delivering a shortlist of qualified applicants.

Some experts believe the best time to recruit a CTO is during the seed or Series A funding stage, while others believe it should be done during the conceptual (pre-revenue) formation of a business. There is also a school of thought that says that hiring a part-time, consultant or temporary CTO for a certain project or product launch is the smartest, most cost-effective option.

FanFinders, a marketing company that links brands with parents, hired its first CTO after 4 years of trading. “I knew bringing someone in-house was the solution because we had previously outsourced,” says Alec Dobbie, co-founder of the company.

“The reality is that you need that person to be absorbed in the business day in and day out to truly lead your IT,” he says. “When you have someone external, they may be technically proficient, but you’re still lacking that commitment in the larger business plan, and to some extent, they’re unable to commit at the required level.”

“As a co-founder, you’re essentially handing over the keys to this individual to head up a critical area of your business,” Dobbie continues, “so trust must be an absolute priority.”

Recognising that most businesses are financially constrained when it comes to attracting top talent right away, Dobbie suggests two alternatives. The first is to hire someone with potential in a lower-level position to see whether they can grow into what you require over the course of time. According to Dobbie, the second alternative is to sell prospective hires on the concept that they have influence over their professional fate and the resulting effect on your company’s success.

“It should be exciting for any technologist to be able to make those big, defining decisions and operate on a green field,” he explains.

Paul Gwynn, FanFinders’ eventual CTO appointment, reminded us that it’s critical for any new CTO to have established credentials and a proven track record of driving either similar, or the exact goals of the organisation.

“If a crucial component of executing against strategy is hiring a CTO, then a company needs to select someone that has expertise of going through a comparable process. They should have been successful in constructing infrastructure to deliver on business strategies, which might have included software, hardware, or staffing. “It’s all about the big picture,” Gwynn explains.

But he warns: “In the past, I’ve seen CTOs come in and put in a number of inferior procedures where there were already solid ones just for the sake of putting down a marker, creating conflict in the process and demoralising the team.”

Leaving the hire too late can also cause problems. According to Robin Beattie, General Director of Spinks, Harvey Nash Group’s specialty start-up and scale-up recruiting arm, many entrepreneurs wind up delaying the hire not because of financial limitations, but because they find it difficult to let go.

“Often, founders/owners don’t feel they need a CTO because they’re technical experts themselves and know their own business inside out. They don’t have a team of 30-40 technical people and don’t have large-scale architecture – they think they can still manage everything themselves,” Beattie says.

“But it gets harder as the business begins to scale.”

Is a full-time CTO always the answer?

Spinks suggests a so-called partial CTO – someone who works 2-3 days per week or even a month – while other experts propose an interim CTO to gain an insight of what can be achieved in the early days or to drive a specific project forwards.

When it comes to interim CTOs, Heather Abbott of AKF Partners frequently fills the void for smaller organisations who are unable or hesitant to hire a professional CTO yet require input and direction at this level.

“Interim CTOs can help bring in external experience or validation for new approaches to key priorities and challenges. As such, an interim CTO is often brought in when a significant threat arises to help troubleshoot the problem and to make potentially difficult calls and changes to fix the issue, getting the tech team back on track to success,” she says.

“Being a temporary outsider can make it easier to objectively dive into issues and to make fair but perhaps hard decisions, particularly when it comes to sensitive areas, such as organisational and team structures.”

Abbott adds: “The temporary nature of the assignment can be effectively used to create more of a sense of urgency on key priorities. Still, it’s vital to always think carefully about any projects that would be better to be delayed until the full-time candidate is on-board.”

According to Abbott, before you even begin the hiring process, you should consider not only what you need now or in the short term, but also what skills and experience you’ll need two or three years down the road.

“Make a prioritised list of the most important capabilities, skills, and aptitudes of your CTO. Most importantly, as well as having the technical knowledge and know-how, can the candidate translate that tech speak into the language of business? Can they transfer the technology strategy onto a wider product and company strategy and vision?” she says.

“One of the top reasons for CTO turnover is a lack of business acumen and these kinds of competencies should be highlighted in any job description.”

Alan Baldwin, an ex-police officer, admits it was tough for his startup Practice to Progress to find its first CTO, as he felt the company was then “largely made up of less tech-savvy people.”

The company, founded in 2019, helps anyone, whatever rank and role, to join the police service or reach their career goals within policing, regardless of background.

Baldwin’s brother James eventually filled his CTO role, but he advises that you should think about what your business might need from technology prior to your recruitment search.

“It’s easy to assume you know what the CTO does, but very often in a startup there are nuances to take into consideration,” he says. “Look for someone that wants to understand your business, not just the technology.”

While there is no one-size-fits-all approach to when or how companies should hire their first CTO, there are several common areas that all companies, large and small, should consider in advance of any recruitment attempts. And, perhaps most significantly, this careful evaluation of what the company requires and the personnel specification needed in order to turn the company’s theory into reality, shouldn’t always result in a full-time job offer.