The Rise of the Fractional CTO
Written by Chris Picard
Power Up Software Engineer Co-Founder and CTO Chris explains the reasons behind hiring a fractional CTO.
There has been a surge in startups using fractional CTOs instead of full-time CTOs in recent years. This raises the question of why this is happening. Is this a good approach? What is the right approach for your startup? In this fractional CTO blog post, we will address all these questions.
Top Three Reasons for Using a Fractional CTO
1. Availability of Resources:
Several drivers are causing the rise in fractional CTOs. The most significant factor is the availability of resources. To be a good CTO, you must have strong technical acumen, be an engineering leader, understand the business, and be able to communicate the technical vision effectively. Finding all these traits in one person is extremely rare, leading to companies making compromises.
Larger companies tend to make compromises on engineering leadership abilities and technical acumen. The result is a CTO who knows the business well but makes poor technical decisions and is not relatable to the engineering team.
Based on conversations I have had with startup founders, they tend to compromise on the CTO's ability to understand the business and ability to communicate the technical vision. This results in bad business decisions and confusion from investors. These compromises are not suitable for any business, let alone a startup.
2. Cost:
Another major driver is the cost of a CTO. The salary range of a CTO can range from $100,000 to $450,000. However, most senior software developers will make at least $200,000 a year. Top companies can even exceed the high end of the CTO range. This means to get a quality CTO, you would need to be on the high end of the scale. Most startups could not afford that rate if it were not for a fractional number of hours.
3. Not Having Enough Work:
The final major driver for the rise of fractional CTOs is not having enough work for a full-time CTO. Only some start-ups are heavily tech-focused. You may need regular part-time technical direction. You might need help developing a technical product but do not need a CTO to maintain the product.
Each startup is different, and their technical needs are different. Before the rise of the fractional CTO, startups without a technical focus would contract out all the technical work to a development shop. This led to numerous issues with product quality, predatory behaviors, and conflict between the founders and the development team. Eventually, startup founders realized that hiring a fractional CTO solved these issues and let them focus on their vision.
Picking Your Approach
So, what is the right approach for your startup- should you hire a fractional CTO or a full-time one?
Here are questions to consider, and feel free to write out your answers to these questions below:
What is the nature of your startup's technical work? This one is the most important thing to consider first.
Do you have enough work to warrant a full-time CTO?
Is the technical aspect the cornerstone of your business or simply something needed to achieve your business goals?
What is your budget for a CTO?
Who is your ideal candidate?
A good strategy might be to start with a fractional CTO at the start to get things moving and then transition to a full-time CTO down the road. These are all things to consider when making this decision, but only you can know what is truly right for your business.
If you want to discuss your business needs or are curious about our fractional CTO services, please visit our page or contact us here.
