6 keys to choosing a great CTO who will ace your company's product strategy

One of the most critical tasks you’ll have as a non-technical founder is hiring an effective CTO that can execute your company’s technical vision. Make no mistake, this choice can make or break your company’s product strategy.

Many questions will inevitably pop up: What do I look for? What should I offer? How do I know I got the right person for the job?

Here are some hard-earned lessons we learned from helping startup founders find top tier technical talent for CTO positions so you can avoid the most common pitfalls and get ahead of the curve.

So what does a CTO do?

First, let’s define what a Chief Technology Officer (or CTO for short) actually does. In a nutshell, the CTO is the number one technical person on your team. Just as a CEO defines the overall company’s strategy, a CTO defines the technical strategy that goes along with the overall business strategy. This is the person who will guide every high-level technical decision your company makes in terms of technology and product.

A CTO should also help define the technical stack for your company’s products and services, both internal (operations) as well as external (i.e. client-facing), as well as the technical skills your company should hire for.

Also, If the company is a “pure software play” then the technical strategy most likely is the business strategy, in which case the role of the CTO is even more important.

What follows are some key points you should focus on when looking for a prospective CTO that can execute your company’s technical strategy.

1. Different skills for different stages

At certain companies, the CTO position can be somewhat symbolic, with very little involvement in all things technology. These are not the kind of companies we are talking about here. We are talking about the kind of companies where actual software products need to be released on a regular basis.

With that out of the way, a distinction should be made between a startup and a more established company. In a startup, the CTO will probably need to code along with your team and in some cases potentially do all the coding, at least until the company can secure an investment round to grow your technology team. In this case you really need to find someone with the technical skills needed to get your product off the ground, at least in MVP form (i.e. without all the bells and whistles of a full-fledged product).

On the other hand, for a more established company that’s already up and running with a tech team in place, then the CTO could likely have a more “hands-off” approach, helping shape high-level technical decisions without getting down to coding.

2. Technical skills

For a CTO-level position it’s pretty much mandatory to be able to show a track record of building robust systems end to end. They should have a very comprehensive understanding of the various aspects that make up the entire product strategy. This includes not only programming but also product design, user experience (UX), quality assurance, security and more.

By contrast, a very senior programmer who only has experience on a narrow subset of software problems is probably not an ideal candidate for a CTO position. Their experience might be quite deep but still too narrow.

Ideally, you should be looking for a CTO that has experience in the industry your company is targeting. If, for example your company is going into the Fintech space then having a CTO with experience in the financial services sector would be a huge plus: Not only is there a lot less explaining to do in terms of how the financial industry works but also, chances are she is already aware of some of the blind spots from that industry, which could be a great competitive advantage.

That said, a lack of experience in a particular industry can be overcome by having a solid track record in a wide range of other areas. The idea here is that if they were able to take on many varied technical challenges in the past, you can be more confident assuming they will be able to transition to your target industry effectively.

3. Mind the “soft” skills

It’s really important to remember that a CTO is a leadership position. As such, it will require the ability to pitch ideas, negotiate, empathize, influence and manage people. Unfortunately, some of the most capable technologists out there who could code your entire product stack with one hand tied to their backs and their eyes closed may be somewhat lacking in “people skills”. Sad but true.

The good news is that these so-called people skills can absolutely be learned and coached for. But this obviously requires a personal desire and commitment from the candidate to grow in that direction. The main takeaway here is that you should be wary of candidates not understanding the need for such skills, no matter how technically capable they are.

4. Beyond technical skills

There’s another aspect of leadership that is often overlooked, especially when the focus is pure technical skills.

Ideally, a CTO should bring to the table more than just specific knowledge. They should also contribute a strategic vision that complements the company’s overall strategy. This includes having a vision around product, business, company culture and more.

An ideal candidate for a long-term CTO position should not only have great technical skills, but also a sense of leadership and the ability to think strategically. If any of these are missing then you might be setting the bar a bit too low.

5. Have a realistic view of the challenge ahead

One of the main mistakes we see non-technical founders make is underestimating the challenging nature of building software products.

Software development can be quite grueling and much less forgiving than other areas like sales, marketing, etc. where mistakes might be more easily fixed. A bad product can make or break your company and potentially kill your financial runway.

So it’s useful to realize that the CTO will probably bear a huge responsibility with lots of moving parts and a high degree of unpredictability which invariably comes with the act of building, launching and iterating complex software products.

Sadly, we see many non-technical founders and CEOs underestimate the complexity of the CTO role and all the hard work and dedication it takes to even qualify for such a position. They are under the perception that the technical side of things is easier than it actually is (”it’s just code, right?”) and that’s usually reflected in both their attitude during negotiations as well as in the caliber of the offers they make to a prospective CTO.

Another way to look at this is by thinking that a person with the skills it takes to single-handedly build world-class products can probably work anywhere they choose. And yes, this also includes starting their own companies and potentially becoming a competitor.

6. Make concrete offers

Okay, let’s say you found the perfect CTO candidate. Congrats!

But how do you get them onboard and what should you offer?

Most C-level positions will be mainly motivated by equity and a CTO is no exception. A common mistake we see a lot of founders and CEOs make during negotiations is not being clear in their offers and dancing around the subject of how much equity they are willing to give up in exchange for all the hard work ahead.

It’s not my place to tell you to offer 50% equity, or 5% or 2%. All I’m saying is that you should have a realistic view of the importance that technology plays in your company’s long-term strategy and value your offer accordingly.

Here’s a video by Michael Siebel from Y-Combinator speaking exactly about this subject:

The main takeaway is to make sure you make a tangible offer based on a realistic view of the value this role will contribute to the company long term.

Parting thoughts

Needless to say, there are no hard and fast rules for hiring top-tier talent. Making the right decision will depend on your company’s particular context, industry and growth stage.

In this post we wanted to share some of the lessons learned from our experience both sourcing top-tier talent for CTO positions as well as some of our individual experiences being considered for such positions.

Hopefully this post will help you gain some perspective for landing the amazing technical talent that will make your company a total success!