ct

Don’t even doubt it. If you want to found a startup, the figure of the CTO (from the English, Chief Technology Officer) must not be missing from the beginning of the idea. He will be the one responsible for designing and leading the entire technological strategy to enable what you have conceived in your head. “We have to make it clear that we are not talking about a programmer. The CTO is someone who guides the startup’s technology beyond programming,” warns Quino Fernández, program director at Conexión. “What sets us apart is the ability to execute. When your product is technology based, the success does not lie in the happy idea you came up with by creating a Gin and Tonic. Success lies in knowing how to start it, and for that you need a CTO,” he emphasizes Angelica Lozano, CTO of mLean.

That will be crucial at the beginning. “In smaller startups, this is usually one of the founders and more or less young people, someone who is technically very good, possibly the best engineer in the company, but with little technical or personnel management experience. And at a certain level, management capacity makes a good CTO. My experience tells me that you have to be able to organize with 10 or 12 people. As much as people are very good at what they do, they need someone to set the guidelines for what the technology product and the company need. And how to translate those needs into code,” he explains. Jordi Miró, former CTO of Wuaki.tv.

ghosts in the shadows

Call them formerly CTOs, CTOs, or technical co-founders Steve Wozniack (Apple co-founder) and Mark Zuckerberg (Facebook co-founder). The crucial role they play in the early stages of a startup is well summed up by a recent experience of startup Ghinwa, a karaoke app for the Arabic market. “Ghinwa has gone from a failed prototype to a winner of the $50,000 MIT competition. Before I joined the project, my partner and CEO Mohammed Almunaikh tried to apply to a freelancer for the first time and it didn’t work at all. In fact they hired me, they showed me the code and we couldn’t. They spent the money on a worthless MVP (minimum viable product),” he warns. Alfonso Fernandez, CTO of Ghinwa.

After Fernández took on the role of technology partner, the project got off to a smooth start and was funded today with just 3 million euros. Why is there such a high probability that something will go wrong when development is outsourced? “It’s a matter of commitment. We have assembled a dedicated team of five people and also worked with external parties. With the outsourcing consultancy that has helped us at certain times in development but the involvement is very noticeable when it’s our own team. When you work with outsiders, you have to give them everything very precisely, because they don’t have that proactivity to care about the product, they literally do what you tell them. And in a start-up, the commitment of each team member to bring their opinion on the product is essential, as this is a phase of idea generation and implementation,” says Alfonso Fernández.

And what seems to have little to do with technology: The CTO is the key to raising funds. “When you’re seeking capital with a technology project and you don’t have a technology lead who I believe is capable of leading the project, it’s very complex. At the end of the day, what an investor is looking for is that you have a complete team. And if you don’t have a thinker right from the start in the technological area, whether it’s a partner or first employee, it’s very complicated, because if you do outsourcing of the technology from day one, where is the value for the company?” comments Jordi Miró.

expensive and scarce

If they are so important, why are so many startups doing without them? For two simple and very important reasons. First, the cost: “The salary of a CTO is between 40,000 and 50,000 in the startup area; between 70,000 and 90,000 if he assumes a leadership role, and from there he skyrockets with a premium of between 100,000 and 200,000 euros. If it is a company that cannot have such high salaries, it can offer Equity capital and lower salary. 5% for example if the company did not enter a round. And that 5% will grow a lot when the rounds start. When the CTO enters late stages, we’re talking about 0.1% or 0.2%,” he points out Javier Santana, former CTO of Carto. In this sense, Jordi Miró is clear: “You have to be ready to offer a good package Equity capital especially if you bring someone with outside experience who knows how to turn that first product into reality and is willing to trade their employment situation for something with more risk but with some reward. Because he’s taking a chance with you.”

The second brake is the scarcity of this type of profile. “It’s crazy, today in Spain there aren’t many profiles that have managed great teams. They can be counted on the fingers of both hands. That is why it is common that in a startup someone is brought to grow within the team who has more leadership, so that he not only manages the purely technical part but also the people,” recommends Javier Santana.

This deficiency is due to the necessary combination of technical and business knowledge required for the position. Something that involves a lot of personal training from each technician. “We’re complicated, introverted, we don’t have easy communication with other realms, we’re too closed off in our zeros and in our programming, and we have a very hard time making ourselves understood by other realms. And here the CTO has a very important role to play, translating this language of engineers into something that can be understood in a marketing, product or finance department and vice versa,” stresses Jordi Miró.

How to choose the most suitable one

It is clear that the CTO will be the one who will decide which technology will enable the development of the idea, and who will hire and lead the entire technical team. But there are other questions to ask yourself before you decide:

How mature is the project? “For me there are two central themes. When starting the company, the CTO must be part of the initial workforce that is not a contractor because they must understand the vision very well, why we develop what we develop and believe in it. And second, that they have knowledge or an intrinsic motivation to dominate, otherwise it will be impossible. If you want to start a business with a personal trainer type application, choose someone who loves sports and is a user of this type of platform. Then, as you grow, it might make sense to hire a more professional CTO – in quotes – to help you meet the challenges the company continues to face as it gets bigger, but very important to me at first, especially the knowledge around the domain,” emphasizes Angélica Lozano. And he adds: “As the company grows, you may need another person who has experienced this scale in people and products, and it’s time to hire an outside CTO. But in early startups, I don’t recommend it.”

What type of CTO do I need? “Ask yourself what role the CTO should play. If you need him to be the best engineer because you only have three engineers, then look for that and not someone who has more of a managerial profile. Now that the company is growing, you need someone who is technically quite good but knows how to understand the business, understand the product and generate resources, both people and money,” explains Jordi Miró. And he adds: “You have to learn to distinguish when you want to do things very well, when you want to run and do them less well, which risks you take and which not. In general, I see that these are many startups fail. Founders have been able to grow to a point, but then struggle to do things they haven’t done before. Even I. I took up to 100 people with me. I’ve done it in different environments, projects and countries. But can I carry 500? I don’t know because I’ve never done it before and maybe my degree of maximum disability comes into it,” says Jordi Miró.

Technical and managerial skills. “For me, a good CTO needs three things: technical knowledge of what they are working on, the ability to lead people, and a global vision of the company. Although the company is small and very technological, there are always things that you need to be aware of and not solely focus on one part. You need business knowledge because you have to make many decisions that affect the business on a daily basis. When the team starts to grow, they need to know how to deal with people, how to organize a team, how to organize a development process so that everyone has a job, can make decisions and really does what the company needs,” explains Javier Santa Claus.

For Angélica Lozano, this combination of skills will be fundamental as the project grows: “At the technical level, the big challenge is scalability as the company grows, but as the company grows you also have to manage the human part. Remember that we usually grow a lot. We went from zero to 23 in three years. They grow by one and a half people a month. It’s very demanding for the team and can have an impact on the culture.”

modesty. The ability to learn with humility is also essential. “There is no such thing as a CTO master’s degree, you can’t go anywhere to learn how to become a CTO. So you must have the humility to reach out and learn from other people in the community. Don’t be afraid to ask how you solved something and learn from the mistakes of others. When you are in a position of leadership and leadership it seems that each of you expects to be told what to do and that is not always the case. Sometimes you have to admit that you don’t have an answer today, but you will find the solution,” says Angélica Lozano.

I AM SURE YOU ARE INTERESTED…

How to assemble the first team of a startup

CTO, Head of Technology