How to Find a CTO for Your SaaS Solution?

CTOs are on fire with enough organizational and technical skills to create and manage a company. CTOs are often industry veterans with years of experience managing and running a business. On the other hand, it can often be inexperienced but talented programmers who have turned their passion for programming into a business. This article will help you better understand the function and role of a CTO in SaaS development and how to find the very professional for your project.

What is the role of CTO in SaaS: explanation video

The Mission of a CTO

We live in a time when the IT industry is very actively being built today, consisting of a huge number of IT products. There are a lot of them now and more are appearing. Each of them requires a CTO. In all countries, the problem is with the staff, it’s hard to hire IT people and all the more difficult to find good and experienced ones. Obviously, without competent technical management, any product can disappear. As a result, the whole business will suffer.

Creating a software product is a production that can only work with a competent manager. Under no circumstances should this product be left without CTO. Although sometimes some products survived and even developed well, despite the absence of an obvious CTO. 

This happens not because this position is not needed but because it is implicitly distributed among several employees and often the owners do not even realize it. Hiring a good CTO is a big problem. This problem would be less if the owners understood what the CTO should do and at what moment. 40% of the problems occur because the wrong person is chosen as the CTO.  

CTO duties

1. Full Technical Responsibility - СTO Responsible for all technical solutions used in the product. And most importantly, for all their consequences.

2. Management of development priorities and development plan - it depends on the CTO in what order the requirements will be developed. This is not to say that only networks determine a development plan because it is primarily determined at the level of the product and business, that is, marketing by the director or product manager. The CTO adjusts the priorities and the plan taking into account all the technical features that affect the development, most often these are technical dependencies that do not make it possible to develop according to the most desirable plan for the business.

3. Responsibility for the cost of development - it is the СTO that answers investors for the cost of production and answers questions about why it costs so much and why you need to develop something without which it is possible the business can live and also participates in determining the development budget and makes estimates for future development.

4. Political and diplomatic responsibility is to communicate with clients if necessary. Either with investors in case of raising money or with other products with which it is necessary to integrate and some complex technical issues arise. Also, with any business representatives who require contact with a person representing the production.

Why Does Your SaaS Solution Need a CTO?

You can work without CTO, but you can’t work without its functions. Therefore, in small and medium-sized products it so often happens that there is no one particular dedicated chief technology officer. But this does not mean that no one is fulfilling his duties. In such companies, often all technical issues lie with the “technical lead”. All financial and political issues are dissolved between the CEO and the Project Manager. By the way, most often in the process of product evolution, a project manager appears first who begins to perform as a CTO, and only with further product growth and staff increase do separate dedicated service stations appear. 

For example, in Stripo.email, one of the products we are developing, there is no concrete chief technology officer and never has been. Even though the total staff is already 28 people. His responsibilities are distributed between a very strong project manager, an equally strong tech leader, and a CEO.

Another example is the SaaS product esputnik.com in which more than 80 people and 40 of them are developers. This product already has a dedicated chief technology officer, which no longer serves as a manager or analyst.

Why Is It Hard to Find a CTO?

The functions of the chief technology officer are always at absolutely any stage of the product, a question in their scale and complexity. It is better to distinguish three phases of product development that differ fundamentally in how CTO should work.

Phase 1 - Startup and MVP development

As a rule, it lasts up to six months. If you release the first version over six months, you already have problems and need to review priorities urgently. This stage is characterized by the fact that: 

• Not enough money; there is always not enough;

• The business model was not found and not proven, so the speed of change and experimentation should be very high;

• The team is very small and should be minimal to fit into a limited budget;

• You need to develop it in quick and dirty mode to start checking the market faster and not investing in excess quality, reliability, security, and stability.

Phase 2 - Post MVP stage

• The first customers appear, which means that absolutely real feedback starts from them, which must be taken into account - development goes from “imagination-driven” to “customer-driven”;

• The goal of this stage is to gain marketing traction - that is, to do everything you need to prove the viability of business models;

• The business is constantly in brainstorming mode and within 1-2 years there may be several pivots that require a drastic change in the development strategy.

Phase 3 - Mature product

• This is not necessarily a product that works in plus or goes to 0, it can even work in minus, but it has not yet returned the investment. But the most important thing is that the business model is fully proven and there is a very specific increase in revenue;

• Business security is of paramount importance as well as its stabilization. The emphasis should be on protecting the product from all sides;

• As the number of clients grows, performance, server database architecture, and overall application speed begin to matter. Because of this, you can lose customers;

• Delegation business processes begin to line up actively, and so on - new posts appear, and the product begins to grow in people where there was no need before;

• At some point, business processes begin to streamline.

IMPORTANT: Before hiring CTO you must understand very well at what stage you depend on which different people will be suitable.

Now let us consider the function of SRT at each stage in detail.

CTO in a startup

• Creating MVP and especially its cost is very dependent on CTO. Choosing technologies, teams, and building a development plan considering all priorities and business requirements leads either to the successful creation of the product's first version or to complete failure. Startup cost savings of 90% depend on CTO. This is critical for a startup because money is always insufficient to cover risks and unpredictable events.

• Oddly enough, the CTO of a startup should be a salesman, and he will have to sell confidence and reliability in it as a Technical Leader to investors. Indeed, investors in the person of CTO will see the person on whom the technical success of the project depends. CTO attends all meetings with investors, answers technical questions, and does everything necessary to instill confidence in technical success.

• CTO in a startup is not so much a manager as a jack of all trades. Most often, the development team consists of either one or several people and there is no one to manage, instead, he must do it himself. Therefore, the best CTO in a startup is a techie with extensive experience in development and preferably knowledge of different technologies.

All of the above does not seem like a classic understanding of the role of the CTO. It is rather a very technical lead, a little salesman, an entrepreneur, and a creative person all rolled into one.

The worst mistake of the chief technology officer at this stage: is it is inadequate to spend money - to recruit a lot of people to build some unnecessary processes, develop unnecessary functionality, develop what is not verified by the market and what is difficult to sell, allow yourself extra experiments. That is why one cannot take directors from large established and mature companies as STO startups. They are used to working in other modes and are not used to being sprinters.

Qualities that a CTO in a startup should possess

From the point of view of the Adizes system, CTO is:

• Producer. Because it should quickly and efficiently produce results;

• Businessman. Because it should be flexible and entrepreneurial, not afraid to take risks, and look for new effective ways and solutions;

• Administrator and integrator. At this stage, almost no need because there is no one to manage and no one to integrate. For small teams, these qualities are needed to a minimum.

СТО on the post-MVP stage

At this stage, CTO should ensure that the feedback from the customers of the product is implemented as quickly as possible and the product begins to satisfy their expectations as much as possible. In the beginning, the development of promising functionality will most likely recede into the background or be suspended altogether.

Now, most likely, the product either pays for the development or there is an investment. Therefore, the development goes into the budgeting mode and CTO should manage the budget as competently as possible.

We must work closely with marketers to ensure maximum product compliance with the market, so CTO should be as business-driven as possible. Each pivot will be a serious task for him.

Since, at this stage most of the money goes into sales and marketing, CTO should provide support and maintenance of the product with a minimum budget without spending money on developing what does not provide marketing benefits.

If the product is successful and growing, then CTO will have to recruit people to conduct interviews, begin to form a team and fine-tune processes. Most likely, at this moment, he will still be personally involved in project management and analytics, but gradually this will have to be delegated. If all is well, at that moment, CTO begins to transform into a manager.

 

The worst mistake of the chief technology officer at this stage is to be focused on something other than making the product as adequate as possible for the market and going through the stage of establishing it as a business.

Qualities that CTO should have at the post-MVP stage

From the point of view of the Adizes system, STO now becomes:

• Integrator. Stronger than at any other moment because if the project is growing, you need to recruit people, form a team, and start delegating. And at this moment, it is important to maintain efficiency and create a good cohesive team, it is here that it is important to be an integrator more than anyone.

• Producer. It is very important to stop them from doing everything on their own because CTO will become a neck bot on all fronts, in which case development will be impossible.

• Businessman. To be an entrepreneur, you don’t need to do other things with all this and focus on production and the team.

• Admin. It's time to start being an administrator because it is impossible to manage others without it. It is especially important to combine the administrator and the integrator in yourself correctly.

СTO at the mature product stage

As a rule, at this stage, the product sharply begins to technically not satisfy the business because it was developed according to compromise principles with a minimal budget in high-risk conditions (what we call quick and dirty). Now CTO has a lot of work because, on all fronts, it is necessary to modify the product and sharpen it under the growing customer traffic and growing loads.

Typically, this is associated with the following tasks:

• Poor code quality and product architecture. CTO must properly organize refactoring. Now refactoring is an integral part of the budget and development process.

• Security is a very complex and extensive topic requiring audits and fixing a large number of problems. And when the project is noticeable, security holes should never be left behind as it can be fatal for the business.

• Load scaling. Most often, this means that it is necessary to redo the entire architecture of the backend. Its complexity increases many times over, a big decision date is introduced, etc.

• Test Automation. Most likely, before that, there was no budget to automate testing, but now that the complexity of the system has increased many times, the number of people in the team has increased, the number of developed functionality has increased, and you can’t categorically rely on manual testing. Firstly, it is expensive, and secondly, it is very difficult to ensure a high-quality product. Automated test coverage is now becoming an integral part of the budget and a new development standard.

The worst mistake of the chief technology officer at this stage: This is if he does not have experience in developing large complex products, he decides to work in the old way (i.e., Quick and dirty) and does not understand how important it is to switch to a professional development model. The project will likely not survive for any of the above reasons - it just loses the technical competition.

Qualities that must be possessed at the stage of a mature product

From the point of view of the Adizes system, STO now becomes:

• Integrator. You will have to continue to be an integrator if you want to create self-organizing teams and spend less time on its management and also on solving all the problems of the human factor.

• Producer. At this stage, nothing has remained of the producer for a long time.

• Businessman. Likewise, entrepreneurship is optional at this stage.

• The administrator will have to be exactly the extent to which your team still needs to become completely self-organizing. Most likely, it will never become completely as it is a utopia. Therefore, the entire list of administrative skills must be in place. Always have to manage teams with people with low awareness and poor motivation.

The problem of transition from stage to stage

The biggest challenge of the transition is that it always happens at different times in one day. This is usually a process that takes months, maybe even years. You need to be able to transform yourself and transform the team on the one hand without harming the business, that is, gradually, on the other hand, quickly enough and without wasting time.

The most unpleasant thing is that, most likely, the same person will not be able to stretch the product through all three phases, turning from a startup to other types until a mature, successful company with a large staff. This is because good talented technical managers and creators are unlikely to want to turn into an administrator and an integrator. After all, they will have to give up their favorite business and do something else and it is unlikely to be a pleasure.

And most likely, it will turn out that the product will need three different people to go through all three phases effectively.

Best Way How to Find a CTO For Your SaaS

You can outsource the CTO function. At first glance, it seems that it is impossible, at least for the following reasons:

1. Investors very often require the CTO function to be inside the Core team (or business team). In most cases, they also require that he be in the country where the investor is.

2. Often, outsourcing companies do not offer the CTO function as a service since either they cannot do this because they do not have the expertise to develop their own products or cannot delve so deeply into their customers' products.

If your product is at the stage of a mature business, then it is definitely too late for you to think about outsourcing the service station and it should be on staff and work full-time. However, for startups and products in the post-MVP stage, it is often difficult to find a good CTO, either expensive or unrealistic. And at this point, CTO outsourcing can be a perfect solution if the outsourcing company can do this.

For example, our company offers to block all the functions of service stations for investors and founders who cannot do this. Because we have experience in developing our products and understand this cycle from beginning to end. We have experience in this both from the point of view of technology and the point of view of a business. We can afford to provide this service for SaaS development, which is very atypical for an outsourcing company.

Our experience shows that it does not matter whether CTO is with the team. With a sufficiently large team, it is much more important than the project manager is with the developers. In completely distributed or remote teams, it is generally impossible to be with the team. However, we generally do not recommend creating your own distributed teams for complex and long-term projects. Sooner or later, it turns out to be ineffective.

Final Thoughts

Finding a CTO in your field takes a lot of work. A great CTO for one project can be completely incompetent for another. And even keeping one specialist from the moment of the startup to a mature product is also a rather difficult task. The stages of the project and the functions that the chief technology will face should be considered.

And if you are still looking for a chief technology officer for SaaS development, let's discuss this. Please fill out the form below, and we will answer you quickly and think about what dedicated development team can be gathered for your product.