Why your Start-up needs CTO as a Service

It has been shown that 70% of start-ups fail within their first 2-5 years because they are not able to build the foundation needed to successfully scale their business. Building a digital product requires a competent team and a scalable technology stack in order to achieve profitability. When companies lay the groundwork needed, they are more likely to survive. But, without the guidance of a CTO, many start-ups lack the expertise and strategic oversight to establish a reliable infrastructure.

Many start-ups cannot afford a CTO, which is why we offer a CTO as a service model (also known as CTOaaS or CaaS). In this post we will explore the role of a CTO, how CTO as a service works, and what CTOaaS can do for your business.

One of the main benefits of having a CTO is that they can help a technology start-up attract and retain top technical talent. In addition, an experienced CTO will help to build a positive work environment that encourages collaboration and innovation.

Smaller start-ups without a CTO may be less agile and less able to adapt to new technologies, which can put them at a disadvantage compared to their competitors.

Why start-ups don’t hire CTOs

Often, start-ups don’t hire CTOs in their early stages due to several barriers to entry. Even though it is well-known that a CTO can offer immense benefits, start-ups struggle with three main challenges:

• Cost

  The cost of a full-time, high-salary executive is the main reason start-ups don’t onboard CTOs right away. They fear they won't get a return on the expensive salary.

• Finding the right fit

  Vetting candidates is difficult and it is hard to ensure that a CTO possesses the necessary skills for the specific company and work culture. Finding a candidate with the precise expertise to match the start-up’s needs can be a challenge.

• Full-time is not needed:

  Not every start-up needs a full-time CTO, as they may just need oversight for certain projects or phases at specified times. In this situation, paying a full-time executive doesn’t seem cost-effective.

What is CTO As a Service?

CTOaaS is a business model where start-ups are able to benefit from the expertise of a CTO, without committing to the overhead. Working with a network of CTOs, start-ups can consult with professionals on a one-off or duration-based timeframe to address specific needs, while benefiting from a specialist suited to the exact project scope.

On-demand CTOs offer a range of services, including:

• Strategic technical solutions
• Expert leadership & oversight
• Software development solutions
• Implementing sustainable systems
• Building a scalable MVP
• Positioning the startup to secure funding
• Data engineering solutions
• SaaS migrations
• Team mentoring, assessments, and coaching

 

CTOaaS provides the expertise and guidance of an in-house CTO but is far more cost-effective than hiring a full-time executive to oversee the technological aspects of the business. In addition, start-ups can select from a diverse range of candidates and choose an individual that fits their company's tech stack, culture, and vision for the future, while also benefitting from the network of professionals their CTO can consult with.

How a CTOaaS Helps Start-Ups Scale

A CTO on demand helps emerging technology companies build a solid foundation. Below are four ways a CTOaaS provider can help start-ups scale.

Early-stage MVP development

The MVP is not a rough sketch; it is the foundation of your final product, and every development hinges on a strategic start. Although it may not have the full set of features, it needs to be created with the final outcome in mind and working with a CTO will help your startup ensure success at this crucial stage.

Mid and late-stage data solutions

As a startup evolves, it amasses immense volumes of data. Usually, most startups don’t have the resources to make the most of this data in the form of driving insights, creating forecasts, and integrating AI/ML. CTOs can help you build effective data warehouses and migrate to SaaS platform to make the most of your growing data-pool to eliminate manual labor, redundancy, and errors.

Technology due diligence

CTOs have experience working with various tech stacks and third party solutions to build profitable digital products. A knowledgeable CTO will help businesses choose the right technologies saving them valuable resources at critical points in development.

Effective leadership

Founders are too busy to provide adequate oversight and management on all technical projects. Hiring a CTO on demand brings a new, outside perspective to the table to help influence architectural and technical decisions. CTOs also have experience building effective IT development teams. Bringing on a leader can dramatically change the work culture and create the right team qualities necessary to capture market share.

Benefits of Using a CTO on Demand

While not every tech company needs a CTO, all start-ups can benefit from the skill set offered by an individual with experience in scaling digital products. Below are five benefits of hiring a CTO on demand.

• Optimize Development Cost
• Integrate the Latest Technology
• Improve the Overall Quality of the Product
• Identify Weaknesses
• Coach and Assess IT Team

 

Case study: What a CTO can do

This example will show how a CTO works and can benefit a company. We examine how a failed insurance services marketplace platform didn't have the financial stability to hire a full-time CTO, but desperately needed leadership in developing its product.

The founder built a marketplace platform with the help of an external IT company. Outsourcing development projects are common in the space; however, the choices made around the company's launch will dramatically impact the company's trajectory. In this case, the IT company built the software with overly complex technologies. As a result, all work going forward required developers to have experience in these technologies. Hiring these types of employees is expensive and they are difficult to find.

Choosing the wrong tech stack for a web marketplace has significant consequences. The situation could have been avoided if the founder had started with common programming languages suitable for these types of platforms. If they had made better choices in building the start-up infrastructure, the company would have had a better chance of survival. Instead, the founder couldn't afford a team to develop the platform, and the project died.

Hiring a CTO on demand in the initial development stages of the marketplace would have been highly beneficial for the start-up. A knowledgeable CTO would have recognized that the platform was being built with a practical tech stack and suggested a more pragmatic approach. In addition, a start-up technology consultant could have offered a hiring strategy to build a team of developers to help the marketplace grow.

Work with a CTO using Scale App

Scale App is a comprehensive CTO services provider available to start-ups on an as-needed basis. The model is the most cost-effective way to build technologies ready to scale. At Scale App, founders can easily find a CTO from our extensive talent pool of diverse, qualified, and experienced candidates.

Find an independent, virtual CTO on demand at Scale App. For more information, please reach out to our team for a free consultation.