How to Hire a CTO: an In-Depth Guide for Startup

The fact is, not every tech company needs a Chief Technology Officer. But if you’re reading this, chances are you’ve put together a strong team and dynamic product, and have realized you’re missing an integral piece of the puzzle. Knowing how to hire a CTO is one thing—knowing when to hire a CTO is another.

If your time to hire is now, keep reading, as this post will help with the how.

Before You Can Decide Whether You Need a Chief Technology Officer, You Have to Know What One Does.

Depending on the existing structure of your company, your Chief Technology Officer can be an incomparable one-hit wonder, banging out tech solutions by the minute…or they can be the octopus that powers every tech aspect that is keeping your business churning into the future. In either case, the CTO is the overarching strategist who will take what your company has done in the past, organize it for the present, and be the technical visionary who takes you into the future.

They manage the people, the processes, and if you want them to, they’ll help manage the product, too.

You can hire a Chief Technology Officer by following these steps:

Use the links below to jump to specific sections of the post.

1. Learn what a Chief Technology Officer actually does 
2. Know that there isn’t just one kind of Chief Technology Officer
3. Discover the right time for your company to hire a CTO
4. Consider the potential challenges you might face
5. There are four angles you can take—but each has their own pros and cons
6. When Your Startup Should Hire a CTO 
7. Determine the right kind of CTO for your unique company

So, what does a Chief Technology Officer actually do?

1. The CTO establishes processes for tech development

The software development process is critical to building a great product. Your CTO sets the framework and marching orders.

• Will you use scrum or other forms of agile development?
• How will you track development velocity?
• How will you compare teams and grow them both horizontally and vertically, using benchmarks that will keep your team motivated and aspirational?
• How is the health of your product—is it high-quality, secure, maintainable, and scalable?

Deciding how to measure all of these things and how to incentivize the team to achieve the desired goals is a critical function of the Chief Technology Officer.

2. The CTO creates the tech team culture

Yes, tech is tech. But tech is fueled by humans, and if the humans driving your tech aren’t vibing, you’ll never be able to attract and retain the talent you need to thrive (let alone meet your business objectives).

The team culture shapes your team and either keeps it vibrant or eventually empties the room. Your Chief Technology Officer will look at your staff, their tenure, and their trajectory. Who left and why? Who was promoted and why? Is there a team of senior leaders only or are junior tech contributors being recognized and pulled up the chain? What’s the churn—do you have high turnover or long haulers?

Whether you hire a remote CTO, hire a virtual CTO, or bring someone on physically, they’ll work to understand your history by gathering and considering feedback from the team. From there, they’re able to edit your org structure (or create a new one that makes sense for your team) and nurture a culture that not only reflects the principles and values of the company, but that has your team’s support because they had a voice in the creation of it.

3. The CTO plans your product’s architecture

This planning can go one of two ways, depending on your company. If you are a small startup, the Chief Technology Officer can roll up their sleeves and do the planning themselves.

But ultimately — and sooner than later if you already have a robust team—they will work with existing tech leads within each scrum team to make architecture decisions.

The CTO will guide the process, and they can of course be the final authority on the architecture. But when they delegate this responsibility to your team leads, it engages the whole group in the process. Everyone has a voice when making decisions that affect all stakeholders, and everyone gains experience that helps their career trajectory.

4. The CTO creates the tech strategy for the team

Your tech team is working away and we love that journey for you. But you didn’t get into the business to sit under a low ceiling, right? Your CTO won’t just come in and keep the ball rolling for you. They will be the ultimate visionary of your tech strategy. They’ll assess and change where needed. They’ll set goals for the team. And because they have a constant finger on the pulse of the industry, they’ll vet and introduce relevant new technologies as you grow.

5. The CTO partners with your product managers to create your roadmap

Product management knows where you need to go and where you should pause along the way. But your CTO and technical team can add to that roadmap logistically and technically, contributing perspective on the issues that always enter the roadmap via the CTO and tech team such as: 

• Security issues
• Scalability issues
• Maintainability issues
• Technical debt
• Refactoring plans

6. The CTO researches the market trends

We’ve already established that you don’t want your tech team hamstrung by a low ceiling—neither do you want your team in a proverbial windowless building. Tech travels FAST. It’s constantly evolving and iterating and unless you have a CTO with an eye on each growth spurt, your own growth will be stunted, too. Kubernetes, mobile app development, QA automation, real-time monitoring—all of these functions constantly have new tools and a better, faster, cheaper way of getting the same job done. Evaluating which technologies are a passing fad and which should be adopted is a key skill of a CTO.

Often, the CTO will establish an internal council to help with the decision-making process. Other times, the teams themselves can decide what they need or want and report back on their success. The CTO can mandate adoption of new tech or, if the company desires, the decision can be left up to the individual teams to decide.

7. The CTO sets and manages the hiring strategy for the tech team

Because the CTO is also the evangelist and gatekeeper for your company culture, it makes sense that they also oversee who contributes to it. First, an internal assessment will happen. Who is already on the team? How and when do they get reviews and raises and do you communicate pay scale transparently? And when building the structure of the team, what’s the most economical way to do it? Does your company need to train and promote from within to keep people motivated and driven to exceed goals (and to keep costs down)? Or do you need more senior staff, which might mean a higher budget but will deliver elevated productivity?

Moreover, a great CTO will also set the strategy for retention. For example, what is the response when someone says they have a job offer that pays more? If you have a CTO who has developed fair wage practices, communicated openly what the pay levels are, and offered competitive market prices, that conversation should never happen.

Still Got Questions About the Role of a CTO and How to Optimize It? Reach Out Now!

Compensation Strategies for a Chief Technology Officer (CTO)

The compensation for a CTO varies significantly based on the business’s development stage. For startups, it’s common to provide up to 30% equity, ensuring the CTO’s deep commitment to the company’s success. However, with higher equity, salaries often fall below the market average.

The compensation package is also influenced by the CTO’s experience, expertise, and reputation.

In the United States this year, the base salaries for CTOs typically range as per different percentiles:

• At the 10th percentile: $230,099
• At the 25th percentile: $265,700
• Median (50th percentile): $303,000
• At the 75th percentile: $347,400
• At the 90th percentile: $388,913
• Including bonuses and benefits, the median total compensation reaches approximately $380,591.

Contrastingly, data from angellist.co shows that many startups offer salaries ranging from $80,000 to $130,000, significantly lower than these figures, but compensate with substantial equity offerings between 10% and 30%.

But there’s a super cool plot twist: There isn’t just one kind of CTO

As you learned above, a CTO has to be multifaceted, and some are more successful, focused, or skilled in one area than another, which of course, is human nature. So when faced with a difficult challenge, the CTO will naturally default to their most dominant trait. Depending on that trait, and no matter the problem, a CTO might think the solution is either better tech, better processes, or better people. Those three angles play out in the following three scenarios:

• Tech is the answer! The tech-focused CTO will say that any problem can be solved with newer, faster, better, and/or cheaper tech. They’ll want to either buy it or build it. They are widely admired for being one of the best—if not the premiere—programmers in your organization. This CTO invents new ways of doing things. Their mind just works differently. Are they a genius? They just might be.
• Process is the answer! This CTO is center-focused on efficiency. They offer a get ‘er done mentality and not only will they get it done, they’ll tell you how to do it, too. Every challenge can be overcome by establishing repeatable processes for optimal functionality.
• Team is the answer! Give this CTO a problem and they’ll look to people to solve it. They’ll line up the faces and names and start asking questions. Who do I have on the team who can do this? Who do I need to hire? Whose performance is so low that they should be let go? How do I incentivize the team to do more? The people-person CTO is high on EQ and is known as cheerleader, coach, and quarterback of your team.

When you’re thinking about how to hire a CTO, realize that if your candidate is dominant in only one of these areas, they will ultimately fail. A team builder can hire highly skilled process and tech staff, but they’ll never be able to compensate fully for those deficits. So when hiring a CTO, look for people who have a strong combination of at least two of the above areas.

Now you’re thinking about it in the right way. You know how to hire a CTO and what to look for. 

In essence, the CTO’s role is to translate the business vision into a technological reality, ensuring the startup stays innovative and competitive.

Interim vs Temporary vs Fractional CTOs

Interim, Temporary, and Fractional Chief Technology Officers are all specialized roles within organizations that require strategic technology leadership. While they may appear similar, there are distinct differences between them.

An Interim CTO is a temporary executive brought in to fill the void created by the absence or departure of a permanent CTO. Interim CTOs typically have significant experience in technology leadership roles and can quickly assess the company’s technological needs, develop strategies, and provide guidance to the existing technology team. They offer stability during the transition period while the organization searches for a permanent CTO.

A Temporary CTO is also a short-term solution, but differs from an Interim CTO in that they are often hired for specific projects or time-limited assignments. Temporary CTOs possess specialized skills and expertise in a particular technology area or domain. They are typically engaged to lead initiatives such as system implementations, software development projects, or technology transformations. Once the project is completed, their engagement ends.

On the other hand, a Fractional CTO provides part-time strategic technology leadership to organizations. They work with multiple clients simultaneously, dedicating a fraction of their time to each organization. Fractional CTOs bring a breadth of experience and knowledge to the table, advising on technology strategy, aligning technology initiatives with business goals, and overseeing the overall technology operations.

To compare these roles, let’s take a look at the following table:

Aspect	Interim CTO	Temporary CTO	Fractional CTO
Engagement Duration	Temporary, during transition	Temporary, project-based	Ongoing, part-time
Focus	Transition management	Specific projects	Strategic technology guidance
Expertise	Broad technology leadership	Specialized skills in a domain	Diverse technology experience
Time Commitment	Full-time or near full-time	Full-time during the project	Part-time, shared with others
Cost	Typically higher	Project-specific	Cost-effective for SMEs
Continuity	Provides stability temporarily	Task-focused	Long-term strategic partnership

In summary, Interim CTOs offer stability during transitions, Temporary CTOs provide specialized expertise for projects, while Fractional CTOs deliver ongoing strategic guidance on a part-time basis. The choice of which type of CTO to engage depends on the organization’s needs, budget, and the desired level of continuity and expertise required.

When is The Right Time to Hire a Chief Technology Officer?

Here is the good news for all the non-technical founders and leaders out there: not every software startup needs a Chief Technology Officer from day one (or even day 500). And let’s be honest, unless the CTO is part of the founding team, a qualified CTO – aka a person who can lead a team of 50+ engineers and has done so already – will not want to be the CTO of a startup with a handful of engineers on the payroll and thus you probably can’t recruit her anyway.

This then begs the all-important question of when you know the time is right to hire a CTO.

Startups typically opt to hire their first Chief Technology Officer (CTO) during the seed stage primarily because they desire sufficient time to communicate their vision and long-term plans for scaling.

Answering that question depends on the product you are selling and the environment in which you operate. Here are the three main scenarios to consider:

• If you’re a B2B company with a highly technical product, hire a CTO early on. Highly technical products (think enterprise software platforms) are usually sold to a customer’s CIO or CTO. That means that virtually every major customer deal will need a technical heavyweight at the executive level that can not only sell the technical vision of your company to customers, but explain to them how your tech fits into their existing ecosystem of products (of which there are usually many). In other words, in this scenario, the CTO is really a CTSO (Chief Tech Sales Officer). They’re also tasked with being a CIO Whisperer, constantly assuring the customer that the tech works, it can scale, and that they have anytime access to a technical executive. Even if you don’t have a ton of engineers for the CTO to manage upon hiring, qualified CTO candidates will be attracted to the opportunity to make a huge impact on the financial growth of the company.
• If you’re a B2C company that’s scaling explosively out of the gates, you also want to hire a CTO early. The reason for the early hire is that in this scenario, the CTO is really a Chief Technical Scalability Officer. They have to figure out how to quickly support millions—and then billions—of users with 99.99% uptime and no loss of fidelity. Look for seriously senior experience because more junior talent just won’t have the chops to handle this type of exponential growth. Side note: If you are scaling aggressively from the start due to insatiable demand for your product then stop reading this article and go buy a lottery ticket—fortune is smiling upon you.
• If you’re a B2B or B2C company that doesn’t fall into either of the previous categories, welcome to the club. You’re in the majority and you only really need to bring on a CTO when you have a larger team in place to manage. Start with a tech lead as your team grows and let that leader have an opportunity to show off their management abilities. As you grow and add another team, bring on (or promote) another tech lead and give them time to shine, too. Once you reach about three teams, add a director level position to oversee the tech leads. Then, when you’ve got about four teams to manage, it’s time to bring on a CTO to oversee growth and solidify internal processes.

Pro tip:
If you aren’t sure how to hire a CTO (even after reading this spectacular article), bring on an advisor who can help interview for that role (it’s well worth the money).

Remember, timing is everything. CTOs are an invaluable part of any great software company, but hiring a CTO for a team that won’t scale fast could be a waste of valuable resources and invite internal turmoil. That said, when you bring one on for all the right reasons, it can steel your platform and add jet fuel to your growth.

Maybe you’ve only got 10 engineers, but your goal is to quickly scale to 100+. You’re lit, baby. Hire a CTO! Or perhaps you’ve grown up right and you already have in place your tech teams, tech leads, a director, and a VP. You’re built, superstar. Hire a CTO!

Either way, assessing what stage your company is in and identifying your core need is a perfect first step in the right direction.  The next section will get you started down the path.

Want to Talk Through the Best CTO for Your Organization? Let’s Chat!

Interview Questions to Ask CTO Candidates

Here are some tips on how to interview a CTO for a startup and what questions to ask:

1. Assess technical knowledge: Start by assessing the candidate’s technical knowledge and experience in relevant technologies for your business. Ask them about their experiences with similar projects, the tech stack they’ve worked with, and their understanding of industry trends.

2. Leadership skills: A CTO needs to have strong leadership and management skills. Ask them about their experience leading teams, managing budgets, and making strategic decisions.

3. Communication skills: Good communication is essential for any successful team or project. Ask the candidate how they communicate complex technical concepts to non-technical stakeholders, how they handle conflicts between team members or departments, and how they collaborate with other executives.

4. Problem-solving abilities: The ability to solve complex problems is crucial for a CTO role. Ask the candidate about their approach to problem-solving, examples of difficult challenges they’ve faced in previous roles, and how they resolved them.

5. Culture fit: A CTO should be aligned with your company’s values and culture. Ask them about their personal values, work style preferences, and what motivates them.

Some specific questions you could ask during the interview include:

• What motivated you to become a CTO?
• How do you stay up-to-date with new technologies and industry trends?
• Can you walk us through your experience leading development teams?
• How do you prioritize tasks when working on multiple projects simultaneously?
• Can you describe a time when you had to make a tough decision that impacted your team? How did you handle it?
• What qualities do you look for when hiring software developers?
• How would you balance innovation with maintaining stability in our technology infrastructure?
• Have you ever implemented an agile development methodology? If so, can you describe your experience with it?

Remember that each startup has its unique requirements; tailor your questions according to your business needs while keeping these general guidelines in mind.

Now you’re ready to consider the potential challenges and how to recognize which CTO is right to lead your technical teams.

Common challenges that companies face when hiring a CTO are:

• High salaries
• Lack of interest in working for a startup
• Not enough qualified professionals in the pool
• Difficulties finding the right personality and culture fit
• Trust issues

Then there are the “What if…?” questions to consider:

• What if they can’t communicate complex technical systems and considerations in a way that the executive team can understand?
  • Answer: Don’t hire them. If they can’t speak the executive language, they aren’t a fit. You have to trust their judgment—if you don’t speak a common language, how can they speak for you?
• What if they seem right but only some of the teams are on board?
  • Answer: Don’t hire them. A CTO should be a well-rounded business executive, able to work closely with various cross-functional teams. They don’t have to be fluent in every vertical, but they should be able to diplomatically communicate and partner with sales, marketing, operations, legal, compliance, and risk management, as well as the executive team.

So what’s the best way to overcome these challenges, eliminate the questions, and hire a CTO that fits in your business structure, your growth pattern, and your culture?

There are four angles you can take—but each has their own pros and cons

Hire from within

This is a great strategy for a company with adequate talent already within the organization. It’s also a positive morale practice and shows that promotions—even to the top—are possible. However, it’s not for everyone (if you don’t have a big enough pool to choose from, this approach is impossible).

Hire directly from the existing market

This option works great, too. But keep in mind that someone who is thriving at one company won’t necessarily thrive at yours. You don’t need someone who relies on past accomplishments to feed their ego. What they did somewhere else doesn’t help you reach your goals. You need someone who will absorb your culture, then add to it.

Hire freelance

BOO. This one won’t fly my friend, not for the CTO role. You are looking for citizens, not swashbucklers who jump on the ship to “save the day” then leave when a more interesting opportunity arises. Freelancers are great in some situations, but they are (rightfully) more focused on building their own brand than they are your company. If you hire a freelance CTO because you need their expertise to help you find a permanent one, good on you. But a temp CTO isn’t going to be a long-term win.

Hire an offshore solution

Now you’re cooking with gas. But do it right through a reputable, high-touch company like TurnKey. You want your CTO to be a citizen, remember? They have to live and breathe your company, embody your values, and be passionate about your culture, goals, and platform. Quick test questions to ask yourself if you go this route: Do they add you to their LinkedIn profile? Do you know (and control) their salary?

And now, here we are. You made it! You know you need to hire a CTO and you’ve narrowed down the challenges, options, and considerations. You’ve got your business acumen tight, your technical leader is on board, and you’re ready for a steady stream of potential candidates. Your CTO position is ready… congrats!

So how do you find the right Chief Technology Officer for your startup? Simply follow these five steps…

If you aren’t technical yourself, bring on a technical advisor before hiring a CTO.

• Define your CTO requirements and non-negotiables, and determine the technical background and type of CTO you need.
• When going through the interview process, prioritize motivation, integrity, and culture fit.
• When you identify your ideal target, discuss the exciting challenges and sell the position.
• Don’t settle—and don’t stop until you’ve found the right candidates.
• When you’ve found your diamond, make a compelling offer they can’t refuse.

…or you can call TurnKey for help.

We’ve been in your shoes so we know how challenging finding the right CTO can be. Partner with TurnKey to help you talk through all the key issues around the CTO layer—both from a people and process perspective—and help you maximize your chances of success. We’d love to connect and discuss ways we can help make your life easier! Drop us a note here and we’ll get back to you lickety split:

FAQs

What is a CTO responsible for?

That depends on what you want them to be responsible for. Your Chief Technology Officer can be the master of one or the master of all. In either case, your CTO is the overarching strategist who will take what your company has done in the past, organize it for the present, and be the technical visionary who takes you into the future.

When should a startup hire a CTO?

That answer is different for everyone. If you’re a B2B with a highly technical product, hire a Chief Technology Officer sooner than later. Same goes for if you’ve got a B2C product that is exploding out of the gate. If those two scenarios don’t describe you, you’re in the majority, and you’re good to wait until you have a team large enough to warrant the hire.

What does a compensation package look like for a startup CTO?

Compensation depends on the size and stage of the company. Most startups in the Seed through Series B will look to lower salary/bonus (say $200,000-$250,000 per year) in exchange for greater equity (say 1-3%). In later stage companies, the salary/bonus piece will be larger (say $300,000-$450,000) but the equity will be less (i.e., .5-1%). But with all that said, the #1 goal is to find the right fit before you talk numbers—that’s the only way you can guarantee an ROI regardless of the price tag.

Where can I find a CTO for my startup?

You can start by calling us… we navigate that road all day every day and can find someone who will hit the ground running for you, stat. Your other options are going to take more time (but hey, you’re not busy…right?). You could hire from within if you have anyone who fits the bill (but if that were the case you’d have thought of that already), hire from within the market (and cross your fingers it’s a culture fit), or hire a freelancer (and pray they’re more interested in your product than their own portfolio).