Technology · Product Development

CTO vs. Product Engineer/Development - What are the differences?

GREG WOOD

August 1st, 2016

Until now we have always outsourced our technology development. Now we are at a critical point where we need to add this key talent to our team. What makes more sense for us to be able to raise funding, a CTO or Product Engineer? Until now it has been the founders vision and execution, we need someone to own this function now, but also share in our vision. Ideally it would be someone that would have a stake in the business and not just an employee.

How do I go about finding such a person if I am not running in the same networking circles? We are putting together a roll up strategy and need this venture to be tech enabled. So this is obviously a huge factor in scalability.

Any help would be welcomed.

Peter Baltaxe Consultant, product leader, serial entrepreneur

August 1st, 2016

Let me touch on a couple of issues:

I have invested in startups with strong local technical leadership where all the code writing is done offshore.  This can be a very attractive model since capable developers in many locales are very had to come by, and the costs of offshore development is typically 25%-30% of local salaries.  So I'm not sure you need a technical leader who is going to write lots of code.

In my view a technical leader as part of your investable team needs to be able to:
- Vet and recruit technical talent (onshore or offshore)
- Set technology strategy, make technical architectural decisions, research 3rd party technologies and platforms (e.g. AWS vs. Azure)
- Set the dev ops and general SW deployment strategy (and likely manage it)
- Review all the incoming code
- Set up the QA processes
- Set up data management and backup processes and infrastructure
- Manage all the technical resources
- Other stuff I'm forgetting (e.g. set up on-call for outages)
Many CTO's I have worked with still like writing code.  But without knowing more it is hard to assess whether that would be a good use of their time.

Often the product roadmap is set by the head of product management or the CEO rather than the head of development.  Someone who is close to customers.

As a potential investor, I would want to see an engineering leader who:
- Has experience in the class of applications that you are building.
- Has managed teams, ideally has worked with outsourced teams before
- Has experience in the breadth of disciplines described above
- Has made architectural decisions and 3rd party tech decisions and can articulate and defend their rationale for their choices

As an angel investor who sees a lot of pitches, it is worrisome to see junior developers or even more experienced developers (IC's) being given the CTO title.  This can become a problem when you need to bring in someone more senior, and it hints at either naivete among leadership or ego on the part of the employee.  I prefer "head of SW development" or something similar.

As far as where to find them.  Good suggestions above.  Go where they go, e.g. meetups on startups or meetups on specific relevant technical issues, e.g. Angular JS.

Martin Omansky Independent Venture Capital & Private Equity Professional

August 1st, 2016

I suggest a CTO if you are planning on (a) having the CTO work as a senior member of the team; (b) a contributing member to the strategic positioning of the firm; and (c) compensating him/her with a relatively large amount of stock or options. On recruitment, we have found that a good place to go for higher level people is the relevant professional association; for working engineers - those that might work well but have no company-wide administrative duties, we often look to university placement offices.

Aaron Call

August 1st, 2016

Greg,

Not knowing your product but knowing startups - I believe what you want is a VP of R&D or a VP of Product Development. 

In my experience, CTO describes a VERY technical, scientific and seasoned individual that will probably not be very deep into the weeds of the technology - less hands on.

Product Engineer is someone primarily in the weeds that can get sh*# done and do it well but is not visionary enough. 

This is where I see the VP of Product Development being the right person for what you need - someone who is technical enough and startup oriented enough to drive the business from a product perspective, but also someone who can get into the weeds when needed.

David Austin Relentless problem solver and innovator.

August 1st, 2016

Not intending to point out the obvious, but the only consistent difference (from startup to startup) is that a CTO is a C-level executive. All the other differences are determined by how you set up your organization. Personally, I'm not a big fan of bringing in people to a startup at a high level unless necessary and the person is very well vetted.  It's shocking how seldom that is the case.

Dan Meier

August 1st, 2016

I sadly share the opposite conundrum.  I'm a technical person with a strong technical vision, lots of industry experience, and developing a solid product that's gaining interest in my industry. But I'm having difficulty connecting with a business-side cofounder to drive business development and fundraising. Potential partners acknowledge the potential in the product and the plan, but they demur, claiming no "passion" for the industry (manufacturing).  GE has been spending tons of money advertising for engineers in their Industrial IoT efforts for the same reason -- the industry just isn't sexy.

So...I'll follow this thread closely!  :-)  Many thanks for raising the topic.  Making connections is what it's all about, and one never knows where the next opportunity will originate!

David Pariseau

August 1st, 2016

I've filled "all-the-above" roles and my hands have always been "dirty" work-wise.  In my view the CTO designation indicates that you have someone who is both technical and can lead (and often actively participate) in development and who has significant skin in the game, so that a significant portion of their compensation is upside is based on the performance and ultimate success of the venture.

As opposed to being merely salaried, with perhaps some bonus incentives.  In a large company their role might focus on technology and R&D, in a startup that role, in my opinion, should also encompass development (internal and external) and managing the roadmap with input from the other disciplines.

Steve Getman Partner/CTO/CIO at Flash Point Communications

August 1st, 2016

In my experience "CTO" indicates a larger role than managing the development and direction of a product or products. I do that in my current role, but also much more. Martin provided a good guideline above I think.

If you're a start up, you likely don't need a CTO at this point.

Feel free to reach out. I'm happy to answer any questions or provide any advice I can.

Anonymous

August 1st, 2016

My business partner and myself have been the visionaries for the last 8 years but tied down my a major sponsor/consulting project that has held us back from growth. During that time we were able to build up a brand and a subscription business that we are looking to use as a platform to pull other small companies together to make a very unique platform.

The key missing position when pitching to investors is that high level tech person. Tom, I think you gave sound advice. It does really come down to who and not what they can do. I need someone that we can get along with and that has a background that can lead us into the next phase of our business. That is what investors are going to be looking for...

Anthony Dobaj

August 1st, 2016

You're right on to recognize that this is a key role you need to fill, I would go as far as to say immediately. Moving forward with a technical product without a technical co-founder is a recipe for disaster. Call him or her whatever you want, but he or she must have deep domain experience as both individual contributor and leader. The body of knowledge (in software development, for example) is huge and so it's not sufficient to bring on a "software" expert, you might need to hire a consultant to get the right person in the first place depending upon what need you're addressing. If the system you're building is not based upon sound architectural principles, it's a house of cards. I attended a state-sponsored hackathon that was moderated by non-technical judges, and not surprisingly the entry with the prettiest pictures won the $25K prize, never mind that the code base would never meet any of the stated requirements. As far as finding one, right here is a great place to start - from personal experience. You're certainly not going to find the right person right out of college. As has been suggested I would go to relevant tech-specific SIG meetups, hackathons, Comicon (haha), and other places where geeks  might gather.

Steve Nieker

August 2nd, 2016

I lurk a lot. Sometimes, I see a trainwreck of answers and can't help myself...

In a startup, EVERY hire has to be an "owner." Yours won't scale quickly or adapt responsibly unless you trust every member of your team owns something. Of course, higher-level team members "own” more - they are responsible for the aggregate --but by delegating small chunks of ownership to subordinates, more gets done, more quickly, and with higher commitment to quality.

You haven't spelled out fully what this hire would oversee. Clearly, product engineering…but to what extent will they own the vision? Will they be responsible for interfaces or usabilityfor any aspect of customer satisfaction or support...for deployment, scaling, and recovery?

In my CTO roles, I was sometimes responsible for only product and system engineering (including deployment and scaling). Other times, I also oversaw product roadmaps, usability, and A|B testing. My VPs owned aspects of product or aspects of tech. Beneath them, there were product engineers, system engineers, designers, usability engineers, product managers, etc.

In a startup, we all expect to wear many hats -- I've been the CTO overseeing all of that, and I've also been the CTO doing all of that -- it all depends on where you are in your growth curve. Figure out what you want this person to own, and let the title follow. Are you looking to have one person own a lot and, in the future, hire subordinates? Or are you looking to have someone take over product engineering, while you retain ownership of other responsibilities, perhaps to delegate to other, future hires? The answer to that will tell you what you're hiring for.