Startups · CTO

Experience vs. Talent? Finding a talented Architect/ CTO for your startup

Kristina Cebatko Project Manager & Commercial Assistant at Pursuance Capital

September 6th, 2016

I am sure some of you have faced the same issue like we are facing. We are IT startup in Malta working on developing digital platform for High Net Worth Individuals. So....we have the idea, we have the plan, the structure and ready to build the platform but faced with one big issue - finding the right Architect/ CTO to build our platform and lead the future team seems to be a big challenge...We have interviewed few great highly experienced CTO`s but the problem with experienced Architects - they are too expensive and would not sacrifice salary for equity. When you are Startup company you cannot afford to pay 000,000 yearly salary to your CTO/lead BackEnd Developer. What should you do? Experience vs talent. Which would you choose if were IT Startup providing services to highly demanding demographics?

The question is - Where do you find passionate, genuine, young, talented, entrepreneurial Back End Developers/ Future CTO`s with co-founder mentality that would be interested in joining a really exciting project to build a disruptive service? So far I am getting replies just from highly experienced CTO`s who request huge salaries and we cannot afford them. However, who we are looking for - is someone who is young, has co-founder mentality, highly analytical and passionate about being part of startup.Really struggling to find these type of Architects.

I do not know where the problem is...maybe we put the wrong title in the job spec? Originally we did put role as CTO so perhaps that puts off some of talented Back End Developers/Architects as they might think they are not experienced enough to apply for this position?

What your advice/ recommendations be? How and where we can talented Architect/ future CTO with co-founder mentality and entrepreneurial spirit?
A great idea is 1% of the work. Execution is the other 99%. In this course, we’ll teach you how to conduct market analysis, create an MVP and pivot (if needed), launch your business, survey customers, iterate your product/service based on feedback, and gain traction quickly.

Doug Winter Founder and Director of Isotoma

September 7th, 2016

Bluntly this is a sellers market.  There are very few people with the characteristics you describe and they can earn $200k+ plus options at Google, Facebook, Apple etc.

They are not being unreasonable in choosing to do that, really.

You probably don't need that kind of person full time though, so you may be better finding an agency to do the build for you, and they provide the specialist skills.  If your startup takes off then you are in a position to recruit a team to take it forward.



Eyal Feingersch

September 7th, 2016

Pitch to potential tech co-founders the same way you do for investors.
Convince them that their investment (time is money) is worthwhile.
If your team has entrepreneurship record, it could help a lot.
Otherwise, techs might disregard you as 'idea people'.

Terrance Boult El Pomar Prof of Innovation and Security at U. Colorado at Colorado Springs

September 6th, 2016

For pure equity you probably have two choices:  someone still in school (talent with no experience) or someone with talent whose done well enough to take the no-salary risk.   If you want experience you'll need someone that could be your client (High net worth), which means they will also have a lot of ideas about how the business should work, not just a architect that will implement your ideas.   You'll need to treat them as a partner, not an employee. 

You did not mention how much equity was being offered. 
All too often I work with business folks that want to offer the CTO a small equity stake, 5 or 10%, while the "business founders" are at 40%."  That sends a clear message about how you value them and I advise potential CTOs to steer clear of that.   (5% can be fine if they are are also getting normal salary but even 10% when there is no salary is insufficient).    The "idea" is worth very little, its the execution that matters and for a tech-based product/service the tech is probably critical part of the execution and worth nearly equal valuation as the idea. 

If your equity offer is reasonable,  and If you want an experienced CTOs that already has many options you have to consider what motivates them.  Most are likely looking to do something that either moves them toward the CEO role (if they like that side of the business), or that is technologically interesting or both.    The way you describe your effort it sounds like it offers neither.   So the only remaining motivation would be $$, so for someone that has multiple potential directions, the upside has to be high and risk low which is why cash+equity is the norm unless they are the actual founders. 

You've not described the role well enough to answer if you described it wrong. As a rule of thumb, if there are not multiple developers you don't need a CTO, you need a developer and if they are not working with customers and setting product vision,  they are not CTO (they are a head of engineering or something).  

Your best bet is to hang out at startup event/co-working space and build relationships.  If you want to find young talent, you might also try working with tech faculty at the local school, or work some entrepreneurial event there to see about finding talented student developers.

John Cwikla I build. You sell. Boom.

September 7th, 2016

I'm old, but I'll answer anyway....

If you want to hire me can you:

a) excite me so much about your product that money doesn't matter - I WANT to take equity? It doesn't even have to be a billion dollar exit - maybe I've never worked on this before and it sounds fun?  Like the video above - if you can sell me, money isn't that interesting....

b) When you talk about equity, have you done the math? Most startups exit in the 30-50 million dollar range (if at all). So when you offer half a percent of a company with the risk involved how does that equate to potential earnings against other companies for the next 4 years? (Remember YOU believe you have 100 million dollar company, if you haven't nailed a) then why are we here:).  So many times I talk to founders who want me to take the risk at 0.5 or 2-3% when they have 50%.  Sure that's going to happen....

c) Do you have funding? Not angels - that's easy.  Real funding. A few million.  Now YOU are in the driver seat. You can pay me salary and KEEP your equity. You can afford to hire smarter people than me from Google or Facebook. But that doesn't sounds like where you are at.

d) Do you have customers? Paying customers? Non-friendly customers? That are growing?   You now have a lot more power in your hands because a tech leader can accelerate the business you have already figured out.  If you haven't - it's all risk.  Same for me as it is for you. It doesn't matter if you spent 3 years on this - you are where you are and I'm joining at the same risky place as you. So either match me in equity against yourself, or pay me market rate.  Why would I do otherwise?  

e) Do you have an MVP?  Actually I don't care. It was probably outsourced and is a piece of garbage, that I have to figure out how to support, and you have a customer who needs stuff, and you need it soon, but even though that could make/break your company you have this idea of giving pennies away to make it happen.

f) None of the above. Let's be partners. With a great story that makes me want to join you. ;)

So my real advice - if you want a great VP (if you need one) - give equity in a range that is above and beyond (for fun read the Y Combinator doc about equity vs value).  Offer a salary that is something you and they can live with, something that could help pay a bill or two with a promise.  The promise - so now you have good equity and a shitty salary. The promise when you raise a significant round (A round usually) that you will bring them up to something close to market. 80-100k at first to 150-200k after (I'm in San Francisco, your mileage will vary).   If you raise an A round, and they got you there, and you are happy with them - you will not care about the cash at that point. And quite frankly they will be much more bought into the company that I can almost guarantee at that point they'd rather receive more equity than compensation going forward...


Josh McCormack Owner, InteractiveQA - Marketing, Web Dev, Testing, Data & Market Analysis

September 7th, 2016

Doug Winter summed it up well - a lot of people with strong technical skills can earn good money for their labor. The risk/delayed reward ratio just isn't right for them.

Try to start out simple. Don't make too many technical decisions/assumptions yourself. If you don't really know what you're doing, you might make things more complicated and expensive. Understand that you might need to pay a lot in cash or equity for technical expertise.

Be careful who  you use. I've recruited a lot of people to work for me and others. You have to know how to identify and avoid people who want to build beautiful code from scratch so that it's perfect. You want to use existing code as much as possible, keep things simple. 

More experienced people will also help you avoid getting trapped in corners when circumstances change. Inexperienced people will more often write delicate, fragile code.

Himanshu Chudasama Founder CEO at Veloz Techform & Start-n-Excel

September 8th, 2016

Hello Kristina,

This is a major concern for most StartUps as neither they have the fund nor the Tech Knowledge to hire the appropriate CTO. Considering this problem, we have just started an Offshore CTO model, where you can get a CTO for the initial stage of the project or longer depending on your need and the same can be either paid in Cash if you have the fund or shared in Equity.

The model is turning out to be viable and interesting as we are in discussions with a few StartUps. Only issue is do we have the right resource as per your desired technology, this is important as an architect needs to have a deep experience and knowledge of the platform you wish to embark on.

If you want to discuss further do connect.

HC (https://in.linkedin.com/in/himanshu-chudasama-9b15442)

Sophia Maler Product Management and Marketing Professional. Message Alchemist.

September 7th, 2016

You will have plenty of choices if you allow your next hire to work remotely. A lot of people will sacrifice salary for flexibility to work from anywhere in the world. This is very motivating for those who already made successful exits with their past employers and can take a risk with you.

Location? I would start from Silicon Valley. It became very expensive and I'm sure you might find some great talent ready to "cash out" of the overpriced housing market here.

George Parrish Founder/President

September 7th, 2016

Look, personally I think if you get more involved in the StartUp Scene to find the right person, the better off you will be.

Society3 operates out of Switzerland, and hosts Pitch events in Berlin, Munich, Lucerne.

Seedrs in London might be able to help.  They're on the Continent now.  And they are growing.  Ask them to help you, it can't hurt to ask.

I think if you follow this path, you have a pretty good chance of finding the right person for your team.

I get this ALL THE TIME in the Bay Area from StartUps that are in the same position as you.  And I give them the same advice.  Best of luck to you and your team!

Galina Ozgur GM at Grand Central Tech

September 7th, 2016

Kristina, do you really need a CTO? a CTO with an entrepreneurial mentality is a smart engineer with a lot of development and management experience and often with startup experience. They can either consult/ do project work or can work for the big guys that pay 250-300 K/ year (in the US, I'm not sure what it's like in Malta) with benefits and realize that getting startup options or equity is no guarantee. They are hardly out of work and shop around all the time. You can't blame them for that. I'd join networking groups, search within friends & family networks, check out hackathons - and focus on people who can do hands-on development and push out first iterations. There is no special sauce here, really. 

Tim Scott

September 7th, 2016

Young? Better start covering that up with "culture fit."