CTO · Non technical

How to convince startup founders they don't need a CTO?

Guy Brockless Head of Growth Marketing @ Creatella Venture Builder - We launch startups

Last updated on May 26th, 2017

We work with startups providing a kind of CTO on demand service. We've built and launched 12 startups in the last 12 months taking them from idea stage to MVP to market traction.


The problem is, our business model is not scaling the way we would like. We are struggling to find good sources of leads and one of our biggest challenges is winning over founders. We spend a lot of time convincing them that they should stop searching for a CTO, that actually they don't need one, and to partner with us for their tech development instead.


If you were a non-technical founder in need of a CTO, or in-house tech development how would a partnership with us seem the most appealing?

What would your concerns be when considering a partnership with a venture builder like us?

How can we find founders who are really in need of affordable tech development services with startup expertise?


UPDATE:

In response to Karl's answer.


Thanks for your answer, you raise some valid points. I'll go through them one by one:

  • Issue 1 - Only offering execution and not the visioning for short, medium, and long term solutions
    • We do not simply take the vision of what a partner wants, build mockups and then develop it. We spend a long time learning about the business, the envisioned product and how it will be used in order to devise a lean MVP - the absolute minimum required to test an idea. The goal here is actually to do as little tech as possible! At the same time we digest the overall vision and transform it into a development roadmap divided by MVP 1, 2, 3 etc
  • Issue 2 - Our business model is contrary to the business model of those you are serving. We optimise our profits by doing more work and the startup has to try to use as little of our services as possible
    • I disagree - As I said above - we try to as little as possible in MVP 1 in order to test the idea, prove the concept and get traction. We ourselves are a bootstrapped startup with projects of our own and we know that every dollar spent is lifeblood from the business. We aim to partner on the long term, meaning our goals are aligned with those of our partners. We want to be there when our partners come to us 6 months down the line needing to improve and expand their product beyond MVP 1, into MVP 2, 3 and beyond.
  • Issue 3 - Inexperienced staff
    • Granted we don't have projects in our portfolio with hugely successful exits but that's to be expected - we work with startups before they even have a working product. In fact, 5 of our partners have gone on to raise capital.
  • Issue 4 - Our development staff is mostly SE Asian and therefore must be low quality
    • Our 3 FE Team leaders are based in the US, Europe and India
    • Our BE team leader is based in China
    • Across our whole team of 20+ we don't have a dominant locale - we select based on quality, vision and culture fit, not location


UPDATE:

In answer to your question Andy:

Of the 12 startups we've launch how many have scaled beyond a certain size, value, investment round or such ?

  • 5 of these have gone on to raise funds successfully (one of which was using Creatella's network of investors)
  • We also have 2 that are in the process of raising funds
  • One was already backed by investors when they came to us


Karl Schulmeisters CTO ClearRoadmap

May 16th, 2017

Well I will up front admit to bias as I come from the Technology side and have been a CTO. Frankly I think you are misleading your customers and to some extent that's why you are struggling in gaining traction. While it is true that in a startup, a CTO often is also a developer, it is a mistake to identify the CTO as simply the lead developer, which to a large extent is what your site comes across as doing.


Your "how its done":

  1. gather requirements
  2. wireframe
  3. design
  4. develop
  5. launch
  6. Host

frankly is what I would expect a Dev Team to do, NOT what a CTO does. Even in a startup part of the CTO's role is to engage in visioning for what the short, medium, and long term solution should be for the company. And I don't see any of that in your offering process.


Secondly, fundamentally, your business model is contrary to the business model of those you are serving. Yes I know - you do take some sweat equity to reduce the cost of development, but fundamentally YOU optimize your profits by delivering more services to your client, whereas your client optimizes their profits by using as little of your services as possible.


Note, I'm not accusing you of anything unethical or intentionally overbilling or such. Not at all, but as Upton Sinclair once pointed out :


"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"


So that creates an inherent conflict of interests that I think most CEOs/Founders understand viscerally.


I took a look at your LinkedIn profile and your team. And your dev/tech staff is fairly green and you really don't have anyone on your staff list that I would feel comfortable discussing technology roadmaps with, much less someone whom I would be confident understands the tradeoffs between technology and business roadmaps.


So while I think its not a bad approach to try and distinguish yourself from the other Mobile App Dev for Contract shops out there as "partnering on technology" you frankly don't really have the staff to give you credibility in that approach.


So my concerns in considering a partnership with your organization would be as follows:

  • Your staff is relatively inexperienced in building projects of any significance
  • Your tech staff seems to have limited experience in executing in a Deliver on Business Goals environment
  • Your development staff is almost exclusively SE Asian. This used to be seen as an advantage on cost - but more and more there are folks like myself, my current CTO, and my sister (who is a "rescue CEO" for tech startups having started Intel's Telecom Venture fund some 15+ years ago) - who have run mulitple dev projects through SE Asian development cycles and found that of the list of
    • On time
    • on budget
    • with quality
    • scalable
    • affordable
  • in SE Asian development, you get to pick 2 of those 5.

Frankly at this point I'd rather hire a more experience developer in the USA or EU paying them a bit more in equity but knowing much better what sort of quality I will get - or NearShore to eastern EU where the time zone and cultural differences are reduced.




Zhenya Rozinskiy Partner at Mirigos

May 16th, 2017

It sounds what you are providing is an outsourcing service to startups with a fancy spin of calling it CTO on demand. The problem you are running into is that you are asking a company to outsource their core function. It might work at early stages to build an MVP but at some point they need to take control. In addition most startups are looking to raise money. It's pretty difficult to do with fully outsourced development.

Iulian Mocanu Down to earth kind of guy, motivated, competitive, fair and self confident.

May 16th, 2017

Hi. I think I am one of the right people to reply on this subject and if you'll allow me I will tell you why:

I'm in the idea phase of a business and I'm looking for a CTO that will take care of this part of the business. I don't have the skills required to do it and have no problem in admitting that. Unfortunately, I don't have the resources to repay your service at the moment and I think my scenario it's not unique.

So, to answer your question, my requirements to partner up or hire you would be your willingness to venture with me and expect compensation (equity, cash in a fair negotiation) along the way, when (and if) it will come.

If anyone has better answers, please write them down.

Cheers.

Adam McCann Founded/sold a media co, looking for opportunities

May 16th, 2017

I find it interesting that nobody has yet picked up that this appears to be a sales pitch rather than a genuine request for help. But amusingly I don't imagine the answers are quite what was expected!

Mike Makuch Software Engineer / CTO / Cofounder / Consulting

Last updated on May 16th, 2017

If you are selling yourself as a CTO service, then shouldn't you be convincing your clients that they DO need a CTO and that you're a better CTO option? But to Karl Schulmeisters point a CTO is much more than a lead developer.

Mike Watson Full Stack Developer, SharePoint, ASP.Net, HTML5/Javascript

June 8th, 2017

If you were a starting creative agency 12 projects would be a very good start. However, I assume you are providing services for a 1/10th or less of the price and need scale to justify your numbers.

I think the respondents are getting hung up on the CTO title, not the service you are offering. Your service allows non-technical founders to build an MVP. Presumably you offer many of the services that a CTO would usually accomplish so I see your point.

We all see these posts, some on this site, "I have a great idea, but no technical skills." These folks are your core audience, but they are not always what they seem. Many are not ready to build an MVP and this is where the co-founder comes in to firm up these ideas. People are naturally wary of firms and think a co-founder is the only way to truly get what they want. Unfortunately, this business may require much more nurturing of prospects than you want or is feasible. Also, looking at your site I don't see anything that distinguish you from any other creative agency and they have locale over you. I'm not sure what the fix is, but perhaps giving prospects a bit more control over their experience such as building a pseudo MVP on your site without talking to anyone may be a good start.


Vishal Heble Full stack developer

May 16th, 2017

To build a MVP I don't think CTO is needed but yes in the long run its definitely needed. And mostly the founders find a way to partner with their friends who is a tech person or meet someone at some event. Besides, sites like Cofounders too are helping. But still there must be a gap which could be perhaps fulfilled only with proper marketing. Besides, you give a service for which you charge and most of the start up founders are looking to pay in terms of equity.

Andy Hoebeke Web dev also into apps, machine learning, devops

May 16th, 2017

Everyone hopes to scale beyond an MVP and small platform or product. Amongst the 12 startups you have built and launched, how many have scaled beyond a certain size, value, investment round or such ?

As said by other comments here, outsourcing the core function isn't smart... Depending on a company that might itself get into trouble for one thing or another to manage and control your tech core is obviously scaring off a few.

Tapesh Goyal Nothing special, just trying to learn the game.

May 17th, 2017

Pre-funded startups are wrong market to sell technical services. They usually do not have required $$$ to pay for decent developers till they are not funded atleast series A. So stop selling to this market segment and start selling to enterprises or companies who has raised enough funds.

Nickolay Kolev Freelancer at Private

Last updated on June 9th, 2017

A very long time ago I read an article, which was saying that if you treat your developers as pluggable object, that is exactly what you going to get.

Your business model is based on the presumption that all CTOs are equal, hence you can just 'plug in' your service and everything will be perfect.

Well, it doesn't work that way. A CTO is the next most important 'C' in the startup. Why? Because all companies are technology companies. And if the founder or the CEO doesn't recognize this, they have no chances of success. Let me clarify: if for example, you are selling jewelry, you need to understand that you are a technology company which happens to sell jewelry. Or you will be out of business.

In other words, the CTO is in the core of the startup. And all investors recognize that. I don't see anybody investing in a startup that doesn't have a business and technology founders. If they invest, they probably are not that experienced, or have a way to mitigate it. Like for example - bring in their own CTO.

For an MVP - may be. But then you are not 'a CTO on demand'. You are simply providing offshore resources. I must agree I like your spin and I believe it is very smart.

You would probably have more success if you just offer to do the technology side of things for equity only and not trying to replace the CTO, but rather work with him/her. You get your equity for the service, but leave the CTO work to the CTO.