What does a Fractional CTO do?

A Fractional CTO is a professional who has worked as a CTO (Chief Technology Officer) in technology companies or startups and now offers this expertise as a freelance or consulting service. This model allows companies to flexibly bring in an experienced CTO to help with their technology and product strategy. There are many reasons why a company might consider hiring a Fractional CTO, such as filling the CTO role in an early-stage startup, mentoring and supporting a manager in their promotion to CTO, conducting due diligence, or strengthening the management team on a specific project.

The type of companies with which a Fractional CTO usually collaborates are: startups (in early stage, growth and scaleup stages), VCs, accelerators, software agencies, and other traditional software companies. The role has only recently appeared in Europe, but it has existed in the United States and England for several years.

The role of the CTO

To understand what a Fractional CTO does, it is interesting to review first the different responsibilities of a CTO, as this is one of the positions where there is less clarity and more variability about their responsibilities. Responsibilities may vary depending on who you ask and what stage the startup or company is at. In very early stages a CTO may be responsible for building initial prototypes to validate business hypotheses, but as the startup moves into a new phase, the role evolves towards a more strategic and less tactical and operational responsibility.

Abstracting from the type of company and its stage of development, I believe that a set of key responsibilities for a CTO can be outlined as follows:

• Define the technology strategy aligned with the business vision and objectives.

• Act as a communication bridge between business and engineering.

• Actively participate in the definition of the MVP and Product. Depending on the CTO and the company’s resources, the CTO may take a more active role in product definition, as a CTPO (Chief Technology and Product Officer), or more of a supervisory role, in case the company has another person in charge of product design.

• Participate in the definition of the architecture and the choice of the technological stack.

• Manage the Total Cost of Ownership (TCO).

• Define and execute a hiring strategy.

• Consider outsourcing and manage suppliers.

• Define the working methodology.

• Inspire and foster the culture of the engineering department. Values, principles and best practices.

• Define the quality standard of the deliveries.

• Working on talent retention.

• To be ultimately accountable for the delivery and operations of the production systems.

In many cases, especially in early stage startups, the CTO assumes responsibility for the programming of the application. In my personal experience, I started this way, but I soon realized the limitations it posed, as delivery and operations almost always end up taking priority over strategy. My takeaway from this is that it’s advisable to avoid having the CTO involved in productive coding, and if they do, it should be very limited to avoid sacrificing strategic responsibilities.

Services of a Fractional CTO

As I said before, the Fractional CTO is a freelance who offers his services to startups and technology companies, and has several modes of operation or roles that can assume, depending on the needs of the client:

• Interim CTO: Typically for early-stage startups that don’t have a CTO on staff because it’s too expensive or difficult to find, or for whatever reason, they have temporarily or permanently lost their CTO. It also applies to startups that have put a developer as CTO and are running into difficulties in their technology strategy, because as I comment in this post, this is not recommended. The Interim CTO joins the startup in freelance mode with a dedication of X hours per week (the number of hours is agreed at the beginning and can be adjusted according to the needs). As a freelancer, he/she does not receive equity from the startup (which allows the startup to keep this equity for later stages). Act as an interim CTO, and help the startup continue to grow from whatever stage it is in. It can help the startup define a technology and product strategy aligned with the business objectives, and implement it. It can also assemble the initial engineering team, lay the foundations for an engineering culture, help choose an agile working methodology, engage suitable suppliers, and mentor the in-house team, among other things. These collaborations usually last a few months, in which ideally the startup will be able to advance its strategy. After this time, the Interim CTO can help recruit a suitable CTO for the startup and make the handover.

• CTO-as-a-service: En este caso la empresa o startup tiene problemas más acotados y específicos, y por falta de tiempo o recursos no encuentra una solución satisfactoria desde dentro. Para ello puede contactar a un Fractional CTO que trabaje mano a mano con el equipo in-house (bajo la supervisión del CEO y CTOs actuales) para diagnosticar las causas raíces y poner en marcha un plan de mejora. Algunos problemas comunes en los que puede ayudar contratar a un Fractional CTO son:

  • Low team productivity with agile methodologies.
  • Lack of quality in deliveries.
  • Inability of the product to meet business objectives.
  • Opening of new lines of business.
  • Promotion of engineers with no previous experience to an Engineering Manager or similar position.

• Mentoring: Just as a CTO can participate as a mentor in an accelerator or incubator, so can the Fractional CTO. The advantage of the Fractional CTO is that by working in consulting mode with different startups, he/she has the opportunity to see a wide range of cases, which gives him/her valuable experience in helping new startups.

Benefits of a Fractional CTO

• Availability: Unlike a full-time role, a Fractional CTO can be hired and on the job in a matter of days.

• Flexibility: Can be hired for as long as necessary and adapted according to the company’s needs. It allows startups to begin building an MVP, testing business ideas, and even pivoting in search of their market fit without needing to bring on a CTO or give away equity too early.

• Cost-Effective: It is generally much more affordable than a full-time employee. Additionally, there is no need to compensate with equity, and the Fractional CTO can be hired to address specific needs as they arise.

• Experience: Bring all the experience as a CTO and Fractional CTO in other startups and industries. Being a consultant you have the opportunity to work with multiple startups and gain valuable knowledge and experience.

• External Perspective: A Fractional CTO, being external and not having been involved in the entire creation of the startup, can bring a more objective and fresh perspective that offers a new outlook to the team.

• Catalyst: Internal communication often falters, and teams may struggle to convey important messages. Bringing in an external person, who isn’t burdened by the company’s internal dynamics, can help deliver critical messages and improve communication.

• Hands-on: Executes and implements initiatives within the client’s context, collaborating with and mentoring internal teams through real-world cases. This makes the Fractional CTO an attractive alternative to theoretical training, where there is often a significant gap between learning and the practical application of what has been taught.

Conclusions

The number of startups in recent years has increased exponentially and many of the challenges they face have been faced by others in the past. One of the key figures to face these challenges is the CTO, who can determine the success or failure of a startup. However, as the number of startups grows at an exponential rate, there is not enough experienced talent in the market. To try to make up for this problem, startups resort to strategies such as hiring a developer and making him or her the CTO, a priori a cheaper and easier alternative. But as we explained before, the CTO has other responsibilities that are more strategic and linked to the business, which a developer does not know.

Faced with this problem, the figure of Fractional CTO appeared in the United States and England, to allow startups to access experienced talent for a fraction of the cost of a CTO.

About me

• For the last 4 years I have been working as CTPO of a startup that develops AI and computer vision based products for various sectors such as retail, construction, media and transportation.

• I have been involved in product design, development and production for clients in 8 countries in Europe, the Middle East and the USA.

• I led the scalability and transformation of the team, growing from an initial group of 4 engineers to a department of 25 professionals, including developers, data scientists, DevOps, and customer success managers.

• Previously I have worked as lead architect and software engineer in different clients (Vodafone, LaLiga, Orange - Optiva Media) and big companies, such as Amadeus.

• I currently work as Fractional CTO helping startups and companies at any stage, who have needs and issues with technology and product strategy, team productivity and promotion of engineers into management positions.

If you’re interested in exploring how a Fractional CTO can assist with specific aspects of your company or startup, you can schedule a call here.