The CTO: A start-up’s hardest position

In a fast paced startup, you expect your job to change. In fact, some say that if you don’t give away your Legos and it isn’t radically different every 6 months, you’re doing something wrong.

In the half-decade I’ve been working with Bitwala, we’ve scaled from 3 guys and a dog to 70 people (and multiple dogs!). I’ve witnessed a dramatic shift in the work that we do and the way that we do it.

👨👨👨➕🐶 → 👨👩✖️7️0️ ➕🐶🐕🐩

It is, however, the role of Chief Technology Officer that changes the most dramatically.

My life as CTO: 3 Phases

Phase 1: The Jack of all trades

“What a surprise, your launch is delayed?”

In an early stage startup the CTO often finds themselves responsible for just about everything that could possibly be considered technical. Before our first funding round, I was covering frontend, backend, DevOps, web dev, web design, internal IT — whatever we needed to get our product live! What would usually be split into multiple roles, fell squarely on a single person.

It didn’t even stop with tech — it was product too! The most common configuration of 3 person founder teams consists of a CEO, CTO and then CPO or COO. In our case we had a COO, but no CPO.

Jörg (CEO), Lola (CHO), Ben (CTO), Jan (COO)

Looking back to the time when we described ourselves as a company builder, ‘Product’ was split between the ‘what’ and the ‘how.’ The whole company, led by the CEO, would ideate about what crazy product to build next. It was fun to talk about ideas and we always came out of those sessions excited and motivated to work hard.

The ‘how’ fell mostly on me and I was the one turning the idea into something that our customers could use. I had to architect the systems and design a user experience that was just about bearable — luckily crypto users back in 2014 had very low standards!

Like many young startups, we had a focus problem and often tried to do too much at the same time. None of us liked saying ‘no’ and often we would cram in feature after feature and I would struggle to make the whole thing look and feel like a consistent product — all why trying to avoid spaghetti code.

The role was part product, part coding and part everything else that you can imagine.

The ‘Company Builder’ phase — We used to have ‘Crazy i-beer night’ where we brainstormed new products. Even back in 2014 we had the idea for a blockchain bank and rated it the highest possible score for craziness!

Phase 2: The architect & team builder

“Oh, we can afford to hire developers now?”

When we got our first funding round of €800,000 back in 2015 we could finally afford to hire our first team members (and even to pay ourselves — yay!).

The first few developers worked to support the core work I was doing. I would architect, code the most important modules and make technical decisions. They would implement small features, fix bugs and do second level support.

For the first time I wasn’t alone and we needed to set up processes and standards, for example, which checks to make before new code is approved.

As time went on, I had less time to code. I spent more and more of my time hiring — probably at least 50% at peak times. When we started fundraising, I had to help prepare decks and pitch investors and, if we succeeded to make them interested, I had to prepare reels of documentation for the extremely terrifying Tech Due Diligence process for investors.

Even when I did have the time, often I didn’t have time consistently which was even worse as code which takes too long to get ‘merged’ or finalised tends to stagnate and require even more work to get finished. Imagine writing a chapter of a book, but not having the opportunity to react to the feedback until a week later, all while team members are working on the other chapters. I found that I was getting in the way of development.

I learned to delegate and trust in my team, rather focusing on creating the right environment for them. Looking back, I think we were incredibly lucky to find the calibre of people that we did, even when we couldn’t afford to pay competitive salaries.

Phase 3: The manager & strategist

“I guess I’m never coding again”

I remember being surprised when I first was asked if I was still writing code. “Well, of course I still code — I’m the CTO!” was my immediate reaction. However, when the Bitwala engineering team reached about 12 people I stopped actively participating in the codebase.

I had become a full-time manager. Before, I spent my time building things, but now I spend my time building the team to build things. I do miss coding, but there’s a lot of things I enjoy about the new role. During the many 1-on-1s I have, I get to spend time talking to really smart people and ideally helping them to grow and resolve their issues.

My role has also become more strategic as, when you grow to a larger company, planning and alignment becomes more and more critical. At one point this year, we realised that we had too few DevOps resources and they couldn’t keep up with the needs of engineering. We’ve had to become way more proactive and aware of how we scale, ensuring we have the right ratios between our chapters.

At Bitwala, every employee is in a ‘Chapter’, like a department.
About 60% of the company works in cross-functional teams or ‘Squads’. This is based on the Spotify Squad and Chapters model and is working well so far.

I’m also responsible for the overall tech strategy, taking the business goals and thinking about which technology we will use to get there. Especially in the blockchain space, things are moving so quickly it’s incredibly engaging to keep up with the trends and answer questions like: should Bitwala use a MultiSig Wallet or an MPC Wallet. (See the respective arguments here and here).

As we grew to 20+ engineers, we even had the luxury of hiring an Engineering Manager who was soon promoted to Head of Engineering to make sure the chapter is successfully scaling and running efficiently.

The Engineering Organisation structure created by Blair, our Head of Engineering. That picture was not chosen by me!

The CTO is the role that changes the most

All of the founders’ roles change dramatically, but none more than that of a CTO.

Whether you’re at Seed stage or Series B, the CEO is responsible for the vision, fundraising and strategy. The COO, regardless of team size, makes sure that the company is running smoothly.

The CTO, however, goes from being a code-all-day ‘get shit done’ technical generalist to a manager of managers responsible for scaling a team to execute on the business strategy. You go from caring about programming to caring about people.

And let’s be honest, programmers are not famed for their communication skills or emotional intelligence (although hopefully we can change that stereotype!)

The truth is, the CTO that is perfect for an early-stage startup might be terrible for a later stage startup. This is true for every position in a fast-scaling company, but finding the right person is especially difficult for the CTO given:

  1. The enormous change in the requirements of the role over time
  2. The relative difficulty of finding someone with strong technical skills AND high levels of emotional intelligence and leadership

Hire a CTO who can scale with your company

If you’re founding a startup (or even if you’ve already founded one) make sure to ask yourself this of your fellow founders: can this guy scale?

Here are some points to consider when hiring a great CTO:

1. Yes, you should actually hire a CTO

A lot of co-founders-to-be ask me if they can launch their MVP via a development agency and then hire a CTO later. I would strongly advise against that.

Early stage startups often need to pivot and development services are expensive. It’s highly likely the project will overrun and you can bet that the agency will not work for free. You need someone who has buy-in for the project and is ready to put in the extra hours, because you’re going to need them!

2. Ask yourself whether this person can scale into a leader?

Can you imagine this person being the CTO of a thousand-person company? Can they inspire? Do they have a good sense for people? Can they explain complicated topics in an easy-to-understand way? Could they pitch to an investor?

Right now, you need someone who can code, but their role will change and they need to change with it. A good indication of this can be a high level of diversity in the career and education.

3. Don’t hire too ‘far ahead’

In contrast to point 2., you want to avoid hiring a CTO who will be perfect in 2 years time, but can’t help much now. Startups, especially early-stage, don’t have long to live and you normally need to deliver in the 3–6 months to stay alive.

Even if this is the perfect person for the ‘hypergrowth phase’, make sure that they can deliver from day one.

4. Can this person make the right technical choices?

Programmers are famous for having very strong opinions around technical choices. The TV show Silicon Valley popularised the battle of Tabs vs. Spaces and hating on programming languages or frameworks is a pastime enjoyed by every engineer.

Spaces is better btw…
PHP is probably the most hated programming language.

My point is: don’t hire a one trick pony who will insist that their technology of choice is always the right one. Young programmers tend to think that the hottest new framework is definitely the way forward even if it’s barely been tried in production yet. Trust me, I was one of those guys 🤓.

5. How can you give them the support they need?

Everyone needs a mentor. I was a first-time founder and a self-taught programmer. I had learned my craft building MVPs for startups and was great at getting something out there quick and dirty. With Bitwala, we had to go beyond the MVP phase and build a product that could scale to thousands of users and handle millions of euros of their money.

I was connected with Chris Philipps, a veteran of the German startup tech scene who became my advisor and mentor. He was essential in pulling me out of the day-to-day to make me think strategically while providing an objective opinion based on his many years working in different companies.

6. Have you aligned your expectations with them?

Does this person know what’s in store for them? Do they know that they have to stop coding in the future and focus on developing people instead of just developing?

It’s worth having an honest conversation with your potential CTO about how their role might change in the future. If contributing to the codebase will always be important to them, maybe you should set expectations that this person will transition to a VP Engineering role to make place for a more management-focused CTO in the future.

It is definitely better to have that conversation early on.

To anyone out there trying to hire the right CTO, good luck! Having the right technical co-founder is an absolutely essential ingredient in an early stage startup’s success and one of the biggest challenges for potential entrepreneurs.

Bitwala is always looking for great people — especially those that can become technical leaders. Check out our careers page to see what jobs are open.

Startup advisor | Co-Founder & CEO/CTO @Nuri