Fractional CTO: Alternative to Technical Co-founder for Startups

The chief technical officer (CTO) is responsible for successfully transforming a CEO’s idea into a product. They’re the ones who build, test, and launch your product into the market.

Not every CEO is a geek and knows how to code like a pro – in fact, most CEOs don’t know anything about coding, but they still need it to build their product.

In this article, we will cover who is a fractional CTO, their roles and responsibilities in a startup, and how it can be better for startups to hire a fractional CTO rather than looking for a technical co-founder.

Who is a Fractional CTO and Why Are They on the Rise?

The definition of a technical co-founder is a c-suite who manages the company’s tech department. They oversee everything that’s related to tech – hiring, product updates, and engineering operations. 

Responsibility-wise, fractional CTOs are no different from technical co-founders.

At Shiny, we define fractional CTOs as highly experienced technical leaders and engineering managers who can take responsibility for turning a product vision into reality. 

They’ve previously launched products, be it an early-stage startup, a midsize company, or a large corporation. 

But their love for tech and the flexibility to work with multiple clients turned them into fractional CTO.

The main aim of a fractional CTO is to work with exciting startups and develop a product that disrupts the tech industry. 

Whether it’s software, hardware, IoT, or something else, they’re excited to build new tech that has the power to bring revolutionary change.

Ever since Covid-19, startups have been conservative about spending a lot on hiring.

According to Technically, startups are more and more inclined to hiring fractional CTOs nowadays because of the flexibility they offer in payments and work.

If we look at a Google Trends report, after Covid-19, the search for the term ‘fractional CTO’ has noticeably increased.

google trends fractional cto search trend

And if we look at the past 5 years’ worth of Google searches for fractional CTO and compare it with the search for the term technical co-founder

Here’s what we get:

technical co founder vs fractional cto search trend

From the above graph, you can see how, after 2020, the search for fractional CTO has been on the rise, and the search for technical co-founder is steady. 

How CTOs Work with Startups

A fractional CTO helps a startup in three different ways.

Use Case #1: Replacement For Technical Co-Founder

This use case suits pre-seed stage startups with significant funding. 

There’s a chance these pre-seed stage startups don’t have a technical co-founder, but they’re about to try and build their software and need someone to build and lead the development team or manage an outside development firm. 

Their CEO might be capable of doing so, but they are often focused on operations, growth, and partnerships.

So their very next instinct is to bring someone onboard to do the work for them. That’s where fractional CTOs come in handy.

A fractional CTO handles this situation in two ways:

  1. Hires freelancers or full-time developers and builds an in-house team
  2. Outsources all the development to a dev firm

In either case, you need a fractional CTO to keep control, track progress, and ensure that everything’s streamlined.

This means the fractional CTO a CEO hires will not be so much developing the product themselves but instead managing the team and the process.

It’s quite different when we look at it from a technical co-founder perspective because they will be the engineering lead and do most of the development of the product.

But if a company doesn’t have that technical co-founder, then hiring a fractional CTO is a solid alternative. 

That’s because you get the opportunity to bring someone in who’s more experienced than many technical co-founders and have them bring in developers so that they can keep costs low at the early stages.

This route lets you delegate responsibility to a fractional CTO to oversee the dev team and ensure your product’s development is top-notch.

Use Case #2. Expanding and Building Tech

The other primary use case concerns mid-sized companies that aren’t technical but are looking to expand and build some tech products for the first time. Or, they might have a specific project in mind and don’t have a full-time CTO to take it on. 

Instead of spending months hiring the right full-time CTO, or hiring an outside firm to take full responsibility for the project or department, it’s easier, more cost-effective, and more scalable to hire a CTO on a fractional basis. 

You can get started immediately with a fractional CTO, and they can then hire developers under them that develop the technology.

Use Case #3. Help CEO Take Things to the Next Level

The last use case of how a fractional CTO can be beneficial to a CEO of a startup is by helping them take their product to market. 

There are times when a CEO may have software development plans and design ready, but it needs focus and  execution that the CEO may not be able to provide.

In this case, a CEO can hand off the plans and designs to the fractional CTO so that they take the initiative to build and launch the software.

Other Roles and Responsibilities of a Fractional CTO

Apart from the above use cases, a fractional CTO is capable of muchmore. 

#1. Research and Development

No matter what industry your business is in, evolution is inevitable. 

There are changes happening everywhere, and for your business to survive, you need to stay on top of these changes. 

But as a CEO, you might already have too much on your plate to bother about reading, researching, and taking note of these changes. 

Hiring a fractional CTO can be the best way to get regular updates on tech trends in your industry and what areas to pay attention to.

A CTO can dedicate a certain number of hours per week to researching and developing a strategy for features your product must have so that you have an early mover advantage.

#2. Evaluating Buying Decisions

Acquiring a company or buying them and rebranding is a common practice for many investors and companies.

But in order to acquire a company, one should first know the ins and outs of the company and their product.

When it comes to deep technical expertise, a fractional CTO can be of great help.

Fractional CTOs can explain to investors details about the technology used in the product to give them a better understanding of what they’re dealing with.

For example, let’s imagine an investor wants to acquire a startup whose product is based on Augmented Reality (AR). An investor will want to hire a fractional CTO with an expertise in AR tech and ask them all about the AR tech the startup has developed so that they can make an informed investment decision. This process is similar for startups or funds acquiring a startup. 

#3. Increase Technical Efficiency

Technical efficiency is the process of producing maximum output with minimum inputs.

technical efficiency graph

The inputs for most technical startups are labor, cash, and technology, and the output is the product.

CEOs are often unaware of technical efficiency, and ignore the concept altogether; that’s because their mindset is to get things done and make progress, no matter how it’s done. 

A fractional CTO is the one who can help a CEO figure out how to get things done efficiently. 

CTOs can guide the CEO on how many developers they need, the budget for each project, and the right technology to invest in to build the product.

#4. Hiring Developers

Developers are the powerhouse of any tech firm and hiring them is an expensive, crucial, and time consuming task.

Oftentimes, a CEO isn’t much of a coder and might make the wrong hiring decisions or might bring more developers on board than needed. That’s where a fractional CTO can benefit a startup.

They can come in, shortlist candidates, conduct all the tests and interviews, and build an in-house development team in an efficient way.

#5. Cybersecurity

In this online age, your website has a high chance of being hacked if you don’t have a proper cybersecurity system and policy in place.

This might sound scary, but 46% of cyberattacks in 2020 were targeted to hack US-based websites.

cybersecurity pie chart

CEOs often don’t have the knowledge or the resources to fight these attacks, but a fractional CTO does.

An experienced CTO will know the kind of threats your website/product is prone to and what to do when the attack is in progress.

When to Hire a Fractional CTO?

For many startups, hiring a full-time CTO or technical co-founder isn’t an option. Even if it has successfully raised significant funding, onboarding a full-time CTO can be expensive and risky. 

Instead, you can hire a fractional CTO, which is much more affordable and flexible (more on this later).

So hiring a fractional CTO is beneficial for a business when you:

  • Want to build technology but have no tech leader to take responsibility
  • Have a team of developers, but they are too inexperienced to make strategic decisions or need more active management than you can provide
  • Want to work on a project that requires a specific technical expert
  • Face a tech-related problem and want someone experienced to come onboard and take care of it immediately

Fractional CTO vs Technical Co-Founder for Startups

Hiring a technical co-founder is often not the best choice for a startup. Here’s why:

#1. Risk of Hiring a Technical Co-Founder

Hiring a co-founder is far more risky than hiring an employee. If you and your technical co-founder are not on the same page or your visions for the company diverge, it might be tough for you to sustain your business. Many startups shut down at the early stages due to co-founder issues.

Hiring a technical co-founder is a big risk to take, especially when you’re a pre-seed startup that has to build their product from scratch and the lead engineer will have a huge role to play.

Here’s one common issue – your technical co-founder turns out to not be a great personality fit for you and your team. This will affect decision making and your startup can crash even before launch.

Another possible issue is if your technical co-founder leaves to join a big tech company. With FAANG companies offering ridiculously high salaries, it’s easy for great engineers to be tempted by the high salary and cushy life, leaving you and your company high and dry. 

This can be prevented if you hire a fractional CTO instead of a technical co-founder. You can hire them on a monthly basis, test them out, and see if they’re the right fit for your company. If you think they are the one, there’s nothing stopping you from hiring them full-time later down the line. 

#2. Hiring Time

Hiring a technical co-founder will take you many months (even a year at times), but hiring a fractional CTO will just take a couple of weeks.

When you’re in a time-sensitive situation where you want the solution to a problem ASAP, hiring a technical co-founder is not an option.

But when you plan on hiring a fractional CTO from a marketplace like Shiny, you can get the shortlist of vetted talent and their cover letters in 24 to 48 hours.

#3. Specificity

There are times when you don’t need a technical co-founder to take care of everything related to your company’s tech but need help in one specific situation.

Maybe you’re not on the same page with your dev team for a specific idea and need advice from an experienced person.

Your best bet is to hire a fractional CTO within a week, get the ball rolling, help them understand the situation, and take their advice.

How to Hire a Fractional CTO for Free with Shiny

If you’re looking to hire a fractional CTO via Shiny, just click on the ‘Hire An Executive’ button you see on the homepage.

click on hire an executive

It will take you to a typeform, where you can select:

  • Fractional executive role(s) you’re looking for (select CTO)
  • When do you want to hire
  • Your and your company’s name
  • Email address
shiny typeform

Once you’re done filling out the details, click on the ‘Submit’ button.

You can then schedule a call with our CEO to talk more about the roles and responsibilities. 

schedule a call

After we know what your requirements are, we will then look through our talent pool to find you the right match.

Our team will then bring you a shortlist of 5 candidates (or more) who are the best fit to be a fractional CTO for your company, and you can then find the right match yourself.

The best part about Shiny is that we take no fee from you for hiring.

What’s more, we even manage contract signing, invoicing, payment, and 1099s for you.

Are You the Right Fit For Shiny?

Generally, we deal with pre-seed stage startups post-funding trying to develop and launch a product, or companies with 25 to 50 employees that are looking for new technical leadership

But here’s the catch, the CEO has a lot on their plate and can’t find the time to manage the technical side of the business, and that’s when they come to us to hire a fractional CTO.

Generally, these pre-seed stage startups need a fractional CTO for 10 to 15 hours a week to manage and ensure that all technical operations are running smoothly.

Wrapping Up

The power of having a CTO in your company is immense, but that doesn’t mean having a full-time CTO or a technical co-founder is your only option.

A fractional CTO can help you manage, scale, and streamline the process, and maybe after you have built your product and brought it to the market, you can afford to bring on someone full-time for the role.

We suggest you use Shiny to get matched to fractional CTOs, explore all your options, and see where it takes you.

We’d be happy to help you in the hiring process, free of charge.