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Feedback: CTO as a Service?


#1

Hey All,

I’d be really curious to hear your feedback on an idea I had.

After reading Dan Norris’s Seven Day Startup (and the story of wpcurve) it made me wonder what kind of service that I could instantly provide that could act as the foundation for a bootstrapped startup.

It occurred to me that I could offer CTO as service.

I am a CTO. I’ve been building tech startups for 20 years - managing and sourcing teams, building software, defining architectures, scaling systems, building on mobile, web, automating infrastructures etc. I’ve also built (and sold) a soloprenure SaaS startup - plugg.io - from the ground up, including coding, design, marketing, conversion funnels etc. My total revenue from the pluggio project was $250k (ish)

Anyway, CTO’s are expensive ($100k-$300k per year) but their advise and knowledge can prove to be priceless. Having a seasoned full stack CTO helping make & review core technology decisions can act as insurance and in some cases be the difference between rags and riches :wink:

So what do I mean by CTO as a service? I mean you would have a full stack CTO available to you for the following:

  • Answer any question that you may have
  • Help you and your team make the best technology business decisions
  • Review code and architecture if required
  • Choose the best technology for the problems you need to solve

Here are the types of questions that I have been asked in the past:

  • What should the overall architecture be for our product?
  • Should we build our mobile app native or in html?
  • I hear that startups need to be built in ruby why is that?
  • Should we use rackspace or AWS or bare metal?
  • How can I offer 100% uptime?
  • I hear node is amazing! Should we build our checkout cart using node?
  • Were can I hire great developers?
  • How long will it take to build feature X?
  • Etc.

My thoughts on CTO as a Service Pricing & Availability:

Cost
$2k/month (no contract required) minimum of 1 months service (with a 1 month money back guarantee)

Availability

  • 4 hours per month scheduled phone/meeting/architectural/tech review/etc. (i.e. 8 x 30 min meetings, or 4 x 1 h meetings)
  • 8 hours per day IM/Slack access for impromptu questions (within reason)
  • 24/7 email access for impromptu questions (within reason)
  • Research & thinking time as required (i.e. to answer questions!)

Example of how it might work:

Client sends questions in advance for 2 x 30 min weekly meetings to overview core decisions. Or, client saves up face time hours for impromptu brainstorming sessions. Tech team use slack/IM as needed to make some key decisions. Email used for on-going discussions. Etc.

All thoughts and criticism welcome.

Thanks,
JV


#2

I am sure there are plenty of people who could benefit from system architecture expertise. Or even just an independent opinion. I have just been trying to help out a friend with that. But $2k per month for phone calls/IM/email sounds expensive. I am guessing they would prefer to pay by the hour/day. But perhaps there could be a retainer element as well.

Also I think the issue (as usual) is marketing. How do you reach the people that need your service? The ones that need your expertise most probably don’t even know what CTO means.

Ps/ Loving the Techzing podcast! Although, for some reason nothing after episode 266 is showing up in iTunes (might be just me).


#3

I think this is another of those questions that would best be asked of your target customers, and I wouldn’t assume they are here. (Depending on the responses, you could receive incorrect or even harmful advice.)

I’d find where the C-guys hang out (assuming you’ve fully explored the circle of contacts from your experience as a CTO).


#4

I do really like this idea, it does seem tricky to reach the right audience though. Co’s with startup money want to hire a CTO as it’s a core part of their team. Smaller co’s probably feel 2-4K a month for advice is better spent elsewhere (not that that’s true).

I wonder if you scoped it more as a retainer consultancy if it’d work better. Meaning, you only try to get say 4 customers total. Each one paying $5-$10K/month or whatever. So they get a truly dedicated slice of your time. 1 week a month or 3 days a month with the other couple days available via real time chat/phone.

With that perhaps you could snag a few angel backed startups and another few co’s that are doing pretty well, but don’t want to invest the full all in cost of a CTO.


#5

The idea sounds good, but as others have said, how would you promote the service?

For me, the CxO type titles are very loaded: at least in big corporations, they are usually political posts (even if the person if doing technical work).

Smaller groups may find your service useful, but then they wouldnt be searching for a “Part time CTO” or anything similar.

My advice is: The type of companies that would be pay for this, what are they searching for now (ie, keywords etc)? And if they aren’t, then you have a different problem :smile:


#6

Thanks for the TZ shoutout. It is just you I think. What device you using? Sometimes you need to force get latest.


#7

Turns out iTunes wasn’t downloading TZ podcasts ‘because I hadn’t listened to it in a while’. Now sorted.


#8

Personally I think “as a service” only works for simple tasks that can be handled by interchangeable people who solve problems. When someone contacts WP Curve they have a specific problem and it doesn’t matter who they talk to so long as they can solve the current problem.

Effective CTO’s do more than answer random questions. They understand the business, it’s goals and history. This allows allows them to:

  • be proactive in implementing change,
  • trade off business and technology requirements
  • provide a steadying hand when developers are more interested in implementing the latest technology every week.

A better model might be a CTO consulting service. I know accountants who are successfully offering CFO consulting services this way. They typically charge a day rate and are engage for x days per week or month.

That said… put up a landing page and send traffic. It either works or it doesn’t.


#9

I’ve been thinking of something similar and last month picked up my first client for it. They’re a startup with seed investment and a couple of young developers. They don’t have a technical founder and can’t afford to hire someone with enough experience yet.

I pitched it more of as an on-demand CTO and bill by usage.

What they really appreciate is not just having someone with experience, but someone who’s prepared to get to know their business and help them make good choices now for where they’re headed.

In terms of finding potential customers, I’ve been catching up with companies who’ve recently been accepted into tech accelerators. I was surprised by how many companies are raising 6 figure seed rounds without a tech founder.

Definitely seems to be an opportunity there.


#10

I was pitching myself as a Freelance CTO, usually I would have to explain just what a freelance CTO does. The term I’ve decided to go with is Software Consultant (to a large extent a CTO is a full time software consultant + some extra).

So far I’ve not managed to get people to pay for this. Usually end up being hired as a software engineer and end up doing CTO stuff as well.

Soooo I guess it’s not an answer to your question but I guess I’m in a similar boat as you.


#11

I currently work in a govt agency that just hired on a CTO from private industry. Prior to joining us, he served as a CTO-on call for various venture capital firms that would bring him in to help evaluate potential investments to ensure they were aligned with the right technology. This may be an additional opportunity to consider. Good luck.


#12

As others have said, CxO is a key role in a company and doing it part time might not warrant the title. 4hrs / month is less than what part-time means actually.

$2000 / 4hrs on a retainer sounds like a decent amount of cash for almost no time spent, and the quality of your advice would be heavily dependent on the time you dedicate to the problem.

You are basically offering what these guys offer:

Your price is $8.33/min (on a retainer, which is more expensive than the on-demand pricing) and it seems that a lot of talent is available at $2-$4/min.

Your pricing is almost in Eric Ries’ territory. :wink:


#13

The OP’s idea does sound appealing, and I agree that casting the role as a freelance high-level technical consultant might be more familiar and thus palatable.

This sort of position came up when Mixergy recently interviewed Tony Karrer (Tech Empower) [0]. They describe it as an “outsourced CTO” role.

[0] http://mixergy.com/interviews/tony-karrer-techempower/


#14

I’ve got a CTO in my software company. I need him bought in to my vision and fully up to speed on all the issues that we face. His input is crucial to the success of my (15 employee) business.

I would be very nervous about only having access to my CTO at times we’ve previously agreed, and him not being in my office at all times. Perhaps I’ve been spoilt as my CTO is also my cofounder and has been with me since day one.

I think the service you’re offering has a place in the market, but I think suggesting that it’s CTO as a service isn’t the way to package it.


#15

Hi,

4 hours a month seems quite less for a CTO as a Service. I think this will work best with $2500 as a retainer with 10 hours within that price and an additional price for each hour. The initial 10 hours will give you an overview of the objectives, challenges and possible solutions. The next hourly pay can come in for detailed consulting, planning and execution. This rate can be upto $150 / hr.
Most serious businesses will hire you at this price because you will be a fantastic resource keeping their business trajectory on predefined path, help them choose right solutions, resources and save them $$'s for a very long time.
I am wondering why linkedin did not work for you because if I had your skills, I would have been making a killing by now.


#16

I love the idea and personally would use especially if I was bootstrapping new and needed some help!