Early Stage CTOs … Can Be Bad For Your Wealth

Andrew Weaver
October 28, 2022

What happens when founders and early hires who helped launch the business and gain that initial traction, close a significant funding round and have a fast growth scale up on their hands?

At best it’s a steep learning curve across all sections of the business and at worst, it’s a constant fire fight as a result of operational chaos and the potential for rapid value disintegration.

The CTO (or most senior technical member of the team who has now become the CTO) is one of those under the most pressure and without the right support for and around them, is also the one most at risk of being overwhelmed.

Those who follow our book recommendations may recall “Disrupted” as one we felt you should read.

The author Dan Lyons is a talented screenwriter who for a brief moment in his career joined Hubspot, then a high profile inbound marketing company who were blazing a direct path to IPO.

The book amusingly captures his thoughts on the colourful growing pains and dysfunctional operations he witnessed as Hubspot management drove a senior team that largely consisted of over promoted early hires to achieve a breathless pace of growth.

For all the authors humour and cynicism about what went on behind the scenes at Hubspot, it proved to be a successful formula for those founders and investors as they closed their IPO in October 2014 but the book also highlights the challenges that can emerge when early hires, often recruited in a rush at the time, retain some very key senior positions despite the demands of growth far outstripping their skill set.

We’re often brought into companies by stakeholders (CEO, CFO, Investors) who can see the risk of those in the senior tech team, with the talent to succeed, struggling with that sudden change of pace and the challenges of deciding what, when and how to prioritise.

Only yesterday we talked with a CTO in exactly this scenario.
So many items on her “to do” list that she was suffering from severe paralysis when deciding what should take priority.

The challenge for CTOs in these situations is their lack of experience means it’s often a case not knowing what they don’t know.

That early stage CTO is often one of the founders who helped sketch out the original hypothesis on the back of a beer mat but now, with $millions raised and high expectations on growth and product is the one at risk of feeling out of their depth.

Hardly surprising given the speed of change and the importance of the role but it’s why the support they receive is so important, whether in recruiting the right team around team and/or providing the support and up-skilling opportunities that recognises they need to carve out time to learn, as well as implement.

Learning on the job within an early stage company can be an immense experience in any role but when the success of the CTO is so business critical, doing nothing but fire fight is not going to end well.

We find it astonishing – and it happens quite often – when the CEO fails to understand this journey and provide the required support.

There is never going to be enough time.
There is always another priority.

But the early stage CTO also needs some space and support to develop their leadership skill set and become the visionary tech leader those stakeholders need.

Too much focus on the technical will not enable them to grow as leaders and is likely to be detrimental to the success and value of the business.

Ultimately by not taking their professional and leadership development requirements is likely to short change the impact they can have on the growth and value creation within that business.

Early stage CTOs can be bad for your wealth, if you don’t give them the support they need.

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