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What is CTO as a Service (CaaS): A Full Guide to the Tech Side of Startup

October 18, 2022

In the beginning, when a startup is just getting ready to create MVP1, senior employees combine their managerial functions. They clearly understand that they must perform 1,2,3... n tasks to achieve definite goals.

But the more ends, products, and services the company provides, the more it needs a CTO because the developers are engaged in the "technical part" of product creation, and the role of CTO – is organizational and evaluation, planning, etc.

In this article, we will talk about a service that appeared recently – CaaS. You will find out the following:

  • What is CTO as a Service?

  • What does CTO stand for in business?

  • When do you need CaaS, and what tasks will it help you solve?

  • And most importantly, is it worth hiring a "live" CTO or buying CaaS?

Read this ultimate guide of Startupcraft, and learn the answers to these and other questions.

What is a CaaS (CTO as a Service)?

To define CTO as a Service, you must understand what a CTO in business is. So, CTO (Chief Technology Officer) – is a director of engineering who:

  • determines the development of the company’s product;

  • participates in the formation of the development team;

  • runs the development team;

  • participates in the roadmap creation;

  • implementation of new technologies in the project.

CTO is responsible for the company’s R&D strategy. He is working full-time at the company and seldom sits idle. Every day, he attends work meetings and participates in the company's improvement.

And now that you understand the work of a CTO, it’s time to explain what CTO service is. In simple words, CaaS (CTO as a Service) – is still the same CTO, but for specific tasks and the required period. It is also called "External CTO."

These concepts are similar at first sight. But actually, they are different. And if you have a startup or a small company, you need to know these differences.

What is the difference between a full-time CTO and CaaS?

For example, let’s figure out the differences between hiring CaaS and CTO for the startup. You have a "vision of your product," but you don’t know how to implement it. And you have two ways to solve this issue:

  • Assign the task to the HR department to hire a suitable CTO to hire the employed team of specialists and implement your idea. Imagine your HR department is lucky, and you have found the right CTO. You signed the contract, he came to work, and after studying your task, he told you the plan. You thanked him and decided to consider this plan for a few days. At this time, your CTO will receive a salary for waiting...

  • Pay for consultation from the CaaS team and receive comprehensive information on the solution to the problem. You're telling the details of the task you faced, and a few days later, you got a detailed plan for realizing your idea.

A short conclusion. If you hire a CTO, you pay him 100% of his salary, no matter how many tasks he does. If you pay for CaaS, he gets to solve particular problems. That is why small companies and startups choose CaaS today.

CTO as a Service: Pros and Cons:

If your business needs a CTO but thinks it is too expensive to service, we talk about the pros and cons of CaaS.

Pros

  • You’re saving money. SaaS works on the principle of “Pay-per-Use.” So you do not need to pay 100% of the monthly salary of a specialist. Just for the solution of specific tasks.

  • Find a new specialist quickly and cheaply. With CaaS, you deal with a minimum of bureaucratic threads. The specialist did not come – you just said goodbye.

  • You don’t get a specialist, but troubleshooting.. You do not hire a specialist to whom you will pay the salary. Furthermore, you work with a professional who will tell you what to do to improve business processes.

  • Increased Agility.. You decide which tasks you need to accomplish.

  • Quickly hire the right people. If you use CaaS services, you will find the right team 4-5 times faster.

Pros

  • Not always at hand. If you are used to it, CTO is always there - for example, in one chat where everyone answers instantly. Then CaaS will respond when you have negotiated to contact him.

  • External CTO services are more likely to be misunderstood. For example, there may be disputes if you rarely invite meetings with CaaS.

  • If your CaaS is engaged in other projects in parallel, your project's performance may not reach a high level due to diffusion of attention.

Why CTO as a Service Became More Popular?

If you answer as simply as possible, CTO as a service is a cheaper and faster way to create and configure all the necessary processes in the company or startup. Not only will you make the conditions for creating and continuously improving a product or service, but you will also avoid administrative costs.

All these advantages make CTO as a service attractive for small organizations and companies that want to save money. According to Guidant Financial & Small Biz Genius, in 2022, the number of small businesses will increase by 2-5%. Thanks to the correct adjustment of business processes, business success can be increased by 35%.

How this happens - you create an application for your smartphone. Your MVP1 is ready; it is time to assess its benefits and create a road map for months. To do this, hire CTO as a Service, which analyzes the project and gives an accurate Road Map for MVP2. If necessary, he configures these processes.

This is how successful companies like Lyft, YouTube, and others started to work. But to properly approach the choice of CaaS, you need to know their types.

Types of CTO services

5 Key Types of CTO for your business.

CaaS is divided according to the duties these specialists perform. Let’s talk more about that.

Full-Time Internal

This is the CTO you’re hiring on a full-time basis. It provides all necessary technical support and performs the functions we described above.

Yes, so you avoid the costs of the HR department. But you must remember that the admission of CaaS to the state will require additional administrative expenses and rent office space arrangements.

Full-Time Offshore

This is a CTO that works less than 40 hours a week. Often, you define tasks for the director, and he evaluates his time on their performance.

This type of CaaS is the most popular model for startups. Because you are talking about the goals you need to achieve, and the director is counting on his time to achieve them.

Fractional CTO Services or Part-Time Offshore

This is a CTO that works less than 40 hours a week. Often, you define tasks for the director, and he evaluates his time on their performance.

This type of CaaS is the most popular model for startups. Because you are talking about the goals you need to achieve, and the director is counting on his time to achieve them.

One-Time CTO Services

CTO has similar or repeated tasks in specific areas of the company’s work. For example, it is conducting a technical audit in the development department or developing a roadmap.

Its essence – is to do a particular job, perform tasks, and get paid for it.

Project CTO

If it is vital to get a CTO involved in a specific project without having to solve everyday tasks – get help from the Project CTO service.

When Do You Need an External CTO?

Here are “some symptoms” that show you need external CTO help:

  • you have a general idea of what your product will look like but do not know how to make it;

  • you need a consultation on current development technologies, as well as the creation of an effective development department;

  • want to have a master road map to present to investors;

  • you are ready to scale but do not know where to start;

  • it is necessary to change technology and business solutions for more productive work, but you do not know how to do it;

  • your CTO is gone, and you need to find a new one;

  • you created MVP1 and need to plan MVP2.

CTO has already proved its effectiveness. Therefore, even if you have a limited budget – it is much more correct to hire CaaS and earn more than "mark time."

Why should startups consider the CTO as a Service model?

Cooperation with CTO as a Service.

To choose the appropriate CaaS model, you must know its main differences. So you will understand why you need CTO in the startup. And you can accurately calculate the CTO as a Service cost for yourself to deposit this amount into the budget.

CTO Advisory Services

Counseling is one of the most popular services you can get from CaaS. If your startup is just starting its work or you are facing difficulties - feel free to ask for advice. If you do not have CTO among friends, it is better to refer to the external CTO.

In which situations do you exactly need CTO’s advice:

  • if you are not sure about the technical part of the most effective product development;

  • when you need to collect and configure the development team;

  • to create proper communication between departments;

  • test the product, and troubleshoot.

CTO consulting

Consulting is not just a tip or a small service but a complete help in creating a product or customizing a team’s work. You have a development department but don’t know how to start. You need advice and a clear action plan to develop a unique product. After consultation with the external CTO, you will find the answers to all questions.

CaaS fixed price

If you do not know or do not want to waste time on brainstorms about strategies and the development of roadmaps – CTO is an excellent option for you.

You will not spend money on your CTO staff salary, and at the same time, you will pay a fixed amount for a clear list of responsibilities.

CaaS time and material

This type of CaaS is advantageous because you can add or opt out of services as needed. Just update the data and determine how the external CTO will help you. For example, you have created MVP1 and want to add new features.

CTO Services by Startup Growth Stage

How CTO is helpful at every stage of startup growth.

Discovery Phase

When creating your first product, you often have 100+ ideas and no exact implementation option. And its CTO service will help you write a step-by-step product creation plan.

During the opening phase, you and CaaS will be able to:

  • analyze the pros and cons of your competitors;

  • determine the actual goals and objectives of the project;

  • select the latest technologies for development;

  • a roadmap for MVP1 creation.

Technical Solutions

It is in technical aspects that you need CTO. The fact is that even if you trust your senior developer, he will tell you just what he knows. But the CTO service has a view of all the necessary stacks and will tell you exactly what will suit you.

What technical questions CTO will solve:

  • conduct the full technical audit;

  • will evaluate and select the appropriate technology stack for your product;

  • implement current technologies and prepare the team to work.

Project Planning

If you want to carry out proper planning and prioritization of business processes - you need to involve CaaS. Imagine that you scale and add more features to your MVP2. It is the technology director who should guide you and find ways to develop your business.

Because technology is changing. What was once considered inappropriate might become necessary for future processes. So if you have any questions about improving products and further developing the Roadmap – tips from CTO you need.

Project Scaling

You created the MVP1, identified the Roadmap, and suddenly feel that you started running on the spot? So you’re at the zoom stage and can’t do the proper business analysis.

At this point, you need to use CaaS to find the most appropriate solutions for scaling. It will optimize the technical capabilities of your departments and will tell you how you can develop your business further, minimizing risks.

Project Pitch

If you have used (or can use right now) a Senior developer in the post of CTO, you know that having technical expertise is not enough. You need a lot more than top-level development.

If you want to develop products and control business processes, your external CTO should still be a great analyst and manager. CaaS can provide you with information that will convince investors to have more faith in your ideas.

CaaS can be even more detailed than you:

  • explain the value of your product;

  • it is clear to describe the technical side of product creation and compare it with competitors;

  • prove that the team can handle it.

Hiring

Unfortunately, the HR department can not be 100% sure that hired a suitable specialist. But if there is CaaS at the interview, he will always ask the right questions and make the correct conclusions. It increases the chances of finding not only an A-player in your team but also a suitable professional.

  • It will be easy to determine whether the candidate is an expert in his field or whether his expertise is insufficient.

  • Draw attention to the drop in performance and create conditions to correct it.

  • Will motivate the team to work.

Project Audit

Auditing is always something significant and fundamental. And CaaS can help you with it:

  • you will save money on hiring audit company services;

  • you will get the necessary assessment of your business processes;

  • external CTO will precisely carry out the necessary actions due to its impartiality.

It is advisable to audit at least twice a year. This information will help you to respond to the indicators promptly and make the right management decisions.

Soft Issues

Are you familiar with the "The Front Against Beck Developers" or "Developers Versus Analysts" Holy Wars? Then your company has unresolved difficulties in business processes. Every such problem that you run without a solution in the future "steals" you thousands of dollars in profits.

The external CTO can determine the causes of such disagreements and solve internal issues.

UI/UX

The external CTO has expertise in the UX field. Therefore, it will give its assessments and help improve the UX/UI of your product. It will make the project more convenient for the client.

Product Development

It is a CTO service that will help you at the stage of product creation. It will select the latest technologies that suit your business. He will also be able to solve the problems your team will face in time.

CTO as a Service: How It Works In Current Project

How CTO as a Service wotks in current project?

Late to hire CTO at the start-up stage? No problem! CaaS will be a valuable investment at any stage of the project.

Project Audit

You should not be afraid to see "not the most flattering" results. On the contrary, as mentioned above, the external CTO service can save your budget.

Hire CaaS, and be sure to know the difficulties that prevent your business processes from creating the perfect product.

Hiring Process

If you need to rebuild your development department, you need CaaS help. The HR department can only evaluate the candidate's Soft skills and clarify his competence. But the external CTO can accurately understand his experience and level.

Of course, you can invite Senior developers for interviews, but they are part of the team and may not see the big picture. So hiring CaaS is the best solution.

Roadmap

It is advisable to start the Roadmap development process at the beginning of the product. But if you have not done this before or there is a need to scale, then you just need the help of the CTO service.

In addition to defining a roadmap, you will, at this stage, be able to learn the necessary technological stacks to create the product.

Knowledge Sharing

We think you know the saying, "A new broom sweeps clean in a new way." If you hired specialists, you saw exactly how they came up with their ideas. The main thing, in this case, is that new ideas fit your business processes and make product creation more efficient.

When you hire CaaS, you know exactly what it is, a professional of its business. And it will 100% bring methodologies that will work in your project.

TOP-5 qualities of an excellent consulting CTO?

If you asked, "what are the qualities that an external CTO should possess?" – here they are.

  • Strong technical skills. Your future CTO consultancy should have proud tech experience. He should not only show examples of works but also tell how his expertise will help in your project.

  • People management experience. In any team, there are misunderstandings for personal or professional reasons. Therefore, the external CTO has an important task - to rally people around the project.

  • Master of communication. The CTO should talk about the technology clips so that even a beginner in technological processes understands them. The fact is that not all business owners and investors understand special technical terms.

  • Keeps track of current technologies. To use existing technologies, you need to follow them and always test them on new projects. It’s the only way CTO can find the best tech solutions.

  • Long-life learning. CTO – is a dynamic profession. It is impossible to know the concepts of Front End and Back End. He needs to keep his hand on the pulse and have a wide range of contacts to get information.

How to Choose a CTO as a Service: Must-Have Skills of Your CTO

CTO Skillset.

Learn more about the skills of external CTO, which you should pay attention to first.

Years of Experience

We are not talking about years in the CTO but the number of successful and unsuccessful projects. You can work for ten years in development and even be CTO but understand only the basics of programming languages. And you can, in 2-3 years, accumulate so much expertise in different projects that any next project will be more successful than the previous one.

Tech Expertise

To find a suitable external CTO, you need to know the level of their technical skills. To do this, you must look closely at his portfolio and projects. You can even learn more about CTO reviews from other companies.

And feel free to ask for knowledge of the necessary terminology.

Business-Oriented Mind

Remember, if you need CTO, you should not hire another developer for this position. Even if it’s a mega-Senior developer, he’s not always a great business person.

You will win more if you choose a competent and skilled manager with good experience.

Communicative

External CTO is sure to have Soft Skills at a high level. After all, the technical director will manage the department’s work inside the company. And participate in meetings with investors.

If CTO tries to confuse you with terms on the first acquaintance, it is better not to contact him. But if he understands the terms and explains everything as simply as possible, you have found the one you need.

Critical Analysis Skills

It is not enough to simply know the new trends in development. Understanding when and in what projects specific technical solutions can be used is essential.

Big Picture Thinker

While the team is working on specific tasks, the external STO must be able to think strategically. It must see the "whole picture."

Where to Find a CTO as a Service for startup?

You have only two ways to find exemplary CTO service.

  • Offline. Visit conferences and exhibitions. This will allow you to get directly acquainted with different CTO. You can get to know these specialists and communicate with them in a relaxed atmosphere.

  • Online. Visit sites and forums where developers communicate. There you can have a conversation and maybe find CaaS for business.

CTO as a Service for business: How To Hire?

Perhaps now you know everything you need to hire the most suitable CTO as a service for your business.

Preparation (short guide)

If you need CaaS, here are the exact actions you need to perform to hire a suitable specialist.

  • Prepare a precise list of responsibilities for the future external CTO.

  • Consider you can choose CaaS yourself, or you need advice from the technology director.

  • Determine all necessary questions for the interview.

Outsourcing and outstaffing companies

On the Internet, you can easily find companies that offer to hire CaaS on different terms.

Freelance services

On Fiverr or Upwork and similar services, you will easily find the right CaaS. For this, be sure to read the reviews of previous customers specialist.

Recommendations

Ask your business owners. Perhaps they have already used CaaS services and can advise you on a suitable external technology director. It is probably the best way to find a CTO service for you.

Also, visit technical innovation exhibitions and summits. Approach startup stands and recognizes more professionals. So you have a better chance of finding an exemplary CTO service.

Final Thoughts

In this article, you learn what a CTO is in business and know how to choose a suitable technical director with a limited budget. CTO services have already established themselves in top companies, and we are sure they will help you to create a unique product.

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Volodymyr Katanskyi
Article by:
Volodymyr Katanskyi
Volodymyr Katanskyi
CEO at StartupCraft Inc
Volodymyr has over 12 years of experience in software development and has studied Engineering and Multicultural Education. While travelling around the world, he invented the adaptive workflow framework that helped manage a team of around 100 team members alone, stay productive and scale. This knowledge was incorporated in a form of StartupCraft Inc company.
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