A technology business is one where the business has to produce a “digital product”, and that product is the primary manner of customer engagement. The digital product can be an app, a website, or a portal.
Some technology businesses we are used to seeing that classification – e.g. most people would say that Amazon is a technology business. There is less clarity in other businesses. “WeBuyAnyCar” is a technology business, for example, because all their engagement is digital, even though on the face of it the process of buying cars does not "feel" digital.
The definition is this – do you expect your customers primary engagement with you to be digital in nature? If so, they you are a technology business. All you need then is a “digital product” (keep reading).
In a technology business there are usually two founders — one commercial and one technical. The most common pattern is that the commercial partner will become inspired first, and then find a technical person to "do the technology bit".
The technical co-founder is usually someone who has had a very committed career at becoming excellent at building technology solutions, and the relationship between those two founders is usually very high-trust.
If we look at this in reverse, a CTO is "chief technology officer". A CTO is a senior director level/board level person who is responsible for the technology within the business, where that technology is used by customers and partners. (I go into this much more in the rest of these FAQs, but broadly it is an outward facing role where the job is to produce the things that customers use.)
Specifically, the job of the CTO is to "magic into existence" the business' digital products, whatever they are.
If you are a digital business, you need a CTO as there needs to be a person in the organisation who is chiefly responsible for producing the thing that you actually sell. (By allusion, you could not have an effective cupcake business without having someone in the business who is very good at baking cakes.)
A "fractional" anything (i.e. can be CFO, CMO, CHRO, etc) is arrangement where you have a senior person but you buy a "fraction of their time". It's attractive to small businesses because most small businesses don't need input from a senior person on a 40-hours-a-week basis. You may need a CFO for oversight and stragegy but you might only need them for one day-a-week, as opposed to 40 hours-a-week.
At the scale-up stage of growth, most digital businesses do not need a full-time CTO, hence the attractiveness of a fractional offer.
You usually need two days-a-week of a Fractional CTO's time to get enough momentum going to produce a worthwhile output.
Practically, there is very little difference between a technical co-founder and a Fractional CTO. Both roles involve delivering the technology that allows the business to trade – on the one hand, providing a product to sell, and on the other hand, providing the underpinnings to support he business operations.
The difference comes when you move from start-up to scale-up as the nature of the business changes. A start-up is much “scrappier” business – effectively one where there are chaotic problems everywhere and very little money. The scale-up is one where you start to see things calm down and smoother operational and delivery patterns emerge.
But the actual job doesn’t change – the environment in which the job is done is the thing that changes because now you start to have a proper business that’s, frankly, easier to deal with as a founder/owner.
A digital product is just a product (i.e. what the business sells), but that is digital in nature. The most recognisable example of a digital product is an app, although the majority of digital products are not apps. Other recognisable examples of digital products are websites (e.g. Amazon), and increasingly "portals".
(Portals are digital products that are used to engage with customers — think the ability to log into your car insurance provider to 'self-service' requests.)
Building a digital business is the process of crafting a digital product, and that business can only be successful if the product that you produce does a fantastic job of meeting the customer's needs. "Product" should always be the priority over anything else the business does — and it's crucial that product drives technology decisions, rather than the other way around.
This principle is known as "product-market fit", although the way that is written is problematic because the phrase itself doesn't talk about "customer". It's better thought of as "product-customer fit".
When producing a new product, the purpose of an MVP is to create smaller products and get them in front of customers more often.
The way this used to be done was that a the technology business would spend ages beavering away on their own, and put it in front of customers quite late on. The upshot was that they would commonly produce something that the customers would look at and not feel that they wanted.
The world prior to MVPs being the norm made it very difficult to actually know if you had a good product-market fit/product-customer fit because you were only involving customers quite late on in the process.
It's not correct to think of MVP as being a "cheaper way of building a product" — an MVP approach is about speed, not about cost, because you will need to produce one MVP, test it, change it, produce another, test it, change it, and so on. It's a highly iterative approach with lots of testing and experimentation.
As a dyed-in-the-wool technologist, it galls me to say it but non-technology people will tend to produce better technology businesses than technology people.
Imagine a senior leader in a global courier business who has the idea one day that it's better to have a fleet of drones delivering packages compared to the old school approach of requiring people to drive around in vans. That person is going to have a profound understanding of the commercial realties of all aspects of delivering the value that that courier company delivers to its customers — e.g. getting the package there on-time, guaranteed.
This doesn't tend to be the case with technology people who tend to optimise their ability for "operational excellence" over "commercial insight". Over 10-20 years in industry, it can be hard for senior technology people to have a genuinely good grasp of "product" because their practiced concentration tends to be narrowed to delivery rather than broadly encompassing the commercial landscape.
You have to find a "technology Ying" to your "commercial Yang" — i.e. someone who is able to focus on the technical depth, whilst maintaining understanding of the product design/commercial reality. And vice versa — the non-technology partner has to be able to focus on the commercial breadth, whilst maintaining understanding of the technical execution.
The overarching goal is to deliver a product with supber product-market/product-customer fit, but I break this down into four outcomes:
a) Deliver your roadmap features at pace, b) build the business on rock-solid foundations, c) enable reliable future scale and growth, and d) build business partnerships and opportunities. (Keep reading for more on these topics.)
The job to be done is fairly similar, but these two types of businesses are functioning in very different ways as the business is going through a shift in maturity.
The way that I visualise it is that in the start-up period, you (as in the whole senior team) are just trying to make something work. You have an idea, but everything is a problem and nothing is fleshed out. This creates quite a "scrappy" business in that wherever you look things have to be stablised and optimised.
Once you've done that, and the business is going into a scale-up mode, all those little tangled up strands of things have to be teased out into sustainable strands of work. It's at this point that the business because more "sensible", because everyone knows what they are doing and the direction that the business is trying to take. You also are likely to start having people come into the business, and the business is likely learning how to get the best out of them.
The work involved in getting the business to produce its digital product doesn't really change, but the how of that work does change as the capability of the evolving organisation is changing.
A "roadmap" is most commonly done as a one-page document that describes "completeness of vision" — i.e. it's a document that describes where the leadership team wants the product to get to such that the commercial objectives of the business can be realised.
The reason why I've included it here is because being able to get through the "roadmap at pace" is one of my key outcomes that I want to see a business I'm working with be able to achieve, and the reason for that is because it's a very common issue to find a technology business get mired and be unable to progress its roadmap.
Ensuring an ability to keep working through the roadmap at pace involves a combination of technology and non-technology factors, not least of all the ability to optimise the customer experience, knowing you have the right staff, being able to develop the right relationships and opportunities, etc.
The value that a business gets from having a technologist in the senior team (whether a co-founder, a Fractional CTO, or a full-time CTO) is that whilst the product is critical, most of the work that goes into building a technology business that is able to grow and scale goes into the systems that underpin capability related to revenue (marketing/sales), customer success (operations) and governance (finance, cybersecurity, risk management).
The product sits on top of all the other things that make the business an actual business — i.e. an ability to access the market, the ability to delight customers, and the ability to control risk. These three plus product have to be considered in the rounds in order to sustain an business' capability to grow and scale.
Once you understand the broad strategy for growth — i.e. build a product and pair it to a business that's able to improve how well it can market and sell, how well it can delight customers operationally, and how well it can manage risk — the next job is to ensure that what the business builds to support that is done in a "sensible" way. Sensible in this context meaning cost-controlled and adaptable.
Business is a team sport, and that counts for how the business builds its internal team, but also how it develops the business through partnerships and joined-together working. Part of what I do is modifying the trajectory of the work being done to ensure that the business is able to maximise any business development opportunity that it may come across.
Yes. I like working with very early-stage businesses as – frankly – I like solving problems and very early-stage businesses tend to have a lot of problems to work through. The issue with start-up businesses is that they don’t tend to have any cash.
I look at this as a form of angel investing. I work with a founder (or founders) by becoming their technical co-founder, investing time and effort into the business rather than cash. What I look to get out of this is something success-based, either equity, options, or a profit/revenue share. (And I have a simple, repeatable formula for working this out based on projected valuation.)
If you’d like to have me make a “sweat equity” investment in your business, there is an application form that you can fill out.
This model is the result of how clients have been asking me to work over the past couple of years. I believe the way in which businesses buy B2B has changed, specifically that leadership teams are very much focused on outcomes, and my philosphy is that this is how businesses should operate. The business should be able to set aside a budget and, as far as possible, know what value it will get in return. As such, I align my pricing model to this philosophy.
We believe that the way business buyers buy has changed in two ways, and this is particularly true when it comes to “buying in skills” to support the organisation at the “strategic/execution”-level.
Businesses now think much more about outcomes, preferring to do their own research as to what suppliers are out there and what might be the best fit for them. Buy the time the business has selected a supplier, all they want do is bring that supplier in to perform a risk-controlled delivery of whatever that outcome or outcomes are.
Outcomes-based delivery doesn’t have to be linked to time, so we take the approach that if we’re confident we can deliver more value than our retainer each month, we’d rather offer the certainty of a fixed-cost retainer along with being able to flex the work done to meet the outcomes each month.
I have lots of content about this on my YouTube channel. They key is to find someone that you think you can work with for the medium to long-term, and in particular someone who you think you can both bring the best out of it, and who you think can bring the best out of you.
I've been working for just over 25 years, all of them with start-up and scale-up businesses. Unlike the majority of people who do what I do, I have committed my career to working with businesses at these levels of maturity. (Most people who offer Fractional CTO services have followed a corporate career and become fractionals as a route into day rate consulting.)
This equates to an estimated 76,000 hours of delivering projects, directly for founders and senior management teams that are facing the unique challenges of scaling a business either from a standing start, or from a position where there is a good amount of commercial traction.