🔧 Have you got what it takes to be a CTO?
Founders Factory Startup Bulletin #9 (April)
👋 Welcome to the Founders Factory Startup Bulletin. Each month, we bring you a round-up of startup and investment stories, key learnings from founders, and insights from the Founders Factory team.
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We’re probably all familiar with this common scenario in a restaurant. You sit down to eat somewhere you know well, scan through the exciting options available to you, thinking how much you’d enjoy each option. When the waiter comes to take your order—and you order the same thing as usual.
However enticed you are by an interesting new dish, you’re just as likely to pick something you’ve enjoyed in the past, and that you know you’ll enjoy again. This is just one of the mental shortcuts, or ‘heuristics’, that allow us to make quick decisions and make our lives easier—after all, we can’t think long and hard about everything.
These biases, however, often yield bad results. This is true in hiring: the familiarity heuristic encourages you to hire someone who looks like you, or who looks like the person you imagine doing that job.
Overcoming this requires looking beyond conventional criteria that you associate with that role. Take the chief technical position at a startup—what makes a good CTO? You might think of hard skills, like programming, coding, and so on. But there are a host of leadership skills and characteristics which are as, if not more, important. Identify these, and open yourself up to the underrepresented groups that may not typically be considered for the CTO role. We’ve compiled a list of characteristics of superstar CTOs, according to experienced CTOs themselves.
In a startup in general, overcoming these human biases is crucial for creating a diverse, equitable, and inclusive environment. Read on for our top tips on how to create DEI in startups, with five exercises to kickstart your journey.
In this month’s newsletter:
Characteristics of superstar CTOs
Creating DEI in startups—your first five steps
Submit a founder question for our expert panel
Top recommended reads—from startups helping Ukraine, to gender pronouns in the workplace
Latest fundraising news, product launches & more from our portfolio
💪 Characteristics of superstar CTOs
In startupland, we’re easily drawn to the cult of the founder/CEO, overlooking the startup CTO, the person chiefly responsible for the technical side of a business and often the second-in-command. For aspiring CTOs, or CEOs looking to make perhaps their most important hire, here are some characteristics you should be looking out for in your technical lead.
Contributors: Paul Egan (Founders Factory CTO), Kimberley McCann (Reath Engineering Lead), Kunal Varma (ClearGlass co-founder & CTO), Richard Levy (Byway CTO)
Technical debt mindset
In early stage ventures, momentum is essential. While building technology is precise and methodical, you have to be comfortable with moving quickly and imperfectly as you won’t have the time to thoroughly test your tech. This is known as building ‘technical debt’, building in such a way that prioritises creating an MVP, while potentially accumulating problems that you can fix down the road.
Strong communication
Internally, you’ll need to be able to translate the CEO/founding team’s vision into practical targets for your engineering team; vice versa, you’ll need to keep the founders informed about what you’re working on. Communication is also a strong tool for motivation, ensuring your engineers feel empowered to do their jobs to the best of their ability.
When you’re hiring, communication is key. Engineers may be choosing between six-figure salaries at big tech companies, and your startup, so there needs to be a strong value proposition. “Your startup means nothing to them, so you need to translate the proposition into exactly what’s going to be interesting for them,” says Paul Egan, CTO at Founders Factory.
You may also be called upon to contribute to pitches, especially if there’s a high degree of complexity. This is a balancing act—simultaneously explaining the tech in clear language, without losing the complexity that differentiates it.
Sense of perspective
Stepping into the CTO shoes often means taking a step back from the day-to-day coding and programming you may be used to. This can be the hardest part for many engineers, to move from ‘I need to do it’ to ‘I need to get it done’.
It’s all about having perspective of the technology you’re building, and how that serves the needs of the business. “Step back and look at the bigger picture. You can’t just be sucked into the code, and thinking of repairing tiny features,” says Kimberley McCann, Engineering Lead at Reath.
Ability to question—and say no
CTOs aren’t yes people: you should appropriately interrogate the direction of travel and the right direction to bring you there.
Consider the ‘five whys’ method. Your CEO says, “I think we should build X”. Persistently ask the question ‘why?’ to drill down into what they’re hoping to achieve, and to understand whether alternative routes may get you there more effectively.
We asked our LinkedIn audience which of these skills they felt was most important…
Read more in our Startup Jobs series on what you need to know about being a Chief Technology Officer
📣 Founders—Ask us anything!
We’re inviting founders to submit a question to our panel of experts (leading founders, investors, our Operations team). Maybe it’s a burning question about your startup journey; perhaps it’s a tricky scenario or dilemma that you’re struggling to figure out. Literally ANYTHING. We’ll choose one question and publish our answer to it in the next newsletter and on social media.
🚀 Creating diverse, equitable, inclusive startups—your first five steps
Understand current DEI context
Start by understanding the current state of DEI in your business by consulting minoritised or underrepresented talent in your organisation
Make a clear plan with actionable points, thinking through what is bold enough as well as feasible
Create accountability for any plan
Correct your hiring processes
Widen your applicant pool beyond typical sources
Set targets at each stage of the pipeline
Take necessary steps to remove bias (blind hiring, or removing experience from job descriptions, eg.)
Implement inclusive company policies
Conduct equal pay analysis
Introduce flexible working
Design inclusive family leave policies - equitable to all parental care givers regardless of gender, clear returnship program
Support and mentor
Invest in your employees’ personal development (eg. upskilling)
Create mentorship programs that factor in the needs of underrepresented talent
Offer health support (physical and mental)
Conduct culture surveys
Actively measure employee engagement (eg. eNPS survey)
Hold conversations with all employees (particularly minoritised and underrepresented talent) to understand existing issues and how to tackle them
These are just a few things to kickstart your transformation into a diverse, equitable, and inclusive startup. Check out our full list here.
Anything we’ve missed? Comment below or email simon.lovick@foundersfactory.co
📚 What we’ve been reading
Talking about pronouns in the workplace (HRC Foundation)
Acquire, Parner, and Experiment: The fundamentals of building in Web3 (Crunchbase) - written by FF venture designer Alex Daish
Will AI turbocharge the hunt for new drugs? (Financial Times)
How to build an inclusive venture that investors will love (Pioneers Post) - featuring comments from FF venture designer Alexandra Simmons
💸 News from the Founders Factory portfolio
Chatterbox, a platform to help refugees earn a living through teaching languages, raised €1.7m
Renude were named as one of Tech Nation’s Rising Stars, while also receiving their Applied AI award
Perlego - ‘Spotify for books’ - raised $50m in a Series B to build out their online subscription platform for academic textbooks, fiction, and other literature
Winnie Awa, founder of textured hair expertise platform Carra, was named among the winners of the Innovate UK Women in Innovation Award
We hosted Power to Black Founders, bringing together founders with leading VCs for 1:1 office hours. Discover more & sign up for future events here: https://bit.ly/3uhVJvZ
David Hickson, our Chief Strategic Development Officer, appeared on the Nothing Ventured pod to give a brief history of Founders Factory
Aggero, the marketing analytics platform for live streamers has raised $2m, led by LAUNCHub Ventures
🗓 Opportunities for founders
The LGBTQ+ Founder Report - we’re working on this report, in partnership with Proud Ventures, Out in Tech, and Intertech, to build a definitive data set about the experiences of being an LGBTQ+ founder. LGBTQ+ founders can participate in the survey here
See you next month 👋
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The Founders Factory Startup Bulletin brings you a round-up of startup and investment stories, key learnings from founders, and insights from the Founders Factory team.