CTO’s Are The New Pandas

Ok, so maybe they’re not. They’re not endangered, they’re not that cute, and they definitely don’t have the time to play mascot to anybody’s cause. The analogy is still tempting, however, because finding a CTO seem to be the current “issue” of the global startup trend: founders need them, accelerators like them, and aspiring startup cities are desperate for them to move in.

A Scarcity of CTOs

There are many specific reasons for the scarcity of CTOs in any of these new startup hubs, and most of them have something to do with regional history, legislature, infrastructure or economic context. However, regardless of particularities, all these reasons stem from a simple issue of supply and demand; there just aren’t that many developers out there.

Although there is no clean-cut way to determine the populations of both technical and non-technical founders around the world, we can in some cases estimate the population of potential founders from each side. If we suppose, in a gross simplification of the industry, that startup founders are either software developers or business graduates, we can immediately see how out of balance the two populations are.

In the US, for instance, there are approximately 10 non-technical, business profiles for every software developer. Computer science departments in universities are reporting an increase in applications like they haven’t seen since the dotcom bubble, and yet, there are still more than 5 business graduates for every software engineer student in the country.

Geek is popular, Geek is sexy, but Geek is still clearly outnumbered by the suit-wearing Business Grads. And that’s without even counting the MBAs.

The world population of software developers, professionals and hobbyists both, stands at a grand total of 18.5 millions, of which 1.5 are US-based. That’s 18.5 million for a world population of 7.2 billion people. And consider this: How many of these developers would be able to make a CTO material in a startup? How many would be willing to do so instead of working at top-tier corporations for compelling salaries? And of those who would be both able and willing, how many would like to take a chance with somebody else’s project instead of their own? As others have found out before us, not many.

Given these odds, it’s understandable to see CTOs being courted left and right, especially in startup hubs where there was no prior opportunity for the tech industry to grow organically, and where CTOs didn’t have a chance to naturally converge. So what does that mean for the non-tech founders in these cities?

How To Pitch A CTO

It means first and foremost that they will have to learn how to pitch and find a CTO, exactly like they have been learning how to pitch customers, investors and accelerators.  And they will need to do so with something more substantial than a brief in a document or a deck of slides.

The horror stories circulating today on “idea-guys” that “just need a developer” clearly demonstrate that the days of the 2 percent equity CTO are over. A lot of material has been written on finding tech co-founders in competitive environments, and some developers even took it upon themselves to instruct potential founders on how to properly court a tech cofounder, so there are no longer any valid excuse for not doing it right.

This shortage also means that these new startup cities-or communities, universities, governments or institution whose ultimate goal is the creation of a hub- will play every card in their hands in order to attract the talent they need. Canada, ever the hospitable country, rolled out a Startup Visa two years ago for potential founders, and other governments are sure to follow suit very soon.

During our stop at Berlin during the Hidden Founder’s European Tour, our contact with the local startup scene organized a speed-matching event for tech and non-tech founders. Unsurprisingly, there was only one CTO for ten non-tech people. Funnily enough, despite the large choice, the CTO went back home alone.

What it does NOT mean, however, is that you “absolutely need” to find a technical cofounder to start working.  In its early stages, the only thing a startup “absolutely needs” is traction; traction will have to happen before everything else; before funding, before media exposure, and now before co-founders as well. This chain of events may feel counter-intuitive, but in cities like San Francisco, New York or Berlin, it is becoming the norm. Founders without some initial traction will find it hard to woo the perfect CTO and bring him onboard.

We made these observations after touring most Startup hubs in 2014. We concluded that this gap started being more and more noticeable post 2010 and is the main cause the quality and number of idea stage Startups dropped. The current pre-CTO alternatives just don’t cut it and we have been doing something about it since 2015.

So, yes, due to a combination of economic circumstances and dumb demographics, tech co-founders are not thick on the ground these days. Even in mature startup hubs, where the tech industry had years to drain talent from the rest of the world, skilled and available technical cofounders are rare. In wannabe startup cities, they are practically non-existent, or in deep, deep hiding. And they won’t come out just to look at your pretty slide presentation.

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Also shared on Startup Grind.