What’s a CTO vs. VP Engineering?
The difference in roles has a meaningful impact on the organization
I attended my first live, in-person conference in 18 months this week, the SaaStr Annual 2021. I was on the fence about attending such a large gathering. On one hand, it’s an event that brings the best and most accomplished leaders in the SaaS industry to share actionable advice on how they found success. On the other hand, catching COVID is still a very real risk.
For all the concerns, I have to applaud the SaaStr team for putting on a safe event. The entire conference was outside in open air tents and structures. Everyone had to show proof of vaccination, provide a negative COVID test result, and get temperature checked in the morning.
The conference itself was outstanding in terms of content and networking. I connected with people I have not seen in over two years, people that I only knew virtually, and many new folks that were eager to share and collaborate.Though I did not get to as many talks as I had wanted, those that I did attend were thought-provoking and had valuable practical insights.
One of the more intriguing talks was by David Sacks on SaaS organizational structures by funding round. David was the former COO of PayPal, founded Yammer, turned around Zenefits, and has been a prolific investor. It would be fair to say he has seen quite a few startup successes and failures over the years and would have some useful perspectives to share.
When the numbers of employees were laid out next to each other by funding stage, it is a sobering realization. At Series A, a startup will have 50 employees. At Series B, it jumps to 125 employees. By the Series C stage, the typical SaaS startup will have 400 employees. Then as these companies IPO, they will have more than 1,000 employees.
David also touched on one thing that caught my attention, the idea of topping employees. This is the practice of hiring an executive over the current leader for that function. For example, a current head of marketing would be “topped” by an experienced Chief Marketing Officer who has built and scaled marketing teams at the next stage of startup growth.
This is a fairly common practice that happens in every role. The skills required to do the job when the startup was still finding product-market fit are not the same skills needed when the startup is scaling quickly past $10 million in revenue. Some of those early executives can level up in their abilities and meet the challenge, while many others reach a plateau in experience and skills. This is especially true of CEO’s who often get replaced by the board of directors for a more seasoned leader.
In the early days of a startup, everyone is an individual contributor. There may be “leads” for particular roles, but everyone is hands on. That is especially true of the Chief Technical Officer (CTO), who is often simply the most experienced developer who wrote most of the code.
Once the startup begins to scale, the CTO role will evolve from mostly coding to building and managing a team. At this point, the trajectory for that early stage CTO role could change. For experienced startup CTO’s or CTO co-founders, they usually stick around as CTO. However non-founder, first time CTO’s will face a decision. Can they become the technical leader for the long haul?
A startup founder and close friend of mine once told me that there is no onboarding for startup executives. The nature of startups is that anyone that joins in a leadership role needs to be able to hit the ground running. If there are skills you lack, then you either learn them along the way or you stumble around until you resign.
This is when the question often arises as CTO’s ask whether they are a business leader with technical knowledge or a technical leader focused on technology delivery. This is the essence of what differentiates a CTO from a head of engineering. The CTO is as much a business role as it is a technology role, whereas the head of engineering is much more focused on technology.
The distinction between CTO and the head of engineering is most commonly observed in how visible the role is to outsides. CTO is the technical visionary and as such is integral to conveying the strategic technology roadmap to investors, key customers, partners, industry analysts, and the press. The head of engineering is much more internally focused, ensuring the team can deliver on the technology roadmap.
Despite the differences, both roles are absolutely leadership positions. For the CTO, their leadership extends across functional areas engaging with other C-level executives and the board of directors to influence technical direction. For the head of engineering, their leadership encompasses the ranks of developers, data scientists and engineers, SRE’s and operations staff, and other groups that fall within the realm of engineering. At this level, engineering leaders are mostly commonly focused on things that influence the delivery pipeline such as staffing, tooling, onboarding and training, and practices that enable higher quality code and velocity.
The stage of startup also influences the decision on whether to become the CTO or head of engineering. At the earliest stages, it does not matter because team size is small and focus is on reaching product-market fit. The technical leader is wearing all the leadership hats. As teams start to form around the Series A stage, most startups have enough needs and resources to split the CTO role into separate vision and delivery roles.
It is not uncommon for there to be a few CTO’s come and go as a startup scales. Different skills will come into play. In talking to one founder during SaaStr, she had expressed frustrations with her CTO that insisted on continuing with a clearly dated and unscalable architecture. Why was her CTO so convinced of his approach? Because he did not have any experience with other platforms. What skills were most valuable when building an MVP are not the same as the skills needed when ensuring uptime and security for a rapidly scaling app or site.
While I have been talking mostly about startups, I have observed similar dynamics between CTO’s and heads of engineering in larger, established companies. The CTO will be the outward facing leader and the head of engineering is focused on their team. The only real difference between the two is the scale since a large company will often have multiple CTO’s and many VP reporting into each.
What can you do then if you are just starting out as a CTO or are an aspiring CTO that wants to level up your leadership skills? One idea is to shadow or get mentorship from other CTO’s via communities that serve CTO’s. Nearly every city has one of these local forums. Another route are peer programs designed to build and foster a community among the participants. These are somewhat similar to startup accelerator programs, except just for technical founders and CTO’s. For example, AWS has a CTO Fellowship that helps first-time CTO’s through talks, roundtables, and mentoring.
Ultimately, the CTO and head of engineering roles are just titles that often feel interchangeable based on the context. This is certainly true at very early stage startups. What is more important is that the responsibilities entailed in each of these roles are well-defined and that you know what path you are on and what path you want to take down the road.
What do you feel is the most important skill for a CTO? What is the skill that you feel is most lacking in the heads of engineering and CTO’s you have worked with?
Mark Birch, Editor & Founder of DEVBIZOPS
SaaStr was indeed an excellent show and demonstrates what excellence looks like for conferences as we transition to a post-COVID world. I cannot underestimate how awesome it felt to connect with people in person this week.
This also means I will be back out on the road. First stop is Barcelona next week. Then Porto later in the month. And then finally in Lisbon for Web Summit in the beginning of November. If you happen to be out that way, let me know!
Last thing, the AWS Startups Show on Clubhouse is really getting hot, with our Fintech series that I kicked off last week, and our upcoming series of talks with the founders of AI/ML startups, followed by a series focused on healthcare / life sciences startups. I hope you can find time to join our conversations!
Want to learn more about DEVBIZOPS and read more hot takes about IT, technology, and working smarter. Receive our weekly newsletter by signing up to our Substack!