On almost a daily basis, I receive email from non-technical startup founders who are looking for a CTO. A good percentage of these founders have little or no money to devote to their startup, but they have a dream, which is always the first step.
The solicitation from these founders usually starts off with “I am looking for a technical co-founder, but I can only pay with equity for now.” I wish that I could devote a slice of my time to assist each and every one of these founders, but in reality, I do not work for equity anymore. I would gladly give my technical advice for no charge for certain social causes that I believe in, but my current business model is to charge an hourly rate or a monthly retainer.
Do they need a CTO right now? Do they need a technical co-founder at this point? This is one of the most popular questions that I get at my monthly Startup Lean Coffee meetup.
First, the startup founder needs to consider what they are going to build as a first step. Are they looking to create a Minimum Viable Product (MVP)? Or are they looking to develop the complete working product? The MVP can have just enough functionality in it to prove out the idea and to attract further investment. Depending on the answer to this question, they may want to bring in an experienced technologist for just a few hours to sketch out what the technical architecture will look like.
Most of the time, they just need someone to code the MVP. If they have enough budget, then they could use a CTO-type advisor like myself to guide them through the technical aspects of creating their application and pitching the MVP to investors. But, often time, they need some coding help that can be paid for in equity rather than in cash.
If you are a startup founder with a limited budget, and you need to develop your MVP, don’t despair. There are a number of routes that you can take to develop a basic MVP that is designed to attract more investment.
Strategies for Creating the MVP
Low-Code/No-Code
In order to test out the viability of your idea, you can create a “demonstrator” of your idea. This demonstrator can be as simple as a few web pages stitched together, using fake test data that is stored in a few files on your computer.
No-code or low-code development environments have been around for many years. These platforms let you drag-and-drop visual elements onto a canvas, and create a fully-functioning webpage. You can create a number of pages and hook them together through various kinds of user interactions, such as clicking on a link or a button.
The nice thing about these platforms is that you do not have to code anything yourself (or, perhaps, very little coding may be needed if you need more complex functionality). Some of the platforms will let you automatically integrate with various third-party services. You may want to hire a graphics designer to create some custom artwork that you can incorporate into your demonstrator. You may want to consider hiring a User Experience (UX) specialist to make sure that your application flows together in a logical and pleasing way. But you will not have to spend any money on hiring a developer.
Try to code up a demonstrator version of your product using a web-based design platform such as Balsamiq, Sketch, Figma, or InVision. A more advanced low-code platform whose popularity is increasing is Bubble. There are integration platforms such as Zapier that can be used to hook up various third-party services.
Teach Yourself How to Code
There is nothing like getting into the weeds and coding up what you want. Many people have taken a programming course or two in school and might be a bit rusty. If you have not learned how to code, there are courses that you can take at local community colleges, night schools, and online. For example, Udemy has a course in Introduction to Programming. Other MOOCs like Udacity and edX have additional courses. If you want to self-pace yourself and get a wide variety of content, I like Pluralsight.
The courses mentioned above are fairly inexpensive. Once you learn to code, you don’t have to pay another programmer, unless you need some sort of special skill.
Approach a Recent Bootcamp Graduate
There are many coding bootcamps that new programmers go to in order to get intensive training in coding skills. These bootcamps, like Flatiron School or General Assembly, often last for several months and teach the new coder a wide variety of technical skills. The bootcamps will try to find their new graduates a programming job, but these graduates often face the chicken-and-egg problem – many companies want to hire developers that have some amount of experience, but how does one get that experience?
These graduates are hungry for some experience that they can put on their resume. They might be receptive to an equity-only arrangement for a few months while coding up your MVP. There is nothing like having the satisfaction of bringing up a website and saying “I wrote this”.
My only word of caution is that these graduates learned a lot of new technologies in a short period of time, without much practical experience in applying what they learned. Be wary of “resume-oriented development” where the new graduate will want to use a certain technology because they want it on their resume. An architecture and/or code review by an experienced CTO will help identify inappropriate technologies that might come back to bite you later.
Use an Offshore Contractor
You can usually find an independent coder in countries like Russia, India, and Vietnam who charge a fraction of what you would pay a developer in the USA or England. You can find good developers for as little as $20 per hour, or you can negotiate a fee that is outcome-based.
How do you find these developers? There is the ever-popular CraigsList, which I personally would never use, as you are subject to being contacted by lots of scammers. You can contact a local college and post something on their job board. Recently, a number of platforms have emerged where freelance developers advertise their availability while you advertise your project.
A popular platform for finding these types of coders is Upwork. You post your project on Upwork, and you get “proposals” from developers who are interested in working on your project. After examining all of the proposals and interviewing the various developers, you pick the developer who you would like to work with. Developers who have done projects before through Upwork are rated by their customers (and the developers also rate their clients).
One word of advice – Upwork takes a certain percentage of your payment to the developer. This percentage decreases as the developer bills more hours to your project. Keep in mind that the developer will not receive 100% of your fee, so you may want to adjust your fee so that the coder gets a fair wage.
Incubators and Accelerators
There are various incubators, accelerators, and Angel Investment funds that will fund you if they like your pitch. In New York City alone, there are probably a few hundred of these types of places that you can go for some initial funding. There are giant incubators and accelerators, like Techstars and Y Combinator. Many startups apply to these incubators, and the acceptance rate is very low. There are more boutique accelerators like Brooklyn Bridge Ventures. If you are a woman-owned startup, and especially a minority woman-owned startup, then Pipeline Angels is a great place to consider. And some universities, like NYU, have their own accelerators that are designed to fund their graduates.
I help run the Startup Lean Coffee monthly meetup at Betaworks Studios in New York. Betaworks is a space where entrepreneurs gather and exchange ideas about their startups. They also host almost nightly meetings for the startup community.
Some of these accelerators will want to see a senior-level tech person that you are associated with before they will give you funding. Techstars is well-known for this requirement. If you need to have that kind of CTO-like person involved with you when meeting investors, then this is a service that CTO as a Service can provide.
Grants
There are a number of grants available at the state or local level for certain startups. These grants usually come with no strings attached. You do not have to give away any equity in exchange for these grants. Of course, there is a lot of competition for these kinds of grants, and they are usually awarded to startups that are working on ideas that will improve society in some way.
Final Words
If you are a startup founder who has a great idea, then congratulations …. you have taken your first big step. Even if you do not have any money right now to take your idea to the next step, there are several different avenues for you to pursue in order to develop your MVP for little or no money. Some of these avenues will require you to spend a little bit of money, and you may be able to get that money through your savings or through Friends-and-Family investments. Some of these avenues will require you to give up some equity.
No matter which route you decide to take, make sure that you always have a senior technical person who is watching out for your interests by your side during the early stages.
CTO as a Service has over 30 years of writing systems, leading development teams, and doing architecture reviews. Please consider CTO as a Service to be your senior technical advisor on any projects that you might develop.
CTO as a Service
November 2019
Thanks to Kathy Keating, George Sudarkoff, Dave O’Flynn, Glenn Proctor, and Adrian Howard for their suggestions.