What is a Fractional CTO | Why They’re in High Demand?
A Fractional CTO is a Chief Technical Officer who works on a part-time or freelance basis, usually for startups or small businesses. The role of a Fractional CTO is to provide technical guidance and advice to the company, as well as manage and oversee the technology team.
Fractional CTO: The Future of Technology Leadership?
Fractional CTOs are usually experienced tech executives who have a wealth of knowledge and experience in the industry. They are hired on a short-term basis to help with specific projects or tasks and often work closely with the CEO or other senior management.
The benefits of hiring a Fractional CTO include having access to high-level technical expertise without the full-time commitment or cost and being able to scale up or down the level of support as needed.
The high demand for Fractional CTOs
There are two core drivers to increase demand for Fractional CTOs:
1. Remote work
- It takes down geo barriers and opens companies to approach the desired profiles, even if they are in another city/country.
- As more companies operate asynchronously, they're able to break down work into smaller chunks, and they can use Part-Timers efficiently.
2. High salaries for highly skilled tech workers
- High wages make it challenging for many startups to hire full-time leaders and seniors.
- This applies not only to CTOs but also to other senior technical roles like DevOps, Cloud infrastructure, Software development, etc.
Just like for full-time salaries, rates for part-time jobs are through the roof. Suddenly, someone working 10-20 hours/week can make as much as they made on a full-time job a few years ago.
In essence, remote companies that operate asynchronously are driving most of this demand, and they have quite a bunch of reasons for hiring FCTOs.
What are the usual rates for a Fractional CTO?
The rate card varies wildly, depending on experience, a specific skillset, and, mostly, how deep the client's pockets are.
This can range from;
- $100/hour to work for an early-stage startup to create a roadmap or build an MVP.
- To $1000/hour to conduct technical due diligence for a VC before they commit to a large investment round.
And we’ve seen everything in the middle, with common rates ranging between $150-300/hour.
I've worked as a Fractional CTO for companies like US, NL, DE, CH, BE, and PT. However, these engagements are more popular and pay higher rates in the US and UK than anywhere else. Most of the opportunities I'm sent these days are from US companies.
Typical scope of work for a Fractional CTO
The work is usually more strategic and less hands-on than a full-time role. It's important to clarify the scope upfront to make sure it matches the level of commitment agreed upon.
While I constantly work on a few most common assignments as a Fractional CTO, the main use cases for me have been a mix of:
- Roadmapping/Tech vision
- Fundraising/M&A support (docs, DD, etc)
- Day-to-day delivery management
- Architecture work/Audits
- Hiring/Firing/Sudden departure of the tech team
How to be hired as a Fractional CTO
Most of my inquiries come from:
- Founders from my network
- Round tables with other CTOs
- Randomly from my network
I'm now working full-time and don't have the bandwidth for FCTO clients. So I'm offloading the requests I receive. Also, if you’re considering becoming a Fractional CTO, understand the different pros and cons that come with it.
Things to consider
If you’re serious about this unique job role, it would come in handy if you know everything about being a Fractional CTO. To simplify this for you, these are 2 of the most important things to consider if becoming an FCTO is your primary goal:
- Revenue of a Fractional CTO is not fixed. Some months you'll earn a record salary. Other months, you'll earn zero!
- You may spend significant time in screening calls and interviews, not doing actual work.
Is an Interim CTO the Same as a Fractional CTO?
Although the assignments of an Interim and a Fractional CTO are usually identical, the core use case of them both is different.
Picture a scenario where Company A requires a rapid transformation - perhaps to bounce back from a difficult situation or to prepare for an upcoming phase of growth. In cases like these, the company might turn to the services of an Interim CTO.
- Interim positions are typically of brief duration, ranging from one to three months.
- And demands a high level of involvement that could be comparable to a full-time commitment during the interim period.
Contrast that with the situation at Company B, which requires ongoing technical leadership but on a part-time basis over an extended period of time. In this scenario, Company B might choose to hire a Fractional CTO. This type of arrangement is quite common among early-stage startups.
- The Fractional CTO would work in collaboration with the Founders on a recurring basis, helping to address a broad range of challenges that encompass areas such as technology, human resources, and investor relations.
- Fractional CTO engagements tend to be longer, lasting between three and twelve months.
- And requires a lower time commitment, with a workload of 10-15 hours per week.
From what I’ve seen and experienced, common for the Fractional CTO to be offered a full-time position or tasked with hiring a full-time replacement at the end of the tenure.
Fractional CTOs are in high demand because they offer specialized expertise on a part-time basis, which is cost-effective for startups. Rates for these roles vary depending on experience and skillset but typically range from $100-$1000/hour.
Speaking from experience, Fractional CTOs are more popular and are paid better in the US and UK. With a great line of experience, a Fractional CTO can be a kind of part-time or contractual career to consider.
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