The Ultimate Guide to Fractional CTOs

Effectively harnessing the disruptive power of today’s technologies can mean the difference between success and failure in a wide variety of industries. Whether it’s artificial intelligence (AI), blockchain, or the Internet of Things (IoT), next-generation tech is launching a myriad of startups and calling on CEOs of established companies to adapt and innovate.

Key to that innovation is the chief technology officer (CTO)—a leader that has both the strategic vision and practical expertise to build a technology roadmap and guide technical teams. But not every business is suited to a full-time CTO. That’s where the fractional chief technology officer model comes in. This guide explains how the fractional CTO role works, considers the pros and cons, and offers guidance on how to find the best fit for your business-specific needs.

What is a Fractional CTO?

A fractional CTO is a seasoned technology pro who, instead of managing all CTO responsibilities, takes on only your most pressing needs—propelling you to your goals quickly and for a fraction of the typical CTO salary.

The functions and responsibilities appropriate to the role range from developing technology roadmaps to building strategic partnerships with vendors. The focus can also be on leading internal teams, managing infrastructure, or cybersecurity. The possibilities are endless.

Part-Time CTO, Virtual CTO, Interim CTO, and Fractional CTO: What’s the Difference?

A variety of non-traditional CTO models exist today. They sit under the umbrella of chief technology officer-as-a service offerings—filled with the same class of high-caliber technical leaders.

Here’s a list of key differentiators:

• Part-time CTO—A part-time CTO steps into the “full” CTO role—assuming all responsibilities but performing them in a less than full-time schedule.
• Virtual CTO—The virtual CTO is not an in-person employee but instead consults “virtually” by phone or video conference. The contract can be short-term, long-term, or “as needed.”

• Interim CTO—An interim CTO is brought in to close the gap when a full-time CTO leaves an organization or at a key development stage at an early or mid-stage startup. They tend to be less leadership-focused and more technology-focused.

• Fractional CTO—The fractional CTO can also be virtual or interim. The key difference is that this role is responsible for your specific set of priorities—nothing more and nothing less.

The Rise of the Fractional CTO

The rise of the fractional CTO began in the burning-hot dot com startup environment of the late 1990s. The role is still a great fit for that world but has gained mainstream traction in recent years.

It’s becoming more and more common for small and mid-sized companies to bring in a CTO on a fractional basis. The firm may not have the budget to fund a full-time CTO or may only need executive-level technical prowess to take on a particular challenge.

Philadelphia-based CTO Nico Westerdale predicts that opportunities for fractional CTOs will grow as the gig economy ethos spreads beyond the service sector.

“On a leadership level, the need for fractional CMOs, CFOs, CTOs and a whole host of leaders is increasing,” says Westerdale. “Professionals are finding that they can provide huge value in working on a fractional basis, splitting their time between companies.”

With tech talent in short supply and the adoption of hybrid or remote workplaces, the fractional CTO is poised to become the go-to for growing firms.

Pros and Cons of a Fractional CTO

Whether you’re considering bringing in a fractional CTO for a pure tech company or a tech-driven business, you should consider the pros and cons.

Advantages of hiring a fractional CTO include:

• Saving your business money—The average CTO salary in the U.S. is $255,957. The cost of a fractional CTO can be scaled to your budget.
• Reducing time to hire—A CTO search can take six months or more. A fractional CTO can be sourced in hours or days.
• Focusing on your greatest need—Hires can be business-focused, tech-focused, or a combination best suited to your immediate goals.
• Flexibility—The role can be temporary or long-term, full time or limited hours.

The possible disadvantages include:

• Difficulties with institutional buy-in—This is a risk if your organization lacks the forward thinking to embrace the fractional CTO model.
• Lack of continuity of tech vision—If a smooth hand-off to the next technical leader is not facilitated, the roadmap can be derailed.
• Leadership silos—If the fractional CTO is not integrated with the C-suite, technical vision can be compartmentalized.
• IP protection—As fractional CTOs move from company to company, it’s important to have proper NDAs in place before you hire.

When Is Hiring a Fractional CTO the Right Move?

There are many good reasons to hire a fractional CTO. Here are just a few of them:

• Your CTO position is vacant: You might need a highly effective tech leader to step in quickly so that you don’t lose momentum.
• Your development team is stumbling: A fractional CTO can step in to get to the root of the problem and take corrective action.
• You need to reach a funding or technical milestone: Bring in a heavy hitter to guarantee success.
• You need a strategic thinker: If your best developers and technical leads struggle with strategy, a fractional CTO can make the right decisions at the right time.

How to Hire a Fractional CTO

Finding top talent can be a challenge in today’s hot job market. There are three tried and true methods for recruiting a fractional CTO. The path you choose depends on your urgency to hire and internal candidate screening resources.

1. In-person networking—Industry events are slowly making a comeback. This option is great if you can vet candidates over a longer timeframe.

2. Job aggregator sites—Platforms like LinkedIn and Indeed have broad reach. You’ll need to have a team primed to review applicants.

3. Talent sourcing agencies—If you need highly skilled, pre-screened, ready-to hire fractional CTO candidates, a technical talent sourcing agency is the way to go.

It Comes Down to Flexibility and Experience

Technological transformation never comes easy. It requires vision, know-how, and persistence. For startups and established players alike, today’s CTO is often both a tech guru and a strategic planner.

The fractional CTO has the flexibility and experience to make change when and where it matters most to your organization.

Start Your Fractional CTO Search

Esteemed connects you with pre-vetted fractional CTOs that can tackle your toughest challenges. We’ll do the recruiting and onboarding for you—saving you precious time and resources.

Request a quote today to access our world-class sourcing experts.