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The VP, Engineering vs. The CTO

Calendar icon 14th June 2021

One of the most common questions we hear from early-stage start-ups is “When should we hire a CTO”?, however, the more important question is surely “Do we even need a CTO…just yet?”.

 

With growth in the software engineering space expected to rise by 26% until 2026, compared to the national growth rate average of 7% across all other professions, it has never been more vital to get your tech leadership right. Therefore, depending on the scale and scope of your business, do you need a CTO or a VP of Engineering to lead your vision?  In terms of investment, we have seen European tech successes raise record growth rounds in recent months, which totalled $14.3bn in Q1 of 2021, up 202% year over year. This gives the second half of 2021 a huge reason to get excited due to possible European IPOs. So what do companies need – a CTO, or a VPE?

 

Lets start by exploring what the difference is between a CTO and a VP of Engineering. There are many thoughts on this topic, but one word can usually describe the difference between the two roles, and that word is execution. It’s clear that both job titles are fairly inter-changeable and usually dependent on the size and scope of the business, before one role (or sometimes both) are brought in to focus on vision and execution.  The CTO role is usually one of the most misunderstood roles within start-ups. In the early days of any business, role remits can change, and this is no different for a CTO. So, what does a CTO really do? It is widely agreed that the CTO is the ‘technical visionary’ of the business, and can frequently be a Co-Founder if you are an early stage start-up. The CTO is therefore usually fully invested in the vision of the product and how it will meet customers’ needs, with one eye on innovation and the other on driving that vision within the business.

In terms of investment, we have seen European tech successes raise record growth rounds in recent months, which totalled $14.3bn in Q1 of 2021, up 202% year over year. This gives the second half of 2021 a huge reason to get excited due to possible European IPOs.

The VPE is usually more operational, and people focused – dedicated to executing and delivering software whilst managing the Engineering function, and ensuring it is a success. This means VPEs should be great managers, strategic builders of teams, excellent communicators, and of course (once upon a time) great engineers. They are usually required when a business begins to scale their technical function. Being great people leaders – the VPEs are the engineers who rose up through the ranks and led people and projects with ease – their focus now ensuring the engineering function succeeds rather than their own code.

The stage and size is usually the catalyst for what hire is required in a start-up; potentially, when a business begins to gain momentum with its product and acquires funding or investment that takes them to the next level. At this stage, the CTO may want to evolve their role to meet the needs of the growth and bring in a technical people leader. This is where VPEs are of huge value, as their expertise within engineering, executing technical visions and scaling engineering functions allows the business to scale and continue their journey.

For any conversations around hiring within your technology function, whether that is Head of/VPE-level or even a team build out, please feel free to reach out – chris.batters@zerenglobal.com