The reduced role of the CTO in a no-code startup

The reduced role of the CTO in a no-code startup

Simon Jenner

Friday, 15 October 2021

Large teams at pre-seed stage bring unnecessary cost, busy work and, more often than not a watered down founder’s vision.

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We had the pleasure of meeting Colum O’Brien the founder of ChewyAi last night. Colum is a brilliant man and he’s building a fascinating product (Chewy uses AI to create landing pages and content in a heartbeat). Colum is a ‘one-man-band’ that built a startup with no-code, launched it into beta, has won some paying customers and is iterating quickly until the company is seed ready. Our best guess is that the total development cost was less than $5,000 and that Colum owns 100% of ChewyAi… because Colum is clever.
This week we have spoken with a few large founder teams replete with people already putting a ‘C’ before their title. In all cases they are pre-launch, have no traction and will be competing (when they do go live) with a handful of far leaner competitors. Their first port of call is likely to be trying to raise money to cover salaries. It’s money they won’t get.
Things are changing fast but founders are still being told they need to find a tech co-founder and to build a team of leaders around them. Its one of the most costly mistakes they will make. Watching bright people handing out equity like candy to colleagues who can only really engage in theory, rather than execution is exhausting. What’s more a team of leaders quickly demands minions. Minions that most startups won’t need for years.
Let’s look at the role of a CTO in a no-code business. Founders don’t like to hear this (because the wish image of a startup is still a New York loft full of beatnik developers) but they only need one person to build their software. Almost all no-code apps are built by one person, potentially with a little support here and there. What’s more the first iteration of their software is going to take between 100 and 200 hours to build. That’s something like ten to twelve weeks work*
So the entire tech budget for the business pre-seed is something like ten to fifteen thousand dollars and the average seed valuation is around $2.5m. The maths is horrifying, even at this early stage a technical co-founder with 50% equity has derived 150x more value from their work than they should have. Worse, once the application is built the startup is going to carry a member of staff with an irrelevant skill set that will look to drive their own agenda. The devil makes work for idle hands.
Of course successful startups grow beyond their initial no-code build but they don’t bin their MVP, they iterate. Over time code creeps in to secure core processes, to cut operating costs and to innovate new solutions. As the startup grows the requirement for better controls grows with them. Operational and security needs demand resourcing and eventually those resources need leadership. The timeline for hiring a CTO is somewhere between eighteen months and three years, depending on growth. At that stage it’s a salaried role, or a role that demands small, not large, equity. 
Large teams at pre-seed stage bring unnecessary cost, busy work and, more often than not a watered down founder’s vision. They owe more to a vision of startup life created by TV shows and Movies than they do to the needs of the business. They create future cap tables full of shareholders that disappeared long ago because they provided no real value to the business. Shareholders that one day may be paid handsomely for work they never did. 
So last night’s meeting with Colum at ChewyAI was a breath of fresh air. He has created an endless runway for his startup by developing, selling and iterating from his desk while plowing through gig economy freelance work to pay the bills. He presents a perfect image of the modern founder. It might be a lonely road, but he’s in the fast lane in a fast car and he’s not carrying any passengers with him. We hope that he makes a huge success of his startup. 
You can Find ChewyAI right here:

*If a developer tells you something takes a hundred hours don’t divide that number by 8.5 working hours in a day to get a target live date. They aren’t robots and you’re not Joseph Stalin. 

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