Do Startups Really Need a CTO?

We can broadly divide companies into two categories:

• Deep Tech: Pursuing technological breakthroughs and solving significant global challenges, which requires massive R&D investment, long development cycles, and substantial capital. Examples include healthcare, climate change, and AI. Note that “AI” here refers to foundational research and training models, rather than application-layer tools.
• Industry Solutions: You have a solution that addresses pain points in a specific industry.

The vast majority of startups in Taiwan fall into the industry solution category.

Under this premise, surviving the early stages depends less on the technical details of feature implementation and far more on whether you have a deep, thorough understanding of the industry and truly grasp where customer pain points lie.

Especially in the age of AI, the barrier to actually building features has dropped to an all-time low. What is far scarcer, in my opinion, is a quick-witted, agile Product Manager—the truly exceptional PMs can already build their own PoCs using AI tools.

This is also why I believe hiring a CTO or senior technical executive is relatively difficult:

• You want someone with deep technical expertise, yet you also need them to possess enough industry knowledge to contribute to the company’s business strategy.
• Even if they join with the title of CTO, they still need to handle a high volume of hands-on development in the early days. As the product moves through different stages, transitioning smoothly isn’t guaranteed (e.g., shifting from execution-heavy to strategy-focused, or moving from exploratory experimentation to data-driven iteration).
• Joining a domestic startup often yields a relatively low return on investment (ROI).

Why do I say the ROI is relatively low? For a CTO, accepting a single-digit percentage of stock options means bearing years of uncertainty, equity dilution, and below-market compensation. Even if the startup manages to reach an exit, the annualized return might still fail to justify the risk.

Early-stage startup operations are filled with unglamorous tasks: jumping into customer support, rushing out a campaign landing page in a single day, constantly dealing with shifting business logic, custom client demands, miscellaneous chores, and priority overrides. When resources are constrained, early team members must wear many hats. Personally, I enjoy this fluid role dynamic, but to be fair, it isn’t necessarily the kind of environment most developers look for.

Without deep conviction or genuine passion for the company and industry—or a clear personal goal they want to achieve—it is hard for people to stay in such an environment. The compounding tech debt, undefined processes, and lack of structure naturally drive developers away.

As mentioned earlier, for a nascent startup, an experienced developer paired with a sharp PM is often all that is needed to start validating the market. A senior executive isn’t strictly necessary.

However, while a senior executive may not be needed, technical decisions still have to be made. If the founder lacks a solid technical background, maintaining a holistic view of the architecture can be challenging. Some foundational decisions must be designed properly from day one, as the cost of fixing them later is prohibitively high:

• Database design: How schemas and indexes are structured, and how data models map to business logic. Once you have production data, tearing it down and rebuilding is excruciatingly difficult. It may even involve intentionally choosing NoSQL to maintain flexibility.
• Infrastructure: Core business logic architecture, cybersecurity, and deployment pipelines.
• Hiring: The early team defines the trajectory of the entire development process; for a startup, a bad hire is exceptionally costly.
• Tradeoffs: Knowing what must be built now versus what can be compromised or deferred.

This brings to mind a concept widely used abroad: the Fractional CTO. Instead of hiring a full-time executive, you bring in an experienced CTO on a project-based or part-time retainer.

They assist with early architecture design, hiring, development workflows, and team mentorship. This approach mitigates the risk of a costly full-time mis-hire, eliminates the pain of a prolonged executive search, and avoids the dilemma of paying for a role that isn’t needed every day, yet remains indispensable at critical junctures.