My Advice for New Series A Companies
Note: This is a re-publish on my own blog of content produced for my clients as a fractional CTO. I've summarized a series of articles I wrote over the past year.
Congratulations! You've just closed your Series A round and now are flush with cash to turn your market-tested product into a larger business. The ragtag scripts, hacks, and cobbled-together infrastructure have held together since your angel round. You probably used some cloud infrastructure, or maybe you were thrifty and used dedicated servers in some rack somewhere (likely Hetzner or OVH). Your mind turns to the years of tech debt and forward-looking scale of 10x to 100x new customers you'll need to acquire to make the investment profitable. What to do first?
First, take a look at your staff. Your people are your best chance of success and your most expensive asset. With the announcement of the Series A and public forms filed, everyone is keenly aware of how much they are paid. They will be comparing their compensation to their peers within and at other companies (whether publicly or not). Get ahead of the curve and roll out career progression levels and salary bands now. Define roles and responsibilities, slot everyone into a role.Give your top 20-25% most valuable people a raise to keep them with you. You're going to need them to be successful.
Second, meet with the CFO and whomever controls your budget. Behind the scenes there is a death match for that Series A money. You probably haven't noticed because you're buried in thoughts about technology and supporting the business. You can't do anything with the budget scraps. In fact, you should already have a good idea of this since you had to pitch the budget expectations to potential investors. Most likely, it's heavily weighted towards sales.
While meeting with the CFO, ask for stats about your budget. What does the CFO think is too expensive? Focus on operational and capital costs. Whatever they tell you, is likely what their telling the CEO and Board too. Get ahead of the curve here. If cloud-related costs are greater than 50% of your budget, ask for their help in finding alternatives. The great flexibility and scalability of the cloud comes at a steep price.You should already have some operational metrics around usage and load. Whatever you can move to hardware, do so now.
Third, take an honest look at your infrastructure. Be brutal. How much time is spent on maintaining it? hardware/software/code/whatever? What's your customer-facing reliability? If your product isn't reliable, apply the Pareto principle to this area first. Sales is only going to vastly ramp up their efforts. No one has time to wait for "engineering" to rework some code, some infra, and "fix things".
Your tech debt is going to grow, quickly. New features, new products, new sales initiatives are going to come at you fast and furious. You don't have enough staff to meet these requests.
Fourth, look at your own time budget. You need to spend more time managing people and less time managing the technology directly.
Your title may be CTO, VP of Engineering, or Head of Engineering. This is for org charts and no one really cares. You may have built the first iteration of the product and your code is still running in production. You need to shift focus from "I did this" to "my team did this". You need to move away from technology decision maker to influencer. You should be hiring people better than you at all technology skills. You may have gotten a PhD by finding a faster sorting algorithm using SIMD instruction and hand-coded assembly. No one cares now. It's impressive, it got you the job, but unless you're selling sorting algorithm libraries, it's a notch in your belt. If you are not effective in making Engineering a success, you'll find yourself replaced by the investors in a heartbeat. They aren't in this because you're cool, they're in this to make money. Their portfolios are littered with cool people, a few of which actually made everyone rich.
People are your most expensive and best asset. Focus on making them successful and the company will be successful.
You're in for a helluva ride. Enjoy it.