One of the first formal exercises in starting a company is the development of a business plan. For technology startups, the plan is the essential sales tool for bringing in outside investment and is the foundation for the operational plan. Now some technology companies get started by an entrepreneur with a new technology but many others are started based on a business idea, product, or marketing concept that requires a technical implementation. I am more familiar with the latter. I’ll get a call; a friend, a friend of friend… has an idea, a plan, just needs a tech guy to come and fill in the missing pieces of the business plan…
So while every startup is different, here are some key questions asked of the head technologist when developing the business plan
- What is the product and the key feature set?
- How many people do you need?
- How long will it take to build?
- What technologies are needed?
- What are the costs for hosting and licensing?
- Can we buy some of the technology?
The other questions are all related to cost and feasibility. The founding entrepreneurs can develop the revenue projections but needs help to identify startup and operational costs. They will want ways to help accelerate development (can we buy some technology...) and want some basic tech details so that they can fill in these details in their presentations.
This defines the first role of the startup CTO. The CTO will need some background in product management, project management and finance to participate in developing the business plan. They need to estimate quickly, accurately and confidently. They need to strong research skills to learn the industry, the business model, and to help shape the product. They have to remember to have fun because while defining the model is important to a business, building it is the hard part.