March 5, 2013

What does a CTO do?

Posted in Category: Work — Amr Awadallah @ 9:53 pm | link | | comments (2)
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I frequently get asked this question, and it is a question that I sought out to find an answer for a little less than a year ago (when I became full time CTO at Cloudera). I did a bunch of online research and talked to a number of enterprise software CTOs whom I look up to (listed at end). I summarize my findings by answering four core questions: (1) what is the CTO Mission? (2) how to measure the CTO? (3) How should the CTO split his/her time internally vs externally? then finally (4) what are the specific responsibilities of the CTO towards the main constituents inside the organization?

Note that this role description is focused on pure CTOs, as opposed to CTOs whom still own the operational aspects of the engineering organization, it is also biased towards enterprise CTOs vs other domains.

1. What is the Mission of the CTO?

The Mission for the CTO can be summarized across three axes:

A) Fiduciary for Long-Term Technical Strategy:

  • The CTO must effectively hold, develop, articulate, and continually evolve the company’s strategic technical direction.
  • The CTO is responsible for making sure the company continues to have the best technology offering in a dynamically-evolving highly-competitive space.
  • The CTO brings the proper balance between business and technology strategy by effectively connecting the outside world with the inside through distilling information into the key trends that indicate where the company needs to go next, thus aligning the company’s technology strategy with its business strategy.

B) Technical Evangelist:

  • The CTO must inspire/excite people internally around the long-term vision of the company, as well as convince outsiders that this is where the world is going to be, and that his/her company is the best choice to take them there.
  • The CTO must speak with authority about the market needs, must be credible with customers, and must be able to articulate the business value and ROI to a variety of audiences.

C) Spiritual Leader for the engineers and maintainer of the technical culture:

  • The CTO must rally the engineering organization towards the long-term technical goals of the company.
  • The CTO must be able to inspire new engineers to join the engineering organization and must help in the sourcing/identification of such talent.
  • The CTO must help set and maintain the technical culture to make sure the company can continue to retain and attract top technical talent.

2. How to measure the CTO performance?

I could think of three metrics which I outline below:

A) Tech Strategy Alignment:

This is a binary metric, if the company misses a key tech trend then counts against. Also, if there is a significant misalignment between the business and technology strategies then counts against. Towards that end, I highlight this quote which is attributed to Greg Papadopolous [x-CTO of Sun]:

“The CFO is not responsible for making revenue every quarter, but if there is a big surprise, fire her. Similarly, the CTO isn’t responsible for delivering products every quarter, but if he misses a key technical inflection point (e.g. the internet), fire him.”

B) Health of Engineering Culture:

This can be measured by doing a survey of the technical organization to ensure that they are productive and happy at same time. A lagging indicator is significant attrition of top engineering talent, or inability to attract new top talent to the company.

C) Internal CSAT:

In many ways the CTO, similar to the CFO, is a service center to all the other organizations in the company (more on these responsibilities later). Thus an appropriate metric is a weighted customer satisfaction score across these organizations (aka CSAT). If these internal organizations don’t feel they are getting value add out of the CTO, then it is time to fire him.

3. How should the CTO split his/her time internally vs externally?

There is no perfect answer for this one, but the right answer is a bit of both. The CTO will not be able to do a good job inside without having knowledge of the outside, and vice versa. The mix of external/internal is ultimately something that should come out of how the CTO can be of most help to the business. Also there’s travel/family to consider, you have to work sustainably, so find your own sweet spot. The answer will also change as a function of what stage the company is at. With that background this is how I split my time today:

A) External: 70% of time

  • Sales/Customers 35%
  • Marketing/Evangelism/Analysts 20%
  • Business Development/Partners 15%

B) Internal: 30% of time

  • Digest the info collected externally then funnel that knowledge to the appropriate internal teams.
  • Continuously connect engineering, product & business to ensure that the vision articulated publicly is where the company indeed is going, and that the technology roadmap aligns with that vision (especially for new initiatives).
  • Support the marketing team with collateral/white-papers that articulate the company vision.
  • Stay on top of engineering culture, processes, and retention.
  • Shepard for the Intellectual Property portfolio.

4. So what are the CTO’s specific responsibilities for each organization within the company?

 There are five main constituents that the CTO serves: (1) CEO/Strategy, (2) Engineering/Product, (3) Sales, (4) Business Development, and (5) Marketing. Below I list some of the key responsibilities towards each of these constituents.

A) CEO/Strategy

  • Predict and stay ahead of any technical inflection points that might significantly affect the company.
  • Advise the CEO (and CFO/COO) on the long-term technical strategic direction of the company and where to, or to not, make large strategic technical bets.
  • Provide the CEO with different “options” on the technical direction of the company and provide sufficient information for deciding what is the best option to take at any given time.
  • Be a sounding board for the CEO by providing a neutral view which puts the company’s long-term interests above all else. The CTO, similar to the CFO, is in a unique position to do this effectively since he/she doesn’t directly own significant business resources per se.

B) Engineering/Product:

  • Though the CTO isn’t responsible for the day-2-day tactical delivery, he should work closely with the VPs of Products & Engineering to make sure that the overall development direction is well aligned with the company’s strategic technical vision.
  • The CTO should influence the prioritization of resources across large strategic technical bets, but should not be involved in the daily execution once the priorities are set. In fact, it is important to let go entirely of obsessing over the day-2-day execution (which can be hard to let go of), but that is essential so you can focus on the long-term strategic thinking without being encumbered by the immediate constraints.
  • One of the key challenges for the CTO is how to champion people, projects and ideas without stepping on the toes of Product/Engineering management. This is why it is necessary that you seek training to become a strong influencer, and be very selective regarding which ideas you plan to focus your energy on (pick your battles).
  • You need to be a sounding board for the VP of Engineering, allow him to vent, and help him with brainstorming about the different challenges that the development team is facing. In many ways, the CTO and the VP of Engineering need to be bonded at the hip, it is a very critical relationship, so spend significant time on this.
  • Help with the recruiting/retention efforts (this includes ties to Academia).
  • Continuously optimize across the whole organization to avoid any duplication of effort and encourage cross-department fertilization.
  • Ensure alignment of the greater technical organization and, when necessary, arbitrate techno-centric turf scraps, architecture conflicts, etc.
  • Foster innovation by organizing periodic hackathons and by being a steward of innovation in the early stages.
  • Serve as master architect across product lines. I don’t do much of this at Cloudera though, we have a number of truly amazing engineers who are way better architects than I am, so best I can do is to simply get out of their way! (I only get involved if there is a strong conflict, which luckily is rare at Cloudera).

C) Sales:

  • Partner with the sales organization to effectively close customer accounts.
  • Partner with the sales organization to effectively close customer accounts.
  • Partner with the sales organization to effectively close customer accounts.
               (3x replication intended for emphasis)
  • Support the sales organization by building strong relationships with peers at strategic customer accounts.
  • Participate in customer meetings to articulate the long term technology road map hence strengthening the customer’s confidence that our company is leading the industry.
  • Speak with authority about the market; listen to customer needs; quickly understand their issues; and give good advice on the company’s products to the customers.
  • This is very important: know when to say “I don’t know”, then connect the customer with the proper resource whom can go deeper on the question being asked. A good CTO should never ever make shit up on the fly 🙂

D) Business Development and Partnerships:

  • Support the business development team in strategic partner engagements and maintain good relationships with peers at these organizations.
  • Provide technical due diligence of partner technologies and acquisition targets to make sure they properly fit with the company’s platforms, offerings, and culture.
  • The CTO should keep track of all the technology startups in the same space, and have them stack ranked based on what he/she can glean about their prospects. The CTO should have clear thoughts about: possible acquisition targets, what expertise is the company missing? which companies are doing the best work across all of the ancillary areas? which companies have the best technical teams? what could competitors buy that would hurt the company? etc. I rely significantly on my cofounder (Jeff Hammerbacher) for this part. 
  • Represent the company at select technical associations to re-enforce the company’s presence and voice with partners.
  • Predict if a new partner technology would have significant impact on the long-term technological roadmap for the company (e.g. a new type of storage or compute device).
  • Predict long-term competitive trends due to the constant shifts in the market.

E) Marketing:

  • Serve as public face of technology for the company.
  • Evangelize the company vision and technical direction through conferences, speaking engagements, and press/media/analyst activities.
  • Maintain good relationships with designated key industry analysts.
  • Support the marketing team in building a large active community around the company’s products (meetups, hackathons, industry conferences, etc).
  • Social engagement marketing through twitter, blog posts, articles/whitepapers, etc.

In summary, a great CTO can be invaluable for their organization as he/she has the luxury to step back and see the forest through the trees, and the ability to be the voice of the customer and of the employee. Whether you are a budding CTO, or a CTO veteran, I really hope you find this article useful. Please don’t hesitate to let me know if you disagree with any of the concepts presented here, or if there are major areas of responsibility that you think I overlooked.

Cheers,

— amr

PS: I would like to acknowledge the following folks/references:

 PPS: A good CTO must also know how to be an active participant in the VIM 🙂

 

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November 15, 2011

The Geometry of Startup Valuations.

Posted in Category: Tech,Work — Amr Awadallah @ 10:40 pm | link | | comments (1)
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I frequently find that I have to explain to candidates joining Cloudera (and existing employees) how not to be overly concerned about dilution of their percent ownership when a company is experiencing strong growth.

Towards that end I created the chart below to illustrate how percent ownership is just a small part of the total equation. The core concept is that the “paper” valuation of your stock options is equal to twice the area of your sector under the pie, and the area of your sector is proportional to your angle (i.e. your percent ownership) multiplied by the radius squared (where radius is the stock price). Hence if a startup raises a new round of funding at a large radius then that quickly out weighs any shrinkage in the angle of ownership due to the to the squaring of the stock price. I am not saying that you shouldn’t worry about dilution at all, you should obviously try to get the best deal and keep dilution low, but don’t be overly obsessed by dilution, it is just one factor in the grand scheme of things.

Fortunate startups that demonstrate repeatability/efficiency of their business model raise additional funds at a large radius so that they can fuel further growth thus making the pie larger for everyone. On the other hand startups that get overly concerned by dilution and avoid raising money (depsite being in a growth market) can fall in a penny-wise pound-foolish trap where they end up being a zombie company that goes nowhere (I know many such startups, and by the time they realize their mistake it is usually too late).

Cheers,

— amr

PS: For stock options, the “paper” value is (area of sector) minus (cost of sector), where cost of sector is angle * strike-price^2.

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September 29, 2009

Last chance to signup for Hadoop World [Discount Code]

Posted in Category: Work — Amr Awadallah @ 1:08 am | link | | comment (0)
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This is pretty much your last chance to signup for Hadoop World, it is happening this Friday (Oct 2nd) in Newyork City. The registration prices are higher now since these are the last few days, but if you are interested in going then shoot me an email, I have a special deep discount code for “friends of amr”.

Below I highlight a number of news/blog articles that covered some of the use cases that will be talked about at Hadoop World:

I look forward to meeting you there,

— amr

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April 30, 2009

The Essentiality Criterion

Posted in Category: Work — Amr Awadallah @ 1:31 am | link | | comment (0)
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First, I can’t believe it has been three months since I last blogged, all I can say is that a startup will suck the life out of you 🙂

I still see many startups creating free online services and expecting them to generate hundreds of millions of dollars from advertising. I might be stating the obvious here, but that will only work out if these services get tens of millions of users, with those users returning to the service almost every day, and that will only happen if the service meet the essentiality criterion. Essentiality is the litmus test that differentiates a life-style business (e.g. a super popular blog that makes a few million $/year max) versus a venture business (i.e. a business which generates hundreds, if not thousands, of million $/year). By essentiality I mean both the ability to amass a large population of users, but become necessary to these users such that they need to visit the service almost every day (if not many times a day).

For example, here are some essential online services:

  • E-Mail/Chat/IM: It is essential that you communicate, almost continuously
  • Search: We all need to find stuff many times a day
  • News: Almost everybody needs to know what is happening. Facebook is news about your friends, it is communication too.
  • Music/Movies/TV/Videos/Games/Sports: A decent population needs their daily entertainment “fix”, however very few destinations are able to aggregate a large enough audience due to content fragmentation

I was then going to list the many services/sites that I don’t think will make it due to failing the essentiality criterion. Many of these services will collapse due to fact that they are small/life-style businesses but their VCs expect them to hit venture scale (the ones structured as small businesses will live and prosper). But, to avoid alienating such businesses (since some of them are potential customers for Cloudera) I decided not to list them here :). That said, the common pattern among them are: either they have a lot of users but are not essential to any of them, or they are useful but to a very small group of users, in both cases this means they will not be able to amass the huge volume of pageviews required to make venture-scale money based on advertising.

Cheers,

— amr

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January 29, 2009

Diagnosoft raises $4M and hires Firas BenAchour as CEO & President

Posted in Category: Work — Amr Awadallah @ 10:04 pm | link | | comment (0)
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I seed funded a company called Diagnosoft a few years back, mainly because one of the cofounders (Nael Osman) is a life-long friend of mine, but also because the technology was very intriguing and came across as something that could save my life one day 🙂

In layman terms, Diagnosoft develops a program that analyzes cardiac MRI video sequences to generate quantities that show where the heart is weak. These measurements greatly augment the “eye balling” that physicians do today, which leads to faster and more precise detection of problems that can otherwise go undetected. The software also does visualization and integrated reporting, but the core differentiator is the proprietary quantification algorithms. The founders are from John Hopkins University and are the leading experts in this field.


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The funding for Diagnosoft comes from a VC firm called “Technology Development Fund (TDF)“, which is based in Egypt. BTW, many of the life sciences VCs that we contacted in the US wussed out from investing in Diagnosoft, the reason they usually gave us was “it is too risky”! Well, yeah, inventing a new disruptive technology is risky, but Diagnosoft is ready to cross the chasm, it is already being used by early adopters at hundreds of research institutions all over the world. Diagnosoft HARP is now the de facto standard for cardiac tagged MRI analysis (more than 22 published papers involving more than 3000 test subjects).

The key premise behind this market opportunity goes as follows: the previous wave of heart treatment was heavy cardiac surgery, the current wave is non-invasive surgery, and the future wave will be pro-active treatment for which precise detection tools like Diagnosoft HARP will be a must. You can find out more by reading the press release announcing the funding and Diagnosoft’s new CEO:

http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/01-29-2009/0004963069

I am very passionate about Diagnosoft, not just because of the market size potential, but rather because it can truly revolutionize prediction and prevention of cardiac diseases, the number one killer of humans in the United States.

Congrats to the Diagnosoft team on this very important milestone, onward and upward.

Cheers,

— amr

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