And just because they have a job title that you can theoretically hire above doesn't mean they're going to like it. And if they don't like it they'll probably quit (might be a good thing) - I know I would.
There are other options though:
1. Put in place a development plan for your founding CTO, and other C-levels, so they can actually grow with their roles. Again, this isn't something that will work in all cases, but it can certainly help. My CEO has been through something similar, from a tiny 2 person startup, to now successfully running a 200+ person company.
2. Transition them into a new role. Tricky, and not going to work for a lot of people, but possibly an avenue worth considering.
[1] Not only can you bring in a CTO above this, but also SVP and EVP roles.
In a small company CTO seems more like a cool title than actually a real role.
VP Eng configures engineering's organizational structure, sets processes, and manages engineering managers.
VP Eng doesn't make architectural or technology decisions.
VP Eng is a good hire for many startups that start out with a CTO who isn't a specialist in management (which will be most founding CTOs).
In large companies, C-suite roles all mean “someone who comes up with company strategy given a particular set of incentives.” E.g.:
• A CEO is the voice of the Board of Directors within the company hierarchy, and—because they can be fired by the Board—is incentivized to strategize in the direction that will give shareholders value and address their demands.
• A COO is ultimately responsible for the company’s operations, both its operational expenses (e.g. product sitting in warehouses depreciating) and operational revenue (liabilities incurred for income unmatched by deliverables); and is on both sides incentivized to strategize in the direction of making the operations pipeline “leaner”—in est, getting other parts of the supply chain to “hold the bag.”
• A CTO (or CIO, depending on the type of company) is ultimately responsible for any IP assets on the balance sheet; and for any expenses that go into producing such IP. As such, they’re incentivized to create and fund R&D efforts (but also to make them lean), and to push to acquire companies with valuable IP (but to be a miser in the M&A negotiations.) They’re also incentivized to find new ways to exploit any technological resources on the balance sheet, in order to increase their liquid value.
• A CPO (Chief Product Officer—not that many stable, large companies have anyone by that name) is ultimately responsible for exploiting developed or acquired IP assets by building operational revenue sources “around” them, and is measured by the new revenue sources they create. This is what a startup’s “business founder” really is, most of the time, except when they’re raising (during which they’re more playing the CEO role.)
I would liken a company’s C-suite to a Congress: it’s a bunch of people with mostly equivalent responsibilities (define top-level strategy and delegate out the execution) but different constituencies driving their beliefs and preferences.
If you’re actually doing anything in your job that a “corporate Congressman” wouldn’t do, then you’re not really in a C-suite role; or, at least, you have multiple roles within the company, and your C-suite role is just a part-time gig.
(I would highly encourage the latter POV: if a technical cofounder is both a CTO and a Head of Engineering, then later they can give away or delegate one of those titles while retaining the other. I say “delegate” because, as a cofounder, they’re a shareholder on the Board, so ultimately they’re “above” whoever the CTO is, through the office of the CEO, even if they don’t personally end up holding any C-suite title in the end.)
I have seen companies that have both. Purposefully before Googling it myself;), my personal experience in such cases CIO would be more business oriented and have a more software/data oriented view; whereas a CTO would be more implementation, technology, infrastructure, enforcement of standards and policies orientation.
Edit, after Googling, other disagree with my experience: CIO is for internal operations, CTO is for external business:
https://www.linkedin.com/pulse/difference-between-cio-cto-ra...
https://www.telegraph.co.uk/business/ready-and-enabled/cio-v...
How I might explain this to a very technically-inclined audience (the way I would explain this to an executive would be "lay out the management realities of what is expected of a CTO", then sit back and wait for any follow up questions).
It may depend upon how you sell the CTO role. If you get board backing, then the technically-inclined will tend to sort themselves out if you present the CTO role evolving into one that needs someone who no longer codes 20% of the time, but instead only in their limited personal time.
Instead, the role evolves into one more akin to a sell-side investment banker, with lots of communicating between lots of different stakeholders. Endless PowerPoints, traveling road shows to meet investors, if you haven't learned yet then taking etiquette classes so you can concentrate on the conversation around the table instead of stressing over being the only one to not know what they're doing at a table in a Michelin starred establishment, prepping your tech teams on how to present to due diligence teams at customers and investors, meeting with tech teams to get high-level presentations on product technical direction while translating board and CEO strategy into those teams' terms, meeting with the board and CEO to set strategy, researching and talking with analysts about industry direction before deciding what you believe that direction will be and defending your analysis, hashing over the same topics with the board and CEO and other C-levels in a nearly infinite number of permutations, learning golf if you have to, learning how to socialize from actual professional trainers if you have to, "have to" defined by the board and investors on any number of other areas, learn how to read and parse financial statements if you haven't already, hashing out share dilution events between C-levels and your technical teams, setting leadership examples for your technical teams, mediating between engineering/technical department heads if you're in a small enough company, recruiting for such department heads, working with a mentor on how to distill and package complex technical details into salient and succinct framing for leadership, take lessons from PR professionals on talking with the media, and on, and on, and on.
Faced with such hardcore managerial demands acting as a translating layer between the technical and investor/C-level layers, and clear expectations that the board and investors want someone who dives into them without a backward glance at firing up Emacs in Javascript mode at work, most sane early founder CTO's who love the technology for its own sake would leap at the opportunity to take the reins of a VP/EVP/SVP type role depending upon the size of the company, where there is a clear expectation they would still be doing some pull requests, pair programming, etc.
I knew a few companies, where founders were fighting over C-level roles.
If a company under 10 people has a CTO it is a bad sign.
If a company over 20 people doesn't have a CTO it is also a bad sign.
I also know a bunch of companies, where the CEO doesn't tolerate other C-levels, for ego reasons.
I worked for a series A startup client with ~50-60 employees (30 or so were engineers) and they had a VP Eng but no CTO. SaaS/mobile app company.
I've seen this occur in practice, and I'm asking you why that's a bad sign.
a good leader also listens to his team and doesn't make decisions against the teams judgement. so it's not always necessary to replace an inexperienced CTO. you can also give the CTO the opportunity to get the experience they need in order to continue.