Amazing CTO Newsletter
by Stephan Schmidt
This week’s insights include
- My one key to success for outsourcing
- ⛅ CTO Job Market Weather - have the layoffs impact?
- The 👨🔬 Einstein Principle: Accomplish More By Doing Less
- Why 📅 long-term plans don’t work and how to fix them
Good reading, nice weekend ❤️ and until next week,
I wrote a Hacker News comment that got way more upvotes than any comment I wrote before. And because it’s relevant for CTOs I wanted to share it here. It was about outsourcing. Many development outsourcing projects go over budget or go wrong (most only succeed if you way overpay or have low standards).
The key to understanding: The outsourcing company is not your buddy, they have very different goals than you have. Too often do I see people who have nice chats with the agency over a coffee. Remember: They are not your friends.
You need to write the contract to align the incentives of the outsourcing company as much with yours as possible. For example, I see hourly billing, and bug fixing counting as billed hours. How does the agency have an incentive to keep bugs low if it makes them more money? The agency has low retention, new people are slower, and slower means more money for the agency. How does the agency have an incentive to keep people on the project? You might think this is obvious, but I have seen unaligned incentives in nearly every outsourcing project I’ve looked into and was asked to fix – often this was the reason I was called in to fix it in the first place.
The one tip I give to CTOs when outsourcing: Do not take the developers they give you. Interview all of them and reject the bad ones. Rinse and repeat. As a new customer, they will not give you the best but those available that are currently not on a project. Or worse: rejected by other clients.
Happy outsourcing (And you know your Wardley Maps on what to outsource, don’t you?).
⛅ CTO Job Market Weather
How is the CTO job market? With all the layoffs in tech, does this apply to open positions for CTOs? Germany is flat, but the US is up to 110 (!) open positions, the highest since I’ve started recording at the beginning of the year.
Article of the week: The Einstein Principle: Accomplish More By Doing Less**
“We are most productive when we focus on a very small number of projects on which we can devote a large amount of attention.” but yet “We can no longer focus on a small number of important project, but find ourselves, instead, rushing between an increasingly overwhelming slate full of a variety of obligations.” And then every company i look into does too many things in parallel, most of them without impact. If you need to convince others in the company to focus, focus, focus, cite the “Einstein Principle”.
Stories I’ve encountered last week
InnoGames published salaries
This one is in German. But it has LOTS of numbers about salaries, from juniors to heads (haha, again, no CTO, we will publish your salary but not mine!). Dig in.
Why long-term plans don’t work and how to fix them
“Yearly software development plans are my favorite genre of fiction.” If asked I tell people 1. have a long-term vision (not plan) 2. to plan for the next quarter only 3. Have OKRs (but not features/projects) for the next three quarters. If you need some convincing, read the article.
ML code generation vs. coding by hand - what we think programming is going to look like
If you’re going to be a CTO for the next 10+ years, this is relevant.
Software development topics I’ve changed my mind on after 6 years in the industry
I think there are some good ones in there.
Being on-call sucks — Bobbie Chen
Spot on and must read if you plan to put people on-call or already do.
Minecraft and NFTs
I still don’t know what to think about NFTs - a fad or the future? Have you thought about including NFTs in your business (at least brainstorm, this is the kind of innovation CTOs should drive)? At least there is a stand from Microsoft: No NFTs in Minecraft.
Will new UK data laws put adequacy agreement with the EU at risk?
This one could be interesting, for all of you with a presence in the EU and the UK. Before Brexit, the UK often was one of the first international expansion markets, in the EU, but you’ve gained an English website. Now?
Load Testing: An Unorthodox Guide
I see so few people (coachees in this case) doing load testing. As my mantra is to always be able to scale 10x (not 2x and not 1000x) understanding your current situation is necessary. It’s better to find bottlenecks before and not when the wave of new customers arrives (Once in a startup the company decided to 5x inventory and 5x traffic for the first week of January, without telling tech. Guess what happened). Our bottleneck was the coupon checking code during checkout. Never would have thought. Give this to developers and make quarterly load testing mandatory.
How to take things less personally
One of the things I’ve struggled with a lot in the past (it’s better, thanks for asking) and you may too. Nice read without tech
The Ultimate Burnout Guide: Symptoms, Causes, and Prevention
I’ve you slightly suspect this, act.
Good Managers Write Good
About the importance of writing. This one came as a surprise to me.
📚 Book of the week
This week’s book is “The Challenge of the Computer Utility” by Douglas F. Parkhill. The interesting thing is, this is a book you need to know of, but do not need to read. Why? It’s a book about cloud computing, so what? There are many books about cloud computing. It’s from 1966. Let that sink in. It was before the internet. Most ideas are much older than you think. I once had the great idea that 50% of the time to market is lost before a decision is made, and the biggest lever for time to market is speeding up decisions by management. I was proud of that insight until I found it in a 80s computer book. So don’t read this book of the week (but you can!), but know that it exists - you can also impress other people with it ;-)