🐧 Becoming a Fractional CTO

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Now let’s dive into this week’s insights…

Today, in 10 minutes or less, you’ll learn:

🛣️ The unconventional path from software-engineer to six-figure Fractional CTO
🤑 The real numbers behind a successful fractional tech leader's income
🔁 How to weather the feast-or-famine cycle of consulting tech work
🤫 The secret to creating a steady stream of high-paying clients

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🧑‍💻 Becoming a Fractional CTO | Sergio Pereira

Sergio Pereira has been building technology for 20 years and worked as a Startup CTO for the last 10 years. He loves to build tech products from scratch, onboard the first clients, get to product-market-fit, hire the first engineers, and grow product, team and processes from there towards scale.

Whenever he has spare time, he’s building his own SaaS products to keep learning about new technologies and to walk-the-walk in bringing them to market and growing that MRR.

Tell us about your career journey.

I started my career in 2009 as a Software Engineer, and since 2014 I’ve worked as a Startup CTO (twice as co-Founder).

Which has been my career for the last decade, having built from scratch several tech products and engineering teams for early stage startups.

Back in 2016, I had my first Fractional CTO client out of my close network, where non-technical Startup Founders would reach out for technical help to hire software engineers, build their product or simply help them figure out some issue or bug.

Shiptimize was such a case. I helped this startup hire their first engineers and integrate with their first enterprise client, which was a big milestone for them at that time.

I didn’t take this Fractional CTO career too seriously, and I didn’t have any proper bizdev in place back then, so I kept working as a Full Time CTO with occasional Fractional clients on the side on and off for a few years. Only in 2022, did I finally decide to make Fractional CTO my main career. So far so good.

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You’ve been a fractional CTO, consultant, and advisor for over 7 years. What have been the pros and cons of going fractional?

I think there are a lot of pros in this Fractional CTO career, with flexibility being the biggest of them.

I have greater control over my calendar and decide how I will allocate my time each week.

I also get to work with a broader number of companies in just a few years, which exposes me to a wide range of technologies, industries, and business challenges.

I’ve felt that these added perspectives have accelerated my professional growth significantly, as I can transfer learnings across different contexts and add value that way.

The biggest drawback of a Fractional career is the unpredictability of income.

Some months I’m breaking my income record and working long hours, while others can drive me really anxious with a looming empty funnel ahead. It really is a feast or famine, and trust me it’s quite hard to adapt, even if it pays off when looking at my earnings in hindsight.

I think the pros outweigh the cons, but I know plenty of Fractional CTOs that tried and failed. It’s all about building a consistent client acquisition process to avoid that anxiety and any financial trouble.

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How did you design your first offer? How has it evolved until now?

My first Fractional CTO offer wasn’t planned. Around 2015-16, I was a go-to tech guy for the non-technical startup founders in my network, and I occasionally helped them with those technical needs. This led to my first paid engagement in 2016, when one of those Founders secured VC funding.

I took the hint that it could actually become a career, but at that point I had no formal pricing or offer structure in place. It was ad hoc and based on the immediate needs of the client. I’d bill by the hour or by the deliverable.

Over the years, I realized the importance of having more professional offers. And the importance to narrow down my client niche, so I could have a consistent offering across them.

After having worked with startups in multiple stages, and consulted with Fortune 500 companies, I now work only with early stage startups that need to build a tech product, or hire Software Engineers, or both. I find myself working with non-technical Founders at the very early stages of launching their startups, and being their go-to tech guy.

The structure of my engagement changed with this greater focus. Instead of charging hourly rates, I’ve shifted to monthly retainers. And my engagements are now much longer on average (6-18 months) than they used to be (1-3 months). This builds me deeper relationships with clients, and also relieves some bizdev pressure.

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How did you find your first 2 clients?

My first two clients came from the network I built during the StartupBootcamp accelerator in Amsterdam.

During my time there, in 2015-16, I became the go-to tech person to help fellow non-technical startup founders with their technical challenges. Things like interviewing engineers or solving AWS issues or shipping their MVP on time. That’s where my first client, now called Shiptimize, came from.

The second client, 510.ventures, came about a year later and it was also a result of my growing network during that accelerator programme. They were growing rapidly after closing a large deal with a Dutch bank and needed help sourcing and onboarding engineers. I was instantly their go-to person, and it was a significant scope of work at the time. I sourced, hired and onboarded 9 software engineers for them.

Those few initial engagements came about organically that way, but then they stopped and I freaked out a bit.

Since then, I’ve refined my approach to client acquisition, focusing on writing in public on Linkedin and Twitter, speaking at tech events, and partnering with agencies and other Fractional workers in the tech space. But those early experiences taught me the importance of networking and building my reputation in the startup world.

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What does your income look like?

As I said, my income varies wildly over the year, which has been hard to adapt in itself.

At peak months when I have 5-6 clients at a time, I make $25-30k. But there have been months with an empty funnel when I’ve made exactly $0. The latter is more memorable for some reason.

It’s been a long time since I had those $0 months. I’ve built secondary income streams, like micro-SaaS products, courses and publishing deals, which create some passive income baseline.

I’ve also shifted my agreements to monthly retainers, and that has added a long tail effect to my client tenures. Nowadays my usual Fractional CTO engagement starts with an intense pace for a few months (say 10-20h per week), and at some point I ramp down to advisory capacity (say 1-2h per week). Those long tail retainers also add some cushion that’s mostly passive.

I must also reckon that at this point of my career I’m not aiming to maximize my income. I’m rather optimizing for two things that I consider of higher importance for me:

Reduce my exposure to those low months, having shifted to longer engagements and diverse income-generating assets.
Increase the control over my calendar, with fewer “meeting intense” clients and preferring clients with remote+async work culture.

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Now you’re building JobsCopilot.ai on the side, publishing a weekly newsletter on Remote Work. How do you balance your side hustles with your fractional clients in terms of time & income?

This is actually one of the biggest upsides of my Fractional CTO career, I can afford to launch side projects.

I’ve been writing my Remote Work Newsletter, which I publish every Friday. Launched a few courses, a private community. And more recently, I’ve been building my portfolio of micro-SaaS products. JobsCopilot.ai was the fist one, currently automating the job search for over a thousand job seekers.

Interestingly, I started building most of these “side hustles” as a way to learn more, and gain experience with concepts and technologies I’m passionate about. The end goal is to continually sharpen my skills as a Fractional CTO, in such a fast moving market as tech.

The prime example of this is how JobsCopilot.ai happened. I wanted to gain significant hands on experience with LLMs and Machine Learning. I also wanted to have hard data about remote jobs to feed my newsletter.

As a builder, I assembled a list of 400k+ companies and started scraping their careers page, then built a data processing pipeline to make the data searchable. At that point, I built the dashboard and automation that allowed job seekers to connect their Linkedin profile, get lots of jobs matched to them, and push them for auto-application. That’s Jobs Copilot.

And now I’m launching JobMarketCompass.com, because lots of Recruiters, Founders, HR folks, etc have been asking me for access to this market data. I might even release it as an API at some point.

And closing the loop to my Fractional CTO career. I’ve used these skills with recent clients in the AI space. Eg: I’ve built a marketing agency composed only of AI agents. There’s the market researcher, the strategist, the copywriter, the performance analyst. It’s amazing! And that was all built on the back of the experience I gained building my own “side hustles”.

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What unconventional advice would you give to professionals looking to transition into a fractional career path?

Perhaps not too unconventional, but certainly something many people are doing wrong: Start by building relationships, not by pitching services.

In my experience, the best clients come from organic connections rather than cold pitches. Offer your expertise for free or at a discount to a few early-stage startups in your network. This not only helps you build a portfolio but also creates trust and opens doors for future paid engagements.

A key thing that’s worked well for me was to create an inbound lead engine through content. Writing on platforms like Twitter, LinkedIn, or Medium about my specific Fractional CTO niche has gained me exposure and trust. This isn’t deterministic, but over the months and years it does morph into an important source of clients.

Lastly, don’t aim to stack multiple large clients at once, this can easily burn you out and damage your reputation with under-delivery. It’s important to set clear boundaries for how much work you can realistically take on.

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Where can we go to learn more about you?

I’m writing daily on Twitter and Linkedin, and those are the best places to find me.

I’m also writing my Remote Work Newsletter every Friday.

Besides that, I’m working hard on my SaaS products, JobsCopilot and JobMarketCompass.

If you’re a Startup Founder who’s interested in hiring me as a Fractional CTO, just lookup my website and reach out.

🌐 Beyond your borders

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🎲 Investors Spend a Lot of Time Thinking About Risk. But They Do It All Wrong (WSJ)

My first talk at Fincon was completely packed.

Tracking net worth isn't about ego. It's about living your dreams.

My dad immigrated to Canada with $300 in his pocket. He retired at 66 from his IT career.

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