You spent more than five years working in IT. Changed a couple of companies. Got decent compensation. Educated a dozen of juniors. Now what? At this moment in my career, the most common path is to start changing big companies in search of a raise that will give more than 10% to my salary. In this article, I want to share another path to help you earn $100-$300 per hour and generate passive income. It is a path of being a CTO or consultant.
How to retire as a software developer
While thinking about a career, start with an end in mind and imagine your retirement. To comfortably live in Ukraine, you need around $1500 monthly, a house, and a car. Let’s say a house in Kyiv and a good car will cost you around $200k. You will also need around $300k more to invest in low-risk stocks like the S&P 500, which has a 6% annual return excluding inflation, generating an average of $1600 monthly.
So, I believe you need a total of $500k to retire in Ukraine comfortably.
The average senior developer salary in Ukraine is $6000. Every person who thinks about retirement and lives in Ukraine will save at least 30% of it in the retirement account, which will be $2000 monthly. Assuming you need $500k to retire and the annual interest of the retirement account is 6%, as a senior developer, you would need around 14 years to retire in Ukraine. It does not count unexpected expenses like surgeries, traveling, marriage, etc. If we count that, it will take around 20 years to retire. If you want to retire in Europe, it may take you up to 25 or even 30 years.
So it is a lot of time. Assuming you finished university at 23, it takes an average of 5 years to become a senior. You will retire at 48, which is still reasonable compared to the average retirement age 65.
However, we are talking about a minimal retirement plan; it will not be a luxury kind of retirement. You can live comfortably, but you won’t be able to travel the world, change gadgets every month, and have fun investing in startups. But what if you had the ambition to retire at 30 and live a luxurious life? What would you do?
Sell your startup
Startups fail often, but you need to sell only 1 to retire—only one lucky moment, and you never have to work again. Here, I am talking about Silicon Valley startups and any tech product. There is a demand for everything; you don’t have to build the next Facebook to retire. Businesses like a CRM, LMS, CMS, or chatbot can be sold for decent money.
As a startup CTO, you will own at least 10% of the company you work with, especially if you were one of the early employees. At the same time, you own 10% of the company, and you want the company to be sold for at least $ 10 million to get $500k for yourself.
You won’t be able to save money for retirement while working as a CTO of an early-stage startup, but you will build your expertise and grow liquid capital in the face of shares. Expertise will open you a path to becoming a Fractional CTO.
Trying to sell a startup is a casino-type approach to retirement. Sometimes, you just have to get lucky. If you get lucky for the first time, as a CTO, you may need 2-3 years to retire in Ukraine. On average, it takes three startups to sell one for decent money. But when you sell, it may give you much more than $500k. We can talk about $ 10- 20 million if the company is flourishing and you are the initial founder.
Become a Fractional CTO or Consultant
You will work with different companies at the same time, and you will work with every one of them for 5 – 10 hours per week. As a Fractional CTO or consultant, you will be paid around $100 – $300 per hour. From a single client with whom you work 10 hours per week, you will get around $6000 per month, on average. If you become a full-time Fractional CTO, you will have around three such clients simultaneously, earning about $18k monthly.
While living in Ukraine, you can save at least $ 5,000 per month in a retirement account. As a Fractional CTO or consultant, you would need three years to retire in Ukraine. But you need to be a good Fractional CTO and have experience with your startup. So, if you want to be a Fractional CTO, become a CTO first and spend at least three years building your startup.
Become startup advisor
If putting all your eggs in a single basket sounds too risky, you can try to become a startup advisor and work with multiple projects simultaneously in exchange for equity. Usually, technical advisors get 0.5% – 1% of company equity in exchange for 5-10 hours of their time per month. While being an advisor, you are mostly paid for connections and decisions you make, so it is not time-consuming if you have decent knowledge.
With such a low engagement, you can simultaneously be an advisor to 10-15 startups and own equity in all of them. Assuming you will own 1% of the company, you need about two startups to be sold for $25Mil to complete a retirement goal. I haven’t been a full-time startup advisor, but I could predict that you may need six years to retire as a startup advisor.
However, you need to have past startup experience even to be eligible to be an advisor. So again, you would need to start by running your startup for 2-3 years before becoming an advisor.
Create agency
In addition to building risky product startups, you can make something less dangerous and less scalable, like an agency. As an agency, you will charge around 30% for every engineer. The engineer's average salary will be around $6000, so you could get $2000 monthly from a single engineer. It may sound like easy money, but you will be stressed from running this thing.
You need to be a guarantor of successful projects, a mentor to all employees, and a facilitator of disputes. An average Ukrainian agency has around 20 employees, generating around $40k monthly. You must spend at least 50% on business development, rent, hiring, etc. Ultimately, you may pull $20k monthly from an average agency business. As an agency owner, you will need about three years to retire.
To start a successful agency business, you must have much experience. So, even if you want to go this route, I would start as a CTO on your startup. It will give you the reputation and network that you would need.
How to become CTO
To create an agency or become a fractional CTO, consultant, or advisor, you must have relevant industry experience. So, CTO is the next step in any senior developer's career. If you get lucky – you retire from your first startup. If not, you just become a consultant and earn $100 per hour. But it is not something that comes naturally. It is not like you become a junior engineer, then middle, then a senior, and then, with experience, you become a CTO. You need a unique skillset to be a CTO, and before becoming one, you need to go through a couple of additional stages of career development.
Become a full-stack
Also, as a CTO, you will be the main coder in a small pre-seed startup. Most of the time, you will be a single coder. You need to be able to cover all aspects of product development. Set up the front end with a healthy state management. Set up the backend with CI/CD and automatic linter. Set up scalable deployment process using K8S and AWS. Set up observability using Prometheus and Grafana. Set up analytics using Google Analytics and Fullstory. Set up a landing page using WordPress.
The CTO is the person responsible for the delivery of the product. To do it confidently, you must understand how everything works from the inside out. You may not know the details, but you must know every part of your architecture. As a full-stack developer, your value comes from being able to work with technologies you have never been working on before. You at least need to know that those technologies do exist and what are their use case.
Become a product manager.
When a startup grows, the responsibility of a CTO shifts from coding to management. You need to be able to communicate with every stakeholder and build a technical roadmap that will include everyone’s requirements. This moment usually comes after raising the Seed round. You will spend most of your time analyzing your product and tech, speaking with the team, and finding better ways to do things.
As an example, my recent case. The guy was running an analytic business by selling subscriptions for research. He was using WordPress as a platform for managing subscriptions and writing articles. With time, his company became prominent, and he couldn’t scale WordPress.
Instead of contacting an experienced CTO or advisor, he hired an agency from Ukraine. They spent six months and $50k building a clumsy Django project that utilized Django admin as a CMS for writers. They also used React on the front end, which killed the only purpose of the blog—SEO.
When I came, I suggested they avoid migration at any cost and try to use Headless WordPress instead. I never used headless WordPress, I never used Next.js, and I had only one small project in Python. It still took me about 1 hour to analyze and find the best path forward for them.
Become a leader
After some point, it is common practice across VCs to fire the original CTO and hire a new one. They mostly do it because of this point: leadership. Engineers are usually bad leaders. To be a CTO, you must be a leader.
Your decisions will be your main responsibility at this moment. You must make strategic decisions about where your company is moving, which partners you want to acquire, which technologies you want to invest in, and whom you want to hire or fire.
You will also be responsible for building a culture within the team. You will decide if the job feels like a prison or a summer vacation. You would need to work with scrum masters and managers. You would need to participate in business meetings and give speeches to the press.
Tech leadership comes from the ability to inspire your team. Suppose the team loves working in your company. In that case, they are motivated to go to work every day and freely contribute their idea to company development – you succeeded in this role.
Become a businessman
Through your career as a CTO, you will have a co-founder who deals with business stuff. They will figure out our incorporation, KPIs, investor deals, accounting, and all other paperwork. But business is not only about paperwork; it is about strategic partnerships. As a CTO, you are the business owner of your company—the same as every other chief. If you can’t understand discussions going on during board meetings, you will be manipulated by different stakeholders to vote for decisions they want to make.
You need to understand how business and entrepreneurship are working to understand what business needs from your department. You also need to be able to analyze what other companies may require from you. Then, you start aligning your goals and the goals of your partners. That is how you build a business strategy.
Conclusion
Don’t stop your career growth after becoming a senior. It sounds like a lot of money, but you still need to spend 15+ years doing a comparatively less fun job. Becoming a CTO will give you a win-win situation where if you sell the company, you retire instantly, and if you don’t – you become a tech consultant who works 20 hours per week and earns $15k per month.
The hardest part in all of that is to find partners. Platforms like https://kavun.org.ua/, https://www.upwork.com/, and https://www.startupschool.org/ can help you to find the right people. Just go there, create your profile, and start passively visiting it once a week. Talk to the community, check other projects, and one day – you will get lucky to find people and projects you want to work with.