Talk at Daho.am conference 2019 about Tech Due Diligence for CTOs.

1. or:
How to shine in a
Tech DD
by Chris Philipps

2. Chris Philipps
Trans* Leadership
• Co-Founder / MD at PHILIPPS & BYRNE
• Tech advisory for startups and VCs
specialising in Tech Due Diligence
• 20 years in Tech
• Interim CTO
• 120+ Tech DDs, 150+ startups
worldwide
Chris Philipps

3. Clients (excerpt):

4. Chris Philipps
Trans* Leadership
• In my first CTO position I didn’t
have a clue what a Tech DD was
and what I had to do
Tech Due what?

5. • Huge stress point for many CTOs
• “I have the constant fear that
something’s always near”
• Let’s switch the light on and have a
look at Tech DDs!
Fear of the dark

6. Let’s start with the basics!

7. • A DD is a general health check
• Identification of assets and risks
• Evaluation of
• Leadership
• Team and organisation
• Technology
What is a Tech DD?

8. It is probably the most thorough and
honest feedback you can ever get!
Bonus

9. It should be:
• The first test for a trustful collaboration

10. It shouldn’t be:*
• hide-and-seek
• us against them
• a show
* Well, at least not entirely!

11. The Problem:
• No standards for Tech DDs
• Every person or company has their
individual approach

12. Different Stage - different kind of DD:
Stage: Seed A, B C, D
Biz Focus: Build Grow Expand and Mature
DD Focus: Potential
Scalability, ability to
adapt quickly
Maintainability,
Compliance
(IPO, Exit)

13. Stage: Seed A, B C, D
Biz Focus: Build Grow Expand and Mature
DD Focus: Potential
Scalability, ability to
adapt quickly
Maintainability,
Compliance
(IPO, Exit)
Different Stage - different kind of DD:
Just a reference point!

14. The actual Tech DD

15. It starts before it starts…
• Communication before-hand
• Documentation
• Reliability and transparency

16. The context
• Business model, market, objectives,
strategy, …
• What Tech strategy does this require?
• Your CEO / co-founder’s story….
• The investor’s expectations…

17. Typical Points of interest
• Tech Leadership and team
• Is the system…
• stable
• scalable
• maintainable
• Are there any big risks? (“Red Flag DD”)
• Do they keep what they promise?

18. Typical Topics
• Business view
• Product
• Leadership in Tech
• Development process
• Hosting
• Deployment
• Software architecture
• Quality Assurance
• Stakeholder collaboration
• Tech ecosystem and culture

19. Typical Questions
“What parts of your tech landscape keeps you
awake at night?”
“Which changes would you apply to your
current architecture
if you had to scale from now (transactions /
requests) 2x, 10x, 100x?”
“Can you explain the reasoning behind the
choice of XY?
Why didn’t you [make / buy] it?”
“Can you describe your role and responsibilities
as CTO?”

20. Who will be involved?
CEO / founder(s)
CTO
Head of Engineering
CPO
Head of Product
Product Owner(s)
Scrum Master(s)
Agile Coach
Project Manager(s)
Mobile Engineers
Software Engineer(s)
Operations Engineer
DevOps
QA
Test Engineer(s)
Security Engineer
Data / BI team
Selected stakeholders such as Customer Support, Marketing, Sales
Internal IT
DataScientist(s)
Architect(s)

21. Documentation
• The basics (architecture etc) should be always there
• The expected grade of documentation highly
depends on the business

22. Typical Anti-Patterns
• Wrong or no architecture for the
business context
• No engineering best practices
(test automation, Clean Code, …)
• “CTO” == Lead Developer
• Tech highly underestimated and under-
equipped
• Quick & Dirty Prototypes as basis for growth

23. What if sh*t has hit the fan?

24. Skeletons in the closet
• Everybody has them!
• Address them (proactively)
• Share your ideas how to fix it
=> Don’t promise what you can’t keep!

25. Again:
See this as an exercise to fix your actual problems!

26. If it went really bad:
Come up with a mitigation plan - ASAP

27. What can you do to be well-prepared?

28. Stay in shape!
• Define your own quality
standards and keep up with
them
• Define a threshold:
e.g. Six weeks max to get back
in shape for a Tech DD

29. Analogy with bug-fixing
• The later you fix bugs in a software
development life-cycle, the more
expensive they become
• Fix your Tech DD before it even
happens

30. Trend: Tech DD “Dry-Run”
• It is a health check that gives you external feedback in an “as if” way
• Prepares less experienced CTOs / Leads
• Usually 6 to 12 months ahead of a bigger funding round
• Should leave enough time to fix the causes and not only symptoms

31. When do you want to know that you have a problem?
As soon as possible!

32. To wrap it up:

33. Set the right expectations
Address issues proactively
Come up with a plan (and mean it!)
Stay in shape
Check yourself

34. First Quick Check: TechDD Calculator (for early stage startups):
https://pointninecap.typeform.com/to/WaWXfc
Philipps & Byrne Blog on Tech DDs:
https://medium.com/@consciousness
Resources

35. Thank you!
PHILIPPS & BYRNE GmbH
Chris Philipps
Havelberger Str. 12
10559 Berlin
Germany
+49-171-6432002
chris@philipps-byrne.com
http://www.philipps-byrne.com

36. Photos by
Jonas Friedrich,
Iron Maiden,
https://www.mcasiwakuni.marines.mil/News/Photos/igphoto/2001027626/
https://commons.wikimedia.org/wiki/File:Brown_Lemur_in_Andasibe.jpg
Petr Kratochvil https://www.publicdomainpictures.net/pt/view-image.php?image=8654&picture=pensamento-macaco,
https://upload.wikimedia.org/wikipedia/commons/6/67/Skeleton_of_Alouatta.jpg
https://www.pexels.com/photo/africa-monkey-monkeys-the-gambia-1128533/
https://www.flickr.com/photos/iceninejon/3622484460
David J slaterhttps://en.wikipedia.org/wiki/Wikipedia:Featured_picture_candidates/Monkey_selfie
Images