Hiring a fractional COO for your climate startup

Climate tech startups are often led by technical or first-time founders with deep expertise when it comes to their innovations, but little experience bringing products to market. These founders often lack the necessary operational know-how, from hiring to finding product-market fit to customer discovery. So, to successfully scale, you’re going to need help – and a fractional COO can bridge the gap until you can afford to hire someone full time. 

Jen Wagner and Alice Havill are Founding Partners at Fractal. We sat down with them to discuss what a fractional COO brings to the table, the benefits over hiring full time, and how you can get the most out of the relationship.

When to hire a fractional COO 

When you’re past the point of working in a lab, and ready to start turning your technology into an industrial innovation with market traction, it’s time to bring other people in. By going it alone, you risk making poor decisions without even realizing their impact on the long-term viability of your business – you’ll either waste an immense amount of time, or could even prevent your innovation from coming to market at all. An experienced fractional COO has the capabilities to move your technology forward as quickly as possible while avoiding these pitfalls.

Why go fractional over full time?

The traditional route of hiring someone full time can be incredibly difficult to do as an early-stage startup that’s low on funds – your pool of interested, seasoned candidates will be very limited if you can’t pay people what they’re used to earning, let alone if you can only pay $0. To put things in perspective, a really strong operator with the ability to get your company off the ground could be looking for $250-500k a year. Plus, the risks associated with a breakthrough innovation with no market or buyers are manifold, and enough to put off most executives, regardless of the money. 

However, with the fractional model, the COO is working with a handful of startups who are each paying for a percentage of their time. This means it’s less risky for them, and a much more affordable way for you to access this high level of expertise. 

What the engagement typically looks like

In general, people who provide support to your business will fall somewhere on a wide spectrum. On one end, there’s the mentors you might meet through an accelerator or your network, who you see once a month for an informal meeting. While they can give you extremely useful advice, they typically won’t have the capacity to assist further, and actually help implement their recommendations. Your full-time staff or consultants are on the other end of this spectrum, who are paid to do the work. Fractional COOs falls somewhere in the middle. 

In addition to fulfilling immediate gaps on your team, the fractional COO's objective is to empower you to eventually operate independently. The relationship exists at the intersection of coaching and consulting – they’ll get the work started, show you how it’s done, and then move aside when it’s time for you to take the reins. Ideally, after a period of time, you no longer need them, since you either have enough capital to hire someone, or because they’ve effectively upskilled you and your team, so that you can develop your own commercialization strategies as you scale.  

Terms of a typical engagement with a fractional COO

Because a fractional COO’s focus is on delivering value now, rather than establishing a long-term relationship, expect to compensate them with at least some cash rather than solely equity. Fractional executives are typically contracted on a retainer basis, and rates can vary depending on what you’re looking for. For instance, are you willing to pay a premium for someone who’ll know the answers to your questions right away, rather than working with you to find them? Plus, keep in mind that if their work translates into quick results, or a faster fundraise at a better valuation, the higher cost should be worth it.

Tactics for hiring a fractional COO

1. Start with a smaller engagement
Start with a short contract - say, three months. This will allow you to reap a lot of value from the relationship without locking you in, so you have the option to test the waters, and part ways if you are no longer seeing the value. 

2. Map out your challenges 
Get clear on what you believe your core challenges are in setting up your business, and talk them through with the COO. They’ll either confirm those are correct, or point out other issues you won’t have even thought of – at this point, you don’t know what you don’t know. 

3. Make sure they have walked the walk 
For the COO to hit the ground running, they need to have operated in your space before. Otherwise, it’ll take time – that you don’t have – for them to get up to speed. Experienced COOs will be able to deliver value much more quickly. 

4. Get in the weeds with them
 The aim of a fractional COO is to get you to the next milestone very quickly. They aren’t in it for the long haul – they might help you develop a strategic plan for your pilot, but they won’t be there in 5 years when you actually launch it. Ideally the COO is able to teach you and your founding team the skills you need to launch and scale your business yourself. Then you will be in a much stronger position to build a scalable and sustainable business that can accelerate its impact in the market.  

Fractal’s co-founders Alice Havill and Jennifer Wagner are seasoned climate leaders who were instrumental in the growth of companies like CarbonCure and LanzaTech, and have collectively advised dozens of deep tech companies across all climate verticals. As former Business Fellows at Breakthrough Energy and current program leads at LabStart, the team has a firsthand, deep knowledge of the needs for founders and companies at various stages of growth. Fractal delivers fractional executive services to climate technology leaders for curated human development and efficiency in technology advancements, to accelerate the growth of the organization's leaders, teams, technologies and business models. Learn more at www.fractalclimate.com.