Lessons Learned in the Transition from CIO to Startup CTO

Seven years ago, after stints as a CIO at a life sciences products company and his own consulting firm, Nicholas Rioux co-founded and became CTO at Labviva, a digital procurement technology company for the life sciences industry. His new role brings fulfillment and even joy from helping engineers grow and delivering products that help customers. But such a move is only for those whose first passion is business rather than technology.

Rioux, 41, started as an engineer and technologist and spent decades in major B2B and B2C e-commerce firms building toolsets for life sciences, biotechnology and pharmaceutical companies. “There came a time when I felt like I was operating in a position that was too high-level to make a direct contribution to helping life science customers streamline their procurement processes,” he says. One of the challenges of leading a startup, he adds, is shifting from cultivating a healthy culture within a team to scaling that effort to a company growing from 80 to 300 employees.

Bob Scheier: Which of your skills have served you well in this new role?

Nicholas Rioux: A lot of the skills translated quickly. Having been a hands-on engineer earlier in my career and having kept an eye on the industry, I had stayed pretty focused on technology. As Labviva grows, I have found that many of my previous business management skills, such as growing teams, are still useful and relevant.

I have also found that the rewards are greater as a part of the core team at a product-focused technology company. Working as a consultant to implement technology in someone else’s organization didn’t bring the same level of fulfillment as helping to create the product.

Was one of your motivations to create better platforms and applications than you had seen in the market as a CIO?

Very much so. At my previous companies I had considerable difficulty leveraging tools we had acquired at great cost. When I ran my own consulting firm, the aim was to help our clients choose the best options in the market and help implement them correctly. But even then, I saw that many solutions were subpar, despite superior support programs from the vendor and proper governance from the customer. This motivated me to create something better.

What is it like to lead a product company versus a consultancy?

At a consultancy, there’s much more turnover in your workforce as you move from one project to another. The organization is constantly evolving to meet your client’s changing needs. You’re not really building a company, but rather solving problems step-by-step. To build a product-focused company, you need to build and nurture a team through continuous culture shifts as the company grows, while maintaining your differentiation.

And that differentiation is?

What I call customer obsessiveness, building customer feedback so deeply into the development process that everyone adopts a customer-first spirit.

How does that customer focus affect how you manage the software development life cycle (SDLC)?

In my last position, the SDLC was almost completely driven by legacy toolsets. I implemented their first agile methodology across the organization. The process at Labviva is totally different. It begins and ends with the customers. 

How do you maintain that customer focus as the company grows?

Since both the product and engineering teams report to me, I can ensure customer feedback guides the work of our developers. The same goes for sales. They have to understand how our customers use our platform. For example, I put one salesman, on their first day on the job, on a plane to San Diego to put labels on bottles in a stockroom to understand how our customers manage their inventory from the ground up.

We also try to institutionalize the importance of R&D. We reserve 10% of our team’s time to research anything they want that would help the business. Then they come to me like an internal venture capitalist, and I fund good ideas with a solid business case. We use that model to create new innovative solutions that differentiate us.

What is the most important question a CIO should ask themselves to determine if a move to the vendor side is right for them?

Can you be as product-focused and customer-focused as you need to be? Oftentimes CIOs can be a bit separated from much of the business. To grow a business, you need to be closer to the customer. For example, our first product placement was a 20-person pilot with a global firm. I spent a year and a half onsite, with a badge and a cubicle, meeting with their scientists and procurement experts to understand every aspect of the business, in order to inform our product design. 

What did you learn by being onsite for that long?

Among other things, experiencing a customer’s frustrations firsthand. For instance, I remember a chemist who was trying, unsuccessfully, to find a specific chemical by its structure. This led me to prioritize developing this search capability and integrating it into our platform. Now, customers can search and browse for raw materials by their chemical substructure, reducing the time and costs associated with purchasing chemicals for pre-clinical R&D. This is why CIOs of a product company need to work intimately with the customer to get the product design right. They should maybe reconsider if they love technology more than the business.

What else should they consider?

How comfortable would you be working with even tighter budgets than a larger company, not having enough capital to do everything you need? For example, how do you create a secure IT backbone and achieve SOC 2 (System and Organization Controls 2) compliance when there are only five or 10 people in the entire company?

Do you have the skills to right size your architecture for your current needs while building a trajectory for growth? You need to foresee the needs of the organization without hiring expensive consultants. You cannot afford to have many misfires in hiring. And you have to do all this without a big HR department or a large operating team.

How does AI fit into all of this?

We apply AI in the places where it really shines. One of those is identifying and classifying entities – for example, taking a random SKU from a supplier who did not give you any description of that product and using AI to identify it from public information. I call it “pick and shovel” AI, preparing data so scientists do not have to search for it to know what they are buying. I encourage companies to leverage AI technology by finding problems that can be automated.

What other lessons do you have for CIOs considering a move to a product company?

A core lesson for CIOs is striking the balance between stepping forward and stepping back. Stepping back helps create an organization structured to scale and capture market share. If I can have 10 leaders reporting to me who can all scale their departments, that provides more value than one organization scaling under my direct operation. In addition, a CIO who is a single point of failure in some essential processes is a bottleneck to progress.

It sounds like a balancing act.

Yes, because if you step back too quickly, and you haven’t yet created the right corporate culture, things can fall apart, and too much decentralization can reduce the overall consistency and vision of the company. Knowing your organization and weighing the strengths and weaknesses of your team helps determine when to step in versus when to step back. While there is no hard and fast rule, product company CIOs need to trust themselves to manage this delicate balance.