Technical Debt: When to Pay It Down

Every CTO inherits technical debt. The question isn't whether to address it, but when and how. A framework for making these tradeoff decisions.

Technical debt is like financial debt: sometimes it's strategic, sometimes it's accidental, and sometimes it's just poor planning. But unlike financial debt, there's no credit score to tell you when you're in trouble. You have to figure it out yourself.

After working with dozens of companies at different stages, we've developed a framework for evaluating and prioritizing technical debt. Here's how to think about it.

Understanding Technical Debt

Technical debt comes in many forms:

• Code quality: Messy code, missing tests, poor documentation
• Architecture: Monolithic systems that should be modular, outdated patterns
• Infrastructure: Outdated dependencies, manual processes, poor monitoring
• Security: Known vulnerabilities, missing patches, weak authentication
• Data: Poor data models, missing backups, no disaster recovery

Not all debt is equal. Some is benign, some is dangerous, and some is actively costing you money.

The Technical Debt Framework

When evaluating whether to pay down technical debt, consider three factors:

1. Impact on Velocity

Is this debt slowing down your team? If developers are spending hours working around a problem, that's real cost. If it's just "not ideal" but doesn't block anyone, it's lower priority.

High priority: Debt that makes every feature take 2x longer, requires constant workarounds, or blocks new hires from being productive.

Low priority: Debt that's annoying but doesn't meaningfully slow development.

2. Risk of Failure

Could this debt cause a production incident? Security vulnerabilities, missing backups, or systems running on deprecated infrastructure are ticking time bombs.

High priority: Anything that could cause data loss, security breaches, or extended downtime.

Low priority: Code that's ugly but stable, or systems that work fine even if they're not "best practice."

3. Cost of Delay

Does the cost of fixing this increase over time? Some debt compounds — the longer you wait, the harder it gets. Other debt stays constant.

High priority: Architectural decisions that get harder to change as you add features, or systems approaching end-of-life.

Low priority: Issues that are just as easy to fix next quarter as they are today.

When to Pay It Down

Pay Immediately

• Security vulnerabilities: No debate. Fix these now.
• Data loss risks: Missing backups, no disaster recovery plan
• Blocking new features: If you literally can't build what you need
• Preventing hiring: If new engineers can't be productive

Pay This Quarter

• Significantly slowing velocity: If it's making every feature 50% slower
• Approaching breaking point: Systems near capacity or end-of-life
• High compounding cost: Debt that gets exponentially harder to fix

Pay When You Have Capacity

• Code quality improvements: Refactoring for maintainability
• Nice-to-have optimizations: Performance improvements that aren't critical
• Documentation: Important but rarely urgent

How to Pay It Down

Once you've prioritized, here's how to actually address it:

The 20% Rule

Many teams allocate 20% of engineering time to technical debt. This works well if you're disciplined about it. The key is making it part of your planning, not an afterthought.

Debt Sprints

Dedicate entire sprints to paying down debt. This works well for larger architectural changes that need focused attention.

Boy Scout Rule

Leave code better than you found it. When you touch a file, improve it slightly. This prevents debt from accumulating but doesn't address existing debt.

Communicating Technical Debt

Non-technical stakeholders often don't understand why you need to "waste time" on technical debt. Here's how to explain it:

• Use business language: "This is slowing down feature development" not "the code is messy"
• Quantify the cost: "This is adding 2 days to every feature" or "we can't hire until we fix this"
• Show the risk: "If this system fails, we'll be down for 24 hours"
• Propose tradeoffs: "We can either fix this now or accept that Q2 features will be delayed"

The Bottom Line

Technical debt is inevitable. The goal isn't zero debt — it's managing debt strategically. Focus on debt that's actively costing you money, creating risk, or blocking progress. Everything else can wait.

Remember: not all debt is bad. Sometimes taking on technical debt is the right business decision. Just make sure you're doing it intentionally, not accidentally.