Breaking a myth: Data shows you don’t actually need a co-founder

Since then, I've managed my own single-founder startup. We're profitable, growing, and valued at about $2.2 million. We're implementing a lot more over the course of this year and next, and I will look to exit in early 2018, once our valuation is closer to the $10 million or $20 million range.

I have a lot of other companies I want to start after. I will bring on talented people in executive roles who can complement me and make up for my own weaknesses, but I won't cofound again. I'd rather keep the smart, business-oriented people I know in masterminds where we can compare ideas and bounce thoughts off each other, than wade into business situations where our differences turn us into enemies and destroy the company.

The general wisdom on picking cofounders is pick a behind-the-scenes guy if you're a visionary, or make sure you're comfortable as the behind-the-scenes guy if you're partnering with a visionary. The problem I find (and one I've seen in a lot of cofounder groups) is that most of the people who want to start startups are visionaries.

  P(Success | Number of Founders)

  P(Number of Founders | Success)

They are not the same question! In particular, the average number of founders for a successful startup might be low, but the chances could still be better with more founders.

- deals that made a loss - poor relationship management - investing way too much in blaming the team around her

This ended up with a company seriously in the red, heading to liquidation and a completely fucked reputation.

Iteration two: flying solo, small team and 18 months in, we are in profit and I've fixed most of the relationships that needed some help.

I have a department head who I can trust and points out my blindspots but never wanted to be a founder, which is fine.

Be very careful your cofounder isn't just saying the right things in the hope of a payday.

I'm one of those.

Only if you are young and without dependents or if you can afford to write the effort off.

Success is one metric, but another metric is the stress levels. Having been through both single- and multi-founder startups I can certainly confirm that former is incomparably more stressful than the latter. Assuming of course you are trying to build a functional company and not just play with it.

It's as if the article discovered that fifty percent of those in American prisons are black, and came to the conclusion that there's no difference in crime and poverty beacause that's roughly half. That's meaningless. Base populations matter.

What percentage of new startups are single founder?

In my experience, Crunchbase very frequently leaves out some founders. Often, only the most prominent founder will be reported, thus underreporting the instances of having 2+ founders.

And it turns out the article doesn't even mention the relative success ratios (i.e. percentage of startups that succeeded out of startups that were started, broken down by founder count), AFAICT. D'oh. I guess it's valuable information that there are a lot of successful single-founder companies. But "data shows" sounds like a lot more than what is shown.

First of all, most startups fail when they are least funded, before they ever get past friends and family money. When you have close to zero money, mountains of work, and no traction or social proof, there's only one way to convince someone to do the important stuff that you can't do yourself, and that's by giving them a lot of equity. Founders: People satisfied with paper and an idea. (If you're already wealthy, sure, you can hire all the help you need. But that's not most people or most startups.)

The advice YC gives to co-found a startup with someone you can depend on addresses several early-stage startup problems: 1) Most people have severe limits to what they can do. Those limits come in terms of time and talent. Maybe they can code but they can't handle logistics or paperwork. Maybe they can sell an idea to investors and customers, but they can't build software. Startups require much more than one person can give. 2) Early-stage startups should be in a very active conversation with the world about what to build. The startup needs to be taking in a lot of information, reflecting on it deeply, and acting on it intelligently. With the right co-founder, you gather more information, think about it in ways you wouldn't have alone, and execute better and faster with the extra mind and hands.

To wrap this up, a brief list:

* Jobs and Wozniak

* Allen and Gates

* Page and Brin

* Hewlett and Packard

* Noyce and Moore

* Chesky, Gebbia and Blecharczyk

* Camp and Kalanick

Building my first company, to the second largest deep learning firm in Tokyo was exciting. But if I had to break down my time so much was wasted driving consensus where none was really required.

I know most investors hate a single founder. Traction though solves all problems.

But unfortunetaly every relationship changes or ends at some point--always. Then, it's about a quick and smooth separation without briging the company in danger. But this rarely happens, the separation is usually a tedious process over many months till the company breaks.

So yes, solo founding is better in the long run but in most cases there will be no founding at all because of momentum lacking.

Try building a scalable, enterprise IT business on your own...

Here's an excerpt from the beginning the chapter:

When I was a teenager, I toured a factory and met its owner. Dreaming of having my own business, I asked him for the best advice he could give me. His response was two words: “No partners.” When I started the business I run today, I did not take his advice—I started it with one partner and soon added another. Starting a business is hard work, and having a partner made it a fun adventure rather than a lonely quest. We did everything together, from the paperwork to set up the business to sales calls to taking all of our meals together so we could work on the business every waking hour. We became best friends and worked well together for years. When the day came that my original partner decided to leave the business, though, we realized that our lack of planning had endangered the multiyear investment we had all made and had changed the nature of our personal relationships. There is no way I could have started the business or seen it grow the way it did without my partners. As much as I now believe that “no partners” was great advice, I know that a partnership is sometimes the only way you can launch and build a business. But if that is the case, you need to make planning the end of your partnership part of planning the start of it.

[1] http://amzn.to/2blPmmT (affiliate link)

This is why there is a preference for founding teams over solo founders, but it's also why a singular vision and solo founder's ability to distill and manage those inputs may perform better than a team.

Every founder will have days where an investor or employee is driving you nuts, or worse - you're struggling to keep the business afloat. At these junctures, an outside coach (not linked to your funding so you're truly open and honest) can be a lifesaver, helping you work through the complex journey of growing a business.

-Single founder, 6 years 20+ employees

Only one person in charge will always do, if he or she has a very strong personality and also has appropriate supporting subordinates.

Two person founding team will be great if their personalities are complementary, thus one plus one is bigger than two. There are many very successful enterprises in this group, such as Apple, HP, etc.

In initial phases of founding companies, projects, etc., always avoid groups of three strong personalities at all costs. Trinity is a very special case that will ensure endless internal fighting/competition, low efficiency and sustained tensions. However, trinity is good for long lasting (market) competition and ensuring all parties will not be easily wiped out. Example cases: a) US-Russia-China relations; b) President-Congress-Senate structure. c) Firefox-Chrome-Edge browsers;

For groups bigger than three, if the number of prominent members with strong personalities is less than four, see previous cases. Otherwise, avoid at all costs.

I think this would massively distort your results. Founders with a history of success are vastly more likely to succeed in a new venture for numerous reasons, but most people who are interested in these stats (both founders and investors) are interested in the pre-big-win founder case.

Also, I suspect far more 'startups' have a single founder, purely because it's so incredibly easy to 'start' something alone. Having a cofounder implies a certain level of organization and commitment - it doesn't really work with that pet project you dabble with occasionally. If solo dabblers far outnumber 'team' dabblers then you'd expect them to be over represented in successes even if their success rate was much lower.

1: 52.3 / 45.9 = 1.1394

2: 30.1 / 31.9 = -1.0598

3: 12.5 / 15.0 = -1.2000

4: 3.7 / 5.3 = -1.4324

5: 1.4 / 1.9 = -1.3571

Maybe the idea is that a single founder situation is preferred, but as creating a startup can be stressful, trying, and involved, maybe doing so with a single partner (that complements your skillset) is a compromise?

I had never considered creating a business with a partner/co-founder. There would just be too many issues. People have a difficult time understanding what I'm trying to do even when I explain it in plain English, so I shudder to think what it would be like if I were doing something completely new/groundbreaking/different.

I can't deal with someone nagging, draining, or getting in the way as I try to do what I'm doing. It's always been fairly clear to me that the route I should take is to found a company solo, then bootstrap it to profitability, while keeping the employee count low (43-73, or 259-585). Then not go public. That is, I should avoid dealing with a co-founder, investors, or the overhead/inefficiency/bureaucracy/politics that comes with having more than a certain number of employees.

Also, it became clear (especially in the world today with so many service-oriented companies to contract out to) that it's entirely possible to do almost anything with 42+me employees (which is the "ideal" number of employees (1 CEO/founder + 6 leads/executives/managers + 6 individual contributors per lead/manager/executive), as there's only one layer of "management").

That statement remains true. It's a trade-off.

As a solo founder, maintaining both motivation and momentum becomes far more difficult. The upshot is you at least have a singular, unified vision and (hopefully) less drama.

Of course, you're also stuck with all of the work.

neither of those things have anything to do with building or running a successful business. they are not even desirable imo.

You can't just build an universal rule like the title suggests, data is meaningless in individual cases. "Data shows people can live underwater" ;)

Been trying to write up a blog post on my experience over the last 2 years, and will hopefully post it. Hit me up if anybody has any questions though.

Could have been a much shorter article since the data are so full of confounding factors as to be meaningless. It does make for a nice headline though.

So, in other words, the author didn't consider the failed % of startups based on founder? As in, at all, if the article is anything to go by?

Interested to hear in solo-preneurs getting investment and what their timeline and experience was.

Seems to me that very few people can check all three of those boxes.

i reckon not having a co founder might be quite lonely though.

Nothing like a company how have one co-founder as a tech genius and other as sales\marketing expert

I would say, more like creating a sustainable long lasting company with good culture, cutting edge technologies, and people that love coming to work at the morning.

Simply put, most investors prefer that there are cofounders for the reasons stated above.

I have tried several times to start something with a buddy from university, with him it's always the same: We talk about it, like the idea, I start to build it, he does not really join in and I lose motivation myself.

The one product which is the most profitable (or profitable at all if you factor in your own hours) is a rather lame one: A sitebuilder for small businesses. I buildt it while still in uni, lived off of it and literally put customers in one by one. Very stressful.

Another one I started after that with a an economics student, who had the initial idea. It was a dating app for students, when Tinder was on the rise in the US and had not gotten to Europe yet. I could not care less about that space, but I knew it was coming and I just wanted to start a real thing with a cofounder, which was totally different, so we did it. Collected a few hundred users from the local universities, ultimately failed, but I learned a few valuable lessons. It was nice having the cofounder around, but he could not really help at that point. He helped a bit with some guerilla marketing and started to work on our investment. I did the main work. That feeling of unfairness - even though you know that it is not on purpose, was really bad.

After that several other people approached me and I said no several times. I really wanted to build something in a team and have it play out. The feeling to fail alone is not good, but cofounders come with a different set of bad feelings. The failed attempts are costly, because you can only endure so much, before you need a success.

So I decided to approach my consulting as a startup and see the company with it's processes involved as the product. Have several employees and work with freelancers. I meet really interesting founders, I can learn from. I get approached to cofound all the time. I did not think that this would be enough, but really I already have the social interactions I was looking for in a cofounder. I just prefer to always have money exchanged for services. You can still be a good partners and maybe join in later, but I am a huge fan to simplify the relationship with payments. I even did some projects with the uni buddy, which work out great all the time.

The sitebuilder is still profitably tucking along. I know see it less as a lame project, which needs so much work, but as an asset and investment potential. Over the years it has brought in several nice opportunities.

To conclude: My solution sounds one-dimensional, but it really is "have a bit of money and success first". The more you have of it, the more interesting the conversations get. It is a nice filter, because people who have it are more likely to be successful again, plus they have the option to just pay you to build their ideas. You become able to do that yourself with yours. The relationships with your partners are just so much easier, you don't depend on the one perfect match, but different people can fulfil different roles, without the risk associated with a cofounder. Even your own projects appear in a better light and look nicer, when your time becomes more valuable.

The number one and two causes of startup failure in my experience are fights between the founders and VCs forcing the startup to do the wrong thing (which often causes fights between the founders with one saying "we know the market better than those guys" and the other saying "but think of the signal if we don't pivot into widgets for baby monkeys and they decline to pro-rata our B round???!")

But the bottom line is, if you don't know someone you can cofound with, you shouldn't jeopardize the future of the company by just picking one. I don't think you can pick a good co-founder with less than a year of experience with them. Founding a company strains previously good relationships by greatly raising the stakes for every decision and disagreement, compared to your previous relationship with each other. PG forcing Dropbox's founder to get a cofounder seems shockingly dangerous (unless that cofounder was really always going to be number 2 in authority).

If you know someone you've worked with for 4-6 years and they work their butts off, then that's a great potential co-founder. I had one of those, but we got divorced. :-) Still on good terms, but I am not going to start a company with him.

But if you don't have anyone like that- you're ADDING relationship risk to your Startup Risk. And you're unlikely to be reducing your startup risk by the same amount. That co-founder could be hired with a significant opportunity to earn equity, at about the same time, and be just as successful at reducing startup risk without adding the relationship risk by being an "employee". The difference is in control.

So, my plan is to be the Founder, and then get a set of co-founders who get founder stock[1] but don't have the authority to overrule me, even if they all gang up (eg not an equal equity split). Hopefully this will be acceptable to TechStars. This will show others are willing to work on my idea at least- which is the claimed reason for a cofounder cause it's early social proof (also a really silly signal).

[1] I don't believe in multiple classes of stock. A dollar put in by an employee from under market salary is just as valuable as a dollar put in by a VC firm, and the employee is taking more risk- they can only "invest" in one job at a time.