The Solo Founder Discrimination
blog.contentdj.com
blog.contentdj.com
> If books can be written by one person and become successful. Why can’t startups?
Because books and startups have nothing in common? Lots of successful endeavors are done by a single person, but that doesn't put the efforts of a single person vs. a team on the same footing, /especially/ as the problems increase in difficulty. Here's a better example:
"If children can be raised by one person and become successful, why can't startups?"
Sure. There are many children who have been raised by single parents and have become very successful. But that doesn't mean /statistically/, this is as easy as having both parents.[0]
The point that is being made counter to this is very simple: Yes, starting a startup can be done by one person. As can a lot of things. But statistically speaking, there are more successful startups that have multiple founders than single founders. You already provided the pie charts in support of this argument! Now to be fair, correlation does not prove causation, but the point is generally: Starting a startup is hard. Understanding the needs of your customers and both developing a solution to meet these need and reserving time to convince them that you've met their needs (selling) is very, very hard.
One of Ryan Carson's arguments (#2) was in essence that having no co-founders means you can top-down dictate leadership. I don't know about you, but I'm not always right. I've never actually met anybody who's always right. Having a team who's on equal footing with you allows you to vet concepts before they catastrophically destroy your company.
To paraphrase Chris Rock: Yes, you can do it without a [co-founder], but that doesn't mean it's to be done.
A good co-founder will almost always make your business more successful. And that's all there is to it.
[0] http://www.human.cornell.edu/pam/outreach/upload/parentalcon...
The odds of getting onto the NYT as an author is the probably the same as creating the next billion dollar company. And I think the ease of technology has gone down so much that the amount of effort it takes in writing a book is almost the same as writing a basic web app. So, if productivity gain has improved so dramatically, perhaps we should question our decades old assumptions.
It's easy to bring up example like Steve Jobs and Wozniak. But creating a web app nowadays is considerably easier than building the first PC. Even marketing is easier now. So, why is it that we still hold the same belief about starting companies?
That I agree with. Well, I agree as much as I can, because I haven't written a book, but I have written a few web apps (and have started a company). Let's say for the sake of discussion they're reasonably similar, even if perhaps they aren't.
Yes, creating technology is a lot easier than it used to be. Marketing is probably easier as well. But I don't believe whatsoever that building a web app is the same as building a billion dollar business. There are a few examples of business which got lucky, fine, but having started a startup myself, I can say (in line with many others, pg included) that running a company is so much different -- and so much more difficult -- than just hacking up a web app.
Steering a company to massive success requires so many difficult decisions and skills that often have nothing to do with your core competencies (unless you're one of those mythical creatures who can 'do it all'), that you need the support of at least one other person who is either A) better at it than you are, or B) can work together with you to figure out how. Those mythical creatures are the 11% in the pie chart, but the other 89% of us need more manpower behind the wheel.
Whipping up a Rails app in a weekend is not the same as running a company.
I believe the reason is because the odds of you taking this product and turning it into a company are less in your favor than if you had others to consult in your business practices. It's less about "startup cost" and more about having two or more heads in the problem space. There's a reason that critical applications often have multiple people running the show -- it's too easy to make a mistake and it usually requires more than one head to get right. It's not impossible, just hard.
So from an investor's perspective, think of it this way:
You're approached by 10 companies. (Or in YC's case, hundreds.) Many of them have a "prototype, traction, and revenue". They all look reasonably appealing. So which do you choose? The ones with multiple very smart founders? Or the ones with a single smart founder? Which of those will be more successful? Which will be able to more effectively hunker down around the whiteboard and come up with some new brilliant ideas when the times get tough?
OK, how about a harder one: You have one company with a bunch of smart founders but only a concept, and you have another company with one founder but a "prototype, traction, and revenue". Now which do you choose? This gets more difficult, but I'd argue the former choice will have a better chance at success, given equal capability of the founders. The former has validation in the form of N people believing in their company, and the latter has real customer validation. But the former has better /potential/ in terms of coming up with something valuable, whereas the latter has more potential to fail at scaling their business. This of course depends on a lot of factors though, and maybe the latter's prowess in building a prototype, gaining traction, and making revenue is convincing enough that they can make it through the long haul.
Case in point though is that for a VC, it's a numbers game. And with all else being equal, if you can invest in 4 smart people instead of 1, your odds of return are higher.
Also, to your first point, after you're making real revenue and/or have funding, nobody cares about how many "co-founders" you have. This is true. They care instead about how many people are on your team. Ends up really just being a semantic distinction based on your company stage :P.
It's actually fairly straightforward if you know how to game the list. You need to put in a ton of time though and still get a bit lucky, so for most authors it's not really worth trying. (And of course most books weren't written to be best sellers, nor could they be because they're on esoteric topics or written to solve some obscure emotional need of the author.)
Writing a successful book is not the same sort of problem solving. Neither is founding a religion. And developing a programming language may solve a problem that one developer has the time and dedication to solve.
Startups with multiple cofounders have multiple views of the a problem and will have a better chance of finding an optimal solution (wisdom of crowds) vs a single cofounder.
Which, perhaps, is also to say its a combination of factors:
1) Herd mentality (also known as 'social proof')
2) Porfolio theory (diversification of ideas, attention to details)
3) Network effects (iff younger teams, 2x rolodexes >1x)
4) Adverse selection (co-founder is a vetted hire; early hires are hard; and may imact outcome disproportionately).
So not entirely irrational either.The question is: is it remdiable and is such remidiation cost-effective? Two considerations: must be so for <investors> as well as for <founders>. But yes, a heuristic being overly generalized, is it seems to be a variation now of cognitive bias.
I think this may be part of the investment bias. The same reasons why you will eventually need to promote people to very high positions in the company, could be the reasoning behind starting with people in those positions, or having them in place by the time you go for funding and essentially making them founders at that point.
Keep in mind, I'm a solo founder.
Why is that? Is it because it's harder to control from an investor's point of view? I actually think it's a self fulfilling prophecy. Like 001sky mentioned. The conventional wisdom is that you should have a cofounder in order to be successful. And it's really hard to break this once it's THE conventional wisdom.
So single founders don't get investment, so they are less successful. Then it shows in the data...
I think you are assuming that their are an equal number of solo-founder companies as multi-founder companies, but I don't believe that is true. I wouldn't be surprised at all to find that 80+% of companies that are looking for funding are multi-founder. If that is the case, then the odds of getting funded as a solo-founder are equal to the odds of a multi-founder company.
However, we also need to consider how we qualify those companies which are likely to get funding or ready. Many solo-founder companies are not ready, but by the time they are ready, will possibly have added a co-founder.
Either way, the advice I think should be just to keep doing what you're doing. If YOU think you need a co-founder to be active in the company, you get one, if not, you don't. Investment shouldn't come as a result of that decision, unless investors are thinking that you can't do it without a co-founder, and they might be right.
We don't know who founded any of the biggest religions. We know almost certainly that Jesus wasn't a real person because the story of his life predates him by hundreds of years. We know that hinduism wasn't founded by a single person. Buddha and Muhammed may have been real people, but there isn't any definitive evidence. And Steve Jobs had a co-founder.
The company is nothing without a product, so in that case you are correct, but often the co-founder relationship isn't everybody building, it's sharing of all the responsibilities necessary to run a business.
Just to note, I'm a coder, so don't think I'm some MBA guy trying to justify my value.
It's often better to write a book by secluding yourself in a room or cabin. You can't run a startup that way.
A book has a clear ending. A startup does not.