The Solopreneur vs the Co-Founder Startup
What makes for the best performing startup: a single founder or a small team of co-founders?
In my advisory role for startup companies, I often see solopreneurs (a one person operation) dream up a big, bold idea, and get only so far with their concept. Conversely, I see teams of two co-founders get together, forge through the ideation phase and into the implementation phase, and then run into a series of personal obstacles that seem impassable, leading to startup stagnation and ultimately, dissolution.
So it begs the question: which is better – the solopreneur or the startup squad of co-founders?
Paul Graham, founder of the famed startup incubator and investment firm, Y-Combinator, believes in the two or three partnership team approach. As quoted on his blog, PaulGraham.com:
Have you ever noticed how few successful startups were founded by just one person? Even companies you think of as having one founder, like Oracle, usually turn out to have more. It seems unlikely this is a coincidence. What’s wrong with having one founder? To start with, it’s a vote of no confidence. It probably means the founder couldn’t talk any of his friends into starting the company with him. That’s pretty alarming, because his friends are the ones who know him best. But even if the founder’s friends were all wrong and the company is a good bet, he’s still at a disadvantage. Starting a startup is too hard for one person. Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.The last one might be the most important. The low points in a startup are so low that few could bear them alone. When you have multiple founders, esprit de corps binds them together in a way that seems to violate conservation laws. Each thinks “I can’t let my friends down.” This is one of the most powerful forces in human nature, and it’s missing when there’s just one founder.
So let’s break-down the key positives and negatives of both, so you can decide what’s right for your startup:
- Easy to dream big and take immediate action without checking in with a partner for approval.
- Fast to get to market, providing you have the skills to build the product/service yourself.
- Requires no awkward conversations, legal compliance, negotiations, or financial equity splits.
- You get to keep 100% of the equity for yourself.
- You get to keep 100% of future profits for yourself.
- You get to go at your own pace — working when, where, how and at what cadence that you want.
- You set your own timeline and more importantly, deliverables for yourself — you are totally accountable.
- You don’t have to fire a partner if they don’t live up to your standards or pull their own weight.
- You don’t have to build things that are outside of your vision, as you are the one who sets the agenda.
- You have no one to brainstorm with.
- You must hire outside talent for the technical skills you lack. This can get expensive, which may require funding.
- You are limited by your own experiences, beliefs, education, and connections.
- You have no partner to help you get through the slug of incorporation with, hiring, setup stuff, coding, building, etc.
- You have no one to pick you up when you’re feeling low or are at a loss for which direction to head in.
- You have less eyes looking at a problem. Often other view points help us see things we just don’t see.
- You have less access to resources — tech talent, capital connections, managerial connections, PR, etc.
- You have less credibility for the “momentum” of your startup as it’s just you, which gives the appearance that the idea is either not that compelling, or that you as a founder are not great at convincing others to join the journey.
CO-FOUNDERS OR A STARTUP SQUAD (2+ PEOPLE):
- Easy to tackle problems, more hands on deck to put out fires that crop up on a daily basis.
- More strength in solving problems for customers and building solutions that appeal to a broader set of constituents.
- Greater access to resources — investment capital, fresh bold ideas, tech talent, stronger personalities, deep expertise, etc.
- Camaraderie to get through the shit storm of a startup.
- You have more fun staying up late building something that matters with other likeminded people.
- You are more motivated and held accountable for deliverables, therefore you create more output and get further, faster.
- You open your startup up to being poised by bad attitudes from within, should they begin to fester.
- You have to deal with more emotions and other people’s interests in developing their own ideas outside of yours.
- You have to deal with more legal compliance in setting up an equity split, or at the least, having a difficult conversation about who owns what and when.
- You may need to replace someone, which can challenge the original dynamic of the startup team with a new hire.
- You have to deal with people from the original team whose skills may expire as the company scales, and therefore you must find a way to move them out of their current role and into another one that might fit.
At the end of the day, of course it’s easier to take an idea and just run with it ourselves. But startups are an uphill race, and every horse gets tired at some point. You need to be honest with yourself, find a way to clearly write down your personality type, skill sets, and weak areas where a co-founder or co-founders can help add value to you and the startup. If you can find and attract a great co-founder(s), then I say “do it!”. Don’t let fear of it not working out prevent you from talking with potential co-founders. It’s a little like dating — the more you know what you bring to the table, and what you specifically want, the better the odds are that you will attract and find the right match for you and your new venture.
My golden rule for hiring a co-founder, should you go down that path, would be to never hire someone who has the same personality and skillsets as you. We need complimentary personalities and technical/operational skills, not replicative skills. Think ying to your yang. Not besties for life.