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

https://techcrunch.com/2016/08/26/co-founders-optional

by greenspot • 10 years ago

380 166 10 years ago

andriesm• 10 years ago

How many founders did the average startup have that failed? (survivorship bias!!)

bobsil1• 10 years ago

A cofounder is very helpful in pointing out your blind spots. Also the journey is just way more fun with a partner you like and respect.

superplussed• 10 years ago

Here's the key. I'm sole-founding my current startup, and I know I am having less fun than if I had a cofounder.

sportanova5• 10 years ago

Now you're having less fun, but I feel like we have this idyllic fantasy of cofounder - not unlike a romantic partner. It sounds exciting and exhilarating, but what are the odds that it ends in divorce (liquidation)?

smb062• 10 years ago

The data could be biased by early exits (Series A) of several SaaS or mobile app startups. Those tend to have less need for a co-founder.

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

T2_t2• 10 years ago

That's a good point. Startups are not about exits, but big exits.

I wonder if the $$ stack up, and where the sweet spot is, given 2 founders need twice the money from an exit.

smb062• 10 years ago

Usually a tech and a non-tech co-founder partnership works really well because you cannot scale up if the person building the technology/product is also building the marketing and sales machinery.

Single co-founders only work in domains where either of those two - technology/product and sales/marketing - are much less resource consuming than the other so that one person is able to focus on both. That model breaks at scale.

pbreit• 10 years ago

When I see research like this my immediate reaction is "name the single founder companies". The data is apparently public, why not share it?

dan_m2k• 10 years ago

After failure of my startup's first iteration, investigation and data made it clear my cofounder was at fault:

- 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.

20yrs_no_equity9• 10 years ago

Even if your cofounder has absolutely the best intentions, not everyone is cut out for it. It's very easy to be "Saying the right things" and not even aware they they aren't being honest.

In fact, I'd argue that %50 of the "co-founders" of YC startups are not actually ready to be founders, and I suspect that the number who are still with the startup 3 years after are very small. (and that a large number of the YC companies that don't exist after 3 years don't exist because of a bad choice in co-founder.)

huhtenberg• 10 years ago

Sooooo… You can start a company alone. Should you?

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.

eb0la• 10 years ago

Totally agree.

I remember a beautiful family vacation that went wrong because as a solo founder everything that happened got routed to me.

If you decide to go solo, you will start hiring very soon just to make stuff happening before you run out of bandwidth.

And you'll need really high quality hires... wich need a lot of bandwidth to acquire so plan accordingly (if you can ;-).

BerislavLopac3• 10 years ago

Shouldn't they be considered founders too?

charlesdm2• 10 years ago

It is, however, significantly easier to walk away after several years with a meaningful amount of money. One founder means you get all the profit (either in its entirety, or shared with investors)

throwaway73124• 10 years ago

I've cofounded 4 different startups. All were good ideas that bled cash or time and flopped, largely due to infighting or founder differences. One cofounder of one of the companies got really nasty about trying to leave with the rights to the company and we other two cofounders just let him have it. He sold the rights and it's now a successful venture-backed startup with soaring profits (two cofounders). Good for that team.

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.

benevol• 10 years ago

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

What's your take on the situation where you are both? (Where somebody is visionary, "knows business" and codes as well.)

pyromine• 10 years ago

Not OP, but I'd say consider if you really are all those things. Very few people are, even Zuckerberg isn't, he was a competent coder not a great one but a visionary for sure.

Ultimately no one can have it all, learn to focus on the strengths, though if truly all of those are your strengths break forward and absolutely kill it.

50CNT• 10 years ago

Then you don't need a co-founder.

It can still be nice to have one, one guys schleps are another persons hobby. Like I'm good at analysis, but bad at dealing with third-parties. The guy I'm working with is good at dealing with third-parties but is a bit slower at dissecting problems. No worries. There's a number of different other pairings of this kind too, some areas where we have overlap, some stuff one of us needs to figure out, some both of us need to learn. And I think that's pretty cool.

bsdpython• 10 years ago

There's simply not enough time to do all those things yourself. Find someone "good enough" in one of those areas and have them take over main responsibility.

throwaway73124• 10 years ago

Depends on what your end goal is and what you're starting with. If the goal is to get big and you have funds (or funding), you can be a single founder and just look for a couple of talented people, or perhaps one right-hand man, to take over the roles you're weakest in or that slow you down the most.

If your goal is to get big and you don't have funds or can't attract funding, you'll probably do best to look for a cofounder who's comfortable in the behind-the-scenes roll. If you don't have money but there're two of you, and you complementary and on the same page, you'll grow a lot faster than if you don't have money but there's one of you. The situation I ran into was not having money, and having cofounders who were not on the same page with me - that kills companies.

If you don't have money but just want a lifestyle business, then it's fine to be a single founder. You'll grow slower, but have freedom, and if all it's about for you is freedom then that'll be fine.

charlesdm2• 10 years ago

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.

Did you raise any capital on that one? Or was it bootstrapped + growing?

throwaway73124• 10 years ago

We've taken no capital. After the experience of losing control of the cofounded businesses, the last thing I wanted was to bring in investors who'd be staring over my shoulder or telling me what to do.

I'd be open to taking capital on a future project, simply because I'm experienced enough now to know what our upside is and what percentage and how much control I'd be comfortable parting with, and for how much. On this present project, I haven't even bothered to explore it, because we have our trajectory over the next 1.5 years mapped out and everything we want to do we can pay for with profits already, so there's not a lot of incentive to take months off from driving the business forward to go shopping around for investors instead.

throwaway11822• 10 years ago

Interesting data point. However, we're happily chugging along with 6 co-founders, bootstrapped to currently 30 mln us$ valuation and we've only just begun.

Then again, your point about "visionaries" (with which you probably mean high-ego people needing a lot of approval) rings true to me. We're all pretty low-key hard-working people with a lot of self-reflection and humility - also it helps it's not the usual failing friends, family or uni buddies combo but we're really more of a casting band with a team mixed and matched from industry professionals by our main founder.

In this very setup, it's actually very enjoyable with a lot of pros: Scaling is much faster and easier with invested veterans at the helm, all important departments are headed by founders, also having same-level people in the same company helps enormously with the more difficult decisions and just professional exchange, growing as leaders and 1-1 mentoring. If - and only if - the base of trust is there and continuously honed through communication, this is an amazing way to work and learn.

10/10 would do it again.

20yrs_no_equity9• 10 years ago

You admit you have a main founder. Does this main founder have sorta ultimate authority? Or does he hold the singular original vision from which everyone else's vision/mission/purpose comes from?

What's the equity split like among the 6 of you?

What created that base of trust you describe? Was it everyone agreeing to follow the "main founders" vision, and him being respectful and not ego driven (so that the vision became shared?)

k__• 10 years ago

Almost all people overestimate their knowledge of human nature.

I only know a few people who are truly able to judge people right. Most people with good relations are simply lucky.

paulsutter• 10 years ago

How did the team come together, how well did you know each other when the company began?

Amygaz2• 10 years ago

If - and only if - the base of trust is there and continuously honed through communication, this is an amazing way to work and learn.

This is the key, and something narcissist don't do. It's against their nature. They thrive at hugging communication and controlling the flow of information.

bambax2• 10 years ago

I have been self employed for 17 years as a 1-man consulting shop, and enjoy working alone.

I have just started a product activity (making things and selling them to end-users) and can do the work by myself (I design, and then the actual making is done by factories) -- but for the first time I miss someone to talk to, someone with which to explore business ideas and options.

Maybe a co-founder wouldn't help much because they would have a vested interest in the discussion, though.

sandebert2• 10 years ago

It sounds like you might benefit from starting our joining a mastermind. Is that something you have considered?

(I'm not sure how universal "mastermind" is, so here's a link to help explain it a bit, and how to run one: http://www.startupsfortherestofus.com/episodes/episode-167)

ak39• 10 years ago

Same condition here.

I have found that spending time with clients (users in the trenches especially) is enough conversational stimulation I need. I know I'm encouraging the idea of seeing trees instead of the big picture forest ... but as a lone workhorse resource, you want to avoid non-actionable ideas like the plague.

rsp19842• 10 years ago

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.

It's simpler than that. Most people just prefer slacking off to working their butts off.

However it's the narcissists and sociopaths that will call their slacking off being "visionary" while the good guys either just leave or start working their butts off as everybody else. Obviously you want to pick your cofounder(s) among the latter kind.

nxzero5• 10 years ago

Working your butt off has zero to do with having a executable vision that creates value.

Clearly shit needs to get done, but there's only so many hours in the a life of a startup and being able to see what needs to be done ultimately is more important than just getting stuff done. __

"I choose a lazy person to do a hard job. Because a lazy person will find an easy way to do it."

- Bill Gates

tdb7893• 10 years ago

I'm not sure I would go that far but I have always had very mediocre experiences with people who describe themselves as "visionary"

kordless2• 10 years ago

Most people just prefer slacking off to working their butts off.

Representing the individual desire to work for "most people" isn't your job or your right any more than it's my right to say your internal view of the world is totally fucked up if you think that way.

It's all well and fine to mention there are sociopaths in the industry, but colluding them with narcissists is unreasonable. Narcissism is simply the ability to externalize one's internal viewpoints in a way that tend to spread that same viewpoint to other's internal views, often at times without empathy for those who it infects. If that benefits the company, whose function is to make everyone there more money, then narcissism may a required trait of the company's leader. If someone can't accept that for themselves, then they should leave the company or never join to begin with.

The whole sociopath matter is another thing entirely. Sociopaths can be untrustworthy, which makes dealing with them problematic.

20yrs_no_equity9• 10 years ago

"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."

Absolutely. I cannot agree with this more.

I don't think the issue is about visionaries vs behind-the-scenes guys. The problem is people making decisions outside their domain expertise. If you have a cofounder (eg a recent example from a company I've worked with) with no software experience his instincts are not going to serve the company well. I've seen this happen constantly, including recently with a guy who is humble, very nice, perfectly well intentioned, but has the wrong instincts and has undermined delivery of a product, probably adding 3 weeks to the development time.

The people with the expertise should have authority in those domains. If your CEO/solo founder is an engineer, then the marketing and sales guys should have authority over their areas-- and be held accountable to metrics, not micro-managed. And vice versa.

When you have three co-foundres you have three visions, even if they aren't visionary, and three people empowered to operate according to their vision, and it's a lot easier to just not fight over every little thing... until it blows up or you aren't executing well because you're executing at cross purposes.

With a single founder you have a single authority and a single vision. And thus you can be consistent in your execution.

forgetsusername• 10 years ago

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

If you positvely have a feature pipeline that is going to increase the value of your company ten times in less than two years, why isn't that the valuation now?

Silicon Valley math gives me a headache...

skj• 10 years ago

Because no one is certain it's going to reach that valuation. The expected value (chance times possible value) is presumably what makes up the current valuation.

chenster2• 10 years ago

I've cofounded 4 different startups. ... Since then, I've managed my own single-founder startup."

My suspicion is without the previous cofounded failed startups, unlikely you would have the success later in the game because then you know what you are doing and making up the other half by experience. Can't imagine the success rate of a first-time solofounder who makes to the other side. It's not impossible, but probably very difficult.

throwaway6565• 10 years ago

How long ago did you start your current one?

throwaway73124• 10 years ago

5 years. Lots of stumbling around in the dark and making dumb errors before I got serious about ramping the business up and making it a legitimate contender in its niche last year. The first 3.5 years were mostly learning the market + learning how to succeed (and how not to) in business.

mixmastamyk• 10 years ago

I'd rather keep… people I know in masterminds where…

What does "in masterminds" mean here?

dhruvkar• 10 years ago

not OP, but it (usually) refers to a small group of like minded individuals that bounce ideas off of each other.

A more proper definition: http://www.thesuccessalliance.com/what-is-a-mastermind-group...

raarts• 10 years ago

Are older single founders more likely to succeed?

ImTalking2• 10 years ago

I wouldn't think so. What they gain in wisdom they lose in baggage.

It's like the success rates of 2nd marriages are worse than 1st marriages. You would think that people would get smarter with their 2nd, but it's not the case.

ngrilly• 10 years ago

The article would be a lot more interesting if the number of successful startups could be compared to the number of unsuccessful ones, depending on the number of founders.

waterhouse• 10 years ago

Reflexive question from reading the title: Suppose lots of people have been told that you shouldn't start a startup by yourself, and people are inclined to heed that. Some people will disobey this advice. These will disproportionately be people who have strong reasons to believe they'll succeed. If their judgment is at all accurate, then we might well get the result that single-founder startups are generally more successful, even if the single-founder status is always and everywhere mildly detrimental to the business. The question is, did someone mention this possibility?

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.

afoihfoina• 10 years ago

The question that most people are interested in is

  P(Success | Number of Founders)

but what the article has answered is

  P(Number of Founders | Success)

for a couple of different metrics of "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.

cyphar• 10 years ago

mumble Bayes' Rule mumble :P

adwn• 10 years ago

To apply Bayes' theorem, you also need P(success) and P(number of founders = N) for N = 1, 2, 3,...

brador• 10 years ago

Isn't the second one just a subset of the first (post-event and excluding the failures)?

parenthephobia2• 10 years ago

All startups are successful if you ignore the ones which fail. True, but not very interesting.

Not excluding the failures is the point of the exercise. One cannot choose to succeed, one can only choose the number of founders. The question is how many founders leads to the greatest probability of success.

Although approximately 50% of successes have one founder, it does not follow that approximately 50% of startups with one founder succeed. If 70% of startups have one founder, then those startups are under-represented amongst the winners. OTOH, if 20% of startups have two founders then, with 30% of winners having two founders, they are over-represented.

If the numbers I just made up were accurate, then it would be better to have two founders than one, even though most successful startups have one.

marcosdumay2• 10 years ago

To be fair, I've never seen anybody with the P(Success | Number of Founders) data claiming it goes either way.

It is always the much easier to discover P(Number of Founders | Success). The entire "you must get a co-founder" movement is based in it.

no1youknowz• 10 years ago

For getting investment via VC or angel investor. Does having a co-founder increase the chances of investment vs being a solo-preneur.

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

nxzero5• 10 years ago

It's always been pretty obvious to me that the desire to have multiple cofounders in a venture backed startup is to derisk investment, divide & conquer, etc.

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

greenspot• 10 years ago

Starting companies is much easier with a cofounder. There's more momentum and pace with somebody together. Especially with first time founders, a team is the driving force when starting a venture.

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.

jheriko• 10 years ago

what bugs me about the startup community is how things like raising 10M in funding or exiting by IPO are considered success.

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

parenthephobia2• 10 years ago

A lot of people aren't interested in running a successful business except as a means to their actual goal: being independently wealthy.

BerislavLopac3• 10 years ago

But what is a co-founder exactly? I can't imagine a startup being started, built and brought to an exit by a single person -- every employee contributes to some extent, and in my view an early employee who contributed a great deal should in all fairness be considered a (minority) founder.

Etheryte2• 10 years ago

Being an early employee doesn't make you a founder, no matter your effort.

BerislavLopac3• 10 years ago

That is exactly my question -- what differentiates the two?

rl3• 10 years ago

We are often told that starting a startup on your own is madness.

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.

danieltillett2• 10 years ago

The whole reason starting a startup is so stressful, and why you need co-founders, is because of the need for rocket growth to satisfy investors. Take out investors and you take out the need for ridiculous growth and the stress and the need for co-founders.

jakobegger• 10 years ago

True, but that's not really building a "startup" anymore. That's just starting a business.

danieltillett2• 10 years ago

Yes but why build a startup when you can build a business :)

20yrs_no_equity9• 10 years ago

No it's still a startup. It can be a very high growth startup, shooting to a $100M valuation.

It's just not the wannabe unicorn that VCs want.

There's a HUGE gap between what VC wants and a "lifestyle business" (I hate that term, thanks for not using it.)

Redefining startup to be this very, very narrow set of "businesses that will be over $1B in valuation within 5 years" is wrong, it's silly, and it's getting worse.

9 years ago on Hacker News the difference between "lifestyle" and "startup" was "businesses that will reach over $100M valuation in 10 years."

=======

Reply to @danieltillett because HN won't let me submit 4 posts in an hour!

Put another way, I would take a %10 chance of having a $100M business over a %0.1 chance of having a $1B business. (assume in both cases you end owning %5 of the stock at exit, though realistically without VC money you'd likely own more equity percentage at $100M than at $1B)

VCs generally want you to take the second bet, even though the statistical value is 1/10th as much for you!

Worse, you can only found one business at a time, while the VCs can invest in dozens at the same time. So your risk is much higher (not even mentioning that they are investing OPM)

VCs interests are not aligned with founders.

ImTalking2• 10 years ago

Would be interested in understanding the difference between a 'starting a business' and a startup.

danielvf• 10 years ago

Success rate is what matters when you are weighing co-founding or investing, not just the number of successful companies.

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?

ivanca• 10 years ago

... But then you would have to count the bias against single founders and all the investments they didn't get thanks to that bias. And also count all the accelerators than discarded them for this issue.

Plus, there is also the "fake co-founder" tactic some people use in order to avoid this bias from others; so you would have to count those as well, but that data is not public. So yeah, I think you are trying to count the uncountable.

donlzx• 10 years ago

Co-founders or not, the underlining reasons are alike for people (entities) with different personalities (characteristics) working together.

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.

hughperkins• 10 years ago

i guess the data presented might not say not having a cofounder is better; but they perhaps at least show that its not obligatory.

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

jrs2352• 10 years ago

In Fire Someone Today: And Other Surprising Tactics for Making Your Business a Success [1] by Bob Pritchett, cofounder of Logos Research Systems, Inc., chapter 4: There Can Be Only One—Plan for Your Partner’s Departure covers the issue of cofounders. I highly enjoyed and recommend this book.

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)

seibelj• 10 years ago

Are affiliate links allowed on HN? I thought they were banned

whamlastxmas• 10 years ago

They should be if not. It's dumb and probably against Amazon ToS.

_lex• 10 years ago

This is pretty bad article because it focuses on # of funded startups, not # of attempted startups. What if 99.999% of startups attempted were attempted by solo founders? It would make you expect that the # of funded startups should also tilt towards solo founders - if all other odds were even, you'd expect 99.999% of funded startups to be solo founders, and it would not mean much.

brianwawok2• 10 years ago

Is the goal to get funded is the goal to succeed?

Success is the metric you want to measure, which is usually exit if not profitability.

jeremyjh• 10 years ago

It doesn't matter which success metric is used, the point still stands. If you only measure the ratio of solo-founder companies that are successful, you haven't measured anything at all about how likely a solo-founder company is to succeed. We need to know how many of each type failed as well.

jcbeard• 10 years ago

In summary, number of co-founders doesn't necessarily matter. What does is (in no real order): the ability to raise cash, the ability to produce something that has value, and the ability of however many co-founders you have to get along.

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.

urlwolf• 10 years ago

If anything, this analysis under-represents the success of solo founders. Because VCs don't like solo founders, it's less likely they go for a VC path. There must be plenty of successes that are bootstrapped. And these solo founders may not even bother adding their company to Crunchbase.

I'm one of those.

duiker101• 10 years ago

What if, because they are not liked the choosing criteria are stricter and therefore it's more likely that the successful ones will be picked?

morgante2• 10 years ago

This is likely putting too much faith in the Crunchbase data.

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.

Eridrus• 10 years ago

Came here to say this, and in general any dataset that has a chance of having incomplete data is going to tends towards this same result.

Maybe the problem is less pronounced for "successful" companies, but given my past experience looking at the data, I wouldn't take this at face value.

sportanova5• 10 years ago

But then again how many of these companies with cofounders, really only had cofounders-in-name-only? Where one person really drove everything but at some point thought - oh shit, if I'm going to be successful, I need a cofounder!

Given the dogmatic advice "YOU NEED A COFOUNDER", I'm sure a lot of it's title inflation - what would normally be first employees are elevated to founder status to look good for the pitch deck or just to follow the advice. That said, they're still going to be quality people - less met at a find-a-technical-cofounder event, more Biz Stone style "can my title be cofounder lol?"

morgante2• 10 years ago

That doesn't really disprove the point though.

Probably the vast majority of startups have a dominant cofounder. You might call them cofounders-in-name-only, but that still validates the notion that you're better off finding a cofounder (even if they're not as central).

endswapper2• 10 years ago

Forget co-founders or not. The greater the number of valuable, diverse inputs the greater the likelihood for success. This depends entirely on the founder's or cofounder's ability to manage those inputs.

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.

sportanova5• 10 years ago

The greater the number of valuable, diverse inputs the greater the likelihood for success

But is that really true? Seems like more of an unsubstantiated platitude. "The more colors you use in a painting, the more beautiful it is!" Until you get a brown mess

endswapper2• 10 years ago

Yes, it is. I think the sentence that follows the one you quoted provides the required context. It's up to the founder or cofounder to determine and prioritize the value of inputs. This is why such an emphasis is put on the people (often over the idea itself) in startups.

To be clear, I didn't say the greater the number of inputs, i.e. use all of the colors until they are a brown mess.

20yrs_no_equity9• 10 years ago

After decades as an employee and cofounder, and seeing many startups fail first hand (so smaller data set, but much richer information) I agree that the stigma against single founders is in error.

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.

sportanova5• 10 years ago

The "just a warm body, any warm body!" mentality is what's so detrimental about the co-founder craze. Both financially (~50% of equity!) and in terms of more risk. It's a bad idea unless they're at least as talented and motivated as you (preferably in an area that complements you), and even then it's dangerous because you give up a lot of control.

If it's your idea and your vision, why not build the prototype, get some traction, then bring on a talented employee for 5% equity? Much better than 50% with someone you met at a "find a tech-cofounder" event

api3• 10 years ago

Are there perhaps political reasons for it? Do investors prefer having two or more founders they can divide if necessary? Does it increase "bus factor" or otherwise derisk the venture?

My opinion: two or more founders who are really invested and work well together > single founder > forced cofounder relationship. I say this as a single founder.

The hardest thing about being a single founder is cognitive load. I don't necessarily mean time. There are usually enough hours, but switching between at least five hats really strains the brain. It can also be hard to maintain energy. I find groups with other founders and working in a good startup oriented coworking space very helpful.

20yrs_no_equity9• 10 years ago

I don't think its preferable to find a cofounder in an area that complements you. I think that this can be great, but what's most preferable is the right co-founder relationship. If the right co-founder is also an engineer, then that's fine. One of you should be CEO anyway, you can always hire business guys.

I think the classic mistake startups make is the duo where ones "business" and ones "technical" and the engineer ends up spending all this time building the product and the business while the business guy takes the CEO spot and controls something he doesn't understand. (assuming it's a technical business, if it's a non-technical business like a sport drink then a business guy for CEO makes sense, as sales are step key operational effort)

Etheryte2• 10 years ago

The data shows that solo founders have no problem securing investment, yet the author concludes exactly the opposite.

chenster2• 10 years ago

However, based on my experience, VCs do prefer startup with at least two co-founders in case one is, unlikely but possible, deceased.

api3• 10 years ago

I've heard of startups, even those with more than one founder, taking out key person insurance for the company to mitigate this.

It's basically a life and disability insurance policy on the founder(s).

benologist• 10 years ago

It only gets easier to build, launch and sell stuff.

kowdermeister• 10 years ago

I couldn't really proceed without a business co-founder. I enjoy building stuff from the idea to a shipped product, but at that point and before it I would totally need support from a co-founder who is good at business, marketing and other magic stuff I find boring and tedious.

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

Keyframe• 10 years ago

Finding a compatible and complementary business partner is as hard as starting your business, if not harder.

allendoerfer• 10 years ago

I started several projects, most of them I would not even call startups. Most of them unfinished, some failed, some successful.

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.

dalfonso• 10 years ago

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.

Could not agree more. I hate this feeling and realize that IN THE FUTURE the nontechnical/sales/marketing cofounder could absolutely have a longer lasting effect on the success of the business. However, those first months where you're building the product and he/she isn't really doing much or isn't proactive in finding ways to contribute are very tough.

In the future, I'm thinking I'll start out solo building the MVP and trying to get traction, then when there's enough, find a nontechnical cofounder whose equity is based around hitting users/sales/funding milestones.

freddealmeida• 10 years ago

I resigned from the company I started with two other co-founders. Building a new firm now as a single founder. I expect many things will be harder though few will be insurmountable if at any at all.

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.

chrisabrams• 10 years ago

Traction does solve all the problems. This is known.

RawData• 10 years ago

I've been saying this for years...even wrote a book on the subject (The Smart Startup: https://www.amazon.com/Smart-Startup-Without-Falling-Venture...)

Hellgy• 10 years ago

Well, I would say that the metrics that Techrunch uses to measure success are not quite correct. Raising money is not a proof of success, neither is exiting.

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.

vonnik• 10 years ago

I don't think the article proves the point it claims to make (you don't need a founder), or disproves the message from YC: having a co-founder increases the likelihood that your startup will survive.

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

mandeepj• 10 years ago

I think it all comes down to how you gel well\manage with your co-founder and also team.

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

telecuda• 10 years ago

You don't need a co-founder, but you shouldn't do it alone.

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

ddebernardy• 10 years ago

To ensure that I had the most useful and well-reported data, I limited my research to “successful” startups.

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?

benzesandbetter• 10 years ago

Sure, as long as you're skilled in both the technical side and the business side, and have enough free time to do both.

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

baccheion• 10 years ago

The data isn't well-presented (52.3% of exits would be a negative if 68% of the companies considered had only 1 founder, as that would mean less received an exit than would be expected), but if you normalize the percentage of exits with the percentage funded, you roughly see that the author's original claim is likely true.

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").

marcosdumay2• 10 years ago

It's evidence investors discriminate against single founders... What isn't really news, is it?

marknadal• 10 years ago

I am a solo founder as well, and can attest to this fact. I raised from billionaires Tim Draper and Marc Benioff of Salesforce for an Open Source database http://gun.js.org/ (like Firebase).

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.

jsemrau• 10 years ago

The why requires YC a co-founder to be eligible? Honest question !

asd999101• 10 years ago

I think investor preference for multiple founders is almost entirely because it makes it easier to make voting control of the company not be in the hands of a single founder they might disagree with. Two founders provides twice the opportunity to take control.

ThinkerR• 10 years ago

Makes me think of the survivor bias episode of Veritaseum https://www.youtube.com/watch?v=_Qd3erAPI9w or the french caster ScienceEtonnante on the Simpson Paradox https://www.youtube.com/watch?v=vs_Zzf_vL2I https://en.wikipedia.org/wiki/Simpson%27s_paradox

dojomouse• 10 years ago

Can't tell if you excluded startups where the founder had a previous successful startup (solo or otherwise) but it doesn't look like it?

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.

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

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