How many founders do successful tech companies have?

http://philosophically.com/some-data-on-founder-counts-at-top-companies

by vnorby • 14 years ago

32 21 14 years ago

smarx2• 14 years ago

> That being said, based on the initial data, if you want to give yourself the best odds of having a high-growth tech company, two founders is optimal.

I don't see how that conclusion can be drawn from this kind of data.

EDIT: It looks like the post has been edited, so this criticism is no longer relevant.

genwin• 14 years ago

Same here. That data could result even if a greater percentage of one-founder companies succeeded, than two-founder companies, all else being equal.

vnorby4• 14 years ago

More top technology companies are started by 2-person founders. If you had no other data other than what is presented, and there isn't, you would want to start a company with 2 founders. Obviously this is not taking into account how many businesses are started with different numbers of co-founders. Perhaps 50% of all people who start companies as a single founder end up on this list. We don't know that. The idea I have in my head is that it's easier to start a company with fewer co-founders, so more would be started with one than two, and two more than three and so on. In any case, the data is there for you to make your own conclusions and you don't have to take mine.

smarx2• 14 years ago

> If you had no other data other than what is presented, and there isn't, you would want to start a company with 2 founders.

Your next two sentences explain why this isn't true.

InclinedPlane3• 14 years ago

Erm, ok, let's follow that through.

I don't even need to look at the data to say that in the US most successful companies have at least one white, male founder. Does that mean that if you start a tech company and are non-white or non-male you should make sure to partner up with one to ensure success? Is it just a bias due to demographics? It it a real factor related to an intrinsic advantage of white males in making successful startups (even if it's just an external cultural factor)?

Or, is it a much more complex issue that can't and shouldn't be so easily infographed and turned into a convenient piece of folk wisdom?

Taking this data, which incidentally is extremely incomplete, and using it as a rubric on how to start your company is little more than cargo cultism.

okamiueru• 14 years ago

The title is accurate, and that is all the data presented tells you.

The implication that this can indicate which number that gives you the highest chance of success is completely bogus. Without taking account failures (or distribution of attempted companies by founder count) you have no data whatsoever for discussing what is most likely to succeed.

Makes me ask, what is this doing on HN?

jacques_chester3• 14 years ago

> Makes me ask, what is this doing on HN?

1. Collecting karma for the submitter. ("Why X is foo" followed by "why X is NOT foo" followed by "Foo is irrelevant, it's actually all about bar").

2. Promoting the guy on the other side of the link. Unfortunately Vibhu Norby is one droplet in the indistinguishable white mist that makes up the ever-expanding Svbtle Borg, so it probably isn't working all that well.

(Yes, I totally do 2. Every chance I get to link to myself, I take.)

Problems:

1. How did Deloitte define their data set? (edit: I found out, it's in the report)

2. Does fast growth == success?

3. How is a founder defined?

4. What about companies that failed?

vnorby4• 14 years ago

Actually, I thought it was interesting to know what the breakdown was amongst successful startups since I've never seen any data about it, only anecdotes. I did the research. It took several hours. I happen to have a place where I can share the research with people that might care and have something to add. Clearly, I am mistaken.

Khurrum• 14 years ago

Its an interesting question. I think that if you're going to have more than one person leading, they should typically be leading separate parts of the business (sales / tech).

The problem with a single individual managing responsibilities is that there are still plenty of tasks that need to be done so it becomes a question of what you can automate and what you can outsource for as cheap as possible. Basically, good delegation and management skills.

MojoJolo• 14 years ago

The information here about a single founder backs the "doing it alone" thing, the top topic here in HN. (http://ryancarson.com/post/35939367603/you-can-do-it-alone)

I'm happy that there are a bunch of single founder companies. I'm planning to start one, as a single founder.

smoyer• 14 years ago

"If it is true that greater than 70% of all companies are started or owned by one person, you would be able to make the conclusion that more single founders fail than should on average."

Not really ... it only indications that more single founders fail to grow fast enough to make Deloitte's list.

brudgers• 14 years ago

"There is an argument going on at Hacker News about whether you should found companies as a single founder or not, spurred by Ryan Carson."

This mischaracterizes the dialog.

The issue is about a specific type of company, startups, and a specific definition of "startup," that used by venture capital.

PG's comments were as narrowly focused as his essays and YC itself. His data set was not the Tech Sector, but a particular type of business.

hluska• 14 years ago

TL;DR -- The US census provides the wrong data to answer this question, but I can't think of a better way to spend a cold Sunday morning....:)

I did some digging on the US census site and found these numbers (for 2008):

- 22,614,000 returns were filed for non farm sole proprietorships. Of these, 16,434,000 indicated any type of income. Combined, these 16.4 million sole proprietorships reported a net income (less loss) of $265 billion.

- 3,146,000 returns were filed for partnerships. These returns showed a total of 19,300,000 partners. Of these, 1,609,000 returns indicated any type of income. Combined, the 1,609,000 partnerships reported a net income (less loss) of $458 billion.

Some numbers:

- 72.67% of sole proprietorships reported income.

- 51.14% of partnerships reported income.

- 22.614 million sole proprietorships generated $256b in net income (less loss). This is an average of $11,320.42 per proprietorship started.

- 3.146 million partnerships (covering 19.3 million people) generated $458 billion in net income (less loss). This is an average of $145,581.69 per partnership started. Or, this is a net income (less loss) of $23,730.57 per partner.

Using US census information on non incorporated businesses (in 2008) provides some interesting space for thought. A higher percentage of sole proprietorships report income, but on average partners in a non incorporated business report more income. This seems to indicate that it might be easier to get started if you go alone, but adding founders increases the magnitude of success (when it works out). Logically, this makes some sense, though I hesitate to make any conclusions based off of this data.

While this data is interesting, it is ultimately quite useless at answering the question. First off, this data is on all non incorporated businesses (other than farms). Therefore, this data may or may not be applicable to technology. The Deloitte report (and the writer's research) indicates that the top 100 technology companies have an average of 2.12 founders. The US census data gives an average of 1.62 founders per company. That difference could indicate differences in the two populations (ie - tech companies versus all companies) or sampling differences (Vibhu looks at 100 companies, I'm looking at data on 41 million).

How many founders do successful tech companies have?

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