There’s a saying that goes:
“If you want to go fast, go alone. If you want to go far, go together.”
This statement takes nothing away from solo founders. Ordinarily, this concept applies to building a startup. So if you are still building your brand, it is really worth it. However, there are conflicting beliefs concerning this. While some people believe that a solo founder is better, others think that two or more founders will make everything better.
With all the exciting tech startup ideas around, it’s easy to get confused. Do you become a solo founder or have a founding partner when building your startup.
This is what we will be discussing today, let’s get on with it.
Solo Founder Vs Founding Team: Which is best?
A solo founder typically bears all the responsibility of the startup. He is responsible for all the decision-making processes and also responsible for what the startup should do. A solo founder wears many hats in a startup since the funding to hire employees isn’t readily available.
As a solo founder, you have the freedom to do what you want, anytime you want. There’s the flexibility that comes with being in control of your own decisions. However, it is also burdensome to build a startup on your own.
Co-founding a company might seem like the easy way to go because it greatly relieves your burden. In fact, one would think that having the support of one or more people will increase productivity if properly managed. Research has however proven otherwise.
Jason Greenberg, Ph.D. ’09, and Ethan Mollick, Ph.D. ’10 and MBA ’04 have advised that businesses should walk the path of the likes of Amazon’s Jeff Bezos and Oprah Winfrey. In their research, “Sole Survivors: Solo Ventures Versus Founding Teams, Greenberg and Mollick show that “companies started by solo founders survive longer than those started by teams.”
Greenberg said “It sounds like two heads should be better than one,” they should have more resources, more human capital, more access to financial capital, and bigger networks. But what that tends to ignore — particularly for early-stage ventures — is the extent to which there are all sorts of social frictions that can occur when there’s more than one individual. To the extent that leads to diversions from productive activities to conflict resolution, the outcome may in fact be quite negative.”
Mollick and Greenberg based their research on a survey of creators for thousands of Kickstarter projects between 2009 and May 2015. 28 percent of the sample was made up of solo founders, 31 percent were two-person teams, and 41 percent comprised of three or more members. They sent these surveys to more than 65,000 businesses launched on Kickstarter over a seven-year period.
Greenberg said that compared to three-person teams, solo founders are 54 percent less likely to dissolve or suspend their business. Also, they are 41 percent less likely to do so compared to two-person teams. “Solo founders are, however, about 42 percent less likely to have ongoing nonprofits than three-person teams, and roughly the same versus two-person teams,” Greenberg said.
It is interesting to note also that companies with multiple founders are able to raise more money than those headed by a solo entrepreneur. This can prompt you to think this gives founding teams an advantage over single founders, but you’d be wrong.
Regardless of the fact that single founders start off with a relatively small capital or funding, single founders are more likely to still be in business than those with two or more. Though startups with a team of founders may have been able to raise more money initially than single entrepreneurs, companies with only one founder also saw higher revenue than those with two or more.
For instance, if you lack technical skills and you also lack the funds to employ a Chief Technical Officer (CTO), then getting a co-founder to lend their skills is a very reasonable option.
In Summary
It is important to know that there is no one size fits all approach to business. You have to find what works for you and tailor it to fit the needs of your business. For some, they would bring in co-founders who they can work with as a team to get diverse skills that can handle different areas of expertise.
For some founders, they have ideas of what they want in their startup but they still need a more experienced person to assess and scrutinize such ideas with their professional experience. This could make them bring in a co-founder to help in building the startup.
You also need to consider key business areas and decide if bringing on a co-founder with expertise in those areas will allow you to get to a viable product, market traction and speedy revenue growth.
