Two creators are not always better than one(mitsloan.mit.edu)
mitsloan.mit.edu
Two creators are not always better than one
http://mitsloan.mit.edu/ideas-made-to-matter/2-founders-are-not-always-better-1
100 comments
Exactly! This headline is totally misleading!
Wow, good catch. We replaced 'founder' with 'creator' in the title above.
I think the reason Y-combinator and others like to see two or more founders is that at least those two people are willing to work with/for each other. It is a rough filtering mechanism, and probably a very useful one, especially if your philosophy is that technical people make great business founders.
More honestly it is "Technical people can make great startup founders, but first filter on if they can recruit one other person to work with them." In any team of two, most of the time there was one person that had the idea and drive and asked the other to join them. A technical person with this type of skill, that is willing to spit the ownership of a company with someone else, is much more likely to have the skills and talents to run a high growth startup than someone who has not recruited their first person to join them.
I would imagine that when interviewing a pair of founders, whether consciously or not, people place one of them into the CEO role and the other into the CTO role. Don't most startup teams split up work like this pretty quickly?
More honestly it is "Technical people can make great startup founders, but first filter on if they can recruit one other person to work with them." In any team of two, most of the time there was one person that had the idea and drive and asked the other to join them. A technical person with this type of skill, that is willing to spit the ownership of a company with someone else, is much more likely to have the skills and talents to run a high growth startup than someone who has not recruited their first person to join them.
I would imagine that when interviewing a pair of founders, whether consciously or not, people place one of them into the CEO role and the other into the CTO role. Don't most startup teams split up work like this pretty quickly?
When I was 20 I met a businessman in his mid-30s at a meetup in SF. At the time I knew a small amount of web development and was looking for work, any work, to start my career after dropping out of college. This was just as Blockchain was starting to be more then a whisper and he wanted to create something with it for the financial industry. He was obsessed with getting into YC but lamented how after talking to several "higher ups" at YC the importance of finding co-founder(s) for his application to be accepted/taken seriously. I had nothing better to do so we ended up meeting a second time at the little Starbucks at the corner of the Metreon. He offered me a CTO position with significant equity at his company to build a very complex application which would cover things like payment processing, complex permissions systems, and high data integrity requirements. I politely declined thinking he was crazy for wanting a 20 year old to do that, though I tried to push him to contract me for a landing page or whatever.
I never talked to him after that, sometimes I wonder if he made any money having been so early consumed by Blockchain. It was an immensely valuable lesson for me in the absurdity of Silicon Valley and its false signaling mechanisms.
I believe a lot of YC applications have founding teams in name only, or with bad selections, purely to appease this desire to have more then one founder. In aggregate it may work out, but in my experience...
I never talked to him after that, sometimes I wonder if he made any money having been so early consumed by Blockchain. It was an immensely valuable lesson for me in the absurdity of Silicon Valley and its false signaling mechanisms.
I believe a lot of YC applications have founding teams in name only, or with bad selections, purely to appease this desire to have more then one founder. In aggregate it may work out, but in my experience...
From what I have heard, YC is pretty good at sniffing such teams out during an interview and also while reading the application. It's hard to fake good co-founding relationships.
>I think the reason Y-combinator and others like to see two or more founders is that at least those two people are willing to work with/for each other.
No, investors prefer two or more founders because it dilutes the power of any individual and makes it easier for investors to play founders against each other and water down the influence of either of them. It makes investors much more influential.
No, investors prefer two or more founders because it dilutes the power of any individual and makes it easier for investors to play founders against each other and water down the influence of either of them. It makes investors much more influential.
Maybe that is the biggest reason for some/many VCs, but given how Y-combinator started, the fact it was only investing in the Angel round, and many other facts of its history, I tend to doubt it. It could be true now, but when they started and formed this idea of Y-combinator, Paul Graham, Jessica Livingston and the others were running it a startup themselves basically as an experiment on how to get more startups to exist. I think Y-Combinator even followed this pattern with Paul recruiting the others to start the company. VCs were not in the small Angel level investment scene and Y-combinator was only investing $7000? grand in the early days. Rent for 3 months basically (oh, how rents have exploded since then).
As in all complex behavior, there is not "one reason" for anything and I could have better stated it as: "I think 60% of the reason Y-combinator liked to see two or more founders is that at least those two people are willing to work with/for each other. Other people saw Y-Combinator's success and followed their example (including Y-Combinator)."
It would be pretty cool if people started giving percentages to causal factors when discussing complex events. It would be a concise way to get a much more useful understanding of their opinions.
As in all complex behavior, there is not "one reason" for anything and I could have better stated it as: "I think 60% of the reason Y-combinator liked to see two or more founders is that at least those two people are willing to work with/for each other. Other people saw Y-Combinator's success and followed their example (including Y-Combinator)."
It would be pretty cool if people started giving percentages to causal factors when discussing complex events. It would be a concise way to get a much more useful understanding of their opinions.
The rest of the world doesn't delineate between startups and new ventures like Y Combinator. That likely accounts for most of the difference here considering they used Kickstarter data for their analysis.
==According to the researchers, ignoring other factors, solo founders are 2.6 times as likely "to own an ongoing, for-profit venture" than teams of three or more co-founders.==
==According to the researchers, ignoring other factors, solo founders are 2.6 times as likely "to own an ongoing, for-profit venture" than teams of three or more co-founders.==
It's a filtering mechanism and also 2+ founders working for a company below market wages is more valuable than 1 founder working for below market wages.
I think it is affirmative action for non-technical cofounders if you ask me.
The non-technical cofounders who become VCs want to support people who remind them of themselves in the past.
This is why founder dating is like dating at a tech school. There are many non-technical cofounders who bring nothing to the table except the desire to make a huge amount of money. That is something to work with, but it is by no means enough in a world where billions of people are hungry.
The non-technical cofounders who become VCs want to support people who remind them of themselves in the past.
This is why founder dating is like dating at a tech school. There are many non-technical cofounders who bring nothing to the table except the desire to make a huge amount of money. That is something to work with, but it is by no means enough in a world where billions of people are hungry.
Paul Graham had a great article on Lisp. In his view, Lisp programmers love Lisp because it offers extremely powerful features in a way that other programming languages don't. Those who don't understand Lisp are (rightly) skeptical. Their thought process goes something like, "I don't need these features, and I do my work just fine". In other words, they don't know what they're missing out on, and so it appears useless to them.
I've found this pattern of human thinking to repeat itself in countless places in my life. From politics to programming and everything in between, systems look like unusable chaos when you don't understand it and have not been able to derive a controlled benefit from it. Once you learn how to use it, everything falls into place, and you immediately see how blind others are to the system as you now understand it (the curse of knowledge).
Working with people effectively is a skill, and one as rare as competent programming. And when you don't know how to do it, it looks useless or arbitrary.
I've found this pattern of human thinking to repeat itself in countless places in my life. From politics to programming and everything in between, systems look like unusable chaos when you don't understand it and have not been able to derive a controlled benefit from it. Once you learn how to use it, everything falls into place, and you immediately see how blind others are to the system as you now understand it (the curse of knowledge).
Working with people effectively is a skill, and one as rare as competent programming. And when you don't know how to do it, it looks useless or arbitrary.
The problem is there's no easy way to know which things will actually make you more productive and which won't. Will switching to lisp make me more productive or will it just mean I have to re-write 30 libraries from scratch that aren't written in lisp? Will that productivity multiply as I hire more people or will the fact that it's hard to find lisp programmers mean my options to expand will be limited? Does lisp work well on large teams or does the fact that it's typeless and every programmer makes their own DSL macros mean that it's actually harder to share knowledge?
Will switching from framework X to framework Y really increase my productivity? Is it a matter of not understanding how Y is so much more efficient to build thing than X or is it just hyperbole/marketing/cult. Switching to different product management software, different game engine, different 3d software, different wiki system, etc etc .. How can I know. If I believed everyone I'd be switching every week.
Will switching from framework X to framework Y really increase my productivity? Is it a matter of not understanding how Y is so much more efficient to build thing than X or is it just hyperbole/marketing/cult. Switching to different product management software, different game engine, different 3d software, different wiki system, etc etc .. How can I know. If I believed everyone I'd be switching every week.
For Lisp in particular, you're probably right about many of the tradeoffs. You won't benefit from a large ecosystem, you won't find as many job candidates (albeit likely a higher quality of average candidate), and it's probably not the best language for large decentralized teams that need to coordinate development (although, what language is?).
The lack of knowing you reference is exactly what I'm riffing on here. There are people who have leveraged Lisp features to huge benefit, and there's just no easy way to explain those features to people who don't use Lisp. "There's no way to say it in that language". To outsiders then, Lisp looks like a back-patting cult with no tangible benefits and yet an air of elitism. Similarly, those with "people skills" can't always explain the mental framework and skills they've built up to make themselves excellent at working with other people, but they can easily recognize those skills in another.
EDIT: Here's the article. http://www.paulgraham.com/avg.html
The whole thing is well worth the read, but for what I'm talking about here, you could skip down to read about the Blub paradox.
The lack of knowing you reference is exactly what I'm riffing on here. There are people who have leveraged Lisp features to huge benefit, and there's just no easy way to explain those features to people who don't use Lisp. "There's no way to say it in that language". To outsiders then, Lisp looks like a back-patting cult with no tangible benefits and yet an air of elitism. Similarly, those with "people skills" can't always explain the mental framework and skills they've built up to make themselves excellent at working with other people, but they can easily recognize those skills in another.
EDIT: Here's the article. http://www.paulgraham.com/avg.html
The whole thing is well worth the read, but for what I'm talking about here, you could skip down to read about the Blub paradox.
When I see someone who is a virtuoso of that I have a lot of respect.
There is a common trope that developers lack social skills and business understanding and need a "people person" to "handle the business side." This is basically why almost every technical person at big companies is beholden to PMs (who may not even have any technical background) who get paid just as much, if not more, to write word documents, make powerpoints, and tell you what to do. And while it's true that a lot of developers have bad social skills, I'm willing to guess most developers who want to start a company and raise VC money don't fit that stereotype.
So maybe it's non-technical cofounders implementing a vicious cycle of grifting off the technical people, I think it's more likely it's just due to the fact that we have pervasive negative stereotypes surrounding technical people's ability to do non-technical things.
So maybe it's non-technical cofounders implementing a vicious cycle of grifting off the technical people, I think it's more likely it's just due to the fact that we have pervasive negative stereotypes surrounding technical people's ability to do non-technical things.
It’s not that technical founders don’t have people skills: they don’t have the time. Going full bore into product development only to be interrupted by a potential customer asking about pricing plans is a big time suck, but it’s vital if you are actually building a real business.
Wild speculation: It is the founders that have developed a deep understanding of both computers and people that are likely to be successful. These two domains are very deep and take a long time to learn well (say twenty years at a minimum). Studies suggest that generally people focus on one or the other (men generally focus on understanding things and women focus on understanding people). Find those people who did both at a young age and give them some resources to run a business and they might do very well. As Paul Graham said somewhere, these types of people are only likely to want to start a business as mundane as "make file backups really easy and reliable" if they will be very successful and that success will let them hang out and work with similar people.
But when a good part of your company involves marketing, blogging, content marketing, qualifying leads, talking to potential customers, supporting customers, dealing with advertising, going to conferences (where your target customer is,) that’s a huge amount of “non-technical” work that has to get done. Many technical founders consider a non-technical founder as somehow “less important” that the tech, but it’s definitely is the opposite. All the great tech in the world doesn’t mean jack if you can’t sell it.
> Many technical founders consider a non-technical founder as somehow “less important” that the tech, but it’s definitely is the opposite. All the great tech in the world doesn’t mean jack if you can’t sell it.
And all the marketing skills in the world don't mean jack if you have nothing to sell.
A technical founder who can create a product and market it with average efficiency can still be successful, unlike a non-technical sales guru with no product.
So I'd say the technical person is till the more important one.
P.S We're also ignoring the fact that many technical founders are also great at marketing themselves. Unlike a non-technical one, who isn't technical by definition.
And all the marketing skills in the world don't mean jack if you have nothing to sell.
A technical founder who can create a product and market it with average efficiency can still be successful, unlike a non-technical sales guru with no product.
So I'd say the technical person is till the more important one.
P.S We're also ignoring the fact that many technical founders are also great at marketing themselves. Unlike a non-technical one, who isn't technical by definition.
The only flow in the logic for me in the multi-founder scenario is that if the other person is non-technical, they are automatically considered sales etc... by default. So you can get anyone who is not technical and meet the model; regardless of their skills. It's harder to prove someone is not good at sales vs a technical person (more relevant in younger founders).
The only argument I can think of against what I just said is that the other person is not heads down building so they have more time to acquire those skills.
The only argument I can think of against what I just said is that the other person is not heads down building so they have more time to acquire those skills.
I would think that sales would be easier to measure than tech because successful salespeople have a track record with dollar amounts sold.
I’ve seen people do really well at sales within one organisation completely fail in another.
Dollar amounts between salespeople are really only comparable within a given company and maybe not even then taking into account different territories, product lines and times.
Dollar amounts between salespeople are really only comparable within a given company and maybe not even then taking into account different territories, product lines and times.
Agreed. Sales in big companies is also extremely different than sales in startups. Hard to measure how much of the sales is happening because of big company X being your employer (carrying the weight of the process).
This is an extraordinarily myopic view of business. Most firms do not create new tech; all firms (including tech startups) need individuals capable of selling, winning over the faith of others (recruiting), and who have an eye for creating business processes and operations for delivery, support, and so on. To watch engineers attempt to do all these things on their own is also a comedy.
This idea reminds me of things developers say to disparage anyone who operates on a higher abstraction layer than they do (e.g. Rust sucks cause it's not C. Ruby sucks cause it's for beginners. Salesforce sucks cause it's not real programming.)
This idea reminds me of things developers say to disparage anyone who operates on a higher abstraction layer than they do (e.g. Rust sucks cause it's not C. Ruby sucks cause it's for beginners. Salesforce sucks cause it's not real programming.)
Maybe 1/4 of people who want to be non-technical co-founders really bring something to the table.
It is a black comedy to see how many salesmen could not sell, how many recruiters cannot recruit, how many businesses recruit people at great expense to lose them because they use them in a boneheaded way, etc.
I've seen many people who think they are working at a high abstraction level while they are really ignoring a large number of inconvenient truths.
Given that so many businesses need web sites that are a variation on a theme I wonder why there isn't an accelerator that has a captive dev shop that is highly productive making e-commerce sites that are variations of a theme based on a fixed framework.
It is a black comedy to see how many salesmen could not sell, how many recruiters cannot recruit, how many businesses recruit people at great expense to lose them because they use them in a boneheaded way, etc.
I've seen many people who think they are working at a high abstraction level while they are really ignoring a large number of inconvenient truths.
Given that so many businesses need web sites that are a variation on a theme I wonder why there isn't an accelerator that has a captive dev shop that is highly productive making e-commerce sites that are variations of a theme based on a fixed framework.
I'm continually amazed by the number of recruiters I work with who lack the communication skills needed to do their jobs in an environment where everybody's increasingly picky. You'd think they'd step up, considering it can mean the difference between a $30k year and a $200k one, but most of them continually choose low-effort, low-reward paths. It doesn't make that much of a difference to me whether any one recruiter can land me a role. I'll get one eventually. But it matters to the tune of $X0k to them. Boggles my mind.
I need to start coming up with filters to weed the grifters out. Spending 10+ hours on a homework assignment only to find something important wasn't communicated is getting old.
I need to start coming up with filters to weed the grifters out. Spending 10+ hours on a homework assignment only to find something important wasn't communicated is getting old.
Programmers tend to want to hack and not care about sales/marketing/everything else.
It turns out that doing "sales/marketing/everything else" is of significant value when building a business.
It turns out that doing "sales/marketing/everything else" is of significant value when building a business.
Well look, I already told you! I deal with the goddamn customers so the engineers don't have to! I have people skills! I am good at dealing with people! Can't you understand that? What the hell is wrong with you people?
Two people in head position are easier to sway in favor of investors' benefit than one.
Technical people as not stupid and can delegate that "recruitment" thing you pushed to front before us. I also would like to see something akin to the research we are talking about in the defense of your "much more likely to have skills to run a high growth startup".
High growth startup is of interest for investors, mainly. And that's why they prefer several cofounders, because it is easier to divide and control what can be divided. Single founder cannot be divided (except for medical conditions), two can be.
Technical people as not stupid and can delegate that "recruitment" thing you pushed to front before us. I also would like to see something akin to the research we are talking about in the defense of your "much more likely to have skills to run a high growth startup".
High growth startup is of interest for investors, mainly. And that's why they prefer several cofounders, because it is easier to divide and control what can be divided. Single founder cannot be divided (except for medical conditions), two can be.
I like this theory; though I think the division of labour is usually marketing/tech (quintessential example: Steve and Steve.)
Paul G. says it's just because it can be hard and lonely being a solo founder. It isn't a filtering tool necessarily.
I agree that this is a thing with VC's, but the claimed logic behind it is not credible.
If you are able to recruit founders to work with each other, you didn't prove anything that couldn't be just as easily proven by recruiting a VC to invest in you.
And if it's not sales/hype that we're trying to prove, but instead a technical review by a potential co-founder, then that's what technical due diligence is for.
To me, a much better test is whether or not they've managed to get a believable proof of concept or even actual traction all by themselves, without any help and without even a co-founder.
That is a much better proof point. (leaving out of the discussion other salient points like market size, growth rate, etc)
Being able to attract another idiot who might not know anything at all about the problem domain, or gets excited about it for a few weeks or months, or "joins" five different startups in six months in the hopes that one of them gets funded.. this proves nothing of value.
Convincing a VC to fund you at reasonable terms? Much harder than finding a pliant co-founder if you have even mediocre skills at marketing/sales.
The real reasons VC's want multiple founders aren't really talked about, because they're not flattering to VC's: https://news.ycombinator.com/item?id=18924243
If you are able to recruit founders to work with each other, you didn't prove anything that couldn't be just as easily proven by recruiting a VC to invest in you.
And if it's not sales/hype that we're trying to prove, but instead a technical review by a potential co-founder, then that's what technical due diligence is for.
To me, a much better test is whether or not they've managed to get a believable proof of concept or even actual traction all by themselves, without any help and without even a co-founder.
That is a much better proof point. (leaving out of the discussion other salient points like market size, growth rate, etc)
Being able to attract another idiot who might not know anything at all about the problem domain, or gets excited about it for a few weeks or months, or "joins" five different startups in six months in the hopes that one of them gets funded.. this proves nothing of value.
Convincing a VC to fund you at reasonable terms? Much harder than finding a pliant co-founder if you have even mediocre skills at marketing/sales.
The real reasons VC's want multiple founders aren't really talked about, because they're not flattering to VC's: https://news.ycombinator.com/item?id=18924243
> If you are able to recruit founders to work with each other, you didn't prove anything that couldn't be just as easily proven by recruiting a VC to invest in you.
Eh, I think this is spurious. The specific post you're replying to is about a signal that seed funders can use to predict if founders have what it takes.
Seed funders can't really use the signal of "did they get VC money?"
Also, technical proof of concept is definitely a positive signal, but is not at all sufficient to make a reasonable investment bet.
Eh, I think this is spurious. The specific post you're replying to is about a signal that seed funders can use to predict if founders have what it takes.
Seed funders can't really use the signal of "did they get VC money?"
Also, technical proof of concept is definitely a positive signal, but is not at all sufficient to make a reasonable investment bet.
> Eh, I think this is spurious. The specific post you're replying to is about a signal that seed funders can use to predict if founders have what it takes. Seed funders can't really use the signal of "did they get VC money?"
That's a fair point, but my point was really: if they can convince you as an investor to actually put in money, then they certainly have sales skills that outclass those of acquiring some random co-founder. Admittedly, maybe they don't have the technical skills, or perhaps you as an investor lacks the specific skills to evaluate those in the way that a potential co-founder might be able to, but (as I mentioned) that's what technical due diligence is for anyway.
> Also, technical proof of concept is definitely a positive signal, but is not at all sufficient to make a reasonable investment bet.
I don't see what you are saying. Are you saying that getting a co-founder is more sufficient than a technical proof of concept to make a reasonable investment bet? I wasn't arguing that one should make an entire investment based solely on one factor (the product itself).
My point is simply that: being able to sell a co-founder on the idea or product seems to be an easier lift than selling an investor to invest real money in the idea or product, irrespective of other factors.
That's a fair point, but my point was really: if they can convince you as an investor to actually put in money, then they certainly have sales skills that outclass those of acquiring some random co-founder. Admittedly, maybe they don't have the technical skills, or perhaps you as an investor lacks the specific skills to evaluate those in the way that a potential co-founder might be able to, but (as I mentioned) that's what technical due diligence is for anyway.
> Also, technical proof of concept is definitely a positive signal, but is not at all sufficient to make a reasonable investment bet.
I don't see what you are saying. Are you saying that getting a co-founder is more sufficient than a technical proof of concept to make a reasonable investment bet? I wasn't arguing that one should make an entire investment based solely on one factor (the product itself).
My point is simply that: being able to sell a co-founder on the idea or product seems to be an easier lift than selling an investor to invest real money in the idea or product, irrespective of other factors.
My idea was more that one cofounder probably had an original idea, but then got another person to work with them on it. In the best case both people are working on the project in large part because they want to work with the other person. The project the two work on probably evolves enough between the two people that at the point they get to talking to an Angel, they can both claim full half credit and feel like equals in the endeavor. People who can do this are much more likely to be able to grow a business quickly like Y-Combinator tries to do.
I'm a teaching assistant for a class called Entrepreneurial Finance at my alma mater, which always has a good draw of entrepreneur and investor guest speakers.
One of the recent speakers was Kent Collier, CEO of Reorg (https://www.crunchbase.com/organization/reorg-research#secti...), an information service to the buy-side that focuses on arcane and opaque information, particularly bankruptcy. They are a smash hit that only took $1.3M in financing that now does $1M a week in revenues.
His view is that solo founders and preferable. The reason he gave was that it takes such a clear and unambiguous vision, with total dedication to that vision, that any space between multiple founders creates drag and can kill the startup.
One of the recent speakers was Kent Collier, CEO of Reorg (https://www.crunchbase.com/organization/reorg-research#secti...), an information service to the buy-side that focuses on arcane and opaque information, particularly bankruptcy. They are a smash hit that only took $1.3M in financing that now does $1M a week in revenues.
His view is that solo founders and preferable. The reason he gave was that it takes such a clear and unambiguous vision, with total dedication to that vision, that any space between multiple founders creates drag and can kill the startup.
> takes such a clear and unambiguous vision, with total dedication to that vision
This is very true. For most startups building a product is not just an ongoing engineering/business development task as much as it is an ongoing product development task. Your vision of the product (if you have one) is something that is most difficult to share with others. I think a great entrepreneur is closer to being an artist than to anything else: imagine two painters trying to create one painting at the same time. At times it can get as absurd.
That is not to say you don't need co-founders but maybe, just maybe, sometimes one of the founders needs a slightly dominating position in defining (and refining) the product in the process.
This is very true. For most startups building a product is not just an ongoing engineering/business development task as much as it is an ongoing product development task. Your vision of the product (if you have one) is something that is most difficult to share with others. I think a great entrepreneur is closer to being an artist than to anything else: imagine two painters trying to create one painting at the same time. At times it can get as absurd.
That is not to say you don't need co-founders but maybe, just maybe, sometimes one of the founders needs a slightly dominating position in defining (and refining) the product in the process.
That works both ways. Sure, if someone has all they need to succeed, the distraction of a co-founder might be a problem. For the rest of us, we need the balance, challenge and questions of a peer so that we have to listen and justify decisions.
Questions around skills, again, depend on the scenario. I might be an engineer but I sell online and don't need "sales skills" so don't need a co-founder. In other companies, the need for certain skillsets which I don't have needs a co-founder who can give your business the bandwidth.
I can't honestly see that either way is always preferable - depends on the person, the company, the market etc.
Questions around skills, again, depend on the scenario. I might be an engineer but I sell online and don't need "sales skills" so don't need a co-founder. In other companies, the need for certain skillsets which I don't have needs a co-founder who can give your business the bandwidth.
I can't honestly see that either way is always preferable - depends on the person, the company, the market etc.
From the article:
>The research is based on a survey of creators for thousands of Kickstarter projects between 2009 and May 2015.
From the paper:
>This suggests that the taken-for-granted assumption among scholars that entrepreneurship is best performed by teams should be reevaluated, with implications for theories of team performance and entrepreneurial strategy.
The claims in the paper are pretty limited and based on a questionably representative sample. Extrapolating to "solo founders are better" seems like a leap at this stage. The results seem interesting and worthy of further evaluation, though!
>The research is based on a survey of creators for thousands of Kickstarter projects between 2009 and May 2015.
From the paper:
>This suggests that the taken-for-granted assumption among scholars that entrepreneurship is best performed by teams should be reevaluated, with implications for theories of team performance and entrepreneurial strategy.
The claims in the paper are pretty limited and based on a questionably representative sample. Extrapolating to "solo founders are better" seems like a leap at this stage. The results seem interesting and worthy of further evaluation, though!
How many high-growth companies came out of Kickstarter? The ones that jump to mind are Oculus and Pebble, but I can't think of others.
Two founders are better than one when one of the key problems you will face is hiring. One founder hasn't proven they can recruit. Two founders have proved they can convince at least one other idiot to join them.
This is important for VC businesses, where hiring quickly is the only way to grow. But it's not important for smaller businesses, where cash management matters more.
This is important for VC businesses, where hiring quickly is the only way to grow. But it's not important for smaller businesses, where cash management matters more.
Is being able to recruit the most important trait? I think it is overall selling that matters. Why can selling potential not be demonstrated by other means? Playing with human relationships can come later.
If you sell well, the VCs want you to scale so yes, lots of time spent recruiting.
If you have a smaller business making enough money and don't want to scale and therefore don't need VC money - then selling is definitely the number one requirement.
If you have a smaller business making enough money and don't want to scale and therefore don't need VC money - then selling is definitely the number one requirement.
I'd argue that "recruiting" is a form of selling. Especially in the beginning, when you're selling the dream...
In the initial phase, we can only sell to people who trust us. Becoming a co-founder is a big commitment and a challenge to long-term relationships. Why can't it be something like, get five customers you know using your product/service. I have been through a bad co-founder divorce and I think it is bad advice that co-founder will increase your success chances. I think the mostly one co-founder gets a free(er) ride. Werner Vogels in his startup school lecture says "Have you seen a group with one head monkey and a leiutenant monkey?"
>Two founders have proved they can convince at least one other idiot to join them.
It stops being relevant once you find your 1st customer.
It stops being relevant once you find your 1st customer.
I think most of the research like these are pretty much useless. This is because they assume that the success of a startup has correlation with the founders/co-founders - there well might be, but imo the biggest correlation with success is time.
Some startups go bust when they are launched in an unfavourable climate - sometimes the tech is too raw, othertimes the market is just not ready. Move them a couple of years before or after and they take off. Lots of startups which take off, dont keep the momentum - market forces disrupt startups a lot more than the other way around.
When a startup takes off, often for no fault of the founders/co-founders - it creates a strong incentive for the founders to keep aligned and work together. If a startup does not take off it creates a strong incentive for founders to NOT work together.
Often when a startup takes off - or if it raises a big round from a huge VC it creates a strong signal for co-founders to get on board. Case in point is dropbox - they got accepted into YC and it allowed the founder to 'hire' a co-founder.
Some startups go bust when they are launched in an unfavourable climate - sometimes the tech is too raw, othertimes the market is just not ready. Move them a couple of years before or after and they take off. Lots of startups which take off, dont keep the momentum - market forces disrupt startups a lot more than the other way around.
When a startup takes off, often for no fault of the founders/co-founders - it creates a strong incentive for the founders to keep aligned and work together. If a startup does not take off it creates a strong incentive for founders to NOT work together.
Often when a startup takes off - or if it raises a big round from a huge VC it creates a strong signal for co-founders to get on board. Case in point is dropbox - they got accepted into YC and it allowed the founder to 'hire' a co-founder.
You're right but the investors and founders can't control for time.
so you optimize for the variables you CAN control.
so you optimize for the variables you CAN control.
I am a solo founder. And I didn't see any mention of actual income value of the "successful" businesses in this article. I suspect you can easily get more successful very small businesses a leg up in sheer numbers alone just from personality conflicts wrecking multi-founder businesses.
I had a partner very early on, and it didn't work out. And it was really nice having someone on board that really cared about success the same way I did. Not an employee, client, friend or family member. But another "me" as part of the group.
If I could go back in time, and truly fix the problems, I would rather have kept my co-founder.
Also, they end with this, so maybe there is more to this story.
>...are already working on their next paper, which looks specifically at co-founding teams, and what factors determine their success and failure.
I had a partner very early on, and it didn't work out. And it was really nice having someone on board that really cared about success the same way I did. Not an employee, client, friend or family member. But another "me" as part of the group.
If I could go back in time, and truly fix the problems, I would rather have kept my co-founder.
Also, they end with this, so maybe there is more to this story.
>...are already working on their next paper, which looks specifically at co-founding teams, and what factors determine their success and failure.
In your view, why didn't it work out?
Personal problems with co-founder. I wasn't mature enough (I really had a lot of personal issues myself) to truly help that person overcome their issues. Eventually he stopped being productive and just played video games. He knew he was screwing me over, but he simply couldn't get out of his own personal funk. (it was the days of Everquest and large group raids, it was really bad)
In retrospect, I really really wish I had been more patient and actually tried to encourage him and get him back on track.
I learned a valuable lesson from this though, to not let my temporary grief blind me to other people's distress.
In retrospect, I really really wish I had been more patient and actually tried to encourage him and get him back on track.
I learned a valuable lesson from this though, to not let my temporary grief blind me to other people's distress.
The title of the article should be: "2 founders are not always better than 1 for Kickstarter"
Also, they didn't define success. I bet it was just getting the project funded. The bar for VC success and Kickstarter are very different. Kickstarter doesn't have growth and ROI requirements. This might be a proxy for a lifestyle business, but not VC funded companies.
Also, they didn't define success. I bet it was just getting the project funded. The bar for VC success and Kickstarter are very different. Kickstarter doesn't have growth and ROI requirements. This might be a proxy for a lifestyle business, but not VC funded companies.
> Also, they didn't define success.
It's mentioned in the paper. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3107898
> First, we examine continuation of business operations at the time of the survey (The options were: “Still in operation as an ongoing for-profit business,” “Still in operation as an ongoing not-forprofit, artistic, or other type of endeavor,” “Still in operation, but acquired by/merged with another organization,” “Not operating as a result of being acquired by/merged with another organization,” “Not operating, temporarily stopped operations,” “Not operating, permanently stopped operations,” and “Not operating for another reason.”)
> We also used reported non-crowdfunding revenue based on a 12-point categorical scale ranging from none to over $10 million, using this as a direct measure of company success.
> The first model is an unconditional model, and reveals that solo founders do no worse with respect to average income than teams of three or more.
It's mentioned in the paper. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3107898
> First, we examine continuation of business operations at the time of the survey (The options were: “Still in operation as an ongoing for-profit business,” “Still in operation as an ongoing not-forprofit, artistic, or other type of endeavor,” “Still in operation, but acquired by/merged with another organization,” “Not operating as a result of being acquired by/merged with another organization,” “Not operating, temporarily stopped operations,” “Not operating, permanently stopped operations,” and “Not operating for another reason.”)
> We also used reported non-crowdfunding revenue based on a 12-point categorical scale ranging from none to over $10 million, using this as a direct measure of company success.
> The first model is an unconditional model, and reveals that solo founders do no worse with respect to average income than teams of three or more.
If you're lacking a skill, hire an employee, don't invite a second founder. He who manages the accounting controls the company.
If you must have a co-founder, makes sure he works as long/hard as you do.
If you must have a co-founder, makes sure he works as long/hard as you do.
This. I hate hearing all this co-founder stuff all the time. While I'm sure it works for some people, I've found the whole co-founder thing to be a terrible idea. The only positive benefit I've found is having someone to talk to about what you're working on, but I haven't found co-founders to be helpful other than that in the cheerleader department.
You need capital to do that... Co-founders are free.
What I wonder (and search for "hours" had 0 hits) is the number of hours solo founders put in vs 2+ founders. I founded a company with 5 founds, 3 of which were in daily operations. It was a lot of work and I can't imagine doing a lot of that early work by myself (until there was enough revenue to support hiring).
As a solo founder of a SaaS launching next month, I tracked my time and am at 1350ish hour in the past 10 months. This is my first startup so I made some mistakes along the way with future creep so deadlines got pushed. I worked around 35 - 40 hours outside of my full-time job a week. Felt really burnt out so skipped one month of work 3 months ago but finally trying to get into the mindset of sales and marketing.
I do think though this is all entirely dependent on the scope of your project.
I do think though this is all entirely dependent on the scope of your project.
so you've been working 80 hours a week for almost a year now?
This is the norm in any high-growth startups, or at least it was for me. A few people seem to fall into things that don't require working all the time, but 16 hour days and two day weekends seem completely normal to me now.
Yes. Here is to hoping it starts slowing down now that the development is done and I can automate some of the sales/marketing process.
I think it just depends on the kind of product you're building. It sounds like you were tackling a fairly ambitious problem, so maybe it couldn't have been done by one person.
I've been working on a small bootstrapped service. There have been some long hours, but nothing too crazy. I've also taken a few breaks to do some contract projects (I'm actually looking for a new project now, and you can find some links in my HN profile.) I'm working on a fairly niche product, so I think I can afford to go at a slower pace and not have any cofounders.
Sometimes a startup idea does require a team and some VC funding. Those ones are far more risky and have a lower chance of success, but it's a totally different game.
I've been working on a small bootstrapped service. There have been some long hours, but nothing too crazy. I've also taken a few breaks to do some contract projects (I'm actually looking for a new project now, and you can find some links in my HN profile.) I'm working on a fairly niche product, so I think I can afford to go at a slower pace and not have any cofounders.
Sometimes a startup idea does require a team and some VC funding. Those ones are far more risky and have a lower chance of success, but it's a totally different game.
Having gone through the solo founder -> co-founder -> back to solo founder route with my latest (bootstrapped) startup, I can honestly concur that:
* The most contentful working time for me was when I had a co-founder. It was good to bounce ideas off someone, and having another person with equal share in the business increased accountability and my motivation to keep pushing.
* The most effective working time for me was as a solo-founder. I felt that I wasn't compromising every decision I made to keep my co-founder happy, and that I could make decisions much more quickly and change direction whenever I wanted.
I think the main problem with the time with a co-founder was that we were too similar. We worked great together and got on well, but there wasn't that spark that pushed the business forward. Since being on my own again and pushing against the limitation of my own personality and abilities, I have managed to grow the business trifold since my co-founder left.
* The most contentful working time for me was when I had a co-founder. It was good to bounce ideas off someone, and having another person with equal share in the business increased accountability and my motivation to keep pushing.
* The most effective working time for me was as a solo-founder. I felt that I wasn't compromising every decision I made to keep my co-founder happy, and that I could make decisions much more quickly and change direction whenever I wanted.
I think the main problem with the time with a co-founder was that we were too similar. We worked great together and got on well, but there wasn't that spark that pushed the business forward. Since being on my own again and pushing against the limitation of my own personality and abilities, I have managed to grow the business trifold since my co-founder left.
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I'll share my story.
Solo technical founder. Hired my first sales employee long after I established a product-market fit, got a few paying customers and $300K in annual revenue. I gave him a co-founder title, but we were never equal. It was one of the best decision that I have made. The company would not have been able to survive if 2 of us were equal - we would have gone out of business. Instead, 1 year after I pushed him out we had a moderately successful exit (8 figure).
I think that having a solo founder is beneficial AS LONG AS that one person is great. Otherwise you, as a VC, kind of bet that at least 1 of them will be great and it will all work out.
Solo technical founder. Hired my first sales employee long after I established a product-market fit, got a few paying customers and $300K in annual revenue. I gave him a co-founder title, but we were never equal. It was one of the best decision that I have made. The company would not have been able to survive if 2 of us were equal - we would have gone out of business. Instead, 1 year after I pushed him out we had a moderately successful exit (8 figure).
I think that having a solo founder is beneficial AS LONG AS that one person is great. Otherwise you, as a VC, kind of bet that at least 1 of them will be great and it will all work out.
Based on success rates, 1 founder is best. Then 2. Then 3. Etc. One founder that's in their late 30s (ie, 15-20 years experience and effectively retired due to savings).
The trend of having 2+ founders is a compromise and a result of BS mumbled by VCs.
The trend of having 2+ founders is a compromise and a result of BS mumbled by VCs.
Am a solo founder of a bootstrapped business. One advantage is that you only need half the profit for the equivalent income to each founder. This gets even more important in small niches.
A downside is during those times when you work less, little happens.
A downside is during those times when you work less, little happens.
"Solo founders are twice as likely to succeed in business as co-founders" by research from Jason Greenberg, PhD ’09, and Ethan Mollick, PhD ’10 and MBA ’04.
:-)
hmmm... co-researchers to research on NO need of co-researchers/founders...
:-)
hmmm... co-researchers to research on NO need of co-researchers/founders...
The reason YC is always talking about finding co-founders is because Paul Graham had co-founders. Had Paul Graham gone at things alone, YC would probably be preaching the virtues of flying solo.
I wonder if this has more to do with what level of success is sufficient for individuals vs teams. If you're doing this for money, teams need to be 2x+ as profitable. This would track with the result that larger teams are more likely to start have a non-profit.
In a world where you're swinging for the fences, this model would still argue for teams.
In a world where you're swinging for the fences, this model would still argue for teams.
A startup has three main functions:
- define the product
- build the product
- sell the product
Besides rare exceptions (that do exist!), there is nothing a co-founder can give that you can't hire.
Apart from input and challenge that you have to listen to. That might sound like a bad thing but there are plenty of successful founders who would have gone off the rails early if they didn't have someone else asking, "do we really need to do that"?
do we really need to build a company?
The most important part of the article is that is shatters the myth of having a co-founder to succeed. The stats don’t say that two founders are better than one, it fact is the opposite, more than one is WORSE.
So what would be my take-away; if you are thinking of pursuing a business, and have the energy, contacts and network to make it, go ahead. However if having help from a valuable co-founder who you trust is possible, then compromise, and get a helping hand. Otherwise is better to go it alone.
So what would be my take-away; if you are thinking of pursuing a business, and have the energy, contacts and network to make it, go ahead. However if having help from a valuable co-founder who you trust is possible, then compromise, and get a helping hand. Otherwise is better to go it alone.
Lol this is a hilarious way of defining success. This data proves that if you want to have an "ongoing company" a few years after starting, you're better off going solo. But how many people, when starting a company, dream of reaching "ongoing" status? Why are they ignoring the data from the most valuable, most impactful, and most innovative startups?
Check out my article on it, too https://medium.com/@haftrm/successful-solo-founders-5c7f60ef...
It is true in many ways, not just Kickstarter.
It is true in many ways, not just Kickstarter.
Even though the method can be challenged, I think it is great that people are trying to understand entrepreneurship based on data. Most founder and startup advice is not based on any data. YC could have a great impact here I believe with the vast amount of data they should have
When you think about how 80% of startups fail because of founder issues, this makes a lot of sense. However, to some of the other points made here, investors like to see that you are able to convince at least one person to go all in with you.
Ten cynical reasons why VC's like to see multiple founders:
10. Sometimes (perhaps rarely) a better idea comes from a group.
9. There really is a lot of work to go around.
8. If one of the founders is willing to sell, take more investment or worse terms, perhaps they can apply pressure to the ones who are reluctant.
7. Most humans like to be around other humans, so cooperation is the norm among people who self-group.
6. Expertise can be complementary and allow a natural division of labor in the early days.
5. Hard feelings are more evenly distributed as the founders get pushed out or diluted one-by-one; push out the weakest contributors and least resistant first.
4. More founders = reduced risk and decreased dependency on one possibly loose cannon
3. If the board stops getting along with one founder, perhaps another will be a better fit. (see: Twitter)
2. Multiple complementary founders are rarely of one mind, and therefore it's easy to split control.
.. and the number one reason why VC's like multiple founders:
1. Extra founders cost them nothing
10. Sometimes (perhaps rarely) a better idea comes from a group.
9. There really is a lot of work to go around.
8. If one of the founders is willing to sell, take more investment or worse terms, perhaps they can apply pressure to the ones who are reluctant.
7. Most humans like to be around other humans, so cooperation is the norm among people who self-group.
6. Expertise can be complementary and allow a natural division of labor in the early days.
5. Hard feelings are more evenly distributed as the founders get pushed out or diluted one-by-one; push out the weakest contributors and least resistant first.
4. More founders = reduced risk and decreased dependency on one possibly loose cannon
3. If the board stops getting along with one founder, perhaps another will be a better fit. (see: Twitter)
2. Multiple complementary founders are rarely of one mind, and therefore it's easy to split control.
.. and the number one reason why VC's like multiple founders:
1. Extra founders cost them nothing
> Two creators are not always better than one
Agreed, but I want more than one Elon Musk
Agreed, but I want more than one Elon Musk
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Is anyone aware of similar data on the YC company set?
YC pushes against solo founders. Dropbox was a notable one (even though Drew Houston added a "co-founder" right about when they were accepted...)
Investors in general prefer multiple founders, and they want the founders to have roughly equal equity too. In part this is because they want the ability to push a founder out if he/she isn't working out.
I also hear that it's protection against a founder quitting. Though this to me seems dubious as I would guess that sole founders are much less likely to quit prematurely (for obvious reasons) than a co-founder.
Really doubt that this is true.
Speaking from nearly 40 years experience over several businesses - this is VERY true.
From what I've seen it also smooths out interactions between founders and staff... people will prefer to talk to one founder over another for certain things.
Every best practice has an exception
But are solos happier?
> The research is based on a survey of creators for thousands of Kickstarter projects between 2009 and May 2015.
It would be crazy to generalize from this to most VC-backed (or seeking) businesses... and another thing still to compare the massively larger set of small businesses started by individuals without major external funding. Different kinds of firms face incredibly different pressures and failure modes at every stage.