What’s better, solo founders or co-founders? Either way, your startup success will rest on your ability to put together a great team.
I have been a solo startup founder and I’ve also been a co-founder with others. Honestly, I think my personality is better-suited to being a solo founder (and I suspect my former co-founders would agree).
But for you, as you’re starting your venture, it is better to be a solo founder or to have some co-founders? This is one of the longest-running debates in Startup Land — if you ask three people in Silicon Valley you’ll probably get five answers.
Historically, venture capital investors have been biased toward teams. Paul Graham, co-founder of the startup accelerator Y-Combinator, wrote an essay several years ago in which he said “Starting a startup is too hard for one person”. Y-Combinator pretty much sticks to that belief — only about 10% of the startups they admit to their program are run by solo-founders.
Meanwhile, up on Sand Hill Road, most of the venture capitalists I know also still express a preference for founding teams. It has become commonly-accepted wisdom, and the echo chamber is strong on Sand Hill Road¹.
But does the data back this up? Are outcomes actually better for startups with multiple cofounders than for those with a single founder?
Three years ago a research study came out of Wharton that suggests that no, the data does not seem to back this up. The study, titled Solo Survivors: Solo Ventures vs Founding Teams, looked at 3,526 startup companies. They found an interesting dichotomy: indeed investors seemed biased toward teams, as the startups with multiple cofounders raised more money. But in terms of outcomes, they found that startups with single founders tended to last longer and eventually achieve higher revenue.
The researchers suggest this may partly be because a solo founder is more agile in decision-making. Cofounding teams tend to make slower, more collaborative decisions and are less likely to take chances.
And, of course, co-founder disharmony is one reason that startups sometimes fail, and so solo founders take that risk off the table.
If you want to dive into the data yourself, you could use the Crunchbase API. This guy did and found that of 6,191 startups that had a successful exit (either IPO or M&A), slightly more than half of them had solo founders. The average number of founders per startup in this dataset was 1.85. So the data is mixed, with a slight bias toward solo founders (despite conventional wisdom).
The myth of the “technical co-founder”.
I’ve often had people say to me “I’m stuck moving my startup forward until I find a technical co-founder”. I honestly think that’s a terrible excuse for being stuck — there are a thousand things a non-technical founder can do to move forward with startup and then eventually hire a technical team. The Founder/CEO does not have to be a technical genius — understanding customers and running a customer-focused product development process is far more important.
In fact, when you look at Silicon Valley history, surprisingly few of the great founders were tech geniuses to begin with. Steve Jobs didn’t have a college degree, let alone any engineering experience. Peter Thiel was a philosophy major. Ben Silbermann of Pinterest was a political science major. Stewart Butterfield of Slack was a philosophy major. Marc Benioff of Salesforce has no engineering degree; he was a customer service rep at Oracle. For the most part, the technical knowledge can be hired — the hard part about a startup is everything else.
Running a startup does require multiple skillsets, of course. Dave McClure famously said that every startup needs a hacker, a hustler, and a hipster (a tech person, a salesperson, and a product design person)². I like Dave’s framework, and I think it’s probably about right in terms of the skillsets required for many ventures. But every venture is different, and a solo founder can hire for the skillsets she/he doesn’t have. So while the hacker-hustler-hipster framework is a clever way of thinking of skillsets, it does not literally mean that every startup needs 3 founders.
Mark Zuckerberg had cofounders. But eventually they drifted off, and the real turning point for the company was the hiring of a non-founder, Sheryl Sandberg, who had the skillset that Mark didn’t have. That was the moment that turbo-charged the company. Facebook isn’t a success today because Zuckerberg had cofounders — it’s a success because he made good hires³.
And I guess that’s the bottom line. Solo founders can be a success, and a group of co-founders can be a success⁵. But no startup can succeed without putting together a great team.
Hiring a great team.
When I look back on my own career, the successes I’ve had have always been because of the team I had assembled. Honestly, I think that success in business really just distills down to just that one thing: build great teams.
The ability to build high-achieving teams is what matters, and I suppose that’s been my super power in my career. I’m average with spreadsheets, I’m mediocre at sales, I know just enough about technology to be dangerous, but I’ve been great at building high-achieving teams.
So what’s the secret to hiring great teams? I think it’s more art than science, and every founder has their own style. But I do think that hiring is the one thing that a startup CEO should never delegate to others. I’ve heard it said that the CEO needs to personally hire the first 100 employees at a company, and I think that’s probably about right. A CEO who delegates the hiring process to others too soon has been the death of many companies.
Another thing that has killed a few companies is a CEO who thinks that the solution to every problem is hiring more people. As Ben Horowitz says, “sometimes an organization doesn’t need more people; it just needs better clarity.” It’s the CEO’s job to recognize the difference.
One of my personal rules has always been to only hire A players, no matter how long it takes to find them. That philosophy ends up being a burden on your time, because you have to kiss a lot of frogs, but being very selective about hiring sends a powerful message to the rest of the team about your standards and values. And remember that as your organization grows, A-players will hire other A-players, whereas B-players will hire C-players.
“B players hire C players and pretty soon C players are hiring D players. It doesn’t take long to get to Z players. The trickle-down effect causes bozo explosions in companies”. -Steve Jobs
Never let B-players get into a hiring position. I did that once and it’s a mistake I hope I never make again.
Team is the one place where 1+1 never equals 2. A great hire adds more than their incremental value. A bad hire subtracts from the rest of the team. Get your team math right by hiring slow and firing fast.
“At most companies, people spend 2% of their time recruiting and 75% managing their recruiting mistakes”. -Richard Fairbanks, CEO of Capital One
Google did a study a few years ago, trying to figure out the characteristics of high-performing teams so that they could automate the selection of individuals for their teams. They were hoping for a nice recipe like “A good team has one senior engineer with >8 years coding experience, plus one recent CS graduate with a GPA >3.8, plus one PM who was a liberal arts major”. Or something like that. What they found was completely different — what they found was that the things that made for high-performing teams were common vocabulary, strong communication skills, cultural fit, and mission clarity from management.
So again, that means the Founder/CEO needs to personally do the hiring for as long as possible. A common failure pattern I’ve seen is the founder hiring someone into the finance role and then delegating HR and hiring to that person. To me, this is crazy — finance skills have nothing to do with hiring skills. What emerges is a spreadsheet-centric approach to evaluating people, a “competency matrix”. That’s is a bit like thinking that a paint-by-numbers kit will help you create great art. As Ben Horowitz says, “hiring based on checking boxes or looking for weaknesses is a guaranteed way to create a low-performing organization”.
Leadership is about making others better. Some of my best hires have been diamonds-in-the-rough who were passed-up by other employers. I tend to choose smart over well-educated, and values over GPA. A thirst for learning over years of experience. I like people who ask good questions. I’m always impressed by someone who tells me how much they don’t know — that person knows a lot.
You’ll have your own approach to recruiting, selecting, and hiring. Every startup founder is different, and every venture is different. But the one constant is that team matters more than anything else. In the land of startups (and life in general) there is nothing more important than having the right team.
My mom used to say “You are the average of who you surround yourself with, so choose well”. The same is true with startups — don’t be afraid to hire someone smarter than you. They’ll bring everyone in the organization up a notch.
Choose your team well, and your startup will thrive and succeed.
- My friend, the venture capitalist Danielle D’Agostaro, adds “I mean it’s case by case. Sometimes it’s a personal choice not to have a cofounder. You take everything into consideration when you’re an investor and can usually tell when someone is a lone wolf type who can’t work well with others or if they’re just more efficient without cofounders and can perform a lot of the early roles themselves”.
- A lot of people claim to have coined the “hacker hustler hipster” term, but I first heard it from Dave McClure.
- Jim Breyer, who led the initial VC round in Facebook, says “I would back and invest again and again in Mark Zuckerberg”, suggesting that while there were co-founders, there really was one guy who caught the investors’ attention.
- I am a Paul Graham fan and recommend all of his essays, which can be found on his website.
- This HBS piece has some more good data and thoughts on this topic.
This article was merged into my new book, The Launch Path, now available on Amazon.