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Do you need a cofounder?

The biggest cause of failure among startups is a lack of product-market fit. The second biggest cause, conflict between co-founders.

Having worked for over 15 years as a part of big teams in small organizations, part of small teams in big organizations, with startups, as an entrepreneur, as a cofounder,  I have witnessed that in businesses (and in life), the biggest challenge is dealing with people.

This can be seen, not only as an entrepreneur dealing with internal teams and members but also dealing with external stakeholders including customers, investors, boards, etc. This is why companies become more complex as they increase in headcount. This is also why, it becomes harder to sell products to groups of people vs single persons, for example, selling products to large enterprises and teams.

Many successful startups have been found by single founders – Mark Zuckerberg of Facebook, Reid Hoffman of Linkedin, Jeff Bezos of Amazon, Pierre Omidyar of eBay, Gabriel Weinberg of DuckDuckGo, and many more.

Also in a recent study of all unicorn startups in the US, 20% of all billion-dollar startups had a solo founder.

So what is all the fuss for requiring startup teams to have a cofounding team of 2-3 people and whether you need a co-founder.

And, the big question is “single founder vs cofounding team”, which is better?

 

When you should get a cofounder

With two or three founders instead of just yourself, your set of skills is inherently broader. Reid Hoffman points out that with more than one founder, you can compensate for each other’s weaknesses and attack a wider set of problems.

A study by Startup Genome shows that solo founders take 3.6x longer to reach the scale stage. Going it alone can help keep you focused, but if you need to scale quickly, you might find the solo path difficult.

Much emphasis is given to businesses with multiple founders, especially among the VC circle. Conventional wisdom suggests that your startup needs a co-founder. We hear it often. Accelerators and venture capitalists (VCs) love founding teams.

As a starting entrepreneur, you will need people to play most of the following roles in your startup.

Also, read our related posts:

Roles in a startup

The Marketer: When we think of great teams, we immediately identify the person who takes the role of lead evangelist and engages people. The Marketer excels at communicating and knows how to engage customers.

The Engineer or the Hacker: Many startups have a technical founder/co-founder. A strong scientific and/or technical background means the Technical Engineer often takes the lead on the development of the product/s.

The Business Developer or Hustler: The Marketer can weave the message that captures their attention, but the Business Developer closes the deal. A charismatic personality gets people to commit their money and attention to the startup. Most founders discover some of this element in themselves.

The Domain Expert: Much like the Technical Engineer, your startup needs someone that knows the space, but with a different perspective. The Domain Expert offers experience and industry knowledge other founders lack.

The Creative or The Designer: You might think of marketing when you think of the Creative role, but it goes beyond taglines and logos. The Creative co-founder can visualize the possibilities and translate the vision into wireframes for the Technical Engineer to build or code. This co-founder brings a much-needed design perspective to building and launching your product/service.

It’s assumed that one person can’t do it alone, but that assumption creates a paradox. While two people may share a vision, many a startup idea came from one person whose vision and drive then attracted others to the startup.

Among investors, you’ll find a general bias against startups with only one founder. It’s assumed that one person can’t be excellent at marketing, sales, technology, and running the business simultaneously. Based on these realities, if you plan to pursue outside investments, you may get taken more seriously if you’re joined by a co-founder.

That said, the push for a co-founder often comes more from investor fear than legitimate concerns about a single founder’s abilities. I’ve looked at many companies with single founders, and with co-founders. Both options come with positives and negatives.

A VCs job is to minimize risk while making investments. Of the many risks a startup faces, single founders add a bit to the risk.

should i get a cofounder

By remaining solo founders, they take a much greater risk than he did that their startup will either fail to reach its full potential or just fail outright. For example, they may prioritize a need for control over growing a more valuable company, or, in their overconfidence and their passion for the idea, they may underestimate the need for help.

According to Paul Graham, ‘VCs care more about not having a single point of failure than exact cofounder founding situation or economics’.

Startups are hard. 90% of startups fail. Investors want to be assured that as a single founder, you have the mental strength and persistence to go through the emotional journey over the next 5-8 years. Which is why they have questions like how come no one is willing to team up with you? Do you have all the skill sets required for the business? What happens if you get sick or worst, what if you die? What if you are not motivated to continue running the business?

A cofounder can help you

  • As a friend who you can hang out with or have an occasional beer with
  • run the business if you are sick or on vacation
  • By filling in gaps in the business
  • By taking a lot of work off from your shoulders
  • As a cheerleader

When should you go alone as a single founder?

If you are someone who can juggle the thousands of moving parts in the company, you may have all the attributes of a solo founder.

According to Paul Graham, “Fights between founders are surprisingly common. About 20% of the startups we’ve funded have had a founder leave.”

You can build your venture as a solo founder if you fall within the following cofounder disqualifiers:

You have all the necessary resources

You have all the resources necessary to get the business going on your own. If you can fulfill most of the essential roles in a startup there is no need to hire a cofounder. If a co-founder can’t add any value to the business, there is and reason to add a cofounder.

You want to be King

If you want to keep full control of the company, it’s a good reason to be a solo founder. If you don’t want to give up equity in your startup, don’t. A lot of cofounder conflicts happen over equity and control so as a single founder you won’t have to go through such issues. Also, it’s not like you can’t hire a cofounder in the future when you are more flexible in terms of what you want to achieve for the business and what you are willing to give up.

Decision making assessments for startups

You are not a team player

If you know you are not a team player, you might be better off growing your startup with a team of employees rather than a cofounder or partner.

You don’t have anyone in mind

Not having a cofounder, doesn’t mean you should search for one. If you look at successful teams, there is a common pattern among co-founding teams. Members of the team know and understand each other before they decide to startup.

Most successful cofounding teams include couples, good friends, colleagues who have worked together in the past, siblings. The commonality here is founders know each others’ strengths and weaknesses and are comfortable in working with each other.

 

If you are still confused about whether you want to run the business alone, or with a cofounder, ask yourself the following questions.

  1. Do you believe you should have the final say in all important decision making?
  2. Do you have the ability to gather and process complex information?
  3. Do you have sufficient capital to start on your own?
  4. Do you have all or most of the skills required to found a startup?
  5. For the skills you lack can you learn them or hire employees or freelancers?
  6. Do you like to work individually vs as a part of a team?
  7. You haven’t found someone or don’t have anyone in mind who would want to join you and give you moral, emotional & intellectual support?
  8. You are not ok with giving up equity in your business?
  9. If you are just starting out, it will take you more time to scale. Is that ok with you?
  10. Are you looking for a cofounder only to raise VC money?

If your answer is a ‘yes’ to most of these questions, you clearly don’t need a cofounder.

In the end, no good VC will reject you for being a single founder as long as your business has traction and you have built a great team as a solo founder.

Whether you decide to go it alone or add a co-founder, it’s good to know your role on the team and the team elements you need to add. Which Member of the Startup Team Are You? Begin by asking yourself:

1. What skills do you bring to the table?

2. Within those skills, what do you prefer to do?

3. Do you have the technical background to build your product or service?

4. Do you know the industry that you are starting this company in?

5. Which area of the team mix do you have the least amount of experience in?

And then, if in your journey you come across someone who you want to partner with, ask them the same questions.

FAQ – Single Founder vs Co-Founding Team: Which is Better?

Q: What is the biggest cause of failure among startups? A: The biggest cause of failure among startups is a lack of product-market fit, followed by conflict between co-founders.

Q: Why is dealing with people a significant challenge in businesses and startups? A: Dealing with people is a challenge because it involves managing internal teams, external stakeholders like customers and investors, and increasing complexity as the company grows.

Q: Are single founders or co-founding teams more common in successful startups? A: Many successful startups have been founded by single founders, but a significant percentage of billion-dollar startups in the US have co-founders.

Q: When should I consider getting a co-founder for my startup? A: If you need a broader set of skills, want to compensate for weaknesses, or aim to scale quickly, having a co-founder can be beneficial.

Q: What roles are commonly found in startup teams? A: Startups often need roles like Marketers, Engineers, Business Developers, Domain Experts, and Creatives/Designers to fulfill various responsibilities.

Q: Why is there an emphasis on having co-founders in startups? A: The startup ecosystem, including accelerators and venture capitalists, tends to favor businesses with co-founding teams due to the belief that diverse skill sets and shared responsibilities increase the chances of success.

Q: What are the risks associated with being a single founder? A: Single founders face risks such as being perceived as having limited capabilities, concerns about a single point of failure, and the need for mental strength and persistence over the long journey of building a startup.

Q: How can a co-founder help in a startup? A: A co-founder can provide support, share the workload, fill gaps in the business, assist in decision-making, and act as a cheerleader for the founder.

Q: When should I consider going alone as a single founder? A: You may choose to be a single founder if you have all the necessary resources, want full control of the company, are not a team player, or don’t have anyone in mind for a co-founder.

Q: What should I consider when deciding between a single founder and a co-founding team? A: Consider factors such as decision-making preferences, skills and resources, willingness to give up equity, ability to work individually or as part of a team, and availability of moral and intellectual support.

Q: Will being a single founder hinder my chances of securing venture capital? A: While some investors may have a bias against single founders, if your business has traction and a strong team, being a single founder should not be a significant obstacle in securing venture capital.

Q: What should I know about my role and the team elements I need to add in a startup? A: Understand the skills you bring to the table, your preferences within those skills, your technical background, industry knowledge, and the areas where you have the least experience. These insights will help you identify the roles you need to fill.

Q: What questions can I ask myself to determine if I need a co-founder? A: Ask yourself questions such as whether you want the final say in decision making, if you have the necessary skills and capital, if you prefer working individually or as part of a team, and if you have found someone to provide support and join you.

Q: What questions can I ask a potential partner to assess co-founder compatibility? A: Ask potential co-founders about their skills, preferences, technical background, industry knowledge, and areas where they have less experience to evaluate how they align with your startup’s needs.

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