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19 Comments

Businesses launched by solo founders are more successful than those launched by multiple founders (research)

  1. 6

    This is a very interesting read and flies in the face of the common wisdom that usually teams with >1 founder become successful. YC for example rarely funds a startup with a solo founder. I thought their logic was that they saw more startups with >1 founders to be successful (or become a unicorn?). I wonder, if it's partly the case that the startups with a solo founder raises less/no money, and has a higher staying power as they are financially not at their VC's mercy?

    If anyone is interested in the original research paper, I fished out the link from the posted article. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3107898

  2. 4

    Super interesting article/study. My theory on why co-funded companies are highly looked at by VCs and investors is simply because it suits better the VC business model.

    Why? 3 main reasons:

    1. with a co-founder you have checks and balances on an ongoing basis - so it could be a leading indicator that the founders have an easier personality to deal with for investors, partners, etc.
    2. It mitigates the risk exposure of investors on key man risk
    3. solo founders usually care much more about equity protection which is obviously challenging for the VC business
  3. 3

    While the findings described in the article indeed may be a surprise as they go against the mainstream belief you are better off with a partner than solo, I made several attempts over the years to start with a partner and eventually decided if I ever try again it will be a solo endeavor.

    My current side project is a single-founder venture and I find more empowered and vested than with a co-founder, making decisions much faster, and if need to run some ideas/challenges to get perspective I am finding working with quality contract developers or product managers gives me much better results as I'm able to gain multiple perspectives vs one.

    I also believe the risk is lower than partnering, although I do need to work much harder at motivating myself to finish the tasks as there is nobody else pushing me to do so.

    1. 2

      Research shows that while investors prefer co-founders, investing in solo founders can be highly profitable.

      Solo founders like Sara Blakely of Spanx have proven to investors that solo-run companies are worth funding. I am positive that many smart investors are rethinking if they should continue to focus solely on founding teams. Like it or not, solo-founded companies can be more successful than founding teams. Investors should consider this.

      If anyone is interested, our team at TinySeed just wrote a data-driven article on this topic. Would love to know your thoughts! https://tinyseed.com/latest/founding-team-vs-solo-founder

  4. 2

    Is it the case that solo entrepreneur became "solo" bceause they already have the reosurces they wanted and didn't need support from other co-founders?

    1. 2

      It is missing a lot of other information about the companies. Just solo or not, plus filtering out 2/3 of companies for not seeking a 'meaningful' amount of outside funding. The stat I always look for is companies using 'family' money, they are a huge confounding factor for those of us who can't ask uncle bob for a few 100k

  5. 2

    Interesting, especially as a solo founder considering partnering with a cofounder 🤔

  6. 1

    Someone decided to mention ETFs, and it immediately caught my eye. As a cheapskate, I can say that such investment funds are not always a good cushion for trading. My advisor continuously monitors my investments. He represents my interests and offers comprehensive services integrating financial planning, which I am pleased about. The fund, called ETF Engine, will invest in consumer, energy, financial services, health care, technology, and utilities, according to regulatory filings (from last month). That kind of spending may be acceptable if you know how to handle money right. But the fund aims to drive transformational change, not encourage people to save. http://www.mcgeewm.com

  7. 1

    To begin with, estimate at what price you will sell your product. Estimate the approximate cost of the product, analyze at what price your product will be willing to buy. Remember that you have to cover all costs and make a profit. It is essential not to make too hefty a markup on your products or services. Otherwise, there will be no demand, and you can go broke. Focus on the market. Think about it, maybe you still need a warehouse or office. If you are going to sell exclusively online, then think about delivery. Ideally, you should also understand the customer's problems and desires, their behavior and character characteristics, and imagine situations where they might need your service or product. I would advise you to read the achievements of a successful businessman https://www.edocr.com/v/5bveekw5/talbotorm/neetish-sarda-father-ghanshyam-sarda-a-successful-, it will motivate you to succeed.

  8. 1

    I agree in some ways but in some situations you need a partner to run your business also there are so many disadvantages visit finance website page to take guide about it.

  9. 1

    Such a relief. I can use this when investors not ready for solo founder :)

    1. 1

      Your secret weapon :)

  10. 1

    As a founder who just survived a wrong co-founder problem, I would say that someone should really come out to solve this problem. Solo founders have better luck!

    Well, I was lucky....I found a new co-founder that keys into the dream.

    Here are a few lessons I learned:

    1. Brothers/Sisters? Friends? Make sure each of you have something to lose financially and morally for falling out. The best way to know this is to make sure you choose to partner with your head and leave your hearts out the window.

    2. Financing? Expertise? All of you must provide a bit of both. Startups are all hands on deck drills. There's no room for bosses. You're all interns until you make it.

    3. Side or Main Gig? This is a tricky question but it's got a good answer. Here's how I would answer it. The more money you bring, the less you should be involved. Using this equation, you can decide whether the person bringing more money is hiring others or you're all grinding together. If funding should pay wages, let it be clear in the terms.

    I suffered very serious pain of loneliness from being the only person working in a team of 3 people but I worked to prove viability to a significant other. Now, the first 2 people have gone, we (the new person & me) are just getting started, equally involved.

    I hope that YC gets to know that these things happen in countries that the law is not very easy to uphold without political assistance. I didn't do any of that though. I was lucky!

  11. 1

    Interesting article. Glad that success in solo-preneur is somehow proven. I guess the key is you can't have too many decision makers which will end up in arguments, debates, procrastination and count...I have seen those in real life...

  12. 1

    Looking for a co-founder right now, this is very timely.

  13. 1

    Thank you for sharing . As a solo founder, this really got me going .

  14. 1

    Interesting post!

    Having failed with my first startup attempt, I can relate to some of the points mentioned in the study; especially around decision making. Group decisions almost always take more time. Also, we often end up reaching consensus rather than making the best possible decision at any given time. Of course, it varies a lot between founding teams, experience, background, etc

  15. 1

    Nice to know since I'm a solo founder

  16. 1

    This comment was deleted 2 years ago.

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