Perhaps the first question you have when starting a startup is, should you find a co-founder?
After helping thousands of founders start companies, our recommendation is a clear yes.
If you want to start a company, we’re almost certain that you should find a cofounder to do it with you. There are three good reasons for this: almost all successful companies are started by teams; it’s a better founding experience to have a team; and successful solo founders are a special kind of beast.
Almost all successful companies are started by teams.
First, almost all successful companies are started by teams. External data suggest about 80% of billion dollar startups are started by more than one person. Over the last decade at Entrepreneurs First, we’ve seen thousands of people try tens of thousands of teams, and our internal data is even more pessimistic on solo founders. Of the thousands of founders we have worked with, we can count on one hand the number of people who have gone on to have success as a solo founder.
It’s a better founding experience to have a team.
Second, it’s a better founding experience to have a team. Going it alone is an enormous emotional and practical burden. As Paul Graham, cofounder of Y Combinator, has said, ‘a startup is too much work for one person.’ Worse, doing some things alone makes the same task even more difficult.
For example, raising investment. Although we hope everyone we select finds a cofounder at Entrepreneurs First, combining exceptional people is a human process which can’t work out perfectly every time. So, in every cohort of founders we work with, a small number of people don’t find a cofounder and decide they want to start a company alone anyway.
When we then decide whether we will invest into their company, an investor panel helps us make the decision. Almost always, these solo founders are unable to convince the investors. Most investors have the experience or the bias that solo founders won’t work out. If you can’t convince someone to work with you, why should they invest? Whether this is right or wrong, it’s reality.
Successful solo founders are a special kind of beast.
Third, successful solo founders are a special kind of beast. Because investors are so biased against solo founders, and the solo founding experience is so difficult, the solo founders that do raise investment tend to do quite well.
But there is a selection bias in the data. It’s easier to start something alone – you don’t need to convince anyone to help! If all else were equal, with one less hard task to do, we’d expect most successful companies to have solo founders. But they don’t. If you can get to the point where you are a funded ‘solo founder’, observable in the data and making progress alone, you’ve already gotten further than almost anyone else can. You’ve demonstrated you’re beyond exceptional, so it’s no surprise you do quite well after that. And if you can do that, we wonder what you can do with the right cofounder.
So why bother going solo?
Practically speaking, going solo is making an extremely improbable and difficult challenge – starting a successful company – even more improbable and difficult. If you are the kind of person that would deliberately choose to reduce your chances of success and make your life harder, you probably wouldn’t be reading this now.
In our experience, for almost everyone, the right cofounder improves your personal outcome far beyond what you could achieve alone. Ideally, both you and your cofounder each more than double the value of your equity. A successful serial entrepreneur once put it to us that the perfect set-up is where each cofounder feels the other is a little bit better than themselves.
So, even if you could start a company alone, why bother finding out? Just find a cofounder.
Convinced? Read more on how many cofounders you need.