To solo found, or not to solo found a startup, that's the question
One of the biggest and earliest challenges of founding a startup is finding the right co-founders. The stories of exploding teams are numerous. At the accelerator where I work, these situations happen all the time. People come in with co-founders unwilling to work, or that have opposing views on the direction of the product, or the methodology. These can be technological - technical co-founders can get stuck on one specific technology (we call it "religion" in the tech world, when someone becomes completely irrationally focused on one technology). Or it can be a difference in motivation - one startup founder has quit his job, put all his money savings on the line, and the other one still has a cozy full time job that he has no intention of leaving.
The technical co-founder dilemma
There are numerous examples of these co-founder teams that didn't work out. The question is, is it better to go solo? They exist, of course, startups with a solo founder - about 15% of them, actually. But there are often overriding reasons why not to become a solo founder. One example of that is when you don't have a technical co-founder, you can't build a prototype (unless you have the money to hire someone or an outside company). Without a prototype, at least in Europe, getting any type of funding is nearly impossible, so without either a technical co-founder, or some of your own money (or a round of love money), you're pretty much stuck.
Criteria for founding a startup
You can judge the viability of a new startup by using the three types of capital.
Human capital - are all the skills and knowledge that are required available in the team? The skills that are required are pretty diverse, from hardcore coding to sleazy sales, with everything in between, such as marketing, deal making, operations, and finance. In addition to that, you need to understand the industry youâ€™ll be building your product for. This is called 'domain knowledge'. Does someone in the team know about this? If you build a CRM product for clubs, does someone in the team know the club world?
Social capital - this is all the contacts, connections and networking that someone brings to the table. To recruit, sell, make partnerships, you will need to know the right people. Is that you? How many connections on your LinkedIn profile?
Financial capital - this is the money, or other financial resources you bring to the table. Do you have €50,000 euros in the bank? Excellent, that will jumpstart a startup these days, with the low cost of setting up a web application. But it doesn't have to be money. Can your spouse support you for a year? That means you can forego a salary, so you can be unpaid, allowing you to spend all your time on the project without having to do distracting money-making activities on the side.
Reasons to go solo as a startup founder
Let's go through some of the motivations for startup founders to go solo.
- All forms of capital (human, social, and financial) are available. This is not common for younger founders, but it's always possible.
- The potential of the startup doesn't support multiple founders.
- Control - Are you a founder that values control over value? (see my previous article). In that case, going it alone can beÂ very appealing - no one can take control away from you. At the same time, this can be a red flag for investors - control founders are a less attractive investment.
- Efficiency of decision making - if you have a collaborative decision-making structure with multiple co-founders, this can slow down decision making. Alone, this is obviously not an issue!
- Prefer to work alone. Some people are just at their best when they work alone. You know who you are! Stop fighting it!
Reasons to found as a team
- Missing capital. Missing human, social, or financial capital is usually a showstopper. Assess carefully as part of your decision.
- All capital is present, but the amount of work is simply too much for one person. People have romantic visions of late nights at the office,all nighters worked, but the reality is that people that are tired are terrible performers and decision makers. A programmer that has worked for 10 hours, and works for another one, often ends up creating bugs in that last hour that take 6-12 hours the next day to fix. So not only was that hour useless, it was worse than that, it required additional time to undo the damage it caused! So often times, the amount of work is simply too much. Don't be proud. Especially in time critical markets (late entry) this is a sensitive issue.
- Dislike of certain skill. If you can do something, but you REALLY hate it, this can be another reason to find a co-founder. You can try to force yourself to do this task you hate, but will that work? Long term? Although this should not be taken to an extreme - don't make your bookkeeper a co-founder.
If you're alone, and you can't find additional co-founders, and you're missing critical capital, the smart thing to do is not to found, however frustrating that may be. When should you found solo? When all the capital is present, and when none of the showstoppers are there. Finding a good co-founder, difficult as it may be, is the best way to go most of the time. But maybe you are one of that 15% of startups that go it alone? Now you know how to determine it!