Sole Survivors: Solo Ventures Versus Founding Teams

#1

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3107898

Quoting just the last half of the abstract of this research backed paper:

We show that companies started by solo founders survive longer than those started by teams. Further, organizations started by solo founders generate more revenue than organizations started by founder pairs, and do not perform significantly different than larger teams. This suggests that the taken-for-granted assumption among scholars that entrepreneurship is best performed by teams should be reevaluated, with implications for theories of team performance and entrepreneurial strategy.

I’ve founded solo and founded in a team of two. Both went very well in terms of no-fighting and great long term cohesion. Neither went great in terms of revenue. (But I’m the common factor there so I shoulder the blame.)

What do you think? Solo or team?

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#2

The biggest challenge with solo is being a single point of failure. I spent 8 years as a solo founder before selling the business. If I had a co-founder involved in the day-to-day, I might not have sold it. At the same time, dealing with health issues for the better part of two years, a co-founder may have harbored some resentment during the times I was less able to carry my weight.

There’s risks with both approaches, but in hindsight, I believe it’s more possible to mitigate the risks as a solo founder than to do so with a team. As a solo founder, as long as you delegate and outsource and put the right controls in place so the business can run seamlessly without you, you’re in good shape. The catch is that it’s hard to see that your first time running a business.

  1. Get help with support. It’s not easy to hire someone part-time, but it’s huge for your ability to stay focused on your most important work.
  2. Get a bookkeeper or book-keeping system in place so that it can happen effectively automatically without your involvement.
  3. Have a developer/sys admin on retainer to back you up so you can step away from your computer and alerts without guilt and so that there’s someone who is capable of stepping in at a moment’s notice to back you up.

In hindsight, I’d say my failure to invest more deeply in these three areas was what led to selling. I was trying to shoulder too much of the burden. Once health issues got mixed in, I simply didn’t have the framework to keep things chugging as well as I would have liked. But I believe that it’s entirely possible to build that framework if you’re aware of its importance.

I thought I was doing well as I had done all three of those. I just didn’t do them well enough. And, I should add that I probably wouldn’t have recognized all of this without having gone through due diligence with two different buyers over the course of selling.

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#3

Wow Garrett, really insightful and personal journey.

I’ve held off on doing solo SaaS offerings because support would be 24/7, where as with desktop software you automatically scale onto everyone’s machine so it’s (almost) impossible for everything to be down at once. No big scary moments.

Recently I heard Jason Cohen (a smart bear) on a podcast say the best number is two, followed by one, followed by three. (And it depends of course)

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#4

Support can vary drastically. For me, it was never too bad, but I’ve heard plenty of stories from others where support can consume half of the day every day. So I think a lot of that has to do with documentation and striving to make improvements that reduce support.

I’d have to agree with Jason in general, but I think for some people, one can work better as long as you mindful of and make efforts to mitigate the risks.

I’ve found that the ideal number of founders is–in order–two, three, one, or four. I should mention that two and three are almost dead even in terms of benefits and drawbacks. The benefits and drawbacks of these options revolve around workload, communication, risk, and tie-breaking.

From: https://startingandsustaining.com/chapters/team/

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#5

After a number of companies with co-founders I decided to start one alone and try to be completely independent. So far it’s going very well, but there are downsides, too:

  • Marketing suffers, because there are only so many hours in the day.
  • There is no one to talk to, so sooner or later problems with anxiety and depression will catch up with you. From what I’ve heard, this is a very common problem with solo founders.

I can see why common knowledge is that solo founders are less successful than teams: it is obviously harder to go at it alone.

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#6

This is good. Just having someone to share the anxiety and the decisions, and the ups and downs, would make it worth having a second founder.

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#7

While solo-founding is definitely harder, we are moving closer and closer to the day when a single -very busy- person can do it all.

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#8

no one to talk to

I have a sweet arrangement at the moment, where another solo founder (Richard Mason from https://www.aussiebushwalking.com/) sends me an email every week where he describes what he’s done on his project in the last week and what he intends to do, and I reply likewise.

We’ve both found it really helpful at keeping our projects on track. He’s been sending those emails every week for the last 6 months. It keeps reminding me of a saying like this, attributed to Bill Gates:

Most people overestimate what they can do in one week and underestimate what they can do in ten years.

(the first figure in that quote was originally ‘one year’ but i think our over-estimating shows up in much smaller time frames)

I think if we keep at it, we’ll see big improvements in time.

Something else I’ve been doing, to ease solo-stresses, is more intentional Rubber-Duck-Debugging. You know the thing where you explain the problem very carefully to a rubber duck (or other inanimate object) and by describing it clearly the solution becomes apparent? I’ve been using “gentle and persistent questioning” of myself – in single player mode! – to get solutions to little things that I thought were impossible.

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#9

I put significant effort into communities online and a local peer group. I had a co-founder and he bailed on me before we shipped the first version (long story best consumed with alcohol).

So I’ve consciously scheduled time and made sure I’m maintaining a presence on the Slack group for a local startup community. That’s led to a few people with whom I have mutual support and we can be brutally honest, especially when down. That has helped a lot when we had to deal with a recent suicide of a local developer, who was an active community member and even more of a loss for me as I counted him as my best friend (one of those late-in-life-just-clicked friendships of a few years duration).

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#10

Andy… just… wow. That’s really rough, too rough for words.

The bit you said that having contacts you can be brutally honest with is important. If you use public social media for engagement it lacks the kind of honesty that you get from one on one private connections with people. Having peers who understand your struggles is a good thing when you can find it.

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#11

Best thing when you’re solo founder is no energy or time are spent on communication, discussion or persuasion, you can immediately implement whatever is needed.
Worst thing is you can very quickly and efficiently implement things which are not needed at all or which could be made much simpler, only if second pair of eyes took a look at it :grinning:

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#12

Thanks @Leon . It was never clear to me why a team should be better than a single founder in general.
I can imagine that the experience in an accelerator, where the founders are “locked up together” delivers a different dynamic than a founder who needs to go out and hire help.

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#13

sounds like the basis of a SaaS to me! And a very productive way of 1)being accountable, 2) improving your estimating skills, 3)keeping focused. Is there a set format to these emails?

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#14

Absolutely!

We were talking about related issues a few months ago at a physical meetup I get out to regularly (eGroup, for any Perth people reading) which is mostly older, very experienced “digital business” folk. I’d just read one of Brad Feld’s postings about depression and we were discussing if as a founder you’d feel safe publishing anything as honest. The consensus, actually unanimous, was that you’d talk about this in such local groups but anyone well below Feld’s status should avoid broadcasting such weaknesses.

#15

Yeah. Like a mastermind group, but over email.

Not sure it worth automating tho. A private forum thread would work just fine, methinks.

#16

+1 for in-person meetups with other business owners. Especially if you can share sensitive info and talk openly.

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#17

SaaS with a human touch probably - someone with UX and marketing experience at the other side willing to hold your hand while you go the slow way …