Instead of looking at "% of successful exits that had n founders", it seems more relevant to look at "% of startups with n founders that had a successful exit".
Without knowing the distribution of startups with 1, 2, 3, 4, 5+ etc founders, it's hard to tell how much more/less likely each group is to succeed.
Not sure this even matters that much. What matter is YOU.
Who cares if 12% of solo founders make a successful exit, vs 14% of two founder companies. If you are a lone wolf and want to work alone, you are going to fail if not alone. If you are a social thinker and hate working alone, you would be silly to form a solo startup.
What if you're a lone wolf, and you discover 20% of duos successfully exit and 0.1% of solos successfully exit. Perhaps that is your come-to-jesus moment.
but what if you cant find anyone, or you too introverted to find anyone to work with, I'm very technical, but find it extremely difficult to speak with them, often im asked by others to just make something for them and thats it.
Having a hard time convincing someone else to work with you/on your idea, being excessively introverted, etc might be some of the underlying factors that might lead to a 200x difference in success likelihood in the posited, hypothetical case.
knowing that startups located in city X have .1 success rate compared to city Y, tells you where to start. Or at least, it makes you wonder what makes Y more succesful, is it VC? talent? etc...
I agree, I don't think this really matters to the individual startup (in that there are probably much stronger factors for success than # of founders).
But it may matter for investors looking at things with the opposite perspective - for example, is it a good/bad heuristic to ignore companies with 5+ founders?
Agreed. When they say something like 90% of all new businesses fail, that doesn't mean you shouldn't start a new business, it just means a lot of stupid ill prepared people start businesses and fail. Which has absolutely no bearing on YOUR chances of success.
> Instead of looking at "% of successful exits that had n founders", it seems more relevant to look at "% of startups with n founders that had a successful exit".
I came here to say exactly this. The entire article appears to misunderstand conditional probability.
Also would be interesting to see exit cash per founder. For example, do co-founders make more money from their exits than solo entrepreneurs? One big downside to talking on a co-founder is that we have to grow the company to be twice as big/profitable than if I started it myself. Although, maybe solo entrepreneurs take more funding and give up more equity as they grow -- would be interesting to see the numbers on it.
Not really, there isn't enough information in the graphs to make that kind of claim. You can say that 45.9% of startups that raise $10m have 1 founder, but unless you know percentage of startups that have 1 founder you don't know anything useful. Maybe 50% of all startups have 1 founder, in which case 1 founder startups are underperforming.
If 99.9% of all startups have 1 founder then the numbers for everything except 1 founder startups look incredible.
Companies raise money before an exit, never after. Thus you can look at the difference between the share of the companies raising money, and the ones exiting.
It's not very reliable, and it may not generalize well. But it's something.
You know, I'd venture to say the vast majority of businesses are started by one core person. One person has the idea and convinces others to follow. That's the most important metric to look for, can they create a team, can they convince others, etc.
Personally, I've started projects alone and with others, but by far all my most successful businesses/projects (one of which I'm applying to YC with) have been initialized by myself, and then I brought in others as needed.
Unfortunately, that creates some issues. For example, my most recent partner had to step back for personal reasons. Now, the question is - does that look bad? Now, I'm in an even weaker position because it looks like I failed to convince them the project was worth it, or we had a falling out. Neither of which was the case, we're still good friends, we just had different priorities and risk / reward levels.
Now I'm again a solo founder, searching for another partner. I know I could use one, which is why I'm doing it. There's a lot of work, and I'd move faster with help. I feel that's the only time I'd search for a co-founder going forward.
I kind of doubt people can bring people in just to increase fundability. They still have to be convinced and provide value.
I'd venture to say the vast majority of businesses are started by one core person
On the other hand, we as humans have a well known desire for one person to pin everything on. A 'hero fallacy' if you will (I'm sure there's a better term). Thousands of invested engineers didn't make the iPhone, Steve Jobs made the iPhone. Millions of troops and five countries didn't win WWII, General Patton did. A series of brilliant collaborating scientists building on the shoulders of giants didn't invent nuclear fission, Albert Einstein did. Turing cracked Enigma, nevermind the Polish cryptographers whose work he built on. Can you even name half of The Traitorous Eight?
The list of examples where we pick one name to worship from a large enterprise of many deeply involved individuals is very, very long.
So, maybe it's good to discount a perspective that identifies one single person as the complete nexus of success for any particular enterprise.
Second this. For personal reasons, I am also now again a solo founder. Sometimes having a team is great but the timing may not be right.
I do agree that what's more important is the ability of one core person to convince others that it's worth their time and energy to execute on the idea. The execution part is the biggest challenge - everyone wants to do a startup but whether they can survive the marathon while dealing with everything else that goes on is another story.
I always feel that when I read these articles that the author is referring to a "single founder" as a hacker banging away at their Uber for Skateboards node or Rails app, as then applying the success of someone like Bezos, as if he built Amazon in a glorious one-person hackathon.
These types of article often list Jeff Bezos or Frederick Smith (Fedex) as examples. These guys were already millionaires when they started their company, I don't think they should be counted. There are enough solo startup founders who started from scratch in their kitchen/bedroom/garage, if look for them. No need to list less relevant cases IMO.
He was most certainly a millionaire and so we're his grandparents who owned a 25,000 acre ranch in Texas. Jeff had a silver spoon in his mouth from birth just like many other successful businessmen.
I see a lot of people questioning who is a solo founder or not.
To me, a cofounder is someone who has enough equity to veto your decisions if they don't like them. Everyone else is an employee, whether compensated in cash, equity, or thank yous.
Most of the objections I see here are, "well, they had a support group of X and Y".
No one does it alone. The issue is whether you have ultimate authority (and therefore responsibility) for the success or failure of the company.
I'd say everyone on the list of solo founders was personally responsible for the success of their company.
An anecdote to support this: not every business I've started myself was successful, but all the successful businesses I've started were without partners. On the other hand, every business I've started with one or more partners has failed.
But you're the one that chose the partners: maybe that's your weakness. Regardless, your personal anecdote is not a good metric to evaluate solo foundership.
Well that's the problem with this kind of analysis. While there was officially just one founder, Drew had his friend with him, Jeff Bezos his wife. Not exactly sure if this analysis makes any sense. No one can build something like Amazon by himself, so at one point people are hired and of course they have an influence on decision making, so the solo part vanishes real quick.
Yes, they stop being pure-solo quick, if successful, when they're already a "started-up". Very early stage funding is at an earlier phase.
I'm curious about how successful a start-up can be, before adding anyone. [problem: founders who want to grow will do so ASAP; founders who don't, won't publicise their niche and we won't know about it]
Does Minecraft count as a "start-up"? With a billion+ dollar exit, it should be a "unicorn". I think Notch was solo for a very long time.
A friend or a partner is not the same as a co-founder. If investors were saying they didn't fund solo founders who lack a support system, that would be different. But instead they say they don't fund solo founders.
Of course you cannot build Amazon on your own. The difference is whether you have the type of friends who can work for free for a year while they co-found a business with you (and would be interested in doing that), or whether you are capable of filling the second-head gap with a good hire.
FWIW, pg said that one of the reasons Drew was accepted was because he said in the application that finding a cofounder was a top priority.
That's a bit of a cop-out, since anyone can say it's a top priority on their app. Except not really: Drew was from MIT, and therefore had a large pool of potential cofounders to select from. Most people don't.
It also feels true to say that YC was more squeezed for talent back when Drew applied. Nowadays YC can afford to reject startups for not having two cofounders from the start, especially in borderline cases.
As others have noted, the solo founder list is filled full of people that had immense help from other people, typically from day one.
For example: Henry Ford
He had half a dozen people building his first vehicle for him, most of them contributing their time to help at no cost, while he directed the implementation/vision/ideas. This is the first version of his quadricycle vehicle [1] he built in his little shed. Ford did some early experimentation work on his own, it wasn't very long however before he invited some extremely talented specialists to join in helping him, just to basically see if they could all pull it off. Ford had a high talent for gathering skilled specialists to follow him (messianic leader, he managed to do it throughout his career), all of which were better at specific tasks than he was (whether blue print drafters, or metal workers). Solo founder? Ford Motor wouldn't exist without Ford and it wouldn't have existed without the critical day-one contributions of those particularly talented people (some of which stayed with him for many years). When Ford built the Model T, he pulled together a very small team of hyper talented people just like with the quadricycle, and they did the actual work / implementation, while he played general (to take nothing away from that role, it's at least as critical as the other roles).
How hard is it to get into YC as a single founder? I'm pretty sure I could easily find a cofounder, but I'm not sure if I actually want to. I'm also not sure if I want to join an incubator, since bootstrapping and going at my own pace sounds nice.
The post mentions startups running afoul of minimum wage and overtime laws. The linked PDF mentions that anyone who owns at least 20% of the business can be considered an exempt executive. How exactly do startups wind up running afoul of these laws? The minimum pay is under $25k/year, surely if the startup is covering each founder's living expenses, then it shouldn't be too hard to meet that especially with vesting stock.
If your plan to grow your company by begging for money then you need have a co-founder: you need to convince somebody to work for free. That is first step toward convincing VCs to give you money.
If your plan to grow your company is thru business (actually making something) then having co-founder is not required: you can hire senior people since you are solving real problem.
Google for example could probably work with one person, but what would happen is that Sergey and Larry would have ended up inventing their own search engine companies and competed strongly with one another.
It wouldn't end up even half the size if it wasn't two equally intelligent cofounders working together. That's a huge advantage of the co-founder system: you absorb your competitor instead of fighting them.
The myth of the solo founder. I would venture that every founder has a support system that tangibly enables a business venture, whether it be family or peers or mentors.
In my opinion, VCs prefer their investments to have more than one founder because teams are generally easier to manipulate / more willing to compromise. Solo founders, almost by definition, are going to be much more gregarious and stubborn. That doesn't equate into investor board control, which can cause issues down the road (see Uber)
Then, there's the silicon valley religion of idol-worship. Whatever Paul Graham, Elon Musk ... say must be true, and hence canon.
Ironic for all the AI, machine learning, data-science toting startups to go in the exact opposite direction when it comes to canonizing obvious non-science.
Without knowing the distribution of startups with 1, 2, 3, 4, 5+ etc founders, it's hard to tell how much more/less likely each group is to succeed.