Go Solo, or find help? Pitfalls for Solo founding and Co-founding
Become a solo founder or enlist co-founders? Pitfalls to consider on both sides
Only 16% of startups stem from solo founders [Wasserman, 2012]. This should tell you a lot about the perils and perceptions of solo founding, but don’t let it dissuade you from considering this path. The reason most people do not create a startup by themselves is that they are missing some form of capital, whether it is social, financial, or skill-based. They use co-founders to fill in gaps that they are missing to make a stronger team and core concept.
I am going to walk you through my experience as a solo founder and why I didn’t endure the same pain that many others do. I will also dive into the experiences of co-founding.
Sometimes you unintentionally go it alone. I don’t have a technical background, but because of my experience consulting for small businesses and working in a large corporation, I know and understand how to operate and scale a company. I have extensive experience in sales, management, and — through stretch assignments — operations. I know absolutely nothing about the technical side of running a technology startup.
So how in the world did I, initially, solo found a tech company? Well, I had resources.
VC’s, entrepreneurs, professors, and anyone in the startup world repeatedly discuss that the most important part of any startup is the team. If you have a great team, you can accomplish anything.
They aren’t lying. Your initial idea is useless as it will evolve continuously. It will morph and change as you encounter more interactions with customers and users. When I came up with Spark xyz, my initial thought was: if my idea is almost useless, how do I attract the best talent? Sure, I could sell people on an idea, but what type of talent am I going to attract and hire? If I build a Minimum Viable Product (MVP; essentially an early, barebones version), I will have something to showcase when recruiting, and I’ll be able to attract higher quality talent to offer my venture a greater chance of success.
That’s the path I ended up taking. I used my resources to hire a firm that built my MVP, and I then started recruiting. It turned out well, as I was able to find a technical partner who is far and above what I could have attracted with just an idea. Without my MVP, I likely would have hired someone with a few years of technical experience in. Instead, I was able to attract a legend who was already an architect for some incredible projects.
It was much more important to me to find the best possible base for starting the company than to bring on someone who simply wanted to co-found with me. What ends up happening a lot of the time is that we decide to create a company and we grab the nearest person to us. The challenge with this is that it can lead to a bunch of issues later, which can add up to become the downfall of the company. We will dive into these issues in both the Co-Founding section and in our relationships post.
There are other paths that you can take as well, but most them will take significant resources. You simply cannot do it entirely on your own. Even with a partner, creating a startup is difficult. If you decide to solo found, you will need the resources to hire someone.
If you are solo founding, you will, undoubtedly, need to get incredibly creative with how you leverage relationships. You will need a lot of help, and you will have to lean on current relationships and friends to get you to the point where you can hire or offer equity for their assistance.
And though the importance of your relationships will be key, one of the toughest things about solo founding is the loneliness. If you haven’t been in management and experienced it before, I am not sure you will understand just how tough it is being so isolated. The CEO of a startup will feel similar isolation once he or she installs a more corporate management structure, but solo founders will be trapped in this bubble as soon as they take that first step forward.
There are times, especially early on, when you are going to feel so incredibly lost. You will doubt yourself and the path that you are taking as many others will in your life. Your friends and your loved ones, both in and outside of the startup world, will not understand what you are doing. They will not understand the countless hours of work you’ve completed, or the countless hours to come. They will not understand your exhaustion, or your level of devotion that won’t allow you to quit.
They only see the calm, collected, steadfast founder who is sprinting into the darkness without a care in the world.
When you have a co-founder, you have someone to lean on. You have someone to bounce ideas off and give you reassurance that the company is moving in the right direction. I was fortunate that when I solo founded, I had two teams to help me in the right direction. The team I hired to build my MVP also helped with customer discovery, and an assigned team from my graduate school program provided additional support. The topic of one of our graduate classes was venture initiation, and during my hunt for a partner, I was lucky to have people to lean on and help me with the burden of setting the company in the right direction.
If you are solo founding, it is imperative that you have some support structure. Without it, you’ll crash and burn.
The final piece of advice regarding solo founding: there are many reasons to solo found, but keeping a tight grip on equity is not one of them. If greed is the driver of your desire to solo found, I am telling you right now: you are going to fail. You will not attract the right talent nor will you keep it, and it is impossible to run a company by yourself.
Even though I technically solo founded, when I found my technical partner I — according to my attorney — overpaid him significantly. And you know what? I am happy that I did.
I’ll never forget one case from my graduate school where we reviewed a company called Haute Hunte. In this case, the company’s founder, Vikram, was creating an e-retailing venture for overstocked luxury goods and brought on a co-founder, Daniel, who had immense value to the venture due to his family connections. Daniel’s father was “the founder and majority owner of a globally-recognized high-end label that produced runway and ready to wear fashions.”
They got along great, and everything went well, but Daniel decided to leave the company at the end of the school semester. Vikram didn’t push hard for him to stay and kept moving forward recruiting a new co-founder.
Haute Hunte went on to have success, but eventually got stuck between a rock and a hard place when it came to their first round of funding as they were missing the exact piece that Daniel could have offered. Eventually, the company went under.
Vikram’s biggest regret when looking back on it all? Not offering Daniel whatever he wanted to stay as a co-founder and help him with the company. Daniel’s family connection would have supplied Vikram with the leverage needed during early negotiations, but instead, the company faced rejections from potential customers.
I implore you not to make that same mistake. I can’t run a technology company by myself, and when you find the right talent, you better make sure to hold onto them.
It is incredible to have co-founders. Having the ability to recruit someone based solely on an idea gives that idea validation. Someone else coming along for the ride makes you believe that it is real and that it is worth pursuing.
The challenge is that once you add people to your team, you add an entirely new set of dynamics, which means that you need to sit and think things through together. Once you bring on a co-founder, you are creating a partnership, a partnership that is like a short-term marriage. You are going to work, live, and breathe your product, if you’re fortunate, for the next 5–10 years. I’d encourage you not to make the same mistake that most founders do by grabbing the closest person to you that is excited about the idea.
The person you bring on should fill some role that you cannot currently do or a role you no longer want to do. You could be an engineer pursuing an MBA who no longer wants to code and therefore needs another engineer, or you might be a creative who doesn’t know how to scale and operate a business. If you are bringing on someone new, it is in your best interest to diversify. If you do grab the person nearest to you, and they have the same skill sets, you run the risk of creating a homogenous team with overlapping roles and talents (We discuss more of this in our Roles & Relationships post). All too frequently, this scenario creates friction for the company going forward.
The team might have less internal conflict during the early days, when everyone’s viewpoints are similar and your startup is still in its infancy. They will tackle some challenges quicker as multiple people can work simultaneously, but the team may also lack critical skills. When decisions need to be made regarding an area where both founders are “experts,” harsh conflict and fallout can ensue.
The best co-founders are typically once or twice removed from your personal/social sphere, or someone you have previously worked with or managed and can therefore know how to operate with one another in a professional setting (it is the reason we designed Spark xyz this way). But as with anything, there is a learning curve, and especially when dealing with different people and different personalities.
One of my favorite quotes from my previous career was “employees and co-founders are your most valuable and riskiest asset all at the same time.”
Where we take you next
In the next sections, we will discuss these pitfalls and how to navigate them.
1. Discussion of roles within the founding team
2. The Negotiation of the distribution of economic rewards
3. The pitfalls of previous relationships and how to navigate them
Wasserman N, Braid Y, Prasad N. 2014 Haute Hunte: Pursuing the Big Trophy. President and Fellows of Harvard College.
Wasserman, N. 2012. Founder’s Dilemmas. Princeton University Press.
Lucas is the founder of Spark xyz, platform management software for incubators, accelerators, Angel groups, and VC’s.