Single Founder Bias
Single founder bias has perpetuated through Silicon Valley. Recently I was at an investor meet and greet event, and one of the first questions that popped up was, “Do you accept single founders?” I just knew it would be asked. So where did this bias come from? A good place to start might be item one from Paul Graham’s essay from 2006 regarding startup mistakes.
Have you ever noticed how few successful startups were founded by just one person? Even companies you think of as having one founder, like Oracle, usually turn out to have more. It seems unlikely this is a coincidence.
What’s wrong with having one founder? To start with, it’s a vote of no confidence. It probably means the founder couldn’t talk any of his friends into starting the company with him. That’s pretty alarming, because his friends are the ones who know him best.
But even if the founder’s friends were all wrong and the company is a good bet, he’s still at a disadvantage. Starting a startup is too hard for one person. Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.
The last one might be the most important. The low points in a startup are so low that few could bear them alone. When you have multiple founders, esprit de corps binds them together in a way that seems to violate conservation laws. Each thinks “I can’t let my friends down.” This is one of the most powerful forces in human nature, and it’s missing when there’s just one founder.
You can imagine this made sense back in 2006, and probably for several years thereafter. Today, startup culture is much different. Resources with regard to technology, money, and people are much more plentiful.
Votes of confidence today can come from a variety of sources including kickstarter campaigns, advisors, early adopters, which pretty much is to say: people who love your product.
Biases are bad, like believing the laws of physics are universal truths. Newton was brilliant, so when he tells us about gravity should we accept it and move along, or consider the possibility that we don’t know everything? Along comes Einstein and the theory of relativity supersedes Newtonian gravity theory. Keep and open mind and adapt.
Starting a startup is no longer too hard for one person. It used to be that you needed to have one person who was really interested in the technical side and one person who could jump on design or business but also do technical tasks. Now we have 99designs, free bootstrap layouts, free high resolution photos, free icons, and online courses for programming, machine learning, databases, design, and business to boot. Social media is your friend. For most products, one person should be able to get a product to market without breaking much of a sweat. Will you make stupid decisions? Will you be down when no one responds to your Kickstarter after a day? Yes, but if you have the ganas you will persevere.
What else has changed? Money.
Can a single founder apply for funding? Yes, but the odds of being accepted are lower. A startup is too much work for one person.
Y Combinator’s Application Page Asserting Their Bias
Money in Silicon Valley is not easy to acquire, but it is a lot easier than it used to be. Y Combinator, 500 Startups, and other accelerators now offer over $100,000 to admitted startups. You can do a lot with that money, including adding one or two people to your founding team (with the disclosure of funds available, of course).
Lastly, cofounder breakups cause startup deaths, so why not be just as biased against a founding team of two? The answer is, there should be no bias. You simply can’t factor every detail into an investment.
Is it possible that the most successful companies could have been single founders today? Was Microsoft Bill Gates with a founding team? If Steve Jobs were doing a startup today, would he have a cofounder? Do you think Travis Kalanick could have started Uber alone (leaving aside the genesis was from Garrett Camp)? Look here:
Recent Y Combinator startup with one founder and founding team of three
You have a recent Y Combinator single founder who, instead of having co-founders, has a founding team. Perfect, right?
Ah, ok. Nothing is perfect. Thus, remove your bias. In closing, here is a check list if you are an investor and a single founder approaches you:
- Does their pitch cause you a frisson of excitement?
- Do they have some kind of traction (preferably evidence from users I ❤ THIS PRODUCT! Ballmer-style)
- Do they seem intellectually smart enough (when you ask, “What’s your execution?” do they lick their chops and roll up their sleeves?)
- Do they have at least some social skills where they could find and hire a founding team to rise to greatness (evolve into lions, not unicorns. unicorns are figments of your imagination)
If the answers are pretty much yes, WRITE THEM A CHECK!
