Here’s the question which I am being asked by many people who want to apply to accelerators or planning to start up new businesses. “Should I be the sole founder or find a co-founder?” The answer is not so straightforward. Most accelerators often preached the need to have co-founders and tend to drop applications by single founders. There is justification in why they chose to do so. After all, 9 in 10 startups fail, and, following on with you get 84% with multiple founders vs 16% with single founders in the successful startups. Does that mean that you should not attempt to be a single founder? In this essay, I take a contrarian view that you can be the single founder if and only if you satisfy a set of conditions.
Through talking to different entrepreneurs (and analysing the successful single founders), I have established how a single founder can work out by satisfying the following conditions (and you do not need all of them, but a combination of some):
- You have a very clear vision: The startup you want to build have a very clear vision. In addition, you truly believe that you can fulfil that vision and build the business from startup to a real company with sustainable revenues.
- You understand the industry and focus on how you can make your business work within the industry: You have been in a particular industry for some time and built up both the operating experience and network where you know how to execute on that vision. Typically, you are a veteran in the industry, and observe something that the rest of your peers did not manage to see, and at the same time, figure out how to defend against competitors or upset the incumbents within the industry.
- You want to shoulder the entire responsibility: Instead of having co-founders who can share the blame, you decide to should the entire responsibility if the venture fails. Actually, this may be good for some people who do not want to worry if they fall out with their fellow co-founders or have a difference in vision with them after some years of work. It also minimise the hassle of seeking other’s opinion as you know that you are the person who want to own the decision process and should the responsibility if you make the wrong call.
- You have been through the startup experience (with or without co-founders) at least once: In some cases, the single founder learned from experience what they want and do not want in the next startup. In this situation, the entrepreneur can be led to be the single founder due to a bad fallout that resulted in loss of friendship or betrayal. One other situation is that they realise that they cannot reconcile with another co-founder on the direction of the company and decided that they should go solo for the next one. They have also undergone the tough times and understood the trials and tribulation of being in a startup.
- You want control and want to dilute as little as possible: This is probably the most prominent reason why some founders decide to go solo. It’s all about control. You want to have control of the vision, the execution and how the company eventually turns out. In the same light, coupled with past experience, you will not want investors to dilute you the way they might have in the past startups. However, there are other mechanisms to assure control even with multiple founders: preferential shares and putting co-founders as directors to the board.
- You have access to a vast network and know how to work the partnerships: Particularly in cases where the founder have industry experience, he or she may be able to access people within the network pertaining to that industry. The network can allow you to work the partnerships with companies as a competitive advantage which the other competitors against your startup may not. In some situations, you may be setting up the situation for future investment or acquisition if someone within the network is a decision maker, champion for you in the corporate sector and putting a word for you.
- You are born in a family of entrepreneurs and have observed how the whole process works: I notice this with people who are borne in the family of entrepreneurs. I am sure that it happens everywhere and this is not just an Asian phenomenon. As they have witnessed first hand on how their parents or relatives have operated as entrepreneurs or in business, the entrepreneur is able to learn some of the soft skills which may take experience and time for some rookie entrepreneurs who do not have that access. The other advantage is that the family might have resources, networks or advice for the entrepreneur, making it frictionless for them to be able to start business without the fear or the need for companionship with co-founders. That being said, I have also observed some even with that family background fumbled badly as single founders as well.
- You have mastered the art of hiring people, i.e. you know how to identify people who can work with you: One of the challenges in startups is hiring and having a good skill in identifying people who can join you. You can build a founding team and not make those early employees as co-founders. The only downside is that you might have to compensate more upfront to hire someone because they are not founders. There are ways to build incentives such that the employees will work to achieve, and hence it resolves the challenge.
- You have access to capital (thanks to Eric Koh): If you have access to capital or you have built up a cash reserve to begin building your startup, the single founder option can be an appealing one, as the focus is that you need to hire the people who might be able to help you to scale. Bootstrapping startups take time but the single founder can use that opportunity to optimise and re-invest back the profits back into business.
If you seriously want to be a single founder and you are confident that you can pull this off, my advice is that you should not even bother to apply to an accelerator or any similar organisations who preach the multiple founders mantra.