Should you go it alone? Comparing having a cofounder to being a solo-founder

I’ve seen a lot of conversation this week on cofounder conflict.

Noam Wasserman , dean of the Sy Syms School of Business at Yeshiva University and author of?The Founder’s Dilemma , suggests that?65% of startups fail due to cofounder conflict .

Some venture capitalists won’t entertain sole founders, at all. They will only invest if you have a cofounder.

So, what gives? What’s better? Should you bring in a cofounder or try to go it alone?

Whether you choose to found a company with cofounders or to start it as alone, the reality is that you’ll face both benefits and challenges. The choice between these two options depends on various factors, including your personal strengths, goals, and the nature of your business idea. Here's a comparison of the benefits and drawbacks:

Cofounder:

Benefits:

1.?Shared Responsibility:?With a co-founder, you can share the responsibilities, workload, and decision-making process. This can lead to a more balanced and efficient operation, especially when both cofounders have complementary skills.

2.?Diverse Skill Sets: Cofounders often bring different skill sets, experiences, and perspectives to the table. This diversity can lead to better problem-solving, creative thinking, and a broader range of expertise available to the business.

3.?Emotional Support: The journey of entrepreneurship can be emotionally challenging. Having a co-founder can provide emotional support, motivation, and someone to share both successes and failures with.

4.?Networking: Cofounders can expand your network by introducing you to their contacts, which can be valuable for partnerships, investments, and business growth.

Drawbacks:

1.?Conflicts: Differences in vision, decision-making, and management styles can lead to conflicts between co-founders. Disagreements can sometimes escalate and affect the overall operation of the business. While a 65% failure rate seems high to me to stem from cofounder conflict, the reality is that cofounders need to have processes and mechanisms in place to resolve conflict and continue working together in a healthy way.

2.?Equity and Control: Cofounders often need to share equity and decision-making authority, which can be a point of contention. Balancing control and equity distribution can be challenging.

3.?Dependency: If one cofounder leaves or becomes less involved, it can disrupt the business and its operations. This can be a significant risk, particularly if the departing cofounder possesses critical skills.

Sole Founder:

Benefits:

1.?Control: As a solopreneur, you have greater control over the vision, direction, and decision-making process of the business. This can lead to faster decision-making and the ability to pivot with less consultation.

2.?Efficiency: Working alone can lead to quicker execution and a streamlined decision-making process. There are fewer discussions and negotiations, which can save time.

3.?Flexibility: You have the freedom to work on your own terms, set agendas and schedules, and make quick changes as needed. This can be particularly advantageous for those who prefer autonomy.

Drawbacks:

1.?Limited Skill Set: As a solopreneur, you may have limitations in terms of skill diversity. You might lack expertise in certain areas, such as marketing, finance, or technical development. Early hires will become more important to make up for your own skill shortcomings.

2.?Workload: Running a business on your own means you're responsible for all aspects, from product development to marketing and customer service. This can lead to burnout due to the overwhelming workload.

3.?Emotional Toll: The isolation of working alone and the pressure of making all decisions can lead to increased stress and potential burnout. Or, as we say, it’s lonely at the top. This can be true even with cofounders, particularly for CEOs. It might be worth considering hiring a personal coach that focuses on entrepreneurs or CEOs. This provides the founder an important sounding board—someone to bounce ideas off of, to advise through decision making processes, etc. In fact, I’d advise this regardless of having cofounders.

4.?Limited Networking: Building (and maintaining) a strong network can be more challenging as a sole founder, which could impact opportunities for collaboration, partnerships, and growth. Again, I think that deliberate focus on hires and advisors can make up for this, but it remains a potential drawback.

Interestingly, fundraising is often listed as a benefit for cofounders and a challenge for solo-founders. TechCrunch ran some numbers and?found the opposite to actually be true . Solo-founders raised more money than teams of founders.

Ultimately, the decision between having a co-founder or going solo depends on your own strengths, preferences, and the nature of your business. Carefully consider your own skills, the level of risk you're comfortable with, and the kind of support you'll need on your entrepreneurial journey.

Don’t worry if a VC passes on your company because you have a cofounder or don’t. There’s plenty of fish in the sea, and another might like your founding team structure.

And, no matter which path you choose, carefully consider how you build your team to mitigate weaknesses. And make sure you…

Keep building!

Andrew