What’s better: Founding Team vs. Solo Founder

The history of entrepreneurship is filled with amazing success tales. Some of those success stories were started by a lone founder, while others were started by a group of cofounders. Every business venture and every founder are unique.?

Moreover, from our experience, never in the history of entrepreneurship did "number of founders" tend to determine whether a startup succeeds or fails.

In 2006, Paul Graham of the startup accelerator Y-Combinator in one of his personal blog posts wrote that, “starting a startup is too hard for one person”. Years have gone by, technology is at its prime now with automation and conditional workflows that have made operations and people management somehow easier. This makes us wonder if the statement still holds true.?

Having said that, it is still true that when it comes to funding or backing up an idea, venture capitalists and investors still prefer a group of founders rather than a single founder. Somehow, they seem to believe a group can overcome business shortcomings better.?

However, a Wharton research paper claims that the data does not appear to support this. 3,526 new businesses were examined in the study, Solo Survivors: Solo Ventures vs Founding Teams.?

They discovered an intriguing dichotomy: investors did appear to favour teams because more money was raised by firms with several cofounders. However, they discovered that firms with a single founder typically lasted longer and eventually generated more money.

The researchers hypothesize that this may be partially due to the more agile decision-making of a solitary entrepreneur. Cofounding teams typically take fewer risks and make slower, more cooperative decisions. It is just easier for one person to take a quick call, make bad decisions, and suffer the consequences (or celebrate the win) without pointing fingers at anyone.?

We, at Nentr,? believe it is a wrong approach for people (entrepreneurs) to base their whole startup strategy on the preferences of investors. Their sole goal should be to create a product or offer a service that the users/customers will enjoy.?

Creating a product or providing a service that satisfies consumer wants is the key. Spend time getting to know your customers. It is entirely backwards to build a business based on what you believe investors will find appealing.

Now, everyone knows about the funding winter that is already here. The founders whose operational strategies revolve around the funding and the VCs, they were the first ones to do mass layoffs, salary cuts, and product roll backs.?

Every startup needs a hacker, a hustler, and a hipster (a tech person, a salesperson, and a product design person). To be honest, as the founder, you can take a call as to bring a co-founder, share equity and give more responsibility to the core members, or bring a fractional CXO to help you; just make sure to really understand the skills you lack and what or who can help you bridge the gap.?

If you are struggling with a similar decision or are looking for some mentoring, reach out to us at Nentr today.