The Solo Entrepreneur’s Manifesto
At Near Horizon, we think the bias against solo founders is not just unfair; it’s unfounded. There are already countless examples of great solo founders, and the data suggest that their advantages offset the disadvantages. More to the point, we believe our new co-creation model makes it possible for more solopreneurs than ever to succeed.
But first, some history.
In 2006, YC founder Paul Graham wrote an enormously influential essay about what kills startups, and #1 on his list was, you guessed it, solo founders.
Just six years later, HBS Professor Noam Wasserman’s Founders Dilemma showed that 65% of startups fail because of conflict among co-founders. Solo founding eliminates founder conflict (though not your inner conflict). And current YC President Gary Tan thinks you should lean into your founder conflicts. So… what to think?
It’s fair to say that Paul G’s opinion holds more sway in the Valley than Professor Wasserman’s, for the obvious reason that Paul’s helped fund dozens of world-changing companies.
However, on the particular point regarding whether solopreneurs can succeed, we’re here to argue that (1) the data says Yes! and (2) new models (like ours) can mitigate solo founding challenges.
And next, some unhelpful anecdata!
Jeff Bezos! Pierre Omidyar! Elon with SpaceX. Robin Li with Baidu. Craig from Craigslist. Ok, well, he really would have benefitted from a co-founder. Beyonce. Justin Timberlake. Michael Dell. You get the point.
Haje Jan Kamps at Tech Crunch has shown that ~50% of startups that raised more than $10M (not a bad metric for success) have solo founders. Others have found lower rates of dissolution and higher revenue for solo founders.
None of this feels definitive, given all the confounders in the data. (For example, what is the definition of a founder, anyway? Drew Houston started Dropbox by himself until YC found him a co-founder. Ditto for Apoorva Mehta at Instacart. Are they solopreneurs?)
Our real argument at Near Horizon isn’t that solopreneurs are better, but simply that a founding team (or individual) should be organic—it should be the right team, not one forced (by group think) into a particular configuration.
And there’s never been a better time to be a solo founder. Sam Altman has a betting pool for when someone will build a unicorn with not only no co-founders, but no employees: the ultimate NINECO (No Employees, No Inventory, COmpany). The greatest (near) NINECO in history (prove me wrong!) is still WhatsApp (55 employees at $19B acquisition).
Since so many resources are available for two- and three-person teams, there should be similar ones for solos. And, for what it’s worth (and with apologies to Aileen Lee), aren’t unicorns famously solitary creatures?
So, let’s examine the real advantages and disadvantages of solo founding, look at mitigations, and discuss why now is the best time ever to found alone.
Paul G’s argument against solo founders:
- It’s a vote of no confidence. It means you couldn’t attract co-founders.
Or, you thought it was a lousy idea to give 50 (or 67%!) of your equity to people who did not add as much value as you, as you brought an unfair competitive advantage1. While it’s true you’ll need a team and very good, very senior people with skills you don’t have, that doesn’t mean they need to be co-founders or equal partners.
Company founding economics are like the inverse of buying a new car. There’s immense value lost the moment you drive off the lot2, and similar value creation with a NewCo in the first year. You can hire a very good VP of Engineering, Director of Eng, and a few terrific ICs for less than 15% of the equity of a seed stage company, or you can give 50% to your founding CTO. That’s cool if your founder is Woz, but the former may make more sense, depending on what you’re doing. In fact, by eschewing co-founders, you have a lot more equity to spread among your first ten or twenty critical hires.
- It’s too hard. You need colleagues to brainstorm.
Yes, great co-founders will bring fresh perspectives and a healthy tension to drive your good ideas to great. This is the strongest argument for co-founders, and it’s part of why we created Near Horizon: we are here, with our extremely different perspectives, to push and prod and make sure we pop our NewCos out of any local minima. But you don’t need to give up 50% or even 67% of your equity for these perspectives.
This pushing and prodding is harder than just the “advice” you’ll receive from advisors or accelerators/incubators. As valuable as the YCs of the world are, there is a difference between the strategic value provided by someone dabbling (even if experienced) and someone in the weeds with you.
The Near Horizon model splits the difference – in the weeds enough to help you steer without asking for most of your equity.
- The lows are really low, and the esprit de corps is part of how you stick with it.
While the emotional weight of a startup is real, the data don’t support this as a critique of solo founding. See Professor Wasserman: co-founder troubles destroy more companies than the esprit saves, and you can get emotional support without giving up most of your equity. Firms like Near Horizon help, and so do your first few employees. Or your shrink. Or your partner. The sword of Damocles hangs over a CEO's head, with or without co-founders; the methods for managing that stress are as myriad as the startups themselves.
Dancin' (almost) with myself, oh oh oh…
I’m old enough to appreciate any excuse for an OpenAI-generated Billy Idol image, particularly with the (slightly off) Stone’s reference. And yes, I know what the song is really about.
We see you
In conclusion, the groupthink in Silicon Valley regarding solo founders is a problem. Very few investors see their strengths, like Kevin Youkilis before Billy Bean. But we do. We understand that while a solopreneur will have weaknesses (everyone does), the whole point of our model is to help fill the gaps.
Building a great business requires product, tech, sales, marketing, ops, fundraising, recruiting, etc. Mike, Sean, and I have lived all the different functions enough to make sure execution (and your weaknesses) doesn’t hold you back.
Just as baseball GMs moved from batting average to OPS and WAR, it’s time to move past the misleading and misguided notion that you need a co-founder. The essential ingredients for startup success are a critical problem, an inspired solution, grit, creativity, and a series of good decisions along the way (particularly in the early days). None of these require co-founders – not if you’ve got the right team to help.
We’re here to provide the resources that solo founders need. If that’s you, let us know.
Notes
[1] I didn’t say “brought the idea” since we’ve been taught to believe those are (largely) worthless. Ideas are (relatively) easy. But unfair advantages (data, distribution, technical ability, etc., are not).
[2] at least until COVID supply chain weirdness