Research Says Solo Founders Perform Better. Here is Why.
Solopreneurs move faster, avoid the drama of teams falling apart, reduce costs by default, and have an easier time taking risks.
A recent study suggests that:
"Solo founders are more than twice as likely to own an ongoing, for-profit venture than two or more founders".
Or to put it in other words, ventures with solo founders are twice as likely to be profitable than ventures with 2 or more founders. See the graph below.
How can that be true? And what could be the dangers of being a solopreneur that founders should watch out for? Let us explore!
Why solo is better
As much as it may feel scary to go alone, there are good reasons to consider building a business alone, especially if you are spending a lot of time finding a co-founder.
Reason #1: Speed
As the famous African proverb goes, “If you want to go fast, go alone. If you want to go far, go together.” Solo founders move faster since they don't need to worry about the team alignment on every decision. And being fast can be argued to be the biggest advantage for a startup.
Reason #2: Founder disagreements
Top 3 reasons why startups fail is the founder team in-fighting. Sounds wrong to say this, but no co-founders - no problems.
Reason #3: Lower costs
It seems like there is no big difference between one person on the team and three, but at the early stage, even small differences matter a lot. Whether you need an office, and how many salaries you need to pay are all crucial questions at the start.
Reason #4: Taking risks
Founding a startup is a big risk. Three people who've already sacrificed quite a bit tend to be more risk-averse and the chances of someone choosing the safer path are higher.
The dangers of going solo
We will be honest - going solo is not for everyone. Consider the following dangers:
Danger #1: Funding
It's the sad truth that due to Y Combinator and Paul Graham's gospel, the Zeitgeist of our times is that being a solo founder means that you just couldn't convince your friends to join and therefore can't be trusted. Solo founders tend to receive considerably less funding, yet it could also play to their advantage, allow them to grow more organically and make fewer stupid mistakes.
Danger #2: Lack of support
Loneliness and depression hit entrepreneurs harder and solo founders harder still. Solo founders might also miss on diverse perspectives. I would advise solo founders to get something called a hands-on advisor or joining a supportive community of solo founders like GrowthClub.
Solopreneurs move faster, avoid the drama of teams falling apart, reduce costs by default, and have an easier time taking risks. That being said, they should be aware of fewer funding opportunities and build their own support system.
My aim is to contribute to humanity's development through the levers of (1) personal development and education, (2) human longevity, and (3) political and economic systems. Interests: coaching, developmental psychology, self-managing organizations (Teal, Holacracy), longevity, aging, politics, economics, history, philosophy, metamodernism, China, AGI, meditation. I love meeting highly ambitious people. Are you one? Let's connect!