I suppose I shouldn’t be surprised that with the continuous growth in the number of startups (we’re seeing between 150 and 200 new seed opportunities per month at Homebrew), we’re also seeing a related trend in the growing number of companies being started by solo founders. I’ve taken a particular interest in this because Hunter and I have a strong bias against investing in solo founders (although we have done it once so far). This clear shift in the market caused me to reflect on why we prefer founding teams over founding individuals. In fact, we prefer teams that have known each for a long time and ideally have worked together before. While solo founders can absolutely build great companies, I think we’re right that having a founding team materially increases the chances for success. Building a great company is hard enough. It’s even harder to do it alone. In no particular order, here’s why having co-founders can be helpful:
Idea validation: If you can’t convince someone else to join you in pursuing your idea, maybe it’s not worth pursuing.
Pressure to perform: Having a co-founder makes you responsible to someone else, which in turn puts pressure on you to deliver results, probably faster than you might otherwise.
Emotional outlet: In startups the highs can be high but the lows can be low. And the inevitable trough of sorrow can be a lonely place. Surviving the anxiety and emotion of a startup can be much easier when the burden is shared. It’s great to see much more dialogue about the emotional challenges of being a founder. One way of fighting depression and other forms of emotional distress is by having a co-founder with whom you can be open and honest about your fears, struggles and insecurities.
Skill diversity: No one person, no matter how brilliant, has all of the skills needed to make a startup successful. Having co-founders with complementary skills can make it much easier for each person to say no to everything but the tasks most critical to achieving success.
Hiring strength: Multiple people on the team means a broader network from which to recruit, a diversity of skills with which to evaluate candidates and a more pronounced culture for potential hires to experience. Having co-founders just makes hiring easier.
Sounding board: Co-founders lie awake at night worrying about the same things as you. They’re just as committed to the mission as you. And they’re equally invested in seeing all parts of the company work as you. And so they will challenge you, scold you and push you (and often hug you) unlike anyone else at the company can or will.
It’s important to note that having a co-founder just for the sake of having one, or randomly meeting one at a “dating” event, isn’t the answer. Having the wrong co-founder can be more damaging than going to alone. There’s lots more to say about finding the right co-founder(s), but it starts with having shared vision, shared experience, trust and complementary skills. It means having alignment on goals, culture and values. It doesn’t necessarily require equal equity or compensation, but it does mean early agreement on those things. Finding the right co-founders can be challenging, but we strongly believe that the startups most likely to become the best companies are founded by teams that belong together.