Sole Survivors: Solo Ventures Versus Founding Teams (2018)
&gt; A widespread scholarly and popular consensus suggests that new ventures perform better when launched by teams, rather than individuals. This view has become so pervasive that many of the foremost investors rarely, if ever, fund startups founded by a solo entrepreneur. Despite this belief in the superiority of teams in the startup process, little empirical evidence has been used to examine this key question.<p>There&#x27;s obviously <i>selection bias</i> if only teams get funded. That skews the data that VCs evaluate, because what&#x27;s <i>worked</i> in the past is colored by what was <i>funded</i> in the past. (Similar to what we see with seemingly ageist or sexist VCs that are simply following a pattern of what has worked.)<p>So, the reason why little empirical evidence has been used to evaluate these biases is because there&#x27;s a paucity of data that doesn&#x27;t already have inherent conflicts.<p>If we look at the larger software companies, most of them (Gates &amp; Ballmer, Jobs and Woz, Larry Ellison at Oracle, who was the third richest man in the world for a while, Marc Benioff at Salesforce, etc), they were all launched with a single dominant founder who opportunistically attracted people <i>as they went</i>. Jobs would have found someone else to do the work he didn&#x27;t want to do, for example, or he would have figured out how to do it himself. (He did know quite a lot about motherboards and circuits, and definitely enough to see the potential in microcomputing&#x27;s future, although he lacked Woz&#x27;s technical genius.)<p>None of them started out with a plan to build a huge company, although they clearly had a strong desire.<p>According to <i>The Facebook Effect</i>, Zuckerberg was so unsure about The Facebook that he was working on Wirehog with DeAngelo almost full time even while the Facebook had millions of users.<p>According to numerous Jobs bios, Woz tried to stay at HP and even offered the Apple I to HP.<p>According to his autobio <i>Softwar</i>, Oracle founder Ellison just wanted to hire people to do his consulting for him so he could surf more. He had no intention of building a huge company until he realized that he could build software and it would be less work than consulting.<p>According to <i>Hard Drive</i>, Gates originally flew to Albuquerque to write programs for the Altair, which was the definition of a tiny, niche industry, and Ballmer really was no help at all.<p>In many cases, the co-founders&#x2F;teammates may have actually slowed down the dominant founders.<p>It&#x27;s pretty clear that Zuckerberg would probably have been successful whether he had access to a team (his dorm room roommates) or not.<p>So, this idea that teams will automatically and rapidly coalesce around a charismatic founder is another bit of selection bias.<p>Speaking as a solo founder: the obvious selection bias, and the fact that I was in my late 30&#x27;s and far from a startup hub where I might find equally qualified co-founders, forced me to launch on my own.<p>We&#x27;ve now achieved product-market fit and are growing,and I&#x27;m now attracting people who want to join my startup. But, <i>they all want to be paid</i>. Not in equity. Outside of the valley and startup hubs, people haven&#x27;t <i>seen</i> that stock can bring huge success, so they want at least meager salaries, but they&#x27;re still attracted to join a startup that&#x27;s clearly happening and to work with a founder who is becoming successful. (On the plus side, this means that I retain <i>control</i> and board seats, which are more important to me right now, so sharing profits is just fine with me!)<p>Any founder who has tasted success <i>without VC</i> will tend to be more wary of accepting VC, especially because one benefit of starting a company and growing it to be successful is that you are succeeding on <i>your own</i> terms, and not because you &quot;pass&quot; some arbitrary checklist set forth by a VC that may have never even been an operator themselves. Why put that much trust in another person if they weren&#x27;t there for you at the beginning?<p>So, you could plausibly argue that founders end up engaging in <i>their own</i> selection bias. What&#x27;s clear is that founders who seek out funding at that stage generally prefer to wait until they can control their own destiny; they don&#x27;t want to negotiate out a loss of control (over the board, restricted shares, etc) since they didn&#x27;t start that way. So, any later successful rounds will have to be on the founder&#x27;s terms:<p>1.  big enough to be worthwhile<p>2.  no significant loss of control (unless they&#x27;re naive, but they&#x27;re probably not if they got this far)<p>3.  doesn&#x27;t involve moving their growing company (and lives) somewhere else.<p>There&#x27;s a whole &#x27;nother world there of companies that eschew funding because they started out having to and later realized that they might as well keep going.<p>The companies grow slower because they don&#x27;t have those continuous cash infusions.<p>But, then, <i>magically, overnight</i> they hit the Inc 5000 in some out of the way geographic location, but most VC&#x27;s will never even know they exist. There&#x27;s some irony in all of this!