The core tenet of entrepreneurial culture is the belief that new companies should be founded by teams rather than individuals, and the ideal entrepreneurial team is often described as a talented mix of individuals with complementary skills across disciplines.
We often hear that startups need a "hacker" (engineer), a "hipster" (designer), and a "business expert". Well-known startup accelerators like Y Combinator are known for favoring teams over a single founder. YC co-founder Paul Graham wrote, "We probably won't accept a company with just one founder. ”（we probably won’t accept companies with only one founder）。
Venture capitalists are also often biased against independent founders and prefer to support startup teams. According to data released by First Round Capital, startup teams are 163% higher than independent founders in terms of fundraising.
In today's big wave of AI startups, is this bias against independent founders justified?Or is it just anachronistic groupthink?
In fact, independent founders are more common than we might think.
According to Crunchbase, it's common for a single founder company to raise more than $10 million in capital and exit. The average team size for a successful exit startup is 172 founders, very close to independent founders. 305 individual startups have grown into unicorns.
inc.The magazine reported that in 2018 IncMore than 75% of Fortune 500 companies are founded by 1-2 people.
Forbes found that the median team size for unicorn startups is just 2 people.
Amazon was originally founded by an independent founder, Jeff Bezos, in 1994 as a completely independent founder of Cadabra, Incand then developed it into a trillion-dollar behemoth today. Elon Musk single-handedly started his first company, Zip2, in 1995, which was later acquired by Compaq as 3$0.7 billion** acquisition. Subsequently, he founded X. as an independent foundercom, which later became PayPal. Michael Dell started Dell Computer Corporation at the age of 19 in his dorm room without any co-founders. In 1992, Dell became the youngest CEO ever to make it to the Fortune 500. In today's context, as GPT further lowers the threshold for entrepreneurship, a large number of independent founders are emerging. Not to mention a team of several people, Midjourney, an AI star company with zero financing, and many one-person teams make a profit in just a few months, achieving millions or even tens of millions of revenue every year.
So, don't let the idea of going it alone stop you from turning your business idea into reality. With the right strategy and resources, you can definitely start a great startup on your own.
Let's break down the strengths and challenges faced by independent founders, how to build an MVP on their own, funding options, and tips for building a team over time.
Pros and Cons of Independent Founders
While co-founders can make starting a business easier in some ways, there are distinct advantages to being an independent founder:
More control:As the sole founder, you have complete control and decision-making power. You don't need to consult a partner or reach a consensus before acting. It also means keeping all the equity without having to share it with others.
Flexible decision-making power:Independent founders can transform and change product direction faster without having to get buy-in from others. This flexibility can help you adapt quickly to the business environment and respond flexibly to a variety of challenges.
Enjoy all the results:Since you own the entire equity, all the returns, achievements, and value created are completely yours. Both compensation and satisfaction are directly attributable to a person.
Of course, there are some big challenges that independent founders face:
Need to wear many hats:As an independent founder, you have to take on every role from product development to marketing. This variety of responsibilities can be daunting for many.
Harder to get financing:Investors are often skeptical about funding independent founders and often want to invest in an entire team. Independent founders are more likely to be rejected when it comes to fundraising.
Bear the failure alone:Stress, workload, and business risk all fall on your shoulders. Having a co-founder often makes the ups and downs easier.
How do independent founders build MVPs?
A minimum viable product (MVP) allows you to quickly start testing your business ideas without having to pre-build every feature of your product. For independent founders who lack the time and money, it's crucial to get an MVP right. Here are some of the best ways for solo founders to build an MVP:Verify extreme assumptions:Focus your MVP on validating extreme assumptions about customer needs and problems, testing them quickly.
Use the None ** tool:Services like Bubble, Webflow, and Appgyver can help you build and launch products faster as a non-tech founder.
Outsource development:Consider hiring a freelance developer to turn your wireframes into a viable MVP, which is less expensive than building an entire in-house team.
Small-scale testing:Once the build is complete, test your MVP with a small group of real potential users, whose feedback will prove or disprove your hypothesis.
A well-designed MVP helps maximize learning efficiency while minimizing upfront resource investment. Using the above strategies, independent founders can build and launch their own products faster and more efficiently.
How do independent founders get financing?
Starting a startup without a co-founder, the best strategy for securing funding is to first understand the investor's preference for the team if you need to do so. Here are the main reasons why venture capitalists prefer co-founders:
Control and Governance:In the team, the founders act as a balancer of power for each other. The board of directors is fully controlled by an independent founder, and investors see the risk of centralized control.
More resilient operations:Independent founders are single-handed, helpless. If one co-founder leaves, the others can move on. However, if the independent founders leave, the startup may go out of business as a result.
Wider range of skills:The team can provide combined skills in engineering, design, marketing, and operations. Independent founders must either possess interdisciplinary knowledge or hire someone with these skills.
Easier access to finance:Data from venture capital firms like First Round Capital shows that teams have a higher success rate in raising money than solo founders when it comes to valuing and raising capital.
While these concerns are somewhat valid, independent founders can take targeted steps to mitigate these risks. Especially in the early stage, bootstrapped companies that do not need financing to scale up quickly can take precautions to dispel investors' concerns and prepare for future financing.
How do independent founders build a team step by step?
As an independent founder, it's important to recruit more team members, and here are a few important tips:Initial hiring of freelancers:Outsourcing independent projects to freelancers to fill skills gaps before considering hiring for a full-time role. This allows for flexibility.
Be picky about the first employees:Your first 1-2 employees should be top-notch employees with equity. They will build a corporate culture for future employees.
Outsourced sales and marketing work:Tools like Clearbit and UpLead can help you take the heavy lifting of customer outreach and tracking off your shoulders until you hire the right people.
Consider choosing a co-founder:At some point, giving up a portion of equity for an experienced co-founder can accelerate company growth. Choose this person very carefully.
Maintain efficient use of funds. Before you add a lot of money, you must first make the most of your freelancers, tools, and agencies, and put every penny to good use.
9 Tips for Independent Founders to Succeed
Always keep learning motivated:As an independent founder, you'll need to have a working knowledge of all aspects of business, from product development to marketing. Make time each week to learn new skills through courses or tutorials. Remember to focus on areas outside of your core competencies first. Weak links in delegation outsourcing:Prioritize your time on your strengths. Try to outsource areas that you are not good at. Virtual assistants can help with administrative work. Freelancers and agencies can fill skill gaps in writing, design, development, and more.
Build a personal support network:Actively cultivate a network of mentors, advisors, friends, and family from whom you can ask for advice, support, and honest feedback. Attend meetups and events to network with other founders. Look for a coworking space to avoid isolation.
Validate your ideas early:It's best to validate your startup idea with an MVP before committing fully to it. According to statistics, independent founders have a higher failure rate. Validation helps reduce your risk and strengthens the belief and motivation to move forward.
Lean startup self-reliance:Avoid premature expansion. As an independent founder, Lean Startup can reduce your cash burn rate and extend your runway. You can start your business with your own savings, loans from friends, credit cards, and personal loans before you get external financing.
Bottom-line thinking strictly controls risksBuy individual health insurance and life insurance to provide a safety net in case anything happens to you. Develop a business continuity plan for customers and employees to securely store passwords and credentials.
Use of previous work experience:Independent founders with relevant experience can highlight their credentials when raising funds. Work experience in your industry can give you credibility and earn the trust of investors.
Find a co-creator if necessary:If it's becoming too difficult to play multiple roles, consider bringing in a co-founder after your project has progressed somewhat. In order to attract him to join, the corresponding equity is given.
Focus on the goal and make every effort to build:Don't blindly pursue financing or rush to expand before you're ready. Focus on your goals and compromise accordingly. Stay on top of where your company is headed, and do your best to build the company you want.
Write at the end
There's no doubt that being a solopreneur takes on more risk and effort than a co-founding team. However, understanding the key challenges can reduce the risks that come with starting your own business and increase the opportunities. At the top of today's AI revolution, don't let bias or convention hold you back. Listen to advice, but more importantly, believe in yourself.