Posse is my first tech startup and I’m the sole founder. I’ve worked hard to establish the company for more than two years and, as you can probably gauge from my earlier blogs, it hasn’t been easy.
Before starting Posse I ran a music company, Scorpio, that I founded by myself in 2002. Four years into that company, I decided I wanted a co-founder. I said that I wanted someone to compliment my skill set but the truth is, I was lonely. It’s hard to run a company by yourself. Even though I had staff, it wasn’t the same as having a partner with whom to share things. The experiment was a disaster. We had different styles, work ethics and visions for what we wanted to achieve. I hated it, and within two years we went our separate ways at considerable cost of time, money, energy, and reputation.
This experience influenced my decision to run Posse solo but lately I’ve considered bringing in a partner. I’ve spoken to many friends and advisors, some with co-founders and others who’ve done it themselves, to assess the benefits and risks of solo vs. co-founder relationships. There’s no right answer: both setups work for different people at different stages of their businesses. As I reflect on my own decision, here are what I think are the top four reasons to work with a partner or go it alone.
Why to be a sole founder
1. You set the culture. There’s nothing more frustrating than being in partnership with someone who isn’t nearly as driven or hard working as you are. Imagine slogging it out day and night to get your business off the ground while your partner is at the beach. This not only feels unfair but it also affects the culture of your company: the rest of the team follows the leaders, and if one of the leaders is lazy then it’s hard to create an ambitious and hardworking culture.
2. It’s easier to make decisions quickly. No one is right all the time, but if you made the leap to start a business then you obviously are confident enough in your own ability to back yourself. Different people have different visions and different priorities. Start-ups have to move quickly to gain momentum on a tight time frame. It’s good to deliberate but it’s important to make decisions quickly. One of my favourite things about being a solo founder has been my ability to draw on a lot of advice from talented people, make a decision and go for it.
3. You can’t fall out with yourself. One of the top reasons startups fail is the founders fall out. They often start out as friends and it’s great when things are going well. It’s when times get tough (which they almost always do) partners squabble. Each blames the other. One isn’t as smart, made the wrong call or won’t put in the work. It kills confidence with the investors, the team and very often kills the business. I’ve seen this happen several times with friends’ companies and founder divorce has to be one of the most painful and draining experiences you can go though.
4. Sole founders learn more. Other than the joy of creating something of value (team, product, and so on) and the prospect of an eventual financial payoff, the great reward from being an entrepreneur is the degree to which you learn and grow throughout the process. Certainly, being a sole founder is harder. You are responsible for everything, not just the bits that you like or are good at. You need to understand financial modelling, team building, product design, sales, marketing, community, HR and operations. When there’s a problem, there’s no one else to turn to. You need to solve it. Although this has been difficult and tedious at times, when I reflect, I’m glad that I’ve done it. There’s no MBA on earth that could teach me what I’ve learned running this business over the past couple of years.
Why to have a co-founder:
1. You’ll make better decisions and are more likely to reach the right outcome faster. Two heads are better than one. As long as your co-founder is smart and approaches problems from a perspective that differs from your own, through a process of debate, you’ll arrive at better decisions. If, for example, one founder is technical they may approach a strategy challenge from a data perspective while another founder with a background in marketing may be more insightful. Both approaches are valid and together the two founders are likely to arrive at a better solution than either would achieve alone. The decision-making process might be longer but a better strategy from the outset will save the company time and money.
2. It’s easier to lead a team. For the past five months, our team has been split between Sydney and New York. I’m presently in New York taking meetings by day, then Skyping with the Sydney team at night. One key role of a founder is to work with, listen to the team, articulate strategy, and keep everyone motivated. It’s hard to do this when you’re not in the same physical location. Multiple founders mean that someone can lead investment discussions, someone can run marketing and PR and someone can be with the team at the same time. With limited time to get a project off the ground, one of the biggest challenges is spreading yourself too thin. A strong founding team allows everyone to focus on their strengths, and you can get a lot more done.
3. It’s more fun. If you’re thinking of starting a company by yourself, don’t underestimate how lonely and dark it will be when times are tough. When I think back to my lowest times I feel lucky I didn’t burn out or spiral into depression. We’ve all heard stories of entrepreneurs who’ve committed suicide — there have been two high profile cases this year. I would have loved to have a partner to balance out the hard times and to celebrate with when things went well. When I look at friends with co-founder relationships that work, it seems like a lot more fun!
4. Co-founders are more fundable. In the early stages of a business, investors back the team more than the idea. It’s no secret that professional investors, particularly VCs, don’t like backing first time sole founders. They know how tough the road is and think that multiple founders will pick each other up when one loses motivation, they’ll make better decisions and achieve more, all of which increases their chances at success. If you pick a co-founder with complementary skills to your own, you share the same vision and you work well together, you’re much more likely to be able to raise capital.
I’m glad that I’ve gone it alone over the past couple of years. We didn’t always make the best decisions first time but we managed to learn, pivot and have now developed a killer strategy and the beginnings of a great product. I’ve grown a huge amount and have strengthened my personal resolve in the process. Now I’m at the point where I’d like to bring in a partner. For several of the reasons I’ve listed here, I think it’ll give us the best chance of success in the long run.
If you’re thinking about starting a business with co-founders, make sure you check out my previous blog about how to structure the vesting of founder shares.
Finding the right business partner is like finding the right life partner. You want to make sure you really know the person and how you work together before you make it legal!