Once a decision is made to found a company, one of the first and most important decisions concerns whether to “go solo” or to form a founding team. There are good reasons to form a team, but it is essential to address the question: with whom should I found?
When the light bulb goes off and the founder is wanting to make that leap, one of the key decisions they face is am I going to go and do this alone or am I going to go and try to attract at least one co‑founder to come and do it with me. This is a data set that focuses on high potential startups, in particular the information technology and life sciences industries. It is very much the majority that go and find co‑founders to do it with them. Eighty‑four percent of the startups in my data set had two or more co‑founders who were coming together to found it. And so that means that you have 1/7, one out of every seven ventures or so that are going and trying to do it all themselves, be Superman, be putting the cape on and trying to go and conquer the world all by themselves. And the other side of it is they are competing against teams that have come together, the 84 percent that are the two co‑founders or more who are each bringing important things to the table, who are complementing each other's weaknesses, being able to get each other through the bottom part of the roller coaster when things get really tough, providing the emotional support, filling in the human capital minuses and holes that each of them have, filling in the contacts that the other one doesn't have. And to the extent there that a founder can look and evaluate both themselves, but also start mixing those easier to evaluate, things with the harder to evaluate but sometimes even more important things that they should be looking at when they are trying to decide whether they want to bring a co‑founder on and who that should be. Those things include your working style, the things that you value, your motivation. All of these harder to evaluate things are at least as key for you to be able to evaluate when you're looking at potential co‑founders and the decision whether to bring them on board or whether to be solo or not.
If you are a founder who wants to be able to have your vision, control the idea, be the one who brings it to realization, not have to share decision‑making with other people there, that leads you in a very different direction compared to a founder who wants to build the biggest most valuable and high‑impact venture who knows that he or she is missing something that is going to be needed to get to that. And there to the extent their working style and your values all align with bringing someone else on then it's very compelling for you to bring that person on, get the key things that you're missing filled in, have the emotional and moral support through the toughest parts of that roller coaster ride. And that is where it is much more compelling for that person to go and bring that co‑founder on to help them.
One of the dangers is that there's a very natural human inclination to look to people who are very similar to me. People who are like me I find much more affinity for. I am much more likely to go and co‑found with those people whether they look like me in terms of the functional background that I bring to the table, the academic background that I have, the gender, the race, other ethnicity issues that people find on all of these dimensions. I am much more feeling compatible with a person who looks just like me on those dimensions. And to the extent there that means they are going to be much more similar to each other, that's where you have to step back and make sure is this person really adding things that I don't bring to the table. And to the extent there, that you are doing yourself a disservice within the team because you haven't built the strongest team and making sure that that best friend that you really want to go and co‑found with or that person from college who always struck you as being really good within the same major as you are in, being able to evaluate those concretely and objectively and saying do they really add key pieces that are important for me to be able to bring to the table. Before you go and make that commitment to co‑founding together is a key step that you have to go through in terms of that thought process.
Wasserman, Noam. The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup. Princeton, New Jersey: Princeton University Press, 2012. Chapters 1, 2, and 3.
Hirshberg, Meg Cadoux. "For Better or For Work: Survival Guide for Entrepreneurs and Their Families". An Inc Original, 2012. Chapters 1 and 13.
Higgins, Monica C., and Noam T. Wasserman. Humphrey & Cecilia. Harvard Business School Video Supplement 810-702, 2010.
Wasserman, Noam T., and Rachel Galper. Big to Small: The Two Lives of Barry Nalls. Harvard Business School Case 808-167, 2008, Revised 2012.
Wasserman, Noam. Curt Schilling's Next Pitch (TN). Harvard Business School Teaching Note 812-007, 2011.
Questions for You
What human capital do you possess?: Education, industry knowledge, technological expertise... What are your biggest gaps?
What social capital do you possess?: Colleagues, connections, collaborators... What gaps exist in your network?
How has your career prepared you for launching in the industry that you’ve chosen and for the role you are assuming? How has your career not prepared you and how are you going to compensate for those limitations?
What are the biggest limitations on your personal circumstances? Financial, family... How will they impact your founding timeline?
Are you evaluating the business idea and the market conditions clearly, or is your judgment clouded by your passion and confidence?
What are the risks of waiting? If you decide to work as an employee elsewhere for longer before founding, what are you doing to ensure that your lifestyle expenses remain in line with future founding?
Who are your potential co-founders? What are their backgrounds? How are you similar? How are you different? Have you worked with them before in a professional capacity? What disconnects might develop between you?
Questions for Your Team
What gaps exist for us as a team? How and when will we fill them? How do we balance one another? Where don’t we balance each other?
Are we collectively ready to make the leap? How much time and resources can we each contribute?
How can we support one another? How will we ensure effective communication exists between us throughout?