13 startup signals: Go solo or start a band?
A startup founder’s conundrum
Have you started your startup yet? If not, or you’re still in the early stages, it’s likely you’re trying to decide if you should go it alone or partner with other founders to build your business.
I faced that decision when I launched Entente, my marketing consulting practice, in 2008 and I’m facing it again as I launch ContentMarketingStartup.com.
I built Entente as a sole-proprietor startup. Although I used multiple freelancers to expand Entente’s services beyond my own marketing skills, none of them were co-founders or owners of my business.
But I’m thinking a bit differently about the CMS online business, which has a distinctly different revenue and service model than a consultancy.
I don’t think this conundrum is unique to me. Rather, it seems that the solo-founder versus multi-founder choice is a challenge for almost any startup. So, how do you make that decision?
Setting the stage: Startup on a shoestring
Although a fair number of startups begin with significant funding, I’d guess that’s not your situation. It certainly isn’t my situation, either.
In fact, according to Small Business Trends a full “69% of U.S. entrepreneurs start their businesses at home.” That screams minimal funding and a bootstrap business plan.
A shoestring mindset is probably even more common among those who’re thinking about starting their first business, or starting one with modest revenue potential.
So if that describes you, you’re in good company.
Startup signals for founders
Given a likely shoestring setup, you might think that a solo founder is the only way to go. But there are certain factors that indicate otherwise.
I’ve identified 13 startup signals in all that founders should consider. Some make the case for staying solo, while others make the case for a multi-founder partnership. Let’s take a closer look.
The case for a solo founder startup
1. DIY at heart
If you’re the type who prefers to do it yourself (DIY) rather than involve someone else, then staying solo might be right for you. A single-founder startup will better match your character as an independent, hands-on operator.
2. Your own strategy
In a solo-founder startup, the business ideas and strategy are uniquely yours. There’s no need to share credit or coordinate different approaches with anyone else.
3. Quick decisions
As a solo-preneur, you don’t need to get anyone else’s approval for business decisions. Although it’s somewhat counter-intuitive, working alone can actually make you more productive because there are no drawn-out group deliberations.
4. 100% financial ownership
As a single owner, any revenue and profit is all yours – no sharing required. If that appeals to you, or if the revenue potential of your business is limited, going solo might be a good idea.
5. Your time is your own
When you’re a solo founder you can schedule your time on your own personal calendar. This can be great if you have other interests beside your business, or simply prefer to do what you want, when you want.
6. Be your own person
There’s less chance of personality conflicts in the workplace when you don’t have any co-founders. Although you might eventually have employees, you’ll have a lot more control over those relationships compared to dealing with co-founder temperaments.
The case for partners: multi-founder startup signals
7. Better, more creative decisions
It’s no surprise that the quality of decisions goes up with a small group compared to an individual decision maker. In a multi-founder startup, you’ll have help from key people to brainstorm, strategize, and decide – and face fewer lonely decisions.
8. Skills and knowledge
Multiple founders bring an influx of valuable skills and knowledge beyond your own. This in turn can give your startup a broader foundation for creating value. Think: 1+1=3.
9. Shared funding
In the same Small Business Trends article, they report that 77% of small businesses use personal savings to fund their startup. They also report that businesses with two founders raise 30% more money than single-founder startups. By adding one or more founders you might be able to spend less of your own money. Or, you could increase the overall funds available to get off the ground, which could mean the difference between a launch and a fizzle.
10. A bigger network
Think of the old saying, “It’s not what you know, it’s who you know.” Co-founders bring a wider network of contacts than your own. They can represent additional funding sources, prospects, partners and more that could be crucial for your startup’s success.
11. More energy
Let’s face it: launching a startup is hard, lonely and frustrating in many ways. Multiple founders can buoy your motivation and energy when the going gets tough. It works the other way, too, with your vitality lifting up the others.
12. Faster startup
With multiple founders sharing the work load, you’ll have the potential for a faster time to market and a shorter road to revenue. This can be crucial when you need to gain a first-mover advantage, match a competitor’s new offering or simply fire up your economic engine sooner.
13. Bigger impact
A multi-founder startup has more potential for making a big impact. That could mean more revenue, more customers, more products, more features or value, more strategic partners or other aspects of business success.
Which startup model is right for you?
These thirteen signals should help you imagine your own startup future so you can decide what’s right for you.
- Do you prefer the control and focus of going it alone?
- Or would additional founding partners give you the leverage to realize a bigger dream?
Whatever you choose, I’d love to hear about your thought process.
- Are you struggling with this choice right now?
- Have you made up your mind? How?
- Does one of these signals help you see your path more clearly?
- Are there other factors to consider?
Share your experience! I’m rooting for your success, and your fellow startup entrepreneurs are, too.
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