Ryan Carson recently wrote an interesting blog post on going it alone as an entrepreneur. Ryan’s a very successful entrepreneur and seems to be doing a great job of building Treehouse.
Ryan, to his credit, started Treehouse from a very different position to most entrepreneurs and launched from a platform of network, reputation, experience and financial-stability. Most entrepreneurs however start cold.
I began my entrepreneurial career from a cold start just over eight years ago. Since then I built and sold a YC-funded company with a co-founder and started several companies without one.
My experience both with and without co-founders has inadvertently split-tested different single-founder approaches and I thought might be useful to write down some of what I observed along the way.
The barrier for most investors is team, not co-founder
I’ve noticed that many investors are avoiding solo-teams, not solo-founders. A viable team may have a Carson-esque leader with a group of committed (and salaried) management or it may be a gaggle of co-founders.
Either way many investors are focussed more on whether the team has the chops to deliver on its promises than whether it consists of co-founders.
It took me a long time to realise that building a great team is not the same thing as finding a great co-founder. You may not find the perfect partner but you can nonetheless build revenue, employees and investment (though maybe not from YC).
Attracting a great team means making yourself attractive
Who would you rather join at a bar, two friends laughing and smiling or the guy sat on his own in a corner? The guy on his own either looks smooth in which case you’re suspicious as to why he’s on his own or nervous in which case you stay clear. Seeing someone interact with their friends is a very fast way to understand what they’re really like.
As a single founder you’re the guy in a bar on his own. Surround yourself with people and you’re not. Those people don’t have to be cofounders though.
We recently recruited Florent, a great guy who initially joined as a contractor. A large part of the reason he became full-time was that he liked the way he saw the rest of the team interact. The rest of the team had joined partly as a result of seeing my interaction with Florent. It was a virtuous cycle.
Nobody will join as a co-founder. That doesn’t mean that they can’t become one
I spent a lot of time looking for co-founders and not finding them. A big part of the problem was that I was expecting them to be a co-founder out of the gate.
Expecting someone to join your company as a co-founder is like expecting a first-date to go home after dessert and change your child’s nappy. It’s not going to happen that way. She won’t do that and you wouldn’t feel comfortable if she did. You need to get to know each other.
Hang out for a bit, spend some time hacking together and then kick off in a more flexible relationship with reasonable salary and lower equity (or contracting). If, over time, you focus relentlessly on sharing all responsibility and decisions and all information (good or bad) then you can help someone feel like a co-founder. If they rise to the challenge then you can feed equity out accordingly.
I eventually found someone who I wanted to join me as a co-founder and when we had the conversation about sharing equity evenly I felt much happier for it. He fully understood the significance of what he’s accepting and I fully embraced the change in ownership. I’m not sure either of us would had felt comfortable doing so out of the gate.
Ask not what your new recruits can do for you…
Life as a single founder is not easy. You have to bring all of the energy, all of the belief and all of the momentum. When someone joins you feel they owe you the world, especially if you’re paying them. The reality is that if you’re cliff-vesting their equity then they’re probably taking a bigger risk than you are.
When you’re tight on cash and pressured on time, the temptation is to make sure employees (or cofounders) work every given minute. Doing that just pisses them off, wastes your time and destabilises your team. I’ve done that in the past and people hated me for it.
This time I tried instead to invest my time in my team and taught them about various code-related things that I knew and which happened to interest them.
It turns out that people respond much better to being invested in than being told what to do (who knew). Spending your time investing in your early team is contrary to the battle-weary righteousness you’re feeling but a powerful way to earn their respect and commitment.
You have to be able to produce your own core value
Before you’ve had the chance to surround yourself with team you will need to do everything yourself. This is fairly self-evident but where it’s apparently not always self-evident is when it comes to the creation of your core value. If you’re a sales company, don’t outsource sales, if you’re a software company, don’t outsource code.
I’m a developer and I’ve always started product-driven companies. However, even I have made the outsourcing mistake and, on one occasion I out-sourced development. There were various reasons why it seemed like a good idea at the time but in practice it was terrifically expensive and when my money ran out I was stuck with a half-formed product with no users, no team and no momentum.
You will be in the trough of sorrow for far longer than you anticipate. At $100/hour the Trough of Sorrow mutates very quickly into the Tunnel of Dementors. Stay out.
Product and revenue can trump co-founders in the eyes of investors
At one pitching event, I was astonished how, even as a solo-founder, I got far ahead of my co-founded competitors (and ultimately won) because I had already built and sold a product with a $12k/year licence.
If you are a solo-founder then be doubly-relentless in producing and selling product fast. This will in many cases count for much more than the pre-product, co-foundered company next to you.
(if things go wrong) Don’t become a Zombrepreneur
When there is money in the bank and people on the team it’s clear when the a company has died. You run out of money and people leave.
When you’re working solo on a shoestring you will never pass Cerberus or take the boat across the Styx. You’re light and nimble sure but you’re also a little bit undead and living ephemerally between the two worlds. The problem is that it’s not always clear whether you’re a permanent or temporary resident.
As death overwhelms your project you become more panicky, less attractive to investors and employees, and deeper in debt. Without realising it you become a zombie entrepreneur neither successful nor failed, merely surviving in hope and misery.
Two of the best things I ever did as a single-founder were to walk away and take well-paying contract positions. They recharged my bank balance and my faith in myself.
You should not be afraid to walk away. If nothing else you will save losing months of years of your life that are all too easy to ditch into the swamp of Zombrepreneurship.
(if things go wrong) Doubling down by starting a new company is a bad idea
If you do find yourself pulling the plug, the temptation is to look at your bank balance, look at your contemporaries, panic and stake it all on a new company.
The problem is that you’re starting on the back foot. You’re probably down on cash, down on confidence and down on energy. I tried doing this a couple of times and then finally realised that there’s always more time to start a company and that I’m better off making myself stronger and more experienced than wading back in again in exhaustion.
Entrepreneurs do not make money quickly. Contractors, however, do. Being paid good honest money may not make you a millionaire but you’ll be surprised how few things bother you once the cash starts rolling in. Don’t start a new company on the rebound.
If you want a company that’s greater than you then consider a co-founder
To paraphrase Gandhi’s excellent line on thoughts: “beware your founders because they become your words, beware your words because they become your actions, beware your actions because they become your habits, beware your habits because they become your values, beware your values because they become your destiny. What we are founded by, we become”.
As I’ve seen more and more companies grow I’ve noticed that they invariably become the manifestation of their founding team. If you’re a single-founder that means your company will be you and you have to ask whether that’s really what you want.
Four years ago I realised I wasn’t good enough to produce the type of company that I wanted to build so I started making myself a better, more effective professional. Today I am much, much stronger but there are still many things that a great company will need that I cannot bring.
I’ve been very fortunate to find a co-founder for this company, Rob, who will make it something far more than I could do on my own. I totally trust his perspective and his judgement. Over and above that though I trust him to add something special into the mix that I don’t have and that simply makes our company a better place to be.
As a young, red-blooded entrepreneur, I wouldn’t accept that there was any axis along which I was not strong. It’s taken me a long time to realise real strength comes from the team and not the individuals within it.