Thursday, September 20, 2007

PONDER - ONE: How many founders should a startup have?

Our PONDER series will have some points to think over for startups...

What do Microsoft, Infosys, Oracle all have in common?
Well, they all started as a "team" of newbies to biz.
So is a team a necessary condition for a successful venture?

How about reliance(A famous Indian success). Wasn't it started by
a single founder?

I recently read an article that mentioned "single founders" to be a sure shot reason
for startups to fail. In general the notion is,if you are a single founder of your startup, you need to be constantly motivated. You need to do all the work by yourself, may not have colleagues to brainstorm with or give pep talks.

Jeffrey McManus of approver.com fame doesn't quite think so. In one of his interviews
he had mentioned:

One of the guidelines I've seen repeated again and again is that a startup has to have more than one founder. I obsess over this point because, while I've been lucky enough to have a terrific band of helpful volunteers to pitch in with Approver.com, there's only one founder -- me. Does this mean that Approver.com could never attract investor dough? Dunno, but it would be interesting to delve into the rationale for the two-founder rule to get it figured out.

There's something else I find fishy with the multi-founder rule: I've seen other investor commandments that state that the biggest impediment to success isn't having a good idea or being able to wrangle the technology, but your ability to form and manage a team. (This rule is often stated conversely: "the biggest threat to an early-stage start up is when the founders have interpersonal conflicts".) This commandment seems, to me, to be in conflict with the multi-founder rule. I happen to get along great with myself, and I know I will never screw myself out of stock options or get on my own nerves while working to get a feature out the door on deadline.

Bottom line is that investors who require multiple founders are putting entrepreneurs into a chicken/egg scenario -- you can't attract funding without multiple founders, but you can't hire a second or third founder without attracting funding. At least it seems this way to me -- am I missing something here?

Other successful single founders:
Evan Williams of Pyra and he sold Blogger to Google for $50M

So what is the ideal number for a startup? Do VCs invest in single founder startups? Keep watching this space...

No comments: