239. Do you really need a co-founder?

Do you really need a co-founder? There's intense pressure in the startup world to find co-founders, but the data tells a surprising story.

MIT research shows that solo founders are actually more than twice as likely to succeed compared to teams, while Harvard research reveals that 65% of high-potential startups fail due to co-founder conflict.

In this episode, you'll learn how to make the right decision about co-founders for your business, based on data rather than pressure.

Listen to learn:

• Why the "you must have a co-founder" narrative persists despite evidence showing solo founders often succeed
• What successful solo founders like Jeff Bezos, Sara Blakely, and Mailchimp founder Ben Chestnut did differently
• How to evaluate if you really need a co-founder for your specific business
• A practical framework for finding and testing potential co-founders if you decide you want one

Whether you're a founder feeling pressured to find a co-founder, or an investor evaluating solo vs. co-founded companies, this episode will transform how you think about startup leadership and team building.

Learn why it's better to be a successful single parent than stuck in a toxic marriage when it comes to your business.

Resources mentioned in this episode:

• MIT Sloan: 2 founders are not always better than 1
• The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup, by Harvard Business School professor Noam Wasserman

Timestamps

00:00 Introduction

03:06 The Co-Founder Relationship

06:00 Risks of Rushing into Co-Founding

08:52 Data-Driven Insights 

12:12 Conflict and Co-Founders

15:08 When Co-Founders Make Sense

18:05 Evaluating Potential Co-Founders

20:58 Alternatives to Co-Founders

23:47 Testing Before Commitment

27:09 Focus on Success, Not Pressure

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Transcript

Sophia Matveeva (00:00.044)
Especially if you're a non-technical founder, you've probably been told that you have to get a technical co-founder or basically you're just not going to be successful. And I'm going to show you why that is not necessarily the case.

Sophia Matveeva (00:17.774)
Welcome to the Tech for non-techies podcast. I'm your host, tech entrepreneur, executive coach and Chicago booth MBA, Safiya Matheer. My aim here is to help you have a great career in the digital age. In a time when even your coffee shop has an app, you simply have to speak tech. On this podcast, I share core technology concepts, help you relate them to business outcomes.

And most importantly, share practical advice on what you can do to become a digital leader today. If you want to have a great career in the digital age, this podcast is for you. Hello, smart people. How are you today? In this lesson, we are going to discuss whether you really need a co-founder. And I have some data for you that I think is going to surprise you because when I was researching this lesson,

Actually, I found some literature that really surprised me on the good side. And the first thing that I want you to know is that I think of a co-founder relationship basically like a marriage, and this is probably not new to you. So what I want you to think about is that your business is kind of like your baby and your co-founder, if you're going to have one, is going to be like the person that you marry. So like your business husband or your business wife, and you're bringing up this

baby together. So there are some marriages that are wonderful and those really wonderful supportive marriages, they create really well supported and happy children. And if that was your childhood, amazing, that's great. But for a lot of people, that wouldn't have been the case. So a lot of people would have actually really wanted to get their parents to get divorced because frankly, those relationships would have been dysfunctional.

And so let's bring it back to the co-founder side of things. So if you have a dysfunctional relationship between the business's parents, the baby, which is the business, it is not going to do well as in romantic life, so in business. So this is why, yes, sometimes it's a great thing, but sometimes it's a really bad thing having a co-founder that is. But the thing is, I bet you are watching this video because

Sophia Matveeva (02:36.696)
Because you've been convinced that basically if you don't find a co-founder, then your business is not really going to be much of a success. Well first, before we get to the data, let me tell you about some people that you probably would have heard of that are solo founders. So let's begin with Jeff Bezos, the founder of Amazon. He is a pretty rich, successful man, right? Who has literally redefined entire industries.

And he is a solo founder. What about Sarah Blakely, the founder of Spanx? That's not bad either. Also, if any of you have been sending out emails to lots and lots of people, you might've used Mailchimp and Mailchimp was also built by solo founder. And Oprah, that's another one of my favorite solo founders in a slightly different field. Anyway, the point is there are very successful examples of solo founders. But the thing is we are living in a time

when the venture capital community in particular and accelerators and you know, basically everybody who tries to impress VCs, they believe in this co-founder thing. And especially if you're a non-technical founder, you've probably been told that you have to get a technical co-founder or basically you're just not going to be successful. And I'm going to show you why that is not necessarily the case. So the first thing that I see actually

The first thing I want to tell you about is that when founders believe that they have to find this co-founder and before they find this person, they can't move on, they make this really big mistake of actually not doing the work of building the business. So instead of doing customer validation or instead of working on sale, working on marketing, instead of perfecting your product, maybe getting your prototype or your MVP out, you are going to all sorts of startup events and trying to meet this person.

And you know, you, especially if you're working full time or if you're studying full time, you don't have that much time to play with. So if you are not focusing on building your actual business and looking for this person instead, that's not a good trade off. That is not a good thing to do. And also what I find that founders do is that they kind of just find somebody and then they're like, this person's going to do, okay, fine. I will, I'll sign an agreement with them. And that's.

Sophia Matveeva (05:01.518)
really a terrible idea. think about this. So have you ever been in a situation where you've got some sort of family occasion coming up, like maybe your sister's wedding and you're single and your parents have been going on at you about, why aren't you married? You've got to settle down. When are you going to finally find somebody? And you've got this wedding coming up and you know that family pressure is going to be on. Even if you haven't been in that situation, try to relate to it.

When family pressure is going to be on, what you could do is you could, you know, bring a date, bring a friend. But what I find that sometimes people do is that they're just like, okay, you know what, maybe I do need to find this person. Maybe it is too late. Okay. Here is a suitable looking person that I barely know, but I think we'll kind of get on. Let's get married. Okay. People actually do this especially a lot in their late twenties and early thirties. And then what happens 10 years later when they get to their early forties.

We've all seen divorce rates, right? Okay. Do not do the same thing for your co-founder and yet people do the same thing. And instead of a sister's wedding, it's going to be like an accelerator application. So I advise some of the world's top accelerators and I am trying to fight against accelerator applications saying that you need to have a co-founder, but you know, I haven't completely won the battle, although I'm getting there. But anyway, if you need to apply for an accelerator and it's a really good one.

And you're a solo founder and maybe things are actually going pretty well. Maybe you've got some customer validation, maybe you're making some money, maybe your product is decent, but you don't have a co-founder and you basically just bring on some random person who has kind of a vaguely useful skillset. And then you sign a shareholders agreement and you you give them away some equity so you could basically be part of this accelerator. That is a terrible.

terrible idea. I will get to what to do in this kind of situation a bit later on in this lesson, but essentially just please don't do that. And I do want to say that if you have done things like this, I really, I really sympathize because first of all, I have done things like this. So I don't have co-founders in this business that I'm running. And to be honest, this business is doing really well.

Sophia Matveeva (07:26.36)
But in my previous business, I followed all of that advice. know, I started that business when I was at business school. So I had a lot of the kind of VC community and accelerator community telling me what to do. And so I followed it. Some of the advice was good. Some of it was rubbish. And so I did have co-founders in that. So I, and you know, some of them were committed and some of them were really not committed, but they looked good on the slide deck and they impressed investors.

but they really didn't do that much work. And this is the kind of thing that I mean, that, know, you can sometimes get people on board just because they tick some boxes, some very superficial boxes, but when it comes to actually running the business, it's not going to be helpful to you. And now, here is some research. have some research that I promised you some research that was going to make you happy. Right. So I have discovered some research by MIT.

by two people called Greenberg and Molleck, and I'm going to paste it in the show notes. That says that companies started by solo founders survive longer than those started by teams. Oh my God. Yes. And they have the data. So they say that solo founders are 2.6 times more likely to succeed than teams of three. 2.6. Then the same researchers also say that solo founders are 2.5 times

more likely to succeed than two person teams. So basically if you're a solo founder, you're more likely to succeed than two person team and a three person team. That's pretty good. And they've got another final statistic for you that solo founders are 54 % less likely to shut down compared to three person teams. Okay. So there's a lot of data, a lot of numbers, but basically you don't need to remember every single statistic. The point is that companies started by solo founders.

survive longer than they started by teams. Then I have some more research from you from another very fancy institution. we just had MIT and now let's go to another Boston institution, Harvard Business School. So there is a professor there called Noam Wasserman who wrote a book called The Founder's Dilemma, which actually I've read and I recommend it. And here's a direct quote from Professor Wasserman. He says that 65 % of high potential startups fail due to conflict.

Sophia Matveeva (09:50.048)
among co-founders. Now, if you ever worked on a group project, not even just started a company, but any kind of group project, that is not going to surprise you, right? So when you're working on, know, there's a lot of pressure and you know, you're figuring out what the direction is and also, you know, maybe people are not yet sure exactly what their commitments are. And, you know, some people are working full time on the startup and some people are not.

Some people have kids and other people don't. All of this inevitably leads to conflict. Now, conflict is not by itself a bad thing. It's, you know, does that conflict get resolved healthily? Does that conflict lead to something good? Or is it just arguing that is basically a massive drain that drains your time as a founder and that drains you emotionally?

You know, if you've ever been in a situation when you've argued with somebody who's really important to you, and then, you know, you've gone to work the next day, you know that that following day, you feel kind of depleted, you feel less creative, you kind of feel less enthusiastic about your work life, even though, you know, that argument was, I don't know, with a parent or a sibling or a friend or your beloved. And so when that happens in a startup, when that happens with your co-founders, it is extremely destructive.

So if it happens rarely and if these arguments get resolved, then the startup would get stronger. But a lot of the time, those arguments don't get resolved easily because you know, conflict resolution and dealing with your problems head on, that's also kind of a skill of maturity that frankly is kind of difficult to get and you know, not everybody has. And moreover, when you are creating a company together, you're under immense pressure.

So even if you actually have these conflict resolution skills in general, when you're under immense pressure, people are not necessarily going to be their best self. Anyway, here's another thing I want to tell you that even when I have seen companies that do have co-founders, they don't have equal partnership. So a really good example of that is Apple. So when we think of Apple, most of us think of Steve Jobs, but Steve Jobs was not the only founder. He was a co-founder.

Sophia Matveeva (12:12.536)
He also had the other Steve, Steve Wozniak. But when we think of Apple, we think of Steve Jobs. So he was clearly the dominant force. Alibaba also has co-founders, you know, do most people know who they are? A lot of people, most people who know who Jack Ma is, but he had co-founders. So again, we have co-founders, but really we have this dominant force. So the reality, even when there are co-founders is that

One person leads, so it's not a quality. even if you're going to get co-founders, they shouldn't expect a quality and neither should you. And so if you're going to go for co-founders, do think about this because if both of you are struggling for supremacy, if both of you are trying to be the key decision maker or the CEO, which often happens, then you're going to have some problems. And so why does this happen? So here's a quote from the MIT research.

The reasoning that a difficult process could be made easier with more resources and social support creates a self-fulfilling prophecy. basically the research says that, well, it is reasonable to assume that if you have a group of smart people working together with different skill sets, then they're more likely to have a successful outcome than not. But that basically ignores how people actually behave.

You know, if there are several people trying to be the boss, if you know what we see at OpenAI, there are people who want it to be a charity. There are people who want it to make loads of money. And yes, it's still a very, you know, well-capitalized company with a lot of people using their product, but they certainly have had a very visible, let's say management and founder mess at the top. So what MIT research say, and I like this quiz, they say that venture capitalists have a mental model in place.

when they make an investment and they start to look for teams with certain competencies without any scrutiny around whether their assumption for a successful company is valid. That then becomes the de facto way of doing things. And that's kind of the situation that we're in now, but essentially somebody at some point decided that co-founders were the way to go. So if you're not, if you don't have co-founders, especially if you're non-technical and you don't have technical co-founders, then

Sophia Matveeva (14:40.374)
You know, you are basically too risky. And so that comes up in Y Combinator. So Y Combinator famously rejects solo founders. Yes, they let in some people, but very rarely, most of the time they want founding teams. Accelerators also generally want founding teams. And sometimes even if they let you in without co-founder, then you'll have to promise that, okay, when you

Like for the next stage, like when you start fundraising, you are going to get a co-founder. Which actually could be destroying value. So, and I've also been in pitch competitions when I have been a judge and I've seen other judges say, okay, you've got a great product, you are doing well, you've got revenue, things seem to be going in the right direction, but we are really concerned that you don't have a co-founder. I mean, this to me literally makes no sense, but.

It happens. there is this pressure. Let's kind of not pretend that it's not there. There is this pressure, but when you think of this pressure, think of Jeff Bezos. What would he say? Right? Okay. So when does having a co-founder actually make sense? So it's like in a marriage, I'm not telling people not to get married. I am not telling people not to have.

co-founders, I am saying do it with the right person. So find a person, if you find a person who is honorable, who aligns with your values and who is essentially great where you are not great, then you are going to have a wonderful complimentary partnership together and you know, a partnership that supports. That's what you want both in your personal life and in your business life. In both.

Don't just get somebody because society or accelerators or VCs or your parents tell you to. Okay. So what are the things that you need in your co-founder? So truly complimentary skills that enhance the business. we can, you know, let's go back to Steve Jobs and Steve Wozniak. Steve Jobs was a non-technical founder and he was really good at storytelling. He was good at marketing. He was a fantastic salesman and Steve Wozniak, he was the tech person.

Sophia Matveeva (17:06.318)
So there's a complimentary skills. Also, you need to have shared values about what you want the company to become. So if one of you wants to make it into a billion dollar company and then take it to IPO on the NASDAQ and, you know, become super rich and successful. And the other one wants, you know, a happy lifestyle business where they work three days a week. So the rest of the time they can, I don't know, learn French and do wine tasting. both of those aims are completely wonderful.

And, but they're just not compatible, right? So you also need to have this aligned vision. So you need to have an aligned vision for your company and for your future. And you need to have really clear agreements about decision-making. So you are not fighting about who is the biggest boss. So both of you have domain expertise and both of you are doing things. You know, maybe one of you is a tech person, one of you is the salesperson.

So what are the wrong reasons to get a co-founder? Loneliness. And you know what? The founder journey is lonely, so I totally, totally get you. Just don't solve it with the wrong co-founder. Solve it by joining founder communities. Join it by joining an accelerator. Join it by finding some founder friends that are kind of at your level. You know, get a therapist, get a coach. I have both.

And I also have found a friend, honestly, this really, really helps. So yes, solve loneliness, not necessarily with a bad fit co-founder whom you're dragging along with you. Don't get a co-founder because of external pressure, because that's a very short-term decision. So people are going to be happy, know, you accelerate as all you see is might be happy that you have this co-founder. And so you solve the short-term problem.

But what happens is that you create a long-term problem of potentially bickering and, the emotional distress of constantly bickering with your biggest business partner. That's a big long-term problem. And according to Harvard Business School Professor Noam Wasserman, that really increases your chances of failing. So what about the fear of going it alone? Like that is a thing. So, you know, there's just the loneliness, but then there's also the kind of

Sophia Matveeva (19:30.578)
What, you know, am I ideas good enough? Am I good enough to do this? And okay, am I just going to sit here by myself and work all of this out? No, of course not. But again, you know, fear of going it alone can be solved by advisory boards. It can be solved by a founding team, right? There are all sorts of ways to solve it without making somebody into a co-founder and signing a legal agreement that is basically going to be really, really hard to change.

Here is a strategic framework that I'm going to show you that I want you to use when you are evaluating a specific co-founder. So, so far we talked about the fact that, okay, you don't absolutely need a co-founder to build a successful business. You don't. It is possible. There is also data that shows that actually having a co-founder could decrease your chances of success.

That kind of reminds me of the divorce rate, right? So we're just recapping this lesson here. So if you have a great partnership, it is going to help you flourish. If you have a bad partnership, it is most likely to drive you to destruction and stress and closing down your company. So when you are in front of somebody, when you're actually thinking, do I sign this person on as my co-founder? First of all, have to like the first thing is the mindset shift.

Stop constantly selling. Yes, you have to sell the opportunity. Of course you have to be a salesperson because founders have to be salespeople. But when we are in sales mode, we can forget about whether we actually want the thing. So, know, if they say, yes, yes, yes, I really want this. Do you want this? So number one is first, just think, look at yourself, understand your strengths.

and your gaps, make a list of what you bring to the table and what's missing. So for example, if you're a non-technical founder, I expect that you are going to be good at sales. You're going to be good at marketing, or you're going to really understand your user. Now, if you're not technical and you don't have these skills, then what, what is that? Because basically a startup is product and marketing, well, product and sales. There's a...

Sophia Matveeva (21:54.902)
Those are the two things that you need to do. So if you're not one, you're basically going to be the other. So figure out what you, what you are and what you're not. And if you're looking for a co-founder, that person is doing the things that you are not good at. Also, evaluate alternatives. Can you hire or outsource what you lack? And if you don't have any money or if you don't have enough money to get the kind of person that you really want.

An advisory board is a really, really good way of doing it. And there are some episodes, there are some previous lessons on this channel about why you should become an advisor to a startup. So listen to those and basically reverse engineer. And maybe I'll do some lessons further on about essentially what you need an advisory board. Okay. So evaluate your alternatives. Can you hire somebody basically can you, what other ways can you get this skillset without turning them without giving away your equity?

to a co-founder without giving away the co-founder title. The co-founder title also has weight. The title has weight and equity has weight. Hold on to these things. They are really, really pricey, emotionally pricey and also financially pricey. If you've decided that the person that you're evaluating, if you've decided, okay, they have a complimentary skillset.

They also want to build the kind of business that I want to build so we're both creating a unicorn or we're both creating a lifestyle business. The next thing you need to do is to test before committing. So work together on a small project first. So work together for three months and basically say to them, yes, this is, you know, I'm not yet promising you a co-founder title. And we're definitely not going to sign any paperwork yet. Let's just see how it goes.

Do we like each other? Do we get on? Do you have a working style that complements you? And I know that, you know, in shareholders' agreements, so if you actually do sign an agreement together, their equity will probably vest. That's how you should do it. So basically that means that they don't get all of their co-founder equity as soon as they sign the agreement. But signing the agreement and giving them the title in the first place,

Sophia Matveeva (24:16.364)
That's already a really big step. Let's say that's kind of like giving somebody an engagement ring, right? So yes, getting married, that's the massive step, but getting engaged is a really big step. So think about what would you want to know about the person before you got engaged? You would want to know a little bit more than, well, yeah, they're hot. mean, hopefully, right? Hopefully you would use your brain a bit more.

So get to know them, work on a project before getting that engagement ring and the engagement ring is the shareholders agreement. That's the investing agreement, which means that they are not going to get all of their equity straight away. And think long term. Remember that if you are going to sign this agreement, if you're going to bring somebody on board,

This is really serious business and I've heard people say that it's actually easier to get divorced than to get rid of a co-founder. I'm not sure whether, you know, one's easier than the other. It depends on your situation and your prenup, but those are really difficult. And when you're under pressure from accelerators to get a co-founder, okay, you could actually use this accelerator as your test before committing. Remember I told you that.

We'll come back to the accelerator point later on in this lesson. So when I have been in charge of accelerators, and people say to me, okay, but do I need to get a co-founder? If I am completely in control of the person who gets in, then I say to them, that's not what I'm looking for. That's not necessary. But sometimes I am leading an accelerator that's already been created by somebody. So for example,

I was one of the leaders in a textiles accelerator. They have their own process, which, you I can't completely change. Right. So what I say to people is that if you need to basically just put down some names for the accelerator application, find people who you think could be co-founders and say to them, look, well, we have this opportunity to be in this accelerator or in this program. We have an opportunity to do this program. This program, whether you want to work with me long,

Sophia Matveeva (26:39.424)
long term on this project or not, it's going to be really good for your career because you're going to learn some innovation skills, you're going to learn some sales skills, you're going to learn product management skills, you learn how to pitch. These are really good skills for your career, no matter what. So join me in this project. And it's also going to be a test for us about whether we want to work together. And if they say yes, put their name down on the application. The application is not an equity agreement.

It is not a shareholders agreement, right? It's kind of that test before you get engaged. So this way you can join the accelerator without the long-term risk to you. Hope that makes sense. Okay. So finally to wrap up, what I have noticed is that if you're building your business and you're getting some kind of traction, then good people come to you. Right?

If your social media following is going, if you've got a consumer product, so if you've got a consumer product, if your product is decent, if people like your product and people are sharing about it on social media, then good team members will come to you and ask to be your founding team, ask to be your co-founders. If you are in the B2B space, if you get a corporate client who pays you, then you start telling people about the amazing thing that you've built.

People will want to be part of your success story. So if you are listening to this and watching this wherever you are, my recommendation is that focus on your business. So if you have a person that you're evaluating about being your co-founder, then use that framework that I've just given you. But if you don't have anybody in mind, then that's okay. You've got things to do. You're running a business. Focus on your product, focus on your marketing.

bring money in, whether that's pitching to investors, whether that's sales. And as your business grows, good people will come to you. And that's what happened to Jeff Bezos. He built his business with a very, very devoted founding team. A founding team is different to co-founders. A founding team, they're the people who are the first employees who helped build the business from the ground up, but they are not co-founders. It worked for Jeff. It worked for Jeff Bezos.

Sophia Matveeva (29:04.864)
It has worked for Mailchimp, it has worked for a lot of companies, and it can also work for you. So success attracts great people, so focus on your success. And remember, it is better to be a single parent than to be in a toxic marriage. So as in marriage, so in startups. So choose what's right for your business and not what others expect.

Alright, well thank you very much for watching, thank you very much for listening. If you are listening on Spotify or on Apple, and I would really really appreciate it if you left this episode a rating and a review. So if you're watching on YouTube, just press like, leave me a comment, I will read all of your comments. And if you are on Apple, if you're on Spotify, make sure that you tell your friends about this podcast and give it a rating and a review. Okay, well thank you very much for being with me today.

and lending me your ears and I shall be back in your delightful strategies. a lot. Ciao.