While there has been endless discussion in the startup community regarding the benefits and drawbacks of forming a company with a co-founder versus going it alone, conventional wisdom suggests that having a co-founder is preferred by entrepreneurs and investors alike. Co-founders provide additional skill sets and perspectives, help mitigate key person risk, and provide founders with true partners who understand the emotional ups and downs involved in running an early stage business.
Paul Graham of Y Combinator lists having a single founder as one of the top 18 mistakes a startup can make. He explains:
What’s wrong with having one founder? To start with, it’s a vote of no confidence. It probably means the founder couldn’t talk any of his friends into starting the company with him. That’s pretty alarming, because his friends are the ones who know him best. But even if the founder’s friends were all wrong and the company is a good bet, he’s still at a disadvantage. Starting a startup is too hard for one person. Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.
While I agree that a co-founder offers numerous benefits, and feel that I personally would fare better in a startup environment with the support in place that a co-founder provides, the question I am left pondering is when does a co-founder become a liability? Beyond considerations of equity splits, personality clashes, and disagreements over strategic direction, is it possible that having a co-founder can provide a false sense of security?
What if having someone to cheer you up when things go wrong leads you to undervalue the consequences of poor decisions? What if a co-founder’s endorsement convinces you of the merit of a bad decision that you would be less reluctant to reconsider on your own? What if you struggle to make something work, not because you truly believe in the idea but because you do not want to let your co-founder down? Is it possible for groupthink to manifest in teams of two?
Though entrepreneurs often surround themselves with teams of advisors, investors, and others who provide fresh perspectives for their concerns, having a co-founder who is equally close to the day to day workings of the startup means that we may value their perspectives more than those of these “outsiders”– especially if they validate our own. Conversely, when we are alone, we must constantly question whether we are doing the right thing, as there can be no diffusion of responsibility at the top or confirmation from others that we are making wise choices.
While having a co-founder can be a truly great thing, co-founders should also be aware of these potential pitfalls and take care to avoid the false sense of security that they may provide to one another.