
How many founders do successful tech companies have? - vnorby
http://philosophically.com/some-data-on-founder-counts-at-top-companies
======
okamiueru
The title is accurate, and that is all the data presented tells you.

The implication that this can indicate which number that gives you the highest
chance of success is completely bogus. Without taking account failures (or
distribution of attempted companies by founder count) you have no data
whatsoever for discussing what is most likely to succeed.

Makes me ask, what is this doing on HN?

~~~
jacques_chester
> Makes me ask, what is this doing on HN?

1\. Collecting karma for the submitter. ("Why X is foo" followed by "why X is
NOT foo" followed by "Foo is irrelevant, it's actually all about bar").

2\. Promoting the guy on the other side of the link. Unfortunately Vibhu Norby
is one droplet in the indistinguishable white mist that makes up the ever-
expanding Svbtle Borg, so it probably isn't working all that well.

(Yes, I totally do 2. Every chance I get to link to myself, I take.)

Problems:

1\. How did Deloitte define their data set? (edit: I found out, it's in the
report)

2\. Does fast growth == success?

3\. How is a founder defined?

4\. What about companies that failed?

~~~
vnorby
Actually, I thought it was interesting to know what the breakdown was amongst
successful startups since I've never seen any data about it, only anecdotes. I
did the research. It took several hours. I happen to have a place where I can
share the research with people that might care and have something to add.
Clearly, I am mistaken.

~~~
jacques_chester
I guess I'm just cynical about a pattern that I see played out here on HN a
lot.

Whenever controversial something hits the front page, there's always a spate
of quick and easy responses that turn up in the next few days.

That being said, I think my list of problems still remains.

You say that you have a breakdown of how many founders different successful
companies have.

Well, you are already ahead of Ryan Carson and Paul Graham in that you've
risen above an exchange of anecdotes at 20 paces.

But I think you oversold it in the title.

"How many founders do successful tech companies have?" is not supported by the
data.

First, it's based on a list of "fastest growing". Lots of companies grow fast
and then abruptly stop growing. You just substituted one metric in for
"success" and didn't say that's what you did.

Second, the list is based on self-submitted reports (scroll down to "Selection
and Qualifying Criteria") -- "Deloitte has not audited the ranking ... Some
companies that may be eligible to appear in the ranking are not included
because they did not submit the required information or otherwise declined to
participate".

Third, it doesn't deal with failures, which is _more interesting_ because that
is _the default condition_.

Fourth, it's restricted to North American companies only.

Fifth, how did you define "founder"? That seems to me to still be a slippery
wildcard in this whole discussion.

Take Ryan Carson's case. He owns most of the equity. Is he the sole founder?
If "founder" is based on legal control, yes. What about the day-to-day? He
says he has an employee who is a de-facto co-leader. Are they a founder? Maybe
not. What if they'd been there right from the start? And so on.

Good on you for doing the tedious slog of looking up a hundred companies, but
... well, I think you've oversold on the title.

And that's what my gut, knee-jerk, ex-Slashdot cynicism reacted to.

~~~
vnorby
Ok, got you. I can answer these. Indeed, it is not representing all fast
growing companies all around the world. However, it doesn't have to. Like I
said in the post, there is no reason to believe that biases how many founders
they have. Companies with two founders are not more likely to submit
themselves to such a report. Anyway, almost all of them are businesses
generating tons of revenue. A large percentage of them are public companies
and many are 10-15 years old. Feel free to look them up.

A founder is someone listed as a co-founder either on the management page,
Wikipedia, or in press mentions. It's not really slippery. It took so much
time because I wanted to make sure I was doing it right.

~~~
jacques_chester
In your position I'd have pointed out that the data set shows a clear
departure from Benford's Law, suggesting that something about single founders
is weird.

> Like I said in the post, there is no reason to believe that biases how many
> founders they have.

Different cultures have different ideas about individual risk and teamwork.

> tons of revenue ... 10-15 years old.

Gosh, you mean young companies have more scope for rapid growth and therefore
wind up on a self-selected list of rapidly growing companies?

In no way could this sample be biased against failed young companies.

Also unanswered: are there fewer single founders because there are fewer
single founders to _begin with_ , or is it because they _fail more often_?

------
smarx
> That being said, based on the initial data, if you want to give yourself the
> best odds of having a high-growth tech company, two founders is optimal.

I don't see how that conclusion can be drawn from this kind of data.

EDIT: It looks like the post has been edited, so this criticism is no longer
relevant.

~~~
vnorby
More top technology companies are started by 2-person founders. If you had no
other data other than what is presented, and there isn't, you would want to
start a company with 2 founders. Obviously this is not taking into account how
many businesses are started with different numbers of co-founders. Perhaps 50%
of all people who start companies as a single founder end up on this list. We
don't know that. The idea I have in my head is that it's easier to start a
company with fewer co-founders, so more would be started with one than two,
and two more than three and so on. In any case, the data is there for you to
make your own conclusions and you don't have to take mine.

~~~
InclinedPlane
Erm, ok, let's follow that through.

I don't even need to look at the data to say that in the US most successful
companies have at least one white, male founder. Does that mean that if you
start a tech company and are non-white or non-male you should make sure to
partner up with one to ensure success? Is it just a bias due to demographics?
It it a real factor related to an intrinsic advantage of white males in making
successful startups (even if it's just an external cultural factor)?

Or, is it a much more complex issue that can't and shouldn't be so easily
infographed and turned into a convenient piece of folk wisdom?

Taking this data, which incidentally is extremely incomplete, and using it as
a rubric on how to start your company is little more than cargo cultism.

~~~
vnorby
If a greater percentage of successful businesses are started with 2 people,
there must be a good reason for it. If businesses were more likely to be
successful with one person, wouldn't you see more people opting to go down
that route in aggregate, irrespective of anything else? Businesses are units
designed to succeed, they would not (in aggregate) do something to counter
their own success, especially with something non-obvious like how many co-
founders you start with.

~~~
koide
No, if the proportion of 2 people vs 1 person startup is skewed, which is very
likely.

Also, the amount of founders could be neutral to the success, in such case
neither is countering their own success, and again just a matter of samples.

Correlation is not...

~~~
InclinedPlane
Precisely. If 2-person and 1-person startups are equally likely to succeed but
2-person startups just happen to be more likely then they will be over-
represented in the data.

What is really necessary is a statistically significant sampling of startups
from their inception and tracking the percentage of success and failure
depending on various factors. There is simply not enough data in the study at
hand to say that 1-person startups are less likely to succeed than 2-person
startups, in fact it's quite possible that they are more likely to succeed, we
just don't know.

------
hluska
TL;DR -- The US census provides the wrong data to answer this question, but I
can't think of a better way to spend a cold Sunday morning....:)

I did some digging on the US census site and found these numbers (for 2008):

\- 22,614,000 returns were filed for non farm sole proprietorships. Of these,
16,434,000 indicated any type of income. Combined, these 16.4 million sole
proprietorships reported a net income (less loss) of $265 billion.

\- 3,146,000 returns were filed for partnerships. These returns showed a total
of 19,300,000 partners. Of these, 1,609,000 returns indicated any type of
income. Combined, the 1,609,000 partnerships reported a net income (less loss)
of $458 billion.

Some numbers:

\- 72.67% of sole proprietorships reported income.

\- 51.14% of partnerships reported income.

\- 22.614 million sole proprietorships generated $256b in net income (less
loss). This is an average of $11,320.42 per proprietorship started.

\- 3.146 million partnerships (covering 19.3 million people) generated $458
billion in net income (less loss). This is an average of $145,581.69 per
partnership started. Or, this is a net income (less loss) of $23,730.57 per
partner.

Using US census information on non incorporated businesses (in 2008) provides
some interesting space for thought. A higher percentage of sole
proprietorships report income, but on average partners in a non incorporated
business report more income. This seems to indicate that it might be easier to
get started if you go alone, but adding founders increases the magnitude of
success (when it works out). Logically, this makes some sense, though I
hesitate to make any conclusions based off of this data.

While this data is interesting, it is ultimately quite useless at answering
the question. First off, this data is on all non incorporated businesses
(other than farms). Therefore, this data may or may not be applicable to
technology. The Deloitte report (and the writer's research) indicates that the
top 100 technology companies have an average of 2.12 founders. The US census
data gives an average of 1.62 founders per company. That difference could
indicate differences in the two populations (ie - tech companies versus all
companies) or sampling differences (Vibhu looks at 100 companies, I'm looking
at data on 41 million).

------
Khurrum
Its an interesting question. I think that if you're going to have more than
one person leading, they should typically be leading separate parts of the
business (sales / tech).

The problem with a single individual managing responsibilities is that there
are still plenty of tasks that need to be done so it becomes a question of
what you can automate and what you can outsource for as cheap as possible.
Basically, good delegation and management skills.

------
brudgers
_"There is an argument going on at Hacker News about whether you should found
companies as a single founder or not, spurred by Ryan Carson."_

This mischaracterizes the dialog.

The issue is about a specific type of company, startups, and a specific
definition of "startup," that used by venture capital.

PG's comments were as narrowly focused as his essays and YC itself. His data
set was not the Tech Sector, but a particular type of business.

------
smoyer
"If it is true that greater than 70% of all companies are started or owned by
one person, you would be able to make the conclusion that more single founders
fail than should on average."

Not really ... it only indications that more single founders fail to grow fast
enough to make Deloitte's list.

------
MojoJolo
The information here about a single founder backs the "doing it alone" thing,
the top topic here in HN. (<http://ryancarson.com/post/35939367603/you-can-do-
it-alone>)

I'm happy that there are a bunch of single founder companies. I'm planning to
start one, as a single founder.

