

Ask HN: Single founder startups: real data and experiences? - api

... or HN single founder debate take one million. :)<p>Primer:<p>https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=77246<p>https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=77525<p>In the first read PG&#x27;s response and the ensuing debate. The second thread is someone&#x27;s attempt at statistics. Either PG or the second are wrong.<p>So <i>are</i> there any good statistics on this, and what do people think now? The startup world has a rapidly evolving base of experiential knowledge.<p>Why I&#x27;m asking:<p>I&#x27;m a single founder of something transitioning from side project to startup: https:&#x2F;&#x2F;www.zerotier.com&#x2F;<p>1.4% daily compounding growth on $0 marketing spend (all word of mouth), 1% freemium conversion rate (without much effort to optimize that), lots of happy users, etc.<p><i>Most</i> people I talk to say I <i>must</i> have a co-founder. I will fail, nobody will fund it, etc. It&#x27;s definitely conventional wisdom.<p>I don&#x27;t for two reasons. One is circumstantial. I did most of the work to build this in a small town w&#x2F;no tech scene, then moved to SoCal. I don&#x27;t know many people here yet. Secondly I am not a bachelor right out of college and am not surrounded by bachelor&#x2F;ettes right out of college.<p>Based on a lot of past experience in startups (Boston area), I&#x27;ve observed that a good co-founder is much better than none but a bad one is much worse. Founder conflicts are death. My personal inclination is to put it in my &quot;risks&#x2F;disadvantages&quot; column and move on and try to compensate in other ways. I&#x27;m skeptical about the value of just grabbing someone off the street and entrusting them with something like that.<p>Yet I hear the constant refrain: &quot;you must have a co-founder.&quot;<p>Thoughts?
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davismwfl
It depends, if you are going after investor dollars from the traditional SV VC
bunch then yes, they all talk fairly openly how they favor multi-founder
companies. At the same time, most of them have invested in solo founders as
well if the plan is strong and the business already has traction.

What is your goal? Do you want investment from a SV VC? Do you need it? Do you
have enough traction to even get on their radar? Any connections you can use
to get introduced?

I personally think the co-founder thing is over blown, but don't underestimate
that the many (if not most) investors prefer it. But frankly, if your business
is solid, has traction and is growing an investor will still have interest. As
a solo founder though, you will have more to prove and more to show that it is
moving and you are capable of keeping up. And it doesn't meant that you may
not meet someone along the way to bring into the venture.

Also, remember having a co-founder doesn't necessarily mean that the split is
equal, in fact rarely is it ever equal from what I have personally seen.

~~~
api
Right now I'm thinking enough seed for a lean and mean run to increase the
growth rate, increase the conversion rate by adding value to pro tier, build
out into mobile (iOS/Android), and get into a position where a series A would
make sense. I'm thinking 18 months of runway: 12 months to get into position,
six for series A. (Assuming no revenue growth... revenue growth would stretch
the runway of course and I'd be very, very focused on that.)

That would be enough money to go full time myself, hire another employee, and
secure the services of a serious PR firm to begin getting the brand and the
message out there. It'd likely be in the $500k-ish neighborhood but I haven't
made a real spreadsheet yet... still getting the message, basic pitch, and
rough plan outline down. If it happens it'd be Feb-March 2015 in all
likelihood.

I'm not in SV, and that's too small for most VCs. It'd be an angel/seed round.
I have spoken to one seed-stage VC who expressed a little bit of interest, and
I told him I'd update him as things progressed (will probably do that soon).

An alternative path I've been thinking about is going for a good incubator.
There are two decent looking ones near me:

[http://k5launch.com](http://k5launch.com)

[http://launchpad.la](http://launchpad.la)

That might provide a short runway from where I am now to seed, more or less.

Just posted this for a bit of food for thought since I just keep hearing that
refrain from all kinds of people, mostly from the SV orbit.

I'm not totally alone BTW. I have assembled an advisory board that is really
advising, and I do have some people I bounce ideas off.

~~~
davismwfl
Yea, the HN crowd is always great for ideas and overall pretty needed brutal
honesty.

So my 2 cents, you are looking at angel money, which at 500k means you will
likely be held to a salary of $50-70k for yourself and the hiring of a few
people to meet your goals. I mention the salary only because you mention you
aren't a young fresh out of college person, so I would guess you have some
real bills and possibly a family. After about 6 months of work you will need
to be on the track to raising your next round as well to get money in place at
month 12-14. This all assumes you have never raised before and so have no
proven track record using someone else's money, and of course is just my
opinion.

An incubator might be a good idea if you can find one that will take you as
solo founder, again not impossible but they play to the VC's desires.

Some other ideas/points,

1: look for traditional angel money outside of just the well known SV firms,
people etc. High net worth people invest in companies fairly often and usually
are more personally involved in the deal (not in a bad way) and many times are
a little more flexible with founder salary if that is needed.

2: Bootstrap a little longer and pay a developer part time to help you meet
the other goals. If you have a full time position now take $1,500-$2,500 of
what you are making monthly and spend it on hiring part time help to get some
of the stuff over the finish line before going after money. Either way this
moves the ball further down the path so that if you go after money you are
that much better off.

3: Definitely put it up on AngelList.

4: Don't focus on a PR firm, they generally are expensive and a waste of money
for early traction. We worked with a startup this summer that spent well over
$100k of their money on a PR firm that got them less exposure then did
spending $2,500 on a 30 second video and spreading it through friends, family
and social media sites. As well the founder figured out that by contacting
reporters and bloggers directly the response he received was way better than
having the PR firm do it, and all it cost him was a few hours every week
talking to these people.

5: Update your website, right now it looks like a side project that isn't
getting a lot of love. The website is the first impression people see of you
and your service/product. If it looks poorly, so will your chances with
converting the client. I speak here from great stupidity and experience for
myself on this one.

No matter what, good luck!

~~~
api
Thanks, especially for #4 and #5.

#4 is really food for thought. I mean really. My gut instinct would be to
agree with you wholeheartedly. Maybe PR is an area where "business advice" has
wormed its way into my brain. Try as I might, I just can't ignore enough
"business advice." :)

If I cut that PR component the required raise drops substantially... at least
in half.

So far _all_ my growth and conversion has been from viral, social, direct
person-to-person, and other "organic" means, but I've also observed that blogs
and press mentions drive traffic and prime the pump. My graphs look like this:
a remarkably consistent exponential (straight line on log plot) 1.4% daily
compounded growth, but every major press or blog hit just elevates the graph
vertically a few ticks where it then continues its 1.4% march. The 1.4% number
is so incredibly constant it's spooky... I've never seen anything like it. It
just continues no matter what I do, for months and months. This is for active
online users, which is the best metric for this system. Is a constant growth
rate like that common? I always assumed growth rates would look "rocky" like
most other real-world data.

#5 is interesting too. It looks a lot better than it used to, but perhaps that
isn't saying much. I might just use a professional web design hosted software
suite like Squarespace or The Grid, since I've got better things to do than
dink around with HTML/CSS minutia.

It is up on AngelList: [https://angel.co/zerotier-
networks](https://angel.co/zerotier-networks)

As far as salary goes you're right. I have a family and kids, so I can't
afford a really big pay cut. That's another downside of not being a bachelor
right out of college, and is a big part of why the startup scene is so biased
toward early-twenty-somethings. But hey, I guess part of doing stuff like this
is that you have to deal with what you have as intelligently as you can. You
can't change your circumstances in these areas but you can hack around them.

~~~
davismwfl
You are welcome.

That's great, I totally missed it on AngelList, my bad, glad you posted it.

I have never heard of or seen a growth pattern like that, it is strange. Maybe
someone else can comment on it. Usually we see clients that have much more
rocky patterns with the overall trend growing but it is up and down and of
course has spike trends near events, press coverage etc. Our own growth has
seen that same trend so that seems more normal to me, but hey, long as you are
growing it is good.

On your website, it isn't horrid, but I just don't think it puts your best
foot forward or gives you the first impression of a professional firm yet.

I am in the same position you are overall, solo founder with a wife, kids etc.
That is part of what stopped me from taking some investment dollars earlier
this year for my product business. We had been seeking out interested
investors because we have some traction, but both groups that gave us offers
(term sheets + details) were limiting me to such a small founder salary I
couldn't support my family on it. Literally one of them was around a $50k
salary, which I don't mean to scoff at, but just isn't realistic for this
point in my life. We don't live the high life and have little debt/bills
overall, but that is just too low for us. The catch is I couldn't be pissed at
them because they are focused on making money, it just didn't work for us and
they weren't willing to budge. So instead I changed the plan, pulled back some
and am regrouping to pull more consulting income again. And I will just
bootstrap more until either I make it, the product fails, I fail or I decide
to try and raise again. The only part that really sucked to me was that sadly
rejecting those offers meant I had to change my team up for that product
because I just couldn't support them full time without enough revenue or
investment.

Good luck, my email is in my profile if you want to chat offline any.

~~~
api
Sure. I'll drop you a line.

The growth pattern is weird -- in kind of a good way -- and is definitely real
as confirmed by admin panel signups, paid conversions, etc. mirroring and
confirming it. Those are also pretty solid stable percentages of the overall
count.

Web visits follow a much more rocky pattern but if you smooth out the noise
you get a rough echo of the 1.4% connected devices growth rate for recurring
visits, which make sense and further confirms its reality.

I've just never seen a growth rate so consistent and deterministic. You can
hold the edge of a piece of paper under a log(Y) scale graph of "devices
online" and the line is straight. Apparently in ten years I will have a device
online for every atom in the solar system. /lulz

Granted I've been focusing on bug fixes, software improvements, and working
with select customers, so I haven't done much to update the web site or
optimize for viral growth. This is very much a "hands off" organic rate. It'll
be interesting to see how it responds if I do change things up a bit. The
smoothness of it will make any kind of A/B testing a breeze... any change
should jump right out and smack me in the face. :)

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OscarPedroso
I'm a startup founder myself and someone once told me that no one will run a
startup like the founder himself, especially in the beginning. I've taken this
advice to heart because even during the bad times, I've managed to keep going
because I'm passionate about my space and I'm patient and persistent. (almost
to a fault)

That being said, I've had team members come and go....mostly because I was
hiring young developers that were still in school. Even though I was doing
most of the leg work, I did have that assistance at times and was able to have
that team feel that investors very much liked.

Teams are always in flux and if you have a bad team member, you'll have to
face the difficult decision of letting someone go. It's an evolving process
but it gets better everytime. I've been at this for a couple of years and I'm
not convinced I have that A+ team quite yet. So on certain occasions, I still
think I'm a solo founder (if that makes any sense.) I suppose it's how you
look at things.

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api
Another thought:

If I were an investor, I would probably have a strong bias toward 2+ founder
startups. This wouldn't be because single founder startups never work, but
because of "bus factor." Having two or more founders at least halves the
likelihood that the single founder will in one way or another become
incapacitated. This could refer to medical or personal problems or just to
burnout, personality issues, etc. It's a lot of eggs in one basket.

So I suspect that investors like multiple founders because they like to reduce
risk.

I also do suspect that single founder startups _are_ at a disadvantage. You
have half the networking surface area and are much more prone to getting
discouraged without the moral support another person can offer. We are social
beings. I'm just curious about whether the disadvantage is as extreme as PG
claims. I've seen numerous counterexamples, but honestly I have yet to see any
good hard vetted statistics either way. I mostly see a lot of opinion.

I guess it's a tough statistic to really gather, since there is no single
central registry of tech startups.

