
How you can do it alone as a solo entrepreneur - petenixey
http://peternixey.com/post/36061229722/how-you-can-do-it-alone
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paulsutter
Great article, and a big improvement on the loud debate we've been hearing in
recent comments. When you look at the basic points, pg and Ryan Carson and
Mark Suster actually agree with each other. But a big debate gets fired up
because of semantics (different views around meaning of "cofounder", extremist
statements like possible/impossible). Perhaps the biggest source of friction
is that most people don't write as carefully as pg.

In contrast, this write up is really balanced. He's acknowledging there's a
grey scale of what's possible depending on your situation, and gives a lucid
explanation of the benefits of cofounders and/or a strong initial team.

Nice work.

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lazyjones
I don't know why "being an entrepreneur" is used interchangeably for
"attracting venture capital" so much. Solo entrpreneurs might have more
difficulties attracting VC, but it's generally much easier for them to sort
out their issues in a growing company. How many startups have blown up because
some co-founders left / changed their minds / caused conflicts?

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david927
This is an important point that's lost on a lot of people. _Raising capital_
and _building a great product_ are two separate actions -- and being good at
one means nothing to the other.

It's especially important to note, because raising capital means fitting
investors' checklists, which in some ways will always be arbitrary. They don't
have a magic formula because there's no magic formula to have.

So that leaves a large number of "moneyball" companies, which like Jeremy Lin,
weren't given a fair shot because they didn't have "the look" (sole founder,
female founder, etc.). And if you fit in that group and haven't received
funding, don't change yourself to fit the mold, show your greatness and leave
the mold in pieces.

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hodder
I agree with your point completely.

However, on the magic formula bit, I do highly reccomend beginning investors
read Joel Greenblatt's book,"The Little Book that Beats the Market", in which
he outlines the "magic formula". www.magicformulainvesting.com is the
associated website with it. The magic formula basically sorts the US public
investing universe by return on capital (EBIT / (net fixed assets + working
capital) ), and earnings yield (EBIT/ EV).

I do believe following the formula will likely outperform the S&P500 if your
time horizon exceeds 3-5 years. Same goes for most proven value strategies,
such as buying baskets of low P/E, low P/B, high piotrosky f-score, or net-net
baskets.

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dkrich
I like how the title claims to explain how to found a business solo and then
does nothing but explain different ways to build your team, why investors care
about the team, blah, blah, blah. You aren't explaining how to build a
business, you're just taking about different ways to assemble a team.

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petenixey
I think that you hit it on the head and this is what took me eight years to
realise. Growing the business is about building the team.

I always thought it was about great product, great design about moving
mountains myself. It took me far, far too long to register that while you need
all of those and you can certainly build a business solo, the key to growth is
in creating a team. This is true on many, many different levels.

(Edited for consistency)

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gnaritas
Growing and building are different things. You're conflating them. A lot of
solo entrepreneurs want to build a small lifestyle business, not a team, they
don't want to grow it. A lot developers would kill to have a successful app
that's just big enough to replace the need to work for someone else, and small
enough to not require anyone but him to run it.

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petenixey
You're right in that growth per-se does not of course need a team. What I
should have said was high-scale growth.

It is of course possible that to some degree, even high-scale growth can
happen without team but I think the most sure-fire route to it is by building
an amazing team of talented people.

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gnaritas
Sure, an amazing team is great if that's what you seek, but you're still
assuming growth is the goal of building a business; I'm trying to say it
isn't. Building a biz and growing one are different things, but I see you did
edit your original statement to remove the inconsistency, so nevermind I
guess.

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OldSchool
No matter how independent you may be, consider this: optimize for personal
gain vs risk. Sometimes that means letting go of control.

I know of a former public company CEO who, rather than being forced into
taking an 8-figure cash golden parachute for stepping down yet retaining his
stock, chose to buy his way up to a majority stake with his own capital. Macro
forces soon took the company to bankruptcy.

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OldSchool
In my experience, one driven, completely bought-in and trustworthy cofounder
with a business and sales background instead of engineering can make all the
difference in the world. To be in business, not just raise money and spend it,
you need someone who thinks about revenue and sales the way you obsess on
technology. To retain this kind of person, he/she is going to have to be a
real owner the same way you are and live and die with the business.

A stock plan vesting over X years, allowing for the usual dilution and
acceleration clauses, along with very substantial part ownership: somewhere
between 1/3 and just under 1/2 of the original shares, is what "co-founder"
means to me. An idea and even a MVP demo are useless without sales, marketing
and operations if you actually plan to run a business.

However, if you get too many high stakeholders you will probably have enough
negative attributes collectively that nothing will ever get full buy-in, and
worse, you risk creating factions in leadership.

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vail130
"Product and revenue can trump co-founders in the eyes of investors"

I think this is the shining star of the post for solopreneurs. I'm just
getting started starting up, and I'm going solo. What gives me hope is that,
if the product is good and people actually pay for it, then cash will still be
king, and investors will come.

I'm building a project estimate and client approval app. It's in open beta
right now. All feedback is super appreciated!

<http://projectionable.herokuapp.com/>

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hayksaakian
We tend to cling to aphorisms because they sound nice. OP laid down the facts
quite candidly.

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omnisci
This was helpful. I'm in a solo position right now and I'm also not a
developer. I have a great idea (according to potential customers), but I don't
have the knowhow to make it right now. This article was helpful in giving me
hope that I can build something with the right people (which is what I
expected, but you hear so many different stories).

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lubujackson
Nice essay, a much more nuanced thought process about the single founder
issue. I definitely agree the way to take on staff as a single founder is to
start lightly and go deeper later - a 3 month contract is perfect, and makes
hiring/firing much less crazy if there is a limited relationship in the
beginning.

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ramsevak
In initial days start as a solo entrepreneur that way it gives you freedom to
work, better cash flow and it let you judge your dedication towards your
venture.

