

Paul Graham, Dropbox and The Single Founder Exception - jkuria
http://www.forbes.com/sites/bruceupbin/2011/10/18/paul-graham-dropbox-and-the-single-founder-exception/

======
joshuamerrill
As a single founder who's about to close his seed round (and was rejected from
YC), I'm deeply concerned that opinions toward single founders are devolving
from aversion, to bias, to self-fulfilling prophecy. With every step,
investors are forfeiting the ability (or inclination) to evaluate this issue
on the merits.

I personally have no trouble working with others, nor difficulty enrolling
others in my vision. I am extremely emotionally stable—I don't take things
personally and have little trouble riding the ups and downs. I acknowledge
that there are benefits to a cofounder that I'm missing out on (as well as
drawbacks I'm avoiding!), but simply put, it's disappointing to see many
investors marching lock-step to the beat of someone else's drum.

~~~
dmk23
I take a very simple perspective on this "single founder aversion".

If some investor is going to ignore my traction and business just because I
achieved it without signing on a token co-founder, then frankly it is their
loss and I won't hesitate to politely tell them that. By definition getting to
the same results without co-founders requires a much higher level of ability
than if being part of a "collective". Any investor failing to recognize that
is going to miss out some of the best deals and that is really their problem.

The main focus should be on pleasing customers and partners and if you do that
right, eventually the right investors come along (with better terms too). Much
better approach than to structure your company solely to please investors and
forget what the business is all about.

You might even end up with a business making money and no investors to answer
to (or at least investors not having significant control over you). What a
terrible thing!

PS: Quite a few people promoted to "co-founders" should really be employees
with accountability for specific tasks and projects, not an open-ended license
to call the shots.

~~~
joshuamerrill
"By definition getting to the same results without co-founders requires a much
higher level of ability than if being part of a 'collective'"

I think in order for this to be true, you'd have to assume that the team as a
whole is greater than the sum of its parts. This is not always the case with
cofounders.

In general, though, I agree with you. Results speak for themselves; build a
business for customers, not investors.

------
aston
From Forbes to Hacker News back to Forbes back to Hacker News.

Definition of an echo chamber. In case a Forbes reporter wants to quote me,
this comment is not for attribution.

~~~
Shenglong
Maybe if pg responds here, someone will write a story about it too.

~~~
llambda
I guess the Forbes bloggers are in need of material..? Although that said I
can't say the articles were particularly bad. Maybe it is a stretch to
continue to focus on the same article after it's been published as a feature.
Certainly if nothing new and significant is being added it's a bit of a waste.

------
0x12
The downsides to having no co-founder:

    
    
      - you get to deal with the stress on your own (or maybe you have a 
        supportive spouse)
    
      - you can't have soundboard sessions with your co-founders
    
      - you can't divide the labor 
    
      - you have to have a lot of expertise in a variety of fields
    
      - if you get ill early on it will likely kill the company
    
      - nobody will call you out when you're spouting nonsense
    
      - likely a long long list of stuff following these
    

The upside (and it's a huge upside)

    
    
      - you don't have to deal with your co-founders
    

That one single factor does not outweigh the other ones but it is much better
to have _no_ co-founders than to have the wrong co-founder. And you can't
really know in advance if you have the right co-founder or not. You'll know
when you are in your first very heavy weather but by then it is too late to
easily switch.

That's why even if having co-founders is good plenty of people chose to go it
alone, and end up hiring what would have been co-founders as early employees
once they've established a certain level of success.

If having no co-founders was a guaranteed fail nobody would do it, but plenty
of people get by just fine to prove that it is not a hard and fast law, but
more of a statistical issue.

~~~
maratd
I started a business in college, by myself, and it had revenues of about 6
million by the time I hit 25. I'm now 30 and on my second business, which I
also started and am now running by myself.

Why don't I elaborate on some upsides to your little list?

* You are the only one. That means if something goes wrong, you can't shift the blame. Not even subconsciously. It's always your fault. This guarantees problems get fixed and they get fixed fast.

* You are the only one. That means you don't have to get approval or dilute your ideas. It gets implemented. Now. If you're spouting bullshit, the market will filter and you will adjust, fast.

* You are the only one. You have to do everything. That means you _understand_ every aspect of your business, because at some point, you did it. This helps you make effective decisions.

* You are the only one. etc etc etc

You get the idea. I can go on forever and you can go on forever listing
wonderful things about co-founders. One way isn't better than another. They
are _different_ and the path you take depends on your _goals_.

If your _goal_ is to build a business that grows into hundred-million+ entity
so you can cash out or where you can garner a cult following (i.e. Steve
Jobs/Bill Gates/Larry Ellison/etc), you need a co-founder. On the other hand,
if you want a business where you can pour your unmitigated passion into, where
it becomes a place that not only supports you, but where your ideas take form,
a co-founder will just get in your way. To dumb it down, if the #1 goal on
your list is money or status, bring somebody else on. You won't be able to
compete by your lonesome. However, if the #1 goal on your list is the freedom
to do things the way you want to do them ... the only way to accomplish that
is to remove as many obstacles to that as possible. That means no co-founders,
no investors, none of it. A structure where you don't have to check with
anyone before you do something.

This, by the way, explains why most investors are completely against companies
with no co-founders. It's not in their interest. The goals of the company do
not align with their goals.

~~~
0x12
Good stuff. Dealing with your co-founders indeed expands into a long list all
by itself, to make it explicit is better.

Freedom is indeed the #1 reason I had when I decided to be a 'single founder'
(in fact, it wasn't a conscious decision at the time, I only realized it after
the fact) and getting an investor on board was the last thing on my mind.

------
staunch
What if Arash had turned out to be a bad match? They didn't know each other,
so it was a pretty big gamble.

I suppose if Drew retained control he could prevent it destroying the company,
but then he doesn't really have an equal co-founder to keep _him_ in check.

Seems like a really tough problem. Kind of amazing it worked out so well.

~~~
pg
Oddly enough Drew and I talked about this question tonight on a panel at the
Computer History Museum. It was a big risk to recruit someone as a cofounder
that he didn't know before (and I've seen a lot of cases where it didn't work
out) but in this case the risk was mitigated by how much they had in common.

One thing they had in common was Kyle Vogt of Justin.tv, who introduced them.
So in retrospect the YC alumni network was having a big effect even back then.

~~~
NY_Entrepreneur
Even if the roulette ball drops into the slot 00, the play was still a "big
risk", and so was, under the circumstances, insisting on a cofounder. That is,
given how much Drew had already done, a cofounder had to be mostly just
downside risk. The 'mitigation' had to be minimal.

Or, Drew's left hand doesn't fight with his right hand, but cofounders can
easily fight.

If a cofounder is really needed, then so be it. But a cofounder is always
risky, and a single founder who has already done well starting the business
has a big advantage just because his left hand won't fight with his right
hand.

Now a single founder can do much more than in past years, even just five years
ago.

And here's a big point: always in a startup very much want the CEO to
'understand his business'. In an IT software startup, that includes
understanding the software. But software has now changed: E.g., with .NET,
nearly everything needed in commercial computing, and a larger fraction of Web
site construction, is already in the .NET classes. So, the work is just
writing a little 'glue' code between the uses of the classes. So, the coding
goes VERY quickly. But what doesn't go quickly is understanding the classes
because need about 10 books each of 500-1000 pages and, even for just a Web
site, about 3000 Web pages of documentation from MSDN. And, this understanding
of .NET is just 'overhead' that have to pay just once per programming task
solved with a .NET class actually understand well. So, to 'know his business',
a CEO needs to know the relevant parts of, say, .NET. A cofounder can't help
here. And once the CEO does have that .NET knowledge, there can be some
serious question if a cofounder can add much. Just what the Linux world has in
place of .NET I don't know, but it can't be both small and effective.

There is other evidence: Look up and down Main Street at the successful
businesses that have been started there. Typically there's only one person who
is the real 'founder'. Look at research: Bright ideas come first to just one
person at a time. Period. Microsoft: A Bill Gates show. Apple: A Steve Jobs
show. Berkshire: A Warren Buffett show. Renaissance: A James Simons show.
Continue with the one man shows of Kolmogorov, von Neumann, Knuth, etc. and in
music Heifetz, Rostropovich, Tchaikovsky, Beethoven, Mozart, Bach, etc.

It's tough enough to find a Michelangelo to paint the ceiling. Getting him a
'copainter' who would actually help would be impossible. As you add people to
a team, the team regresses to the mean where you don't want to be. And, did I
mention fights? Sorry 'bout that.

~~~
mmcconnell1618
Bill Gates had Paul Allen, Steve Jobs had Steve Wozniak and Warren Buffett had
Charlie Munger. You can argue that one-half of these duos produced more than
the other but would they have been able to without the support of the other
half?

~~~
NY_Entrepreneur
Allen and Woz both left early on. Allen was in a plane wreck and/or got cancer
or some such? Woz was gone before Jobs was at Next, Pixar, or back at Apple.
I'm sure Jobs had a mother, also, but as I wrote, and is clearly the case,
Apple, that is, the currently successful company, was a one man show from
Jobs. While Munger is a bright guy, my reading is as I wrote it: Berkshire is
a Buffett show.

~~~
0x12
I think you're missing the point here. How they parted does not matter much.
What matters is that without the other they would have never made it to where
they got.

~~~
NY_Entrepreneur
You are just flatly refusing to pay any informed attention at all to history
or to read what the heck I actually wrote.

Take Gates: When Allen was still around, Microsoft was a still a small company
IBM was still laughing at. Then Allen left. Gates, it was JUST Gates, went on
to build Windows 3, Office, Windows 95, Windows 98, Windows NT, IE, Windows
Server, SQL Server, Windows XP, and more. Gates grew his fortune from a few
hundred million dollars to $50 billion or so. That growth was due to Gates.
Period. And that was the significant growth that blew the doors off IBM, Sun,
HP, Lotus, etc. Got it now?

For Jobs, you are really working to be brain-dead: What Woz and Jobs did with
the Apple II, etc. is nearly irrelevant to what Jobs did at Next, Pixar, and
after his return to Apple. Apple became for a while the most valuable company
in the world due to what Jobs did, Jobs, JUST Jobs, with Woz watching from the
nickel seats. Sculley? Amelio? They just helped show how bright Jobs was.

For your "would have never made it to where they got", we have no way to know
that.

You are illustrating a huge point that I did make: People like to fight. Even
over something really obvious, people like to fight. If you and I were
cofounders, then no matter what I did and no matter what success the company
was having, you'd be fighting me every way you could think of, fighting,
fighting, fighting, for no good reason except you just want to be fighting.
There's no way you could be effective.

~~~
0x12
Without Woz apple would have never happened, because he designed their first
flagship product. What Woz did back then is highly relevant because it was the
thing that eventually enabled Jobs to start Next and buy Pixar.

Jobs and Woz to me are the ideal example of the sum being _much_ greater than
either part.

Without Paul Allen Microsoft as we know it would not have existed because he
_named_ Microsoft Microsoft.

Your insulting tone and capitals do not make you right, they're reminiscent of
people raising their voice and making things personal just because they can't
win an argument.

I read a bit in your comment history and this seems to be a recurring theme
for you, it is almost as if you take this single founder thing personal. The
way to prove that it works is to simply succeed. As a single founder myself
I've been there, I've done the multiple-founder thing too (with mixed
success). There are no guarantees, to pretend either way is a shoe-in is
nonsense. But statistically speaking, and looking at things from the point of
view of a guy or girl considering going it alone or from the point of view of
an investor that has the choice to invest in a company founded by one or more
people the statistics seem to point to more being the better choice.
Exceptions will always happen. But the ones that you point to are not those
exceptions.

We can't know anything about pasts and futures that didn't happen, but we can
safely say that things that did happen and that were likely significant were
at least as significant as anything that you think would have happened
otherwise. Jobs, Wozniak, Gates and Allen would probably never have said what
you just said, and that alone marks them as potentially more successful. How
you interact with others is an important factor in your chances for success,
and being able to give credit where credit is due is another.

I agree that you and I should not be involved in any business because we'd
probably fight, and you are making that point very eloquently.

~~~
NY_Entrepreneur
"Without Paul Allen Microsoft as we know it would not have existed because he
named Microsoft Microsoft."

So he named the company? Now you are being totally silly and showing that you
are determined to fight with me for just silly reasons.

You are the one being 'personal'. You just don't want the argument made that
sole founders can be a good bet and just want to stay with the PG and VC herd
that cofounders are crucial, say, for naming the company and cut me down for
not joining your herd.

Jobs was a successful sole founder at Next, Pixar, and his return to Apple.
The only role from Woz and Jobs's first time at Apple was just cash, not Woz
or a 'cofounder'. You are straining to deny that Jobs was successful in his
last three gigs as a sole founder.

Gates? He had to refound the company after the success of MS/DOS and make
Windows, Windows Server, SQL Server, and Office all real. He did. Alone. While
doing this, IBM was laughing at him. He knocked the socks off IBM, DB2, Lotus,
WordPerfect, Sun, HP, and more.

Just look around you: Commonly cofounders and coleaders just suck. Big
committees suck. Group decision making sucks. Take IBM, AT&T, GM, Sun, HP: In
each case, the management suite and top management 'team' was awash in what
was regarded as the best qualifications. Still, they all just sucked. The Navy
knows better: On the bridge of a ship, there exactly one captain. Although one
captain can be bad, two is usually worse.

Then you are ignoring the present for what is central at HN: IT startups,
especially Web 2.0 startups. Elsewhere on this thread I've explained in good
detail: A founder needs to understand his business; he needs to understand the
software; the bottleneck in understanding the software is not the unique
software of the company but just understanding the now huge software
components available; that bottleneck can be passed by just one person at a
time, essentially alone, or learning is not a spectator sport or a team sport;
once a founder has passed this bottleneck, a cofounder becomes much less
relevant than in the past. You can see this, if you want to.

The main issue here is sole founders or cofounders. The resolution is, net,
having all the business between one pair of ears is a great advantage when it
can be done, and now for a Web 2.0 startup it not only can be done but should
be done. The 'team' of Michelangelo and anyone else would be nowhere nearly as
good at painting the ceiling as just Michelangelo alone.

~~~
Impossible
Eh I wouldn't call Jobs a sole founder of Pixar. Ed Catmull and John Lasseter
are really the founders of Pixar. They wouldn't have become what they became
without Job's support, but to call him a "sole founder" is a little bit of a
stretch.

------
phatbyte
I'm also a single founder, and I'm investing part of my own money that I've
been saving from all these years as a developer.

Being a single founder is hard, you have to deal with everything from
incorporating, accounting, writing code, design, worry about SEO, how to
introduce your project to the world get some momentum, etc..

Plus, add that to the fact that I'm from Europe, VC is very complicated here.

But because it's hard we should be more appreciated and not put aside.

I'm working on it for at least 3 months now and it's 90% complete, I've been
able to keep motivated and I've learned lot along the way.

I just felt that this was the right path to go for me, I didn't feel the need
have someone as a parter on this. I may be wrong in a long run but for now I'm
pretty satisfied with what I've done.

Obviously I don't agree with YC rule here, I understand some of their view
points , but not everything is true or false. Some great projects maybe aren't
being looked into because of the single-founder rule.

But then again, you don't have to apply to YC or any funding, try something
else, or simple bootstrap you idea and see how it goes.

~~~
DaveChild
> I'm working on it for at least 3 months now and it's 90% complete

Good luck with the other 90% ;)

------
callmeed
_"Dropbox being the biggest home run YC has had to date"_

That's still Heroku in my book

~~~
davetong
Interesting... Are you measuring by the number of users or revenue?

~~~
callmeed
Not measuring. A "home run" to me is an exit, not a huge round at a huge
valuation. But maybe it was an exit for YC/early investors, I don't know.

~~~
staunch
Dropbox took in $250 million cash for 6% of the company. Heroku took in $240
million cash for 100%.

~~~
wlievens
And as soon as Dropbox becomes liquid, it will certainly be the biggest
homerun.

~~~
seunosewa
Unless it fails, of course.

~~~
ridruejo
At this stage it cannot "fail" in the traditional sense. Even if it enters a
downward spiral, at any point in time it could be sold for the user base alone
(and the price would still likely to be bigger than Heroku)

~~~
0x12
That is a very dangerous attitude. The moment you think you are too big to
fail you are more at risk than at any stage before then.

Dropbox could still fail overnight. It would have to be a bad set of
circumstances but they're definitely not out of the woods yet.

Remember Blockbuster?

~~~
ridruejo
Blockbuster has nothing to do with this. That was a failure in the traditional
sense. I never argued that somebody is "too big to fail". The parent poster
argued that if Dropbox failed, it would not be a big homerun. What I argued is
that even if Dropbox valuation failed by say, 90% and it got sold, it would
still net around 500MM. That would be a failure for the latest investors, but
definitely still a heck of a success for YC (I am disregarding purposedly here
liquidation preferences, etc, but you get the idea)

------
DodgyEggplant
A co-founder is also the minimum social proof. Find at least one person in the
world who is willing to bet on you and your startup.

~~~
sunnydaynow
Yeah, right. You forget: That is easy in college, but actually much more
difficult later in life when all your friends have jobs and family. In other
words, works in some way as a nicely worded age discrimination. Not that it
affects me, but getting older makes you more sensitive for these things ;)

~~~
ig1
You presumably know far more professional developers at a later stage of your
career than someone fresh out of university, so you have a far bigger pool to
find someone out of.

Most of the people who are just finishing university and getting into YC
aren't people who would be struggling to find jobs, these are people who are
choosing to work for a startup over going to work for Google or Goldman Sachs
for a six-figure salary.

The fact that someone older is more likely to have a mortgage and family
commitments and thus be unable to relocate for three months and give up their
salary is far more likely to weed out older candidates than the co-founder
requirement.

~~~
sunnydaynow
The 25-year old knows that if his startup fails he can easily find a first (or
new) job at Google etc two years later. That does not apply to 45+ year olds.
The risk is much higher.

~~~
ig1
I don't get this, presumably by that point in their career they'd have a huge
network of people they've worked with in the past and who would be eager to
hire them ?

~~~
4click
When you're at that point in your career you cost a lot more to hire and there
are fewer positions, especially since it's usually better to promote an
insider instead of hiring a buddy from outside the company.

------
endeavor
Are there any good examples where a single founder made it big, truly on his
own? You can imagine that maybe Drew could have done it without Arash, or
Gates could have done it without Allen, etc. But they didn't, which validates
the exception. So before we casually say /oh if you don't feel like you need a
co-founder then don't bother/, it would be good to know if any single founders
have been successful.

And maybe we should define success as financial/market success, not emotional
fulfilment or getting your first two round of funding.

~~~
sajid
Some examples of successful sole founders:

Aaron Patzer (Mint), James Dyson (Dyson), Pierre Omidyar (eBay), Jeff Bezos
(Amazon), Bob Parsons (GoDaddy), Craig Newmark (Craigslist)

------
bradhe
The people who are most upset about the single founder rule are the people who
were rejected by YC because they couldn't find a co-founder.

~~~
llambda
Or perhaps people who thought they had a good idea or project and then took on
a second founder in the hopes of getting into YC but then found that the
person didn't work out.

------
NY_Entrepreneur
On 'the rules':

Again, just a fast look at VC finances shows that VC just MUST hit 'home runs'
such as Dropbox or better.

Then just a fast look at the history of home runs shows that get only a few
each decade. And just a fast look at those home runs shows that a significant
pattern is super-tough to see. And, any such pattern has only a few examples
because the larger 'circumstances' change so much from one decade to another.
E.g., it used to be that a trillion bytes was a REALLY large chunk of hard
disk space, but now it's not so large just as main memory.

So, since have to be looking for such home runs under such circumstances, what
good 'rules' can be formulated? Remember, we're looking for home runs and not
trying to find a description of a VCs average arriving e-mail pitch. Or we're
looking for some tiny number of golden needles in in a huge pile of hay so
that statements about some average about the hay are just irrelevant.

Well, one could guess, 'the first rule of VC is that there are no rules', but,
actually, that is too strong.

But not good is the rule against 'single founders'. Why? With the larger
circumstances today, a single founder has some big advantages. I will let
readers fill in some of the advantages based on current circumstances just as
an exercise!

Next, for 'the rules', there still are some that can apply to some of the
startup candidates, One collection of such candidates is based on startups
where the core 'secret sauce' is especially powerful and can be evaluated just
technically. For a biomedical analogy, consider a safe, effective, cheap
single pill cure for any cancer: Then just evaluate the pill and f'get about
the founder because if do have the pill and if he did invent it, then f'get
everything else about him! He invented the pill, for god's sake! Or, we know
you are plenty smart, but could you have invented that pill? So, if he's
smarter than you, then you've just gotta think that he's plenty smart. I mean,
given that he invented that pill, what are the chances he's a doofus? Or, to
be quite specific, even worst case, just what issues of 'business acumen'
couldn't be solved by hiring him a COO, CFO, SVP Operations, SVP HR? And
there's no good reason to suspect such a worst case or even a bad case. Or,
did I mention, the guy invented the pill?

For meaningful rules to apply to all IT startup candidates, that seems to be
asking too much.

The simple answer that will fit on the back of the usual 3 x 5" card of VC
rules that even a VC can understand is, in looking for the crucial home runs,
the first rule is there are no rules.

------
craze3
I don't understand where the fixation for multiple founders stems from. I know
it increases the chances that the startup will succeed, but sometimes it's
unnecessary. I'm starting to think that it's more of a power struggle issue-
If YC can't get one founder to agree with or sign off on something, then they
want to be able to approach the other founder and convince them instead.

~~~
ghshephard
" I know it increases the chances that the startup will succeed, but sometimes
it's unnecessary. "

Simply knowing that it increases the chances that the startup will succeed
should be sufficient to understand where the fixation for multiple founders
stems from. True, it's not required 100% of the time, but, a-priori, how can
anyone know whether this is one of those times. There are a hundred well
defined things that can contribute to the failure of a startup (in addition to
the thousand less well defined things) - one thing that YC brings to the table
is identifying that list of 100 things that can kill a startup so they can be
avoided. Coming in with at least one cofounder brings the list to 99.
Incorporating in Delaware to 98. Having someone who can code 97. etc, etc,
etc...

~~~
sandee
Is there really a YC list of 100 things that can kill a startup so they can be
avoided ? Very interested to know

~~~
pg
There's one of 18: <http://paulgraham.com/startupmistakes.html>

~~~
abbasmehdi
Any updates to this list since Oct '06?

~~~
Hitchhiker
PG's list is just the tip. Of one of many icebergs a startup will hit.
Serious.

Head to <http://pmarchive.com>

