
Research Says Solo Founders Perform Better - rmason
https://www.growthclub.online/post/research-says-solo-founders-perform-better-here-is-why
======
pyrrhotech
IMO in the age of insanely high tech salaries, early stage funding is very
overrated. I saved $2.2M in my 8 year Bay Area career as a regular engineer
with no exits, and I didn't even work at FANG. I have friends who saved more
than twice as much as me. And then YC gives out 150k? 150k is a joke to anyone
with a decent job. Why not save 2 million and then start your company at age
29 instead of 21 begging people for tiny money for huge share of your company?
The YC model made sense back when it was founded and engineers made 60-80k.
Now after the second tech boom, you are much better off working for FANG for
5-10 years and then starting your own company owning 100% of the equity until
a real money $10M+ series A

~~~
gnicholas
I'm curious about the numbers — you saved $275k (annually, on average) after
taxes and living expenses as a regular engineer? That implies a pre-tax salary
of $420k if you ignore living expenses, which add at least another $30k in
pre-tax earnings. I'm sure there are engineers who make $450k in SV, but you
imply that this is possible/easy for folks who are 21. Maybe I'm wrong, but
that seems pretty high for someone straight out of college.

Note: I'm not including interest/investment income from annual savings, and
perhaps that's part of how you made money. Certainly it has been easy to make
money buying tech stocks in the last 10 years. But that's not always the case,
and even including investment gains I'm having a hard time seeing $2.2M being
a typical or easy amount to save from age 21 to 29.

That said, I worked as a lawyer for 7 years, saved a decent amount, paid off
my loans, and then started a startup. It was a good path for me, but man I
never had $2.2M in the bank, even having worked at a well-known international
firm and being on the partner track.

~~~
sidlls
They are exaggerating at best, or highlighting an extreme outlier. Non-FAANG
jobs are going to have between 50% and 70% if the total compensation of FAANG
most of the time. Good example: a SWE 1/2 60th percentile base salary is
around $120k in the Bay Area. Taxes and living expenses for a single
individual will eat 40% of that, at least, unless the person is living in a
slum with roommates. Lead/principle engineer (L5) salaries are about $175k at
the 60th percentile. Again, taxes and living expenses for a single person will
consume 35%-40% of that. RSU grants and bonuses at these places are good for
maybe another 30% on top of the base, typically, in extreme cases.

A person saving 100% of their net of taxes and living expenses would have to
see a return of well into double digits every year to accumulate $2.2M over 8
years or so, because their base savings rate over that period will be
(probably far) less than $1M under optimal circumstances.

It isn’t at all common enough to obviate the need for things like YC.

~~~
rramadass
You are very right. To be blunt, the OP needs to be called out on his BS. I
personally, lived in the SV area for over a decade (single and very frugal)
made good salary (non FAANG companies) but my savings though substantial, were
nowhere near what the OP is claiming. It is simply not possible.

I am not sure why people on HN state/claim all sorts of outrageous salaries in
the Bay area. It gives a very distorted view of reality and frankly harmful to
both employers and employees.

~~~
Aeolun
Depends, if you got FB stock awards 8 years ago that were valued at $20,000,
those would be worth more than $150,000 today.

It’s not unreasonable to believe someone could keep their stock for 8 years
and have the combined total be worth 2.2M.

~~~
rramadass
Sure, but that presupposes stocks, other investments, equity etc etc. You need
those and a big dose of luck too. The way the OP's post was written it seemed
to imply that he made it on his take-home salary by itself which is
impossible. The only thing i agree with the OP, is to NOT go for VC money in
the beginning (as far as possible).

A more realistic and cautious way to do a startup (for normal people) would be
(see Nassim Taleb's description of Extremistan/Mediocristan for ideas -
[https://kmci.org/alllifeisproblemsolving/archives/black-
swan...](https://kmci.org/alllifeisproblemsolving/archives/black-swan-ideas-
mediocristan-extremistan-and-randomness/) and
[https://www.capitalideasonline.com/wordpress/mediocristan-
vs...](https://www.capitalideasonline.com/wordpress/mediocristan-vs-
extremistan/) );

1) Hold down a regular job for a decent period of time and earn as much as you
can.

2) Save, Save, Save i.e. no risky investments on a large portion of your
income. This is your safety net.

3) Simultaneously, get started working on your ideas/company by yourself or
with a close-knit group. Spend no money; only your effort and time.

4) Once you have the whole picture/Prototype/MVP figured out estimate how much
it is going to cost you to move ahead. All information is available on the net
and hence do your proper research i.e. don't pay any "consultant" for advice.
You can also shoot an email and seek advice from people like Paul Graham/Joel
Spolsky etc. Remember, "Fortune favours the Brave".

5) As long as it is bearable, spend your or group's money to move ahead. It is
important to cut any and all unnecessary expenses at this stage. Spend only
what is needed and not a penny more.

6) Once the above is stable, you can now decide on whether you want to quit
your day job and spend your whole time on your "New" company. This will be a
function of your safety net savings mentioned above.

7) In order to not blow everything on a idea/company which may not pan out,
set a threshold on your expenditure dropping below which you will approach
others for money (i.e. VC/Angel etc.) or abandon the idea/company and return
to being a regular salary man. This is to ensure that you don't end up on the
streets.

8) Your are now at the stage where you are proceeding with your own company or
have gone back to salaried employment and hopefully working on taking a second
crack at entrepreneurship.

Good luck and Godspeed :-)

------
vishnumohandas
> you just couldn't convince your friends to join and therefore can't be
> trusted

As you grow older, the number of friends who can afford to take financial
risks reduces because they will have components such as family and kids to
factor in.

It’s sad that such gospels exist to make lives more difficult than it already
is for founders who are 35+.

~~~
klaaz0r
This, it get's overlooked so much. It feels almost arrogant when a VC thinks
like that. Yes I can get some friends working parttime on my startup but going
fulltime? They also have rent to pay.

But I also think lot of pitch decks witha team slide contain parttimers but
just don't tell the VC.

~~~
noychery
Author of the article here. Exactly! Sad that Paul Graham is the one who said
that specific thing. I wonder if his opinion changed over time

------
tobyjsullivan
From the referenced study:

> A stratified sample of 65,326 Kickstarter project creators was surveyed via
> email.

[https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3107898](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3107898)

~~~
askafriend
Oh god, Kickstarter is....not a good sample to answer a question like this.

~~~
sojourners
Why? See I understand kickstarter has a history of unfinished products and
founders running away with money, but i feel like you are just having a knee
jerk reaction.

Actually I look at this positively. Most kickstarters offer actual tangible
products and not software, and I think going solo and actually making profit
(though small) is a pretty insightful result.

~~~
bawolff
Because kickstarter is very different from traditional bussinesses, making it
difficult to know if the conclusions of the study translate to traditional
founders.

~~~
sojourners
I edited my comment as you replied, but basically I think this study is pretty
useful and true for kickstarters, but maybe not so much for traditional
startups.

------
jasonkester
Another factor in favor of going solo is that the ratio of deadwood at your
company is going to be either zero or one.

That is, if you're genuinely good at building things, you're going to build
your thing quickly. There's nobody to drag you down, no slow backend guy
blocking you from implementing the frontend or vice versa. Or maybe you find
out it was you doing the blocking all along, which is also handy to know.

~~~
maximzavadskiy
> Or maybe you find out it was you doing the blocking all along, which is also
> handy to know.

What would be the point of reference to know that you are 'blocking' when you
are alone?

~~~
jasonkester
Two things. First, it signals that maybe solo founding isn't going to be your
thing. Second, it cautions a career path that involves working for big
companies with good job security and benefits, ideally in a department where
you can be forgotten about and not ever required to produce any results.

If you remove all blockers from your path and still remain blocked, it's a
good indication that you shouldn't ever place yourself in a position where
people are going to notice.

------
ActsJuvenile
Seems like the dataset behind this article is for founders who have built
businesses with $5K MRR and above. $60K revenue (and $20K profit @ 33% margin)
is a fairly low bar, so it is not surprising to see solo founders create 2.5X
more businesses that clear this bar.

My question after reading this article is, do these solo founders manage to
grow their business as large as founding-teams? How many solo founder
businesses cross the $50M revenue mark?

~~~
shiftpgdn
On what planet is $240k/yr net profit for a boot strapped business a "low
bar."

~~~
fouc
A developer working as a contractor and charging his clients a fairly
reasonable rate of $120/hr could make that.

~~~
shiftpgdn
If you have ever contracted at any length you would know that $120/hr is hard
earned and usually has not insignificant time on the back end in so far as
negotiating the deal, keeping it going, etc.

~~~
jlokier
Here on HN I've occasionally seen people talk about $150/hr as a "low"
contracting rate.

And others talk about how they could not achieve that in their wildest dreams,
and consider $80/hr "good".

I was recently contacted about a contract proposal, in the USA, and they were
offering $50/hr for some quite advanced cryptography work for a BigCorp end
customer. I turned it down but it's good to get an idea of the market rate.

Rate expectation seems to vary a great deal depending on which geography and
network-bubble people are in.

------
bfieidhbrjr
Well... That's inconvenient, isn't it.

I've long suspected the cofounder thing was really to be able to divide and
conquer. To have a spare founder when one inevitably quits. To play them
against each other.

Call it experience.

~~~
marcus_holmes
That sounds like hard-won bitter experience.

I'm always warning founders that investors are not on your side. They're not
your friends, they're not there to help you succeed. They're there to make
money. If destroying your life will make them more money, they won't hesitate
or even feel bad about it.

~~~
andrekandre
anecdotal, but i have seen this first-hand (more than once) and it is not
pretty...

------
drchiu
I don’t think there’s particularly a right or wrong here. I’m solo myself and
have felt for a long time to be in an inferior position because I don’t fit
into the ideal 2.3 founders statistic. It took more than a few years for me to
move past this as a major disadvantage. There are positives and negatives, as
with anything.

~~~
noychery
Author of the article here. Supporting a solo founder in GrowthClub and having
co-founders in Panda Training, my own startup - agreed, nothing is black and
white.

------
yakshaving_jgt
I run three companies.

\- A solo, bootstrapped B2B SaaS

\- A bootstrapped B2B2C SaaS with one co-founder

\- A VC-funded B2B SaaS with two co-founders

My solo project is the one I work on _least_. This is likely because nobody is
holding me accountable for it, other than when I get the occasional email from
someone who wants to use the product and they need x feature (which I haven't
yet bothered to implement).

In my experience, I've done _far_ better owning a fraction of something than
100% of nothing.

~~~
noychery
Author of the article here. This is a good point, and a real issue! What I
advocate is finding a 'hands-on advisor', something in between the co-founder
and advisor, check my other article about that, it's a 2-min read:
[https://www.growthclub.online/post/advice-for-solo-
founders](https://www.growthclub.online/post/advice-for-solo-founders)

~~~
yakshaving_jgt
That’s a great idea! Thanks for writing about that. There are so many more
options for collaboration than what’s typically talked about here on HN or in
other startup forums. I don’t know why arrangements like that aren’t often
talked about, but I suspect it may be something to do with the idea of a
“lifestyle business” being seen as a lesser endeavour, which is not really
fair.

~~~
noychery
Yes! Hard to say much without looking deeper into it, but at least my
experience shows me that I am able to be fairly productive as a part-time
founder

------
aussieguy1234
For me I find the fact I can grow my startup at my own pace without pressure
is a good thing.

I still have my day job as a software engineer, so I won't be running out of
money any time soon. My employer reduced my hours by 20% and I'm working from
home because of covid, giving me more time to focus on side projects. My
product ([https://expose.sh](https://expose.sh)) is basically complete and
unlikely to change in a massive way.

For now I'm just starting to get good at social media ads. After work I set up
some campaigns, then review the results the next day and tweak them.

~~~
auggierose
Maybe it's a case of "If you have to ask what it does it's not for you", but
from the expose webpage it is not clear to me at all what it does.

~~~
aussieguy1234
It will give a server (website or api) you have running on your local machine
a public url.

Like @beaconstudio below mentioned it could be used to test webhooks. Other
uses are testing local sites on mobile devices, like I just did to give the
mobile experience of expose.sh a revamp. Its faster than running adb, rooting
your phone or connecting a cable and doing mobile debugging.

There are other tools, although expose.sh is focused purely on http/https and
not other protocols, this makes the syntax a bit easier as you don't have to
specify a protocol, just a port i.e. "expose 80" instead of "ngrok http 80"
(using ngrok as an example).

------
not_a_moth
Having gone through 3 business-oriented co-founders in 1 year for a b2b tech
startup, in each of those inter cofounder periods where I'm the solo founder I
find it extremely fruitful for product, vision, and strategy. The content,
branding, business strategy, and product all much more sharply aligned.

Have become of mind it's better to go as far as you can as a solo-founder and
only bring in major stakeholders when you're desperate because there's too
much work.

~~~
noychery
Author of the article here. Like the philosophy! Proves true with our
experience in GrowthClub. Reminds me the thinking with bootstrapping.

------
mNovak
Just because you start solo doesn't mean you're going to be solo forever; you
just start hiring marginally sooner. So I guess my question is, all else being
the same, is the extra $500k-1M (my guess) that a team would be able to raise
at Seed/pre-seed over a solopreneur just an outsized recruiting fee for having
found a couple other key hires?

------
simonswords82
Being a solo founder with autonomy has advantages and allows you to take
decisions faster but it is not without its downsides.

As the proverb says (paraphrasing) - if you want to go fast go alone, if you
want to go far take people with you.

That does not necessarily mean get a cofounder - but even solo founders will
need a mentor, chairman or some form of outlet for their thoughts and
problems. Otherwise it's a lonely existence and when times are hard it very
quickly becomes overwhelming for most people.

------
gnopgnip
Solo founders doing better doesn't necessarily mean you are better off going
solo.

~~~
rorykoehler
That depends entirely on your skillset

------
adamsvystun
I wonder if you normalise by the probability of starting a business the
results will change. Meaning that if you are together with somebody - it is
much easier to start something, but when you are alone - you have to have
conviction. So many of these non-solo founders might have not started business
by themselves. This creates lower barrier of entry, and might cause solo
founded companies look better. The correct question to answer is: if you have
already decided 100% than you want to make a company, is it better to do it
yourself or with someone else?

~~~
noychery
Author of the article here. I would doubt the assumption that it's easier to
start with other people. Would be interesting to see the data on that. In
GrowthClub's case it was easier for us to start with one founder.

------
convolvatron
they didn't mention 'someone to call me back when i wander off into the swamp'

~~~
maximzavadskiy
growthclub.online, the publisher of the article, does exactly that - one
founder call a week to help you check for swamps. (I am the founder of
GrowthClub)

------
badrabbit
Opensource projects with a BDFL leadership also have a reputation of doing
well.

------
zupa-hu
# Reason 3: Lower costs

They lost me here. Founders take a significantly lower salary, anything else
is typically a rounding error.

That just flies against (my) common sense.

~~~
noychery
Author of the article here. At least for myself I see a big difference in
payroll in GrowthClub (with a solo founder) and my own startup with 3 co-
founders and 2 more shareholders-partners.

------
airocker
There was a post on HN before saying something like this: non-profits do
better with teams but for-profits do better with solo-founders.

~~~
samvher
I would be interested in finding this post - I haven't seen it and using your
description I'm failing to find it with Google as well. Do you remember more?
Thanks!

------
agustif
Well that's the same than saying design by-comittee sucks.

------
fuzzfactor
I say solo founders perform research better.

------
EarthLaunch
The reasons why will not be discussed here.

------
browsergap
This can't be true. YC clearly prefers multiple founders, and YC is the
leading early stage investor.

~~~
glangdale
From what I understand "solo founder == bad" is a pretty common view held by
both YC and a number of other accelerators. If they all believe this then it
becomes a self-fulfilling prophecy, and smart people will rapidly find another
founder before they go through YC whether they needed one or not.

------
holidayacct
Is this a joke?

