Do entrepreneurs really need a co-founder?

New research suggests solo founders with the right mix of broad and deep expertise can succeed.

Finding the right co-founder can feel a bit like dating. You're not just looking for someone you get along with — you need someone whose skills complement your own and strengthen the business. That search has become more difficult in recent years, according to Travis Howell, assistant professor of management and entrepreneurship, because people simply aren't meeting as many new people. "On a societal level, since COVID, people are not getting together as much or meeting new people," Howell says.

To make finding a co-founder a little easier, platforms such as Y Combinator and CoFoundersLab let entrepreneurs browse profiles and connect with potential partners. But like dating, finding a business partner comes with risks. When startups run into trouble, it's often because the founding partners aren't working well together.

So why are entrepreneurs so intent on finding co-founders in the first place? According to Howell, the answer is simple: the data. "On average, businesses with co-founders grow faster," he says. But there's more to the story. While startups with co-founders tend to outperform solo-founded ventures on average, most startups fail regardless of how many founders they have.

A foundational business decision

Given the challenge of finding the right co-founder — and the risks of choosing the wrong one — should entrepreneurs consider going solo? It's an important question because, as Howell notes, "It's one of the first decisions you have to make in developing a startup." Yet despite its importance, little research has examined the conditions under which solo founding can succeed.

Howell, who has studied solo founders since his dissertation, set out to answer that question. In the paper, "Lone genius or lonely fool? Exploring the viability of solo-founding in entrepreneurship," co-authored with Todd A. Hall, he analyzed data from Y Combinator's startup accelerator and Crunchbase. The researchers focused on technology startups because "we wanted a comparable group of entrepreneurs creating something new," Howell explains, "rather than starting an existing type of business like a dry cleaner or pest control."

When solo founders succeed

The researchers compared founders with broad experience across business functions — such as marketing, operations, and finance — with founders who had deep expertise in a single area. They found that solo founders who combine broad business knowledge with deep expertise can overcome many of the disadvantages of going it alone and perform as well as ventures led by co-founders. This combination of breadth and depth is known as a T-shaped skill set.

"If they are super experienced in coding, for example," Howell says, "or a jack of all trades with experience in marketing, sales, and technology, that's good. But having both is better."

Howell is careful to point out that the findings don't contradict the broader data showing that, on average, companies with co-founders grow faster. Instead, they suggest that solo founding can be a viable option under the right circumstances. As Howell puts it:

Yes, solo founders have it hard and face more challenges. Keeping that in mind, it's not impossible to go solo. There are cases where it makes sense.

Another important point: Most of the venture-backed startups Howell studied fail, regardless of whether they have one founder or several. Depending on the source, failure rates range from 75% to 90%.

It comes down to confidence

Pursuing a startup despite the long odds requires a healthy dose of optimism. But that optimism can also make it harder for entrepreneurs to assess whether they're well-suited to go it alone objectively.

"A lot of it comes down to confidence," Howell says. "When we talked to people, we found that those with the T-shaped skill set were more confident they could do it."

It takes confidence not only to start a business but also to challenge the conventional wisdom by doing it alone. After all, according to Howell, many venture capital firms have explicit policies to fund only companies with co-founders.

"I've always been puzzled by VCs taking that position," Howell says, "because you're cutting out an entire category of founders." His research challenges the assumption that successful startups always need multiple founders.

When the crowd gets it wrong

The findings suggest entrepreneurs should think carefully about why they want a co-founder. If the only reason is that everyone says they should have one, it may be worth reconsidering. "I've met many people who had co-founders and later told me they wished someone had told them they didn't need one," Howell says.

One entrepreneur Howell spoke with worked in a co-working space where many other founders had partners. Feeling that it was simply what entrepreneurs were supposed to do, he followed suit — and later regretted it.

"He didn't do a lot of due diligence," Howell recalls. "The person he chose wasn't a bad person, but they had very different visions. Legally, they both owned the company. It was a messy divorce that went to court, and no one was happy with how it ended."

Whether entrepreneurs choose to build a company alone or with a partner, that early decision can have lasting consequences. Howell's previous research found that companies founded by solo entrepreneurs often develop differently from those launched by co-founders.

"In the solo founder's company, power tends to be much more centralized," Howell says. "And this can be true even 10 years after they're gone."

Taking the pressure off

Neither the statistics favoring co-founders nor some venture capital firms' preference for companies with multiple founders make for a particularly natural approach to choosing a business partner. Feeling pressure to find a co-founder simply because investors or conventional wisdom expect one can lead entrepreneurs to make decisions for the wrong reasons.

For founders seeking investment, that pressure can influence one of the earliest and most important decisions they'll make. Howell's research suggests there isn't a one-size-fits-all approach. In fact, knowing they don't have to find a co-founder may ultimately help entrepreneurs choose the right one — or confidently build a company on their own.

The question of what makes a successful co-founder is also shaping Howell's future research. Rather than studying how artificial intelligence might help entrepreneurs find co-founders, he's interested in how it might become one. "We're starting to see more people using AI as their co-founder," Howell says, "and I think we will see more."