Entrepreneurs need partners unless solo founder has broad and deep experience, study finds

LAWRENCE — “The Social Network.” “WeCrashed.” “The Playlist.” “Silicon Valley.” “Blackberry.”

Plenty of movies and TV series center around startups. Such content frequently focuses on the conflict between co-founders.

“They start to have different ideas, different directions, different moral codes,” said Todd Hall, assistant professor of business at the University of Kansas. “Generally, people think it’s better to found as a team, but there are situations when founding alone can be just as good.”

He investigated that dynamic in a new article titled “Lone genius or lonely fool? Exploring the viability of solo-founding in entrepreneurship.” While the conventional wisdom is that entrepreneurs need co-founders, such a partnership can introduce destructive conflict, potentially creating as many problems as it solves. This research revealed how solo founder disadvantage is partially diminished when the founder has broad and/or deep experience.

The article appears in the Strategic Management Journal.

“Solo founders can make control decisions more or less unilaterally, and they can really impose their vision on the company. If their vision is right, that is a very strong advantage,” said Hall, who co-wrote the article with Travis Howell of Arizona State University. 

That advantage comes with other positive implications, Hall found.

“Avoiding conflict also means speed. You can get to market faster, make decisions faster, avoid bureaucracy,” he said. “The other advantage is if the entrepreneur is right — and most entrepreneurs believe they are — then the best decision gets made.”

As an example, he pointed to Amazon’s Jeff Bezos, who built an empire by solo founding.

“Bezos had a very clear and sort of boring vision: ‘I’m going to sell books.’ But it worked out rather well. Despite not making money for a long time, he just kept pouring any profits right back in the business. Grow, grow, grow. And now Amazon has taken over the world,” Hall said.

The flip side of going solo and ignoring the advice of others is typified by OceanGate CEO Stockton Rush, whose Titan submersible imploded in 2023, killing him and his passengers.

“Here is a good case of why solo founding is dangerous,” Hall said. “The disadvantages are they can do dumb stuff, and they don’t really have people to check them.”

In addition to this lack of oversight, Hall pointed to several other disadvantages for solo founders. 

“Co-founders add a lot of experience to the process. They have their own networks, they signal legitimacy, they bring all their expertise with them, and that’s a huge advantage over solo founding,” he said.

Since so much of business revolves around networking, a lack of connected partners can prove limiting.

“A lot of entrepreneurship is, ‘I know this person. I know that person.’ As a solo founder, you might not have those wide-ranging options,” he said.

“Also, if you’re a solo founder, is that because you chose to be or because you’re terrible to work with? Or is your idea bad? There becomes a signaling thing to investors and even customers, like, ‘Why is this person alone?’”

The final disadvantage involves lacking a more well-rounded knowledge base.

“If you bring in a co-founder who has more experience in this field that you don’t have, that can really help you make better decisions to grow your company,” Hall said.

He found the solo founders who do best possess “T-shaped” skills and experiences. This means having knowledge that’s deep in one area but with a broad set as well.

“Successful solo founders often have T-shaped expertise. They’re a tech person who also has an MBA. Or they’re an engineering major who becomes a project manager afterward,” he said.

To ascertain these results, Hall performed two studies: one using data from Y Combinator’s renowned accelerator program and another using large-scale data from Crunchbase, the primary database of startups.

“Using LinkedIn links for the founders of those companies, we were able to connect this huge database of startups with founders, figure out which ones are solos and then look at the outcomes,” he said.

The researchers defined “successful companies” as those looking at successful exit (IPO or acquisition).

Now in his fourth year at KU, Hall researches how people organize around technologies. His past articles include “Does Artificial Intelligence Stimulate or Diminish Human Interactions? An Affordance Perspective on AI, Relational Coordination, and Performance” and Digital Technologies, Organization Structure, and Coordination by Feedback: Lessons from Information Technology Adoption.” 

Before going into academia, he helped hospitals implement billing software as a project manager for Epic Systems. 

Based on his latest research, if Hall were going to start a company, would he seek a partner?

“Absolutely,” he said.

“As a founder, if you have a clear idea and you have the knowledge and experience to back up that idea — and maybe you’re a strong personality — solo founding is okay. If you aren’t super confident in your knowledge or your experience, then get help. There are individuals who can solo found successfully, but it’s the exception.”