One of your first decisions for your hardware startup is to go it alone, or work with a team. What’s best? Should you work on your hardware startup on your own, or is it better to have a team of co-founders?
Which option is ideal really depends on you and your product.
If you are an engineer who also enjoys marketing and you have a decent amount of your own cash to invest, then going solo may be the best route for you.
On the other hand, if you’re an introverted engineer who thinks development is fun but marketing sounds boring, then you should probably find a co-founder to cover the marketing side of the business.
Or, at the other extreme, if you are completely non-technical then finding a technical co-founder will likely be your best path.
It depends on your skills, connections, available time, and finances.
Overall, it’s a complex question with each option having lots of pros and cons. The rest of this article will no look at those advantages and disadvantages in more detail.
Which is more likely to succeed?
It used to be widely believed that a co-founder team is more likely to succeed than a company with a single founder. The general thought was that teams of co-founders are more likely to have ultimate success and to get outside funding.
However, recent studies question the validity of that assumption. An article in TechCrunch analyzed several thousand successful start-ups from CrunchBase, a platform listing business data on public and private companies.
The data showed that teams with solo founders are more likely to achieve a successful exit (selling the company). This data also showed that solo founders were actually more likely to raise capital than co-founder teams.
However, this study was comprised largely of software startups, not hardware startups. A hardware start-up requires a much wider variety of skills.
Another study from Wharton School and NYU looked at 3,526 businesses that had started with Kickstarter campaigns, so it likely included a good number of hardware startups. They also came to the conclusion that solo founder startups are more likely to succeed.
It appears that social “frictions” and stress between co-founders are detrimental to business. Even though co-founder teams raised more money initially, they under performed compared to solo founders in the long term.
In a comparison of Kickstarter companies, revenues were consistently higher for companies with one founder compared to those with two or more founders.
Advantages of Being a Solo Founder
Personally, I went the solo founder route because I enjoy working in lots of different areas (engineering and marketing), and because I’m naturally very introverted.
Also, at the time we lived in a small town in Alaska (and then Kauai, Hawaii) so the pool of available nearby co-founders was pretty slim. Although, there is no reason your co-founder has to be physically located nearby.
You may not have much experience with sales and marketing, but as long as you have the comfort level to reach out to customers then you may not need a sales minded co-founder.
The two most important aspects of bringing a product to market are product development and marketing. So if you are comfortable with those two areas then you can delay bringing on a co-founder, or get by without one.
Let’s now look at some of the advantages of going the solo route.
It’s easier to get started on your own
For a lot of people with a product idea, it’s easier to get started on your own, especially if you don’t already have someone in mind that would be a good co-founder for you.
If you don’t have existing relationships with potential co-founders, then finding them takes a lot of time and is quite challenging.
You’re asking any co-founder to commit large amounts of their time. In fact, you really are asking them to commit their lives to your project. That’s a big ask, so expect it to take a while to find the right person willing to commit to the project.
Finding a co-founder will commonly require you to make some initial progress in order to prove yourself and your idea to potentials. Whether it’s co-founders, investors, or customers, the further you get your project the easier it will be to get others interested.
You avoid business relationship complexities
One big advantage of being a solo founder is there’s no one to argue with! This can allow you to stay more focused on your ultimate goal.
Keep in mind that being a co-founder is similar to having a spouse. You’re going to be working with this person nearly every day for years, so it can potentially create a lot of conflict.
As with marriage, its best not to rush the co-founder relationship since you want to find someone you are compatible with. At least go on a few dates first!
For some personalities, it just makes more sense to go the solo route.
You get to make decisions more quickly
If you think you should take one path forward, but your co-founder thinks you should take a different route, then that will prevent you from making decisions quickly.
These periods of indecision on how to proceed will obviously cause delays in getting your product to market. Although, a slow good decision is always better than a fast bad decision.
Even worse is if you can’t come to any kind of agreement which is always a risk with multiple founders.
You keep all of the equity
Another advantage of going the solo route is you don’t have to share any equity in your company. Obviously, if you have a co-founder then you need to split the company’s equity with them. It’s usually best if all founders have an equal share.
Losing equity can come into play, but ultimately I don’t think its a strong reason to choose the solo-founder path. It’s much better to have a small piece of a large pie than to have every piece of a small pie, or no pie at all.
You can generate less revenue or reinvest more
When you have two founder mouths to feed, or two founder families, then your startup will need to generate twice the income as it would if you were a solo startup.
This can actually act to slow down growth in some cases because having multiple founders taking a salary will usually leave less available to invest back in the company.
That being said, most hardware startups don’t generate any revenue for at least the first year, so any founders likely need to have other sources of income during the initial stages.
Advantages of a Team of Founders
If you and a friend come up with a great idea for a product together, and then you both move forward from that point it’s a natural founder team.
The benefit of this type of partnership is you are both equally motivated, and feel the same amount of ownership for the idea. Since you came up with the idea together, you should be equally and fully vested in the idea. You also already obviously know each other and your personalities.
Another option is to bring a co-founder on after you have made some initial progress on your own. It is usually much easier to find a co-founder once you have made some initial progress. Convincing others to invest their time and money will be challenging with only an idea.
If you’re an engineer, and already have a prototype made, it’s going to be easier to find a marketing co-founder because you have already made significant progress on development.
The downside of that strategy is the person you bring on later may not be quite as invested in the idea, or won’t feel the ownership that you do, because it wasn’t his or her idea.
Now let’s look at some of the advantages of having a team of founders instead of just a single founder.
You can make faster progress
A founder team will in most cases be able to make faster progress than a founder working alone. With two people working on your project, you can theoretically work twice as fast.
You only have so much time in the day, especially if you’re working a full-time job during the day. You’re going to be working on your project mostly in the evenings and weekends, and that can really make progress slow.
Having multiple founders can speed up the timeline, assuming they all have complimentary skills that allows each founder to work simultaneously on different aspects of the startup.
You have someone to talk to and brainstorm ideas
Another important advantage of having co-founders is you will have people to bounce ideas off of. One of the worst situations you can be in is where everything you’re doing remains inside your own head.
You may come up with the idea for the product, figure out all the details of the product, and determine how it should be marketed. But, what if you don’t ever bounce these ideas off of anyone else?
It can be dangerous to keep your entire project inside your head. What you perceive individually, may not match up with reality. In fact, most of the assumptions you are making will ultimately prove false.
Getting honest feedback from a co-founder at every stage of development can help keep your goals realistic and achievable.
Better chance of getting professional investor funding
Another advantage to having co-founders is it increases your chances of getting outside funding.
Most larger, professional investors highly prefer, or even require, more than one founder on a hardware startup team.
Investors feel more comfortable because more than one person is holding the ball. If one founder gets hit by a bus, there’s someone else to continue to work.
In the book The Hardware Startup the authors suggest that the ideal team for a hardware startup consists of a maker, a hacker, and a hustler.
A maker is going to be someone like an engineer that can manage the design and prototyping of the electronics and product enclosure.
Most electronic products will require some level of programming. You will most likely need some type of embedded firmware to run on the device itself. Supporting mobile applications and computer software will also come into play. This is where having a software hacker on your team is beneficial.
The need for the hacker really depends on how complex your product is from a software perspective. In most cases an electrical engineer will know enough about programming to either do it themselves or manage a software contractor.
Regardless, most electronic products will require both an electrical engineer and a mechanical engineer.
If your product is very electronically complex then an electrical engineer as a founder is more beneficial. But if your product is more mechanically complex, then a mechanical engineer may be a better founder.
For more on the development process see my ultimate guide on how to develop a new product.
Finally, a hustler is someone that’s going to do sales and marketing. The hustler is going to be out there pitching the product and trying to drum up business.
I argue the hustler is the most important persona to have on your team. You need someone on your team passionate about marketing.
Better emotional support
Another significant advantage of a co-founder team is that you will have someone to share the emotional ups and downs of running a startup. Being a founder of a startup can be a very stressful process, and at times a lonely one.
Bringing a product to market can be very exciting, and at other times very depressing. It’s definitely an emotional roller coaster.
When there’s a low moment, having someone that can help you figure out how to move forward can be very beneficial at lowering your stress.
It’s easy for a solo entrepreneur to get stuck in a depressing thought cycle. Having a co-founder to talk to during this time can be extremely helpful in breaking this mental cycle. Although you may have a spouse and friends to talk to, it’s not the same as someone in the trenches with you.
The same is true with the high moments. It’s always great to be able to share good news with someone that is just as excited as you about it.
More income for bootstrapping
Another reason that co-founder teams are beneficial is you have more sources of income.
For the first year or more, you will most likely need to bootstrap your company. You probably will still have a full-time job, or be doing freelance work, while working on your startup when you have time available.
If you have multiple founders, then you conceivably have multiple incomes to bootstrap your startup until it reaches profitability.
To decide if you are better off going it alone or bringing on co-founders, you should analyze your own particular skill set, your network of potential co-founders, your financial situation, and your product.
All these variables come into play when determining if you should go it alone or not. There isn’t one right answer for every startup situation.
Regardless of whether you go the solo route or the founder team route you need to always be seeking guidance from those who have done it before. Unless you’ve done it before it’s impossible for you to know what you don’t know without outside guidance.
If you want access to a team of experts to help guide you in product development, certifications, manufacturing, marketing, business, sales, and more then check out the Hardware Academy.
Other content you may like:
- Episode #28 – Marketing Lessons Learned with Fraser Vaage, Founder of Snik
- Should I Keep My Product Idea a Secret to Prevent It From Being Stolen?
- 7 Strategies to Develop a New Product
- How long does it take to develop a new product and get it to market?
- Episode #17 – 6 Strategies to Get Your Product Developed