Technical Difficulty Rating: 3 out of 10
Should you go at your hardware startup on your own, or is it better to have a team of co-founders? Is one option clearly better than the other, or does it depend on the founder and the product?
There isn’t one clear winner that is the same for every person and every product. As with many things in life the answer isn’t simple or obvious, and it instead depends on your exact situation.
We’re going to first look at some of the advantages of going at this as a solo founder, then I’ll discuss the advantages of having a co-founder team.
For a lot of people that have a product idea, it’s much easier to just get started on their own without having to take the time to find co-founders.
If you came up with a great idea all on your own, then finding co-founders can be a challenging, time-consuming process. In some ways it can be just as challenging as finding an investor.
Instead of money, you’re asking someone 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 it will take you a ton of time to find the right person willing to commit to the project.
Business relationship complexity
A big advantage of being a solo founder is there’s no one for you to argue with, so this allows you to stay more focused on your ultimate goal.
You have to keep in mind that being a co-founder is really like a marriage. You’re going to be working with this person nearly every day for years, so it can create a lot of conflict.
For a lot of people, to eliminate this relationship complexity, it makes more sense to just run their startup completely on their own.
Another advantage of going the solo route is that you don’t have to share 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.
So if you have two founders then you split the equity 50/50, or if you have three founders then you each get a third of the equity.
Losing equity can come into play in your decision, but ultimately, I don’t think it should be 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.
Technical vs. non-technical tasks
For a lot of people, it’s appealing to be a maverick and go at it on their own. This may be especially true if you happen to be an introvert.
Although, just because it may be the most appealing option doesn’t mean it is the best option. If you’re an introvert then going it alone may sound appealing, but it may be best if you bring on an extroverted founder.
Many introverts have difficulty with sales and marketing, so having an extrovert on your team can be highly beneficial. Although the benefits of an extroverted founder may not become apparent until you are ready to begin selling your product.
I think a technical, introverted founder is most critical in the early development stage, and an extroverted founder becomes more important later in the process.
On the other hand, if you’re someone that has sales and marketing experience, but you don’t have any technical engineering experience, then right at the very beginning, your skill set won’t be the priority. You will either need to outsource all of the development, or bring on a technical co-founder immediately.
If you are lucky enough to be both highly technical and comfortable making sales calls, then being a solo founder may be your best strategy.
This was my own case with my startup, sort of. By no means am I an extrovert, but I was willing to do sales calls so I stuck with the solo-founder path. I was also able to bring on independent sales representatives to help with most of the retail sales.
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 co-founder.
The two most important early stages 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 look at the advantages of having a team of co-founders instead of just a single founder.
First of all, with a co-founder team success is going to happen much faster than going it alone. You have two people working on your project, so 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 really speed up development, assuming they all have complimentary skills that allows each founder to work simultaneously on different aspects of development.
Someone to discuss ideas
Another advantage of having co-founders is you will have someone 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, you don’t ever bounce these ideas off of anyone else.
The entire project lives entirely inside your head. This is dangerous because what you perceive individually, may not match up with reality. Getting honest feedback from a co-founder at every stage of development can help keep your goals realistic and achievable.
Complimentary skills and the ideal founder team
If you happen to have co-founders that have complementary skills, then that can increase your chance of ultimate success. For instance, the ideal founder 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 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.
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.
The ideal situation is where each founder has complementary skills that work together.
Another significant advantage of a co-founder team is that you 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. It really helps to have someone to share the ups and downs with.
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.
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.
Without a co-founder, your emotional support will most likely fall on your spouse if you’re married, or your friends, and family. That can cause other problems, so it’s nice to have someone that’s just as passionate as you are about your product.
Trust me (from personal experience), your spouse will eventually grow tired of hearing about every up and down of the journey.
Increase chances of professional investor funding
Another advantage of co-founders is it can potentially increase your chances of getting outside funding.
There are a lot of larger, professional investors who highly prefer, or even require, more than one founder on a hardware startup team. It makes them feel more comfortable because if one person gets hit by a bus, there’s someone else that can still continue to work.
More income for bootstrapping
Another reason that co-founder teams are beneficial is you have more sources of income.
For the first few years, you’re going to usually need to bootstrap your company. You’re most likely going to have a full-time job while working on your startup on the side. The income you make from your day job will fund the work that needs to happen on your start-up.
If you have multiple founders, then you have multiple incomes available for bootstrapping your startup until it reaches profitability.
There are two strategies if you’re going to find co-founders. Let’s say you and a friend come up with a great idea for a product together, and then you move forward from that point.
The benefit of this type of scenario is both of you are going to be equally motivated. You both feel the same amount of ownership for the idea. You had this idea together, and are both equally and fully vested in the idea.
The other option is to bring a co-founder on after you have made some initial progress. The benefit of this is it can be much easier to find a co-founder once you have made some progress.
If you’re an engineer, and already have a prototype made, it’s going to be easier to find a sales and marketing co-founder because you have already made significant progress.
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. That’s something to keep in mind as well. Every strategy is going to have pros and cons to it.
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, a recent study throws that assumption into debate. An article in TechCrunch analyzes 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. An exit means 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 always requires a larger variety of skills than is needed for a software company.
For starters, a software company doesn’t require hardware design. They only require software design. Most hardware start-ups will require both hardware and software development.
In order to determine if you are better off going it alone or bringing on co-founders, you’re going to have to analyze your own particular skill set, your financial situation, your product, and your product complexity.
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.
Personally, I feel that most hardware startups do best with a team of co-founders who have different but complimentary skills. But many founders also succeed going at it alone.
I hope you found this article helpful. If you have any questions or comments, please post them below in the comment section, and I will personally reply.
If you need help understanding all of the obstacles and costs that lie ahead for your specific product, then check out my Predictable Hardware Report service.