You Don’t Need A Cofounder
In the first half of 2019, startups raised nearly $65 billion in private funding and venture capital, which is more than enough to fund thousands of companies. Starting a business is daunting, so many of these entrepreneurs will look for a partner, even if they’re the one with the idea and expertise. But I believe cofounders and partners are often more trouble than they’re worth. In fact, companies started by solo founders survive longer and generate more revenue than those started by teams or partnerships. If you think you have a good idea and the know-how to execute it, consider starting a company on your own.
When I say business partnerships, you probably think about famous, successful partnerships like Ben & Jerry’s or Hewlett-Packard. Unfortunately, these successful ventures are the exception, not the rule.
In my nearly twenty years of entrepreneurship, most partnerships I’ve seen have failed. At some point, the partners disagreed about how to run the business or one partner felt the other wasn’t doing their fair share of the work. From there, one of three things happened:
1. You end up choosing to leave or being forced out of the company you created.
2. Your partner leaves the company, requiring you to buy out their shares.
3. The company dies due to the disagreements and legal battles that often ensue.
Each of those outcomes hurt them and their company.
Still, I understand the appeal of a partner. For some, the benefits are financial, like the extra funding partners may bring. For others, it’s about access to a broader network of potential hires. But for the majority of the entrepreneurs I talk to, it’s almost always about the added perspective or experience a partner can offer.
If you dig deeper into these motivations, another explanation emerges: many partnerships are founded out of fear. Most first-time entrepreneurs don’t trust themselves with the responsibility of supporting a business on their own. This anxiety might be understandable to a point, but letting it force you into a partnership can have disastrous results. The vast majority of small business partnerships—70 percent—ultimately fail.
Years ago, a friend of mine started a bespoke men’s clothing store. He was a lawyer and hadn’t started a business before, so he had some understandable fears about going it alone. He thought he needed a partner who had some experience in the industry. I told him he didn’t need a partner, that he was a smart guy with a good business plan and I thought he could succeed. He stood his ground and brought on a partner. Just a few months later, the partner was driving him nuts. They had completely different visions for the business, so he had to buy his partner out.
But not every partnership story ends that quickly or cleanly. Some partnerships can work well for years before things sour. Another friend of mine started a design firm with a partner, and it was successful for nearly a decade. They worked well together and had a shared vision for the company. Then something shifted—the partner, for personal reasons, wanted to make sweeping changes to everything, from the company’s overarching goals to its day-to-day operations.
They now had incompatible visions for the company and no agreed-upon path forward. Ultimately, they dissolved the company, and it wasn’t an amicable split. It was an uncomfortable process that ruined a business relationship and a friendship, and it made my friend swear off partnerships for the rest of his career. His next venture, a branding agency, was a solo venture that has now been profitable for nearly 20 years.
The lesson is simple: if you have a business idea, start by exploring how you can realize it on your own. If you’re worried about funding, many investors will support your business for a share of the profits, but won’t influence your day-to-day decisions in most cases. If you’re worried about shouldering all of the weight, you don’t have to do it alone. Every entrepreneur needs help, but that help doesn’t have to come from a partner who shares leadership control of the company. Employees, consultants, and boards of directors can all contribute in their own ways and you can maintain a healthy, functional business without sacrificing control.