The success stories of Jeff Bezos and David Karp is quite inspiring. It is a feat about how one man built a profitable venture all by himself. However, as inspiring as it is, it is also unique. Most successful startups usually have 2 or more founders. Google, Microsoft, Souq.com, and Youtube, to name a few, all have developed into successful businesses due to a partnership. Although a partnership is not easy, it is a necessary relationship that startup founders can greatly benefit from. Studies show that ventures with two founders significantly increases the odds of success. With a co-founder, one is expected to raise 30% more investment and grow their customer base 3 times as fast.
Here are some other major reasons why a co-founder is essential for a startup:
- Enhanced Decision Making – Beginning your own venture can lead to various challenges. Therefore, working with a co-founder can help you with problem-solving and decision making. It is important to have another person's perspective that understands the business; this difference of opinion is healthy as it helps in keeping a realistic view about the end-goal of your business.
- Financial Support - Starting a business is a costly affair. Studies show that the vast majority of US startup funds (82%) come from the entrepreneur themselves. However, self-funded businesses do not always make it, especially if one is looking for funds for growth and expansion. Therefore, working alongside a co-founder allows you to split the initial costs and raise funds for a much better valuation.
- Complementary Skills – In order to run a successful business, one would require deep knowledge in a variety of topics. Realistically, one person may not have all that knowledge and therefore a co-founder can compliment your skill set and divide the workload. Additionally, a co-founder can offer more resources to work with.
- Division of Responsibility – It is not easy to run a business. There are numerous tasks, important decisions to be made in the initial phase which will shape the future of the startup. Having a co-founder on board will help you manage the start-up more smoothly and efficiently as well as provide a better work-life balance.
- Risk Mitigation - There are huge risks involved with a start-up and having someone to shoulder the risks with you is a great support system. A co-founder not only shares the profits but bears the losses with you. And, a co-founder may bring more stability to the minds of investors because they are assured that their money is being utilized correctly.
The success of a startup doesn't rely only on the idea; a major determinant is the execution. Having the right team is as crucial as the idea itself. Though it may be possible to be a successful single founder, entrepreneurs have a much better chance of success with at least one co-founder to help build the business. After all, two heads are better than one.