Steve Jobs- Steve Woznick, Bill Gates- Paul Allen, and Sergey Brin- Larry Page; and then you have the likes of Larry Ellison, Jeff Bezos, Mark Benioff, and, not to forget, Mark Zuckerberg. You can certainly have your pick, but it’s hard to discern if the solo founder model is inferior as compared to a multiple founder one.
Even for the businesses started by a bunch, such as India’s very own Flipkart, Zomato, Snapdeal, or OLA (yes, it had two founders) does seem to have one man leading the proceedings. Needless to say, the Marwari family businesses, which have survived for multiple generations mostly have one man (typically so) ruling the roost, till his son takes over the reins.
And yet, VCs and Angels alike look for a co-founder model as a de-risking strategy. Why?
Let’s start with the fundamentals of de-risking, which seems to be the primary objective of investors, and not so much the economic impact (unfortunately). This overt focus on covering the downside, and an almost blind belief that multiple founders would somehow contain the risk might be unfounded. Technically, risk in a portfolio reduces only when the invested-up entities are loosely correlated, or at best, unrelated.
If the argument were to be extended to a startup, what are the odds that the two or more individuals, the so-called founding team, have their temperaments or skills unrelated, or loosely related? The very fact that they gravitated towards each other to create something of substance (at least on paper) depicts a high degree of mutual affinity. On top of this, the investors add their own chefs into the bargain and end-up making a simple recipe complex and eventually distasteful. Remember the scores of Marwari and Gujarati businesses thriving without any external intervention, or perhaps because of that. So much for the need of a co-founding team.
Notwithstanding that the team must share a passion and a belief, and bring complementary skills to the table (which only gets discovered with time), it’s not clear as to why such a talent can’t be hired subsequently. With an upstart navigating through the maze of uncertainty, won’t it be wise to invest as when the skills are needed?
Look at Wipro for that matter, where Premji always maintained a disposition of hiring professionals and promoting talent from within, and to maintain a lion’s share of the company. Contrast this with over half-a-dozen co-founders that Infosys had, which for several years played a sort of musical chair to finally bring in someone from outside to realise that their incumbent talent wasn’t up for the task. Both are equally successful companies, albeit Wipro generated a far greater number of entrepreneurs in the process and that’s by empowering the next rung.