Many entrepreneurs live by this African proverb, “If you want to go fast, go alone. If you want to go far, go together.”
Solopreneurs’ businesses are more likely to survive longer, but teams perform better financially.
According to two researchers, Jason Greenberg, assistant professor of management and organizations at New York New York University’s Leonard N. Stern School of Business, and Ethan Mollick, associate professor of management at the Wharton School at the University of Pennsylvania, this proverb is “so pervasive that many of the foremost investors rarely, if ever, fund startups founded by a solo entrepreneur.”
In their ongoing seven-year study of companies, their preliminary findings contradict that adage.
For-profit ventures that are founded by an individual are 2.3 times more likely to survive than those that are founded by 2 or more people.
Greenberg and Mollick studied 3,526 Kickstarter projects, which collectively crowdfunded US$151 million and generated about US$358 million in revenue between 2009 and 2015.
The duo found that:
- For-profit ventures that are founded by an individual are 2.3 times more likely to survive than those that are founded by 2 or more people.
- Solopreneurs are 55% less likely than a three-person team to dissolve or suspend the venture.
- Individuals are less likely than teams to pursue a venture that is non-profit or artistic in nature
- The more capital a crowdfunding campaign raises, the more income it earns and is more likely to stay around.
- Companies with a greater proportion of founders working full time earn more income.
- When it comes to average income, solo founders are on par with teams of three or more and earns more than teams of two.
- Solopreneurs’ businesses are more likely to survive longer, but teams perform better financially.
Another reason [for solopreneurs’ successes] is the lack of friction and drags that occurs in teams.
The researchers concluded that ventures with a solo founder generally outperform teams of co-founder, particularly two-person teams. Their guess is that the individual founder makes up for the lack of specialised skills with a range of skills that are critical for entrepreneurial success. Another reason they cited is the lack of friction and drags that occurs in teams.
After all, there’s another saying that goes, “Too many cooks spoil the broth.”
Featured image by George Becker from Pexels.