If one founder is sweet, then extra should be higher, proper? Not essentially. New analysis reveals that the advantages of cofounding a startup with strangers may be eclipsed by the dangers.
Sure, cofounders can convey their very own views, together with “entry to wider networks, larger capability, and entry to funding,” says Monique Boddington, a administration follow affiliate professor on the College of Cambridge’s Decide Enterprise College, whose analysis consists of early-stage enterprise formation and startup technique improvement.
And but: “An rising variety of people have been organising companies with no intention of taking up staff,” she explains.
That’s as a result of extra persons are figuring out as solo entrepreneurs—“solopreneurs”—because the pandemic, Boddington provides. And whereas the excellence between self-employed, freelancer, and solopreneur remains to be murky, “the best way to identify [solopreneurs] is whether or not their enterprise pursues novelty and scalable alternative or primarily earnings substitute or replication,” she says. For these operating startups, many such staff are selecting to go it utterly alone.
In 2022, 84% of all U.S. corporations had no staff, which means there was simply the one particular person operating the enterprise. These 29.8 million “nonemployer businesses” accounted for $1.7 trillion, or about 6.8% of the financial system. And the momentum hasn’t slowed; in 2023, Individuals filed over 5.5 million new business applications, and Gusto’s 2025 New Business Formation survey suggests greater than 4 in 5 small companies within the U.S. don’t have any staff.
Why folks do it
In line with the identical Gusto survey, over 50% of solopreneurs cite profession autonomy—“being one’s personal boss”—as the rationale for adopting a lone wolf, owner-only enterprise mannequin.
Many, like progress marketing marketing consultant and content material creator Kevin Fernando, accomplish that due to the “unmatched freedom” it affords them. Fernando, who’s the founding father of Solopreneur Digital, the place he helps entrepreneurs and software-as-a-service (SaaS) firms develop, says that “you get to maneuver rapidly, make selections that align along with your imaginative and prescient, and construct one thing that’s absolutely your individual.”
In fact, going solo, and beginning a enterprise with no cofounder or staff, doesn’t come with out its challenges.
“The pliability and autonomy of being your individual boss typically include the vulnerability of being by yourself,” says Filip Majetić, sociologist and senior researcher on the Ivo Pilar Institute in Croatia. Whereas robust social help from household and buddies can enhance solopreneurs’ total psychological and bodily well being, he explains, “this help doesn’t buffer particular stress-related health problems” akin to exhaustion and complications.
Like many others, Fernando finds every little thing falls on him, and the fixed context switching may be draining.
“Once you’re a solopreneur, you’re not simply the strategist. You’re the marketer, buyer help, designer, and operations supervisor—all rolled into one. You must be self-motivated and resilient as a result of there’s nobody else,” he says. That’s particularly the case when you’re not sharing obligations with a cofounder in your enterprise’s early days.
However new analysis posits that this can be a very good factor.
Stranger hazard
Standard knowledge would recommend that bringing on a cofounder with a vastly totally different community from your individual results in extra potential funds, because the possibilities of overlap in who you understand could be decrease. Whereas that could be true, an evaluation of over 3,500 Kickstarter campaigns in a examine titled, “The ‘Devil’ You Don’t Know,” reveals that new ventures that embody strangers on the crew are lower than half as more likely to ship the services or products they pitched, and virtually twice as more likely to stop operations.
Research challenging beliefs that resilience is universally useful to entrepreneurial groups are gaining traction, suggesting the very benefits that appear so compelling on paper can even introduce friction—making teams less reflexive, slowing decision-making, and complicating execution.
“Whereas having folks with various abilities and expertise on a founding crew has important advantages, their skill to work collectively successfully is simply as vital,” explains Kimberly A. Eddleston, the Schulze Distinguished Professor of Entrepreneurship and Montoni Analysis Fellow on the D’Amore-McKim College of Enterprise at Northeastern College. “They must be appropriate, reliable, and capable of talk.”
It’s one in every of enterprise’s oldest truths: Should you work with the correct folks, every little thing else falls into place. The issue? Nailing the folks a part of the equation is admittedly arduous.
The constraints of going it alone
“Solopreneurship generally is a nice place to begin to get an thought off the bottom. A single particular person can bootstrap with larger useful resource effectivity, larger management, speedy iteration, and hire-in capabilities,” Boddington says. However to scale, she explains, a crew is essential.
Founding groups are additionally more likely to attract funding within the first place, and the Kickstarter analysis revealed that groups comprised of strangers garnered extra crowdfunding backers as a result of they served as novel bridges to assets.
Crucially, operational struggles (akin to coordination breakdowns, delays in delivering promised services or products, differing work kinds resulting in relational uncertainty, misalignment of imaginative and prescient and objectives, and potential early stage dissolution) appeared in groups with strangers within the boardroom, not companies sure by robust household or friendship ties.
Not all cofounders are a legal responsibility, Eddleston says. In ventures with household, for instance, crew members can rally rapidly in a disaster, and “[they] have a ‘survival’ benefit as a result of members of the family are prepared to work for below-market wages, and even at no cost, to maintain their enterprise afloat,” she says.
Nonetheless, entrepreneurs can thrive completely alone, with out a cofounder or a crew.
“With AI revolution, the following wave of entrepreneurship gained’t be about larger groups, however smarter people—AI-powered solopreneurs who flip know-how into their progress companion,” says Areti Gkypali, an assistant professor at Athens College of Economics and Enterprise in Greece.
The technique has labored effectively for Fernando. By automating repetitive duties and constructing techniques to deal with issues like shopper communications, lead technology, and content material distribution, he’s shaved 20 to 25 hours off his workweek, liberating him to concentrate on strategic priorities.
Finally, for anybody eyeing a brand new startup, it’s price being strategic about who, if anybody, to companion with. As Fernando says: “It’s a way of life that rewards focus and leverage greater than uncooked effort.”
