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Stop Looking for a Cofounder

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Re: Stop Looking for a Cofounder

#101

Post by thaumasiotes »

larrys wrote: post #98
xiaoma wrote: post #94

Earlier quoted context omitted.

And it's not like being bootstrapped ensures a business won't be a home run. Microsoft, Oracle, Ebay and Github were all bootstrapped.

Microsoft may have been bootstrapped (I will go with what you are saying without verifying) however it also had the backing and full faith and credit of a somewhat wealthy and connected family.

When Microsoft went public, Bill Gates owned 80% of the stock. His wealth, compared to other tech company founders, is essentially all the product of not getting diluted.

Re: Stop Looking for a Cofounder

#102

Post by danieltillett »

beambot wrote: post #100
PopeOfNope wrote: post #93

Earlier quoted context omitted.

tl;dr: owning a business does funny things to people. Make sure you're one of the ones who can handle it in a healthy manner. Reality is having a couple million a year business can really lead to a fantastic lifestyle if done properly. Emphasis on the "if done properly." I know a man who own his own american manufacturing company (yes, they still exist). They specialize in electric motors. They do good business despi…

$5M gross is kinda low for 50(ish) employees. That works out to $100k apiece fully-loaded (healthcare, taxes, etc). He would need to be paying them each substantially less than $60k a year.... and that's ignoring all his other costs: materials (it's a physical good), inventory, taxes (property, sales, income), and service fees (attorney, accountant, etc). Only then do you get to his net income. It's likely not very g…

People on wages near or just above minimum wage don’t make anywhere near $100,000 a year. There is a reason that manufacturing jobs are coming back from China.

Re: Stop Looking for a Cofounder

#103

Post by rebootthesystem »

With the right project, skills, dedication, some funding and a little luck it is quite possible for a single person to build a business that produces $100K to $200K per month free cash. I understand that SV culture of building for $100MM+ exits but that is utopia. All you have to do is run the stats against total business startups (and failures) per year to confirm this claim.

As for single vs. multi-founder companies. I see SV from afar as an environment where young VC's incubate all manner of ideas by young inexperienced people. It's an educated shotgun approach. And it obviously works or it would have died off a long time ago.

In that context I would say it is absolutely imperative to have more than one person on a team. Why? Because business is hard and most 20-somethings today have never done anything even remotely as hard in their lives. When business slaps you around and tests your limits and you are an inexperienced young person without a support system around you failure is almost guaranteed. Add co-founders to spread the stress, discuss, find solutions and feel like a team with a dose of guidance, money, advise and the benefits of the experience of good VC's and you can make interesting things happen.

Again, in that context, yes, you need multiple founders.

With more experienced entrepreneurs who've been tested in business I don't think the solo founder thing is a problem at all. We can manage the business just fine and we can hire good people to do what's needed. The benefit of experience is that problems are met with aplomb and a mental and business toolbox that turns mountains into hills.

Money is a a thing separate from the single/multi founder issue. You can fail miserably with lots of money and a large team and you can succeed with little money and a guy coding at home (PlentyOfFish anyone?).

What money can and does do is light a rocket under a good thing at the right point in time to make it go. Money is like the blood in the veins of a business. Without enough of it you are not going to go run a marathon and win.

Re: Stop Looking for a Cofounder

#104

Post by beambot »

danieltillett wrote: post #102
beambot wrote: post #100

Earlier quoted context omitted.

$5M gross is kinda low for 50(ish) employees. That works out to $100k apiece fully-loaded (healthcare, taxes, etc). He would need to be paying them each substantially less than $60k a year.... and that's ignoring all his other costs: materials (it's a physical good), inventory, taxes (property, sales, income), and service fees (attorney, accountant, etc). Only then do you get to his net income. It's likely not very g…

People on wages near or just above minimum wage don’t make anywhere near $100,000 a year. There is a reason that manufacturing jobs are coming back from China.

$10/hr workers cost ~$30k fully-loaded per year. That's $1.5M for 50 employees.

If we assume 30% margins, then materials costs are $3.3M and "profit" is $1.6M. Subtract off employee salaries, and he's netting $100k/hr. And that's not even accounting for taxes or other fixed costs (eg. realestate). Given the strong competition in the electric motor market... he's living on a razor's edge.

If he can eek out higher margins, like 50%, then he's doing $1M pretax. It's not bad, but not great -- especially if there's volatility. Still a razor's edge in that market.

Re: Stop Looking for a Cofounder

#105

Post by danieltillett »

beambot wrote: post #104
danieltillett wrote: post #102

Earlier quoted context omitted.

People on wages near or just above minimum wage don’t make anywhere near $100,000 a year. There is a reason that manufacturing jobs are coming back from China.

$10/hr workers cost ~$30k fully-loaded per year. That's $1.5M for 50 employees. If we assume 30% margins, then materials costs are $3.3M and "profit" is $1.6M. Subtract off employee salaries, and he's netting $100k/hr. And that's not even accounting for taxes or other fixed costs (eg. realestate). Given the strong competition in the electric motor market... he's living on a razor's edge. If he can eek out higher marg…

I suspect that you are right about the profit margins hence the bosses stressed behaviour. The point I was making is that we should not just apply tech wages to every situation - many people are living on wages at, or not far, from minimum wage.

Re: Stop Looking for a Cofounder

#106

Post by JonoBB »

jcrubino wrote: post #16

PG context of a startup is a company that has the potential to make it into a leading stock market index. Anything else is considered a "life style" business and not within YC or most other VC's scope of interest for funding.

There are an order of magnitude more lifestyle companies than there are YC or VC companies, most likely employing an order of magnitude more people.

Re: Stop Looking for a Cofounder

#107

Post by nostrademons »

thaumasiotes wrote: post #101
larrys wrote: post #98

Earlier quoted context omitted.

Microsoft may have been bootstrapped (I will go with what you are saying without verifying) however it also had the backing and full faith and credit of a somewhat wealthy and connected family.

When Microsoft went public, Bill Gates owned 80% of the stock. His wealth, compared to other tech company founders, is essentially all the product of not getting diluted.

Think you mean "insiders owned 80% of the stock". Bill Gates only owned 66% of the stock at founding, splitting it between him and Paul Allen, and early employees owned some too.

Re: Stop Looking for a Cofounder

#108

Post by SneakerXZ »

eldude wrote: post #75

Please don't stop looking for a cofounder. It's true that all it additionally takes to be a solo-founder is self-discipline, but as a human being you are psychologically and emotionally unequipped to deal with this. Let me explain... On History, there's a self-filmed TV show about 10 survivalist dropped off separately on Vancouver Island competing for $0.5M to be the last standing. The show is fantastic, not for the…

This also heavily depends on your personality. My guess would be the survivalist were extroverts and it was also the main reason why they went into this show.

But most programmers are introverts and lone wolfs and they don't necessarily need others to share their experience with.

Re: Stop Looking for a Cofounder

#109

Post by j_lev »

"Finding" a co-founder wasn't a choice for the uncountable husband-wife partnerships over the ages. Sometimes for better or for worse you're stuck with your spouse as your co-founder.

I remained in the corporate world for about five years after making the decision mentally to quit until I had confidence that both the technology and my own skill had reached a point where I could have a good shot at hustling a living with my wife as "co-founder." The article somewhat vindicates my decision.

Re: Stop Looking for a Cofounder

#110

Post by timr »

brightball wrote: post #41

He's not wrong, but a lot of what he says is very dependent on self-discipline. Having a partner, in addition to all of the other perks, also gives you a point of accountability the forces prioritization and a real plan. It is entirely possible to start a business by yourself. People do it successfully every single day but there are a whole lot of complicated factors from financial, legal, technical and psychological…

The thing is, a co-founder won't save you if you don't have self-discipline. It's probably one of the top sources of co-founder conflict, actually: one founder slacks off or loses focus, and the other(s) get upset, and the whole thing falls apart.

Self-discipline is a highly underrated quality. In my experience, most people can't work productively for an extended period of time on an open-ended project.

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