Founding a startup alone: opportunities and pitfalls of Solopreneurship

Founding a startup solo presents a unique blend of opportunities and challenges. “Solopreneurship” offers autonomy, flexibility, and the potential for greater financial rewards, but it also comes with significant downsides and risks, such as an increased workload, decision-making pressures, and difficulty attracting investors. In this article, we delve into the various pros and cons of founding a startup alone, and equip you with the tips and strategies you need to increase your odds of succeeding.

Solopreneurship: should you go it alone?

Starting a business is a massive undertaking that needs the right combination of vision, determination, and hard work. One of the most important decisions aspiring entrepreneurs need to make is whether to go the solo route and found their startup alone or embark on the journey together with a founding team.

The solo entrepreneurship (“solopreneurship”) route involves undergoing the process of building a business without the support of co-founders. While this can provide the founder with complete control and flexibility over the venture, is also places all the risks and responsibilities on a single individual which can be a difficult burden to bear. Furthermore, there are numerous studies which show that startups with founding teams generally outperform those with solo founders.

Let’s now explore the various opportunities and risks of founding a startup alone versus as a founding team and see what the data says about which route provides the better probability of success.

Opportunities of founding a startup alone

While data generally shows that startups with a founding team are more likely to be successful, there are valid reasons why many entrepreneurs still prefer to go the solo route:

1. Autonomy

Starting a business alone means you have complete control over how the business is run and the direction you wish to take. You have the freedom to make decisions without needing to reach a consensus with other team members, allowing for quicker pivots and the ability to follow your own vision.

2. Clear and consistent vision

Nobody understands your business like you do. As a solo founder, you get to craft your own unique ideas and create a clear and consistent vision for your startup. This can lead to a more coherent brand and product strategy, as there are no conflicting opinions to dilute your vision.

3. Equity and financial benefits

One obvious benefit of going solo with your startup is that you get to reap all the financial rewards yourself. Founding a startup alone means retaining full ownership of the company and therefore not having to share equity and profits with co-founders. This is, however, a double-edged sword. If the business is successful, you win big, but if it’s a failure, you bear the full burden of loss.  

4. Flexibility and agility

Answering to no one but yourself gives you the utmost flexibility, and this is often what solopreneurs are most drawn to. As a solo founder, you can adapt quickly to changing market conditions and pivot your business model without the need for lengthy discussions and potential disagreements with partners. This type of agility can be a crucial advantage in fast-moving industries where even the smallest delay can mean a missed opportunity.

Solopreneurs starting up a freelance business have the flexibility to work where and when they want, leading to greater job satisfaction and quality of life.

5. Personal growth and skill development

While managing all aspects of a startup can be challenging to the say least, it also provides an excellent opportunity for personal growth and skills development. As a solo founder, you will be pushed into quickly developing a wide range of skills, from overarching leadership and strategic planning to the most hands-on technical abilities. You may make many mistakes and face failures along the way, but each will give you a chance to deepen your experience and further enhance your ability as an entrepreneur.

6. Personal branding

Building your start alone can enhance your personal brand. Successful solopreneurs often attract media attention and inspire respect and adoration from society. In this way, you become your own brand, and may be able to position yourself as a thought leader in your industry.

7. Reduced costs

Without co-founders, you avoid the additional costs associated with having partners, such as splitting profits, renting additional office space, and paying salaries to team members. As a solopreneur, you can avert significant personnel costs by working with freelancers and outsourcers instead of hiring full-time employees. You also get to decide where and how to cut costs, so that you only incur the most essential expenditures. This can be more difficult as a team, where everyone has their own ideas about where and how to spend company money.

Pitfalls of founding a startup alone

The prospect of founding a startup alone is attractive for various reasons, but it’s certainly not all smooth sailing. In fact, the journey of a solopreneur is extremely challenging, and is fraught with risks and potential pitfalls. Understanding these challenges can help you make an informed decision as to whether this is the right path for you, and to be properly prepared for the difficulties you may face along the way.

1. Limited expertise

As an individual founder, it’s impossible to possess all the skills required to run a successful business. This is why solo founders often face limitations and difficulties in areas where they lack expertise, which can hinder the startup’s growth and ability to innovate. To compensate for this, it’s crucial to lean on the support of professional partners, like outsourced accountants, legal professionals, and strategic advisors. Alternatively, you can consider the option of assembling a founding team with diverse skillsets to support you in your business journey instead of going the solo route.

2. Increased workload and stress

There is only so much you can do in a day as an individual founder. Managing a startup alone means taking on a heavy workload, possibly resulting in burnout and an inability to cope. Solo entrepreneurs must juggle multiple roles, which can be overwhelming and stressful. Founding teams have it easier in that they can lean on each other for support, with each founding member taking on the roles and tasks they are most confident in handling. If you do still decide to persevere as a solo founder, you can mitigate the high stress by outsourcing and delegating tasks to freelancers or agencies.

3. Challenges attracting investors

Investors are well aware that the odds are against solo founders and typically prefer startups with founding teams, as they bring diverse skills and reduce the risk associated with single points of failure. As such, you may find it more challenging to secure funding and gain investor confidence as a solo founder, something which is essential to getting your venture off the ground.

4. Limited network and support

Without co-founders, solo entrepreneurs lack the immediate support network that a team provides. Bearing the full weight of responsibility yourself can be mentally taxing. You may feel isolated and long for the supportive presence of fellow founders. While having professional partners assisting you can alleviate some of these difficulties, sometimes there is no real replacement for founding team members who share in the ups and downs at each step of the startup journey.

5. Decision-making pressures

Founding a startup alone means bearing sole responsibility for all critical decisions. This can lead to decision fatigue and the risk of making poor choices due to the lack of diverse perspectives. Above all else, solo entrepreneurs need to have the ability to make quick and accurate decisions. However, no one is perfect, and it’s impossible to avoid all mistakes and errors in judgement. Having a team member by your side can offer a valuable second opinion and help you spot your errors before they cause serious issues.

Furthermore, solo founders often make the mistake of becoming too attached to their ideas and find it difficult to take a step back to analyze them objectively, which is where a fresh perspective helps immensely. A trusted external consultant can also be a great aid in this regard, often even more so than fellow co-founders because a neutral third party is less likely to be biased by emotions or their own personal investment in the company.

6. Self-motivation difficulties

Maintaining motivation can be difficult without co-founders to share the journey and provide encouragement. You’ll have to find ways to stay driven and focused despite the inevitable challenges if you want to succeed as a solopreneur in the challenging startup environment.

7. Limited scalability

Scaling a startup often requires a diverse set of skills and perspectives that you’re unlikely to possess as an individual founder. This can limit the startup’s growth potential and make it harder to reach larger markets. If you still want to go it alone, you’ll have to find ways to scale the business with the support of strategic partners and by outsourcing routine processes. As you continue to learn and grow, you can develop many of the skills and knowledge needed to scale your business further, but there are still inevitable limitations to what you can accomplish as an individual. At some point, you may feel the need to onboard other core team members to help you expand your vision to its full potential.

What do the numbers say?

As always, the proof is in the data. When determining whether it makes sense to start a business alone, it’s worthwhile examining historical data and studies that provide insights into the relative success of solo founders versus teams.

From this perspective, the results are quite conclusive: studies consistently show that startups with founding teams generally outperform those with solo founders.

• Research from the Harvard Business Review highlights that founding teams are more likely to attract funding and achieve higher growth rates compared to solo founders.
• According to First Round Capital, startups with founding teams outperform those with solo founders by 163%, and solo founders’ seed valuations are 25% less than those of teams.
• The Startup Genome Report found that startups with more than one founder are more likely to secure funding and achieve scale compared to solo-founded ventures.

So, is it will worth taking the risk?

Despite the obvious challenges and higher risk of failure, starting a business alone is not necessarily the wrong decision. There are many notable examples of successful solo founders around the world. This includes the likes of Jeff Bezos, who founded Amazon in 1994 as an online bookstore from his garage; Sara Blakely, who founded Spanx with just over $5,000 in savings and grew it into a billion-dollar company, and the hugely popular and enigmatic Elon Musk, serial entrepreneur who started by founding Zip2, and later went on to be co-founder of PayPal, SpaceX, Tesla and more.

While it’s important to not invest too much in anecdotal evidence, success stories such as these can be a source of inspiration for budding entrepreneurs looking to embark on their first solo venture. Additionally, it’s worth studying the strategies and models of other successful founders to gain a better understanding of what they all did right, and how you can adapt and emulate their approaches to your own business.

Ultimately, although founding a startup alone can be tough, if you have the right temperament and drive to succeed, the rewards can be worth the risk.

Tips and strategies for solo founders

Here are some useful tips and strategies to maximize your odds of succeeding as a solo founder in the Swiss startup scene:

1. Build a strong support network

Even though you lack co-founders, you can still build a strong support network. Mentors, advisors, industry connections, and even friends and family can provide valuable guidance and support. Networking with other entrepreneurs can also offer a sense of community and shared learning, as well as provide valuable insights and varied perspectives.

2. Outsource and delegate

As a solopreneur with a limited amount of time and energy, it’s important to focus on your core strengths and outsource tasks that fall outside your expertise or capacity. Hiring freelancers or agencies for tasks like marketing, accounting, and technical development can help manage your workload and allow you to direct your energy where it is most needed in developing your business to its maximum potential.

3. Keep learning

Continuous learning is crucial for the success of solo founders. Staying updated with industry trends, attending workshops, and taking courses can help you develop new skills and stay competitive. At the end of the day though, the best classroom will be the hands-on experience you get from trying new things and even failing many times along the way.

4. Manage stress effectively

It’s no secret that starting a business alone can be highly stressful. To maintain your well-being, productivity, and overall sanity, effective stress management is vital. Techniques such as mindfulness, regular exercise, setting aside time for relaxation, and ensuring proper work-life balance can help manage your stress levels. Don’t be afraid to even seek professional help if needed.

5. Don’t let minor setbacks stop you

Resilience really is the key to entrepreneurial success. Ask even the most successful entrepreneurs about their road to success, and you will find they faced their fair share of setbacks and failures along the way. However, what sets them apart is the motivation they had to persevere and view each setback as an opportunity to learn and grow even stronger. You’ll have to quickly learn to stay persistent in the face of challenges if you want to become a successful solo entrepreneur. Developing a positive mindset and focusing on long-term goals can help you overcome even the greatest obstacles.