A Study reveals – One Decision – That Makes Start-ups More Successful but Most Do the Opposite

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Surprising new research shows that entrepreneurs who start a business on their own are likelier to succeed than those who do so with one or more partners. That’s almost the opposite of what would be guessed by most aspiring founders. You can’t be amazing at all after all. You may be an expert in marketing, but you don’t know how to handle cash flow. Or you may be good at making great items, but terrible at setting prices for them. So you’re teaming up with someone who’s good in the weak places, and you’re starting a company together.

This argument is rational, and it is how most people see entrepreneurship even experts. In reality, it is such an entrenched belief that instead of those with a lone founder, Venture Capitalists (VCs) and other investors routinely tend to finance team-based businesses. But, that is dead wrong, too, according to the research. They noticed that businesses with multiple founders were able to raise more capital than those led by a single entrepreneur, consistent with the preference of investors against teams rather than solo. This would give founding teams an advantage over single founders, you would think, but you’d be wrong.

After beginning with a smaller stake, it was more likely that businesses with a single founder were still in operation than those with two or more. And while teams may have initially been able to raise more cash than single founders, businesses with only one investor still saw higher sales than those with two or more. Companies with a single founder do better than those with many founders over time.

One Founder is Better Know Why

Why are businesses more likely to succeed with single founders? One interpretation is indicated by the findings. In businesses with multiple founders, income is lower than that for businesses with a single founder. But, two or more individuals cost more than one, especially if wages are earned by the founders. Office space, telephone service, travel, and so on, even though they aren’t, cost two founders more than they do for one.

Researchers have pointed to some truths about the complexities of leadership. In terms of broader experience, starting a business with multiple founders can bring a benefit, but a solo founder may also employ others to provide the expertise he or she lacks. In the other hand, thinking things through and then making a decision is far simpler and faster for a single founder than it is for two individuals to address an issue or opportunity and agree on a course of action. Decision-making will take much longer with three or more founders.

To start with, starting a business is a risky undertaking. But many entrepreneurs tend to be conservative and hedge their bets until they’ve taken the leap. Two or more individuals making decisions together are less likely than one person acting individually to make risky steps and take risks. Two or more individuals making a decision together are more likely to escape risk than one individual deciding alone. But it’s also true that a single entrepreneur who prefers to start a company on his own is more likely to be a risk-taker.

And someone who cares enough about a new product or idea to be willing to start a company on their own may have more enthusiasm than a team of founders for the product or business concept. Teams of entrepreneurs can be as inspired by the concept of working together as they are by their new venture or product. The message is, meanwhile, direct. You’re better off starting it by yourself if you want your new company to succeed.

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