Why group entrepreneurship is the norm, even though it brings challenges to start-ups

November 29, 2011


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Yesterday we brought you part one of our interview with EntrepreneurFinder’s Luke Deering (Facebook | @luke_deering).  He told us that “failing fast” isn’t always an option and that there is no one standard path to becoming a successful entrepreneur.


Today we ask Luke if there is a difference between companies started by single entrepreneurs or those started by friends and business partners.  He describes the skills, besides the business ones, that multi-party start ups need to develop to create a successful company and lasting relationships.

If you missed part one you can catch up on the other side of this link.

[The Sociable] There is an emphasis on the entrepreneur, but many successful companies have been created by more than one entrepreneur (Google’s Brin and Page, for example). Is Google the exception?
[Luke Deering] That is a great question. I think Google is pretty much the norm, in regards to the number of founders. A great website called [who have been involved in bringing Reddit, Scribd, Xobni, Weebly, Disqus, Dropbox,, Posterous, DailyBooth to international success] carried out a study a couple of years back and found that approximately 37% of tech startups have a single founder. But I think it depends on the industry. If you start a plumbing company, it might be easier to be a single founder, than if you are in an industry with high human and capital startup cost.

[The Sociable] Is there a marked difference between companies created by solo-entrepreneurs and those created by a team?
[Luke Deering] Maybe not a marked difference but there is definitely a difference. A company created by a team has more information, more tools, access to more initial capital, and should make more well-rounded decisions. All of this combined with a good idea and the ability to execute, usually creates a better base for a company, than that of a single founder.

[The Sociable] What advice would you give a group of people starting up their own business, in relation to managing their dynamic?
[Luke Deering] First of all, make sure you pick the team for the right reasons, not just because they are your friends, but because they have the right skill set and at the end of a crap day you want them sitting next to you.

There will always be some disagreements between founders. Disagreements around directions of ideas are good because they create multiple angles to approach a given scenario. Disagreements lead to innovation and new ideas that would never have surfaced if everyone agreed all the time.

Finally, It’s a good idea to set up an incentive scheme, designed to reward those that work hard and appropriately adjust the ownership of those that become either unmotivated or prematurely decide to leave the company. The last thing you and the remaining members want to do is to end up working for a co-founder that left the company early in the process.


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Ajit Jain

Ajit Jain is marketing and sales head at Octal Info Solution, a leading iPhone app development company and offering platform to hire Android app developers for your own app development project. He is available to connect on Google Plus, Twitter, Facebook, and LinkedIn.


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