entrepreneurshipTop of Mind

Commentary & Insights on Entrepreneurship The Top of Mind blog brings an array of editorial views to current events shaping the world of entrepreneurship. Engage, exchange, and expand your own view of the world!

RSS Feed Link

Two's (a) Company, Three's a Crowd?

Thom Ruhe on July 30, 2013 Source: e360 Blog

When considering the optimal number of founders for any new entrepreneurial adventure, the calculus extends well beyond simple formulas seemingly supported by observations of startup cohorts within specific industries. Famous technology twosomes that come to mind include David Packard and William Hewlett of Hewlett-Packard, Steve Jobs and Steve Wozniak of Apple, Paul Allen and Bill Gates of Microsoft, Larry Page and Sergey Brin of Google. In these examples, it is widely observed that these buddy teams complemented each other well in the early formative years of their companies.

In many instances, however, deciding on co-founders is steeped in practical circumstances without regard to fit, long-term aspirations and growth capacity – "John" was here in the beginning and agreed to help me start this company; ergo he is co-founder. In one of my own ill-fated experiences, it was a mercifully never-launched venture with what was to be nine co-founders, all selected for the simple reason that the dot-bomb we were attached to was preparing to implode; as many did during the first Internet bubble. We vowed we would start a version 2.0 of that company, wiser for the experience. Luckily, we were smart enough not to start it.

And yet other founders are forever destined to be without any cofounder/s for a host of reasons, such as being fundamentally incapable of power sharing or delegation, or having pathological personality disorders that insist no other human being is worthy of sharing in their entrepreneurial vision and acumen. These go-it-alone "self-made" men and women typically opt for a journey of greater hardship than necessary, but feel it is warranted in the long run for not having to share credit and treasure.

Whereas there is a growing body of research on the dynamics of founding companies (The Founder's Dilemmas by Noam Wasserman being a good one), for those who are open to having one or more individuals join them on an entrepreneurial expedition. I would offer the following advice.

I don't believe there is an optimal number of founders that applies universally. For those who don't like this answer and would at least prefer a range, say between two and five, my experience suggests that the optimal number of co-founders needed for starting and growing a healthy company is Pi; namely 3.141592653589...

And here is what I mean when I say the optimal number of founders for any company is Pi.

For most companies of commercial success and accomplishment, the number of founders will be determined by practical necessity. One or more individuals attempting to realize the vision of creating a new product or service will align along their relative contribution of actualizing that new product or service. In other words, who can do what, and together do we have a product – which by default becomes our company?

In these early formative moments, a diversity of skills is likely more valued than redundancy and niche specialty. For many would-be corporate titans, the notion is that specialized talent can be acquired later on an IF-and-WHEN-needed basis. Individuals who can see the bigger picture and can help make the minimally viable expression of that vision a reality are usually the driving force behind starting new things.

Keep in mind, however, that starting and growing new companies is a journey and not a single event. And like most living things, as companies grow, the dynamics of what is needed (from a talent perspective) will change over time. So it is that many companies will later make strategic hires of individuals who have specific talents that become increasingly necessary to differentiate the company. These hires can become absolutely critical to the company's continued viability and survival.

These individuals do not garner the co-founder title, but when the history of the company is written, they will be nearly, if not equally, as important as the founders to the ultimate success of the company. They do usually earn some equity position within the ownership structure, which is deserved, but those decoding the genome of a particular company often overlook these vital resources. Even though these team members have lesser standing, their presence was/is essential.

This is why, when answering the question of optimal number of founders, I include these anonymous soldiers in the numbers that follow the decimal point in Pi. After all, Pi, without the numbers that follow the decimal, is simply three. And unlike the song title that would suggest otherwise, three isn't always the magic number. For that matter, no number is.

Tags:  Co-Founders, Founders, optimal number, number, Pi, Company, entrepreneurial adventure, "Founder's Dilemmas", teams,

  • 1
comments powered by Disqus

Twitter Updates

  • The startup valuation game has changed with new metrics based on user volume and monthly visits. http://t.co/YYdvh7S1rB @WSJstartup
  • RT @KauffmanFS Is sales a big gap in your #startup knowledge? Fill that gap! http://t.co/WS0XX2oHef
  • The startup valuation game has changed with new metrics based on user volume and monthly visits. http://t.co/YYdvh7S1rB @WSJstartup
  • Let Your Employees Bring Their Interests to Work http://t.co/oYinbOYeK2 via @HarvardBiz
  • 7 changes to help your team make better and faster decisions, outlined in this article we've unlocked for the weekend http://t.co/Q51pYCPAM5

Email Newsletters

Want to be up-to-date with the latest news and updates from Entrepreneurship.org? To subscribe, just give us your email address below; you'll choose which e-newsletters you'd like to receive on the next screen.