One Person Profitable

Ideally you want between two and four founders. It would be hard to start with just one. One person would find the moral weight of starting a company hard to bear. Even Bill Gates, who seems to be able to bear a good deal of moral weight, had to have a co-founder

— Paul Graham, How to Start a Startup

What Is One Person Profitable?

There’s a lot of single founders out there, and an increasing number of them are managing to get their startups or micro-ISVs ramen profitable while maintaining 100% equity and incurring no debt. I’ve picked up the habit of calling this milestone “One Person Profitable”.

I’ve found the origin story of Admobs to be a particularly inspiring example of how a one-person shop was funded by Sequoia, quickly grew, and was recently acquired by Google. I’ve also found that there are plenty of Hacker News readers who have successfully bootstrapped as a single founder.

Ramen profitability is always a milestone, but it’s another thing altogether if you can achieve One Person Profitable. If someone has pulled it off, I want to see it on their resume or bio in clear, unambiguous terms. In fact, if you’re building webapps or mobile apps and you have the technical chops to do all the development yourself, there’s usually no reason why you can’t reach profitability as a single founder.

The Multiple Founder Arguments

So why are incubators implicitly or explicitly requiring teams to have multiple founders? Here are two main arguments that come to mind:

• There’s Too Much Work (or Moral Weight) For One Person

This is the most easily debunked argument. If developing an MVP for your startup idea is too much work for one person, maybe you’re just doing it wrong. I still remember the amazement I had while sharing an office with Disqus at how their two-person co-founder team managed to be incredibly productive by making quick decisions and being able to frequently say “no”. Even just one of them could probably pull off ramen profitability as a single founder.

Of course Disqus, Tumblr, and all the other successful two-people startups out there have all had the added benefit of a two-person labor division. But like Paul Graham says, the most important role of your co-founder is to help you navigate through the rough patches. The moral weight has proven time and time again to be too much for one person.

My only rebuttal to this is that the faster you can become one person profitable, the less likely you are to feel the full pressure of being a single-founder. If you reach one person profitability and then bring on four co-founders the next week, you’ve still achieved the one person profitable milestone.

• Your Co-Founders Are Your Biggest Investors

This argument can’t be debunked because it’s true that having solid co-founders and advisors is always a positive indicator. Co-founders and early employees make the biggest investment of any stakeholder, and if you can’t sell your vision to co-founders or employees, then how are you going to be able to sell to customers and follow-up investors?

Conclusion

I find the co-founder as investor argument somewhat troubling only when I consider that investors have no reason to encourage you to reach ramen profitability as a single-founder. You’re more prone to failing or selling at an “acquhire” price, while startups that are five-founders deep at launch time can’t usually be successful unless they’re the type of huge success that investors desire.

Single founders tend to end up with a lot more control of their venture once it does become successful. And control, from what I understand, tends to be the most valuable asset to founders who really care about their ventures. Owning all your equity is just about as pro-founder as it gets, and while good seed-stage investors and incubators are pro-founder, I’m not so sure they are pro-founder enough to enthusiastically support the One Person Profitable approach.

I think it’ll be worthwhile to explore the idea of One Person Profitable further. If we really want entrepreneurship to be as accessible as more traditional career choices, I think it makes sense that there should be at least one decent resource advocating the advantages of being a single founder.