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If one founder is good, then more must be better, right? Not necessarily. New research shows that the benefits of cofounding a startup with strangers can be eclipsed by the risks. Yes, cofounders can bring their own perspectives, along with “access to wider networks, greater capacity, and access to funding,” says Monique Boddington, a management practice associate professor at the University of Cambridge’s Judge Business School, whose research includes early-stage venture formation and startup strategy development. And yet: “An increasing number of individuals have been setting up businesses with no intention of taking on employees,” she explains. That’s because more people are identifying as solo entrepreneurs—“solopreneurs”—since the pandemic, Boddington adds. And while the distinction between self-employed, freelancer, and solopreneur is still murky, “the way to spot [solopreneurs] is whether their venture pursues novelty and scalable opportunity or mainly income replacement or replication,” she says. For those running startups, many such workers are choosing to go it completely alone. Subscribe to the Daily newsletter.Fast Company's trending stories delivered to you every day Privacy Policy | Fast Company Newsletters In 2022, 84% of all U.S. firms had no employees, meaning there was just the one person running the business. These 29.8 million “nonemployer businesses” accounted for $1.7 trillion, or about 6.8% of the economy. And the momentum hasn’t slowed; in 2023, Americans filed over 5.5 million new business applications, and Gusto’s 2025 New Business Formation survey suggests more than 4 in 5 small businesses in the U.S. have no employees. Why people do it According to the same Gusto survey, over 50% of solopreneurs cite career autonomy—“being one’s own boss”—as the reason for adopting a lone wolf, owner-only business model. Many, like growth marketing consultant and content creator Kevin Fernando, do so because of the “unmatched freedom” it affords them. Fernando, who is the founder of Solopreneur Digital, where he helps entrepreneurs and software-as-a-service (SaaS) companies grow, says that “you get to move quickly, make decisions that align with your vision, and build something that’s fully your own.” Of course, going solo, and starting a venture with no cofounder or employees, doesn’t come without its challenges. “The flexibility and autonomy of being your own boss often come with the vulnerability of being on your own,” says Filip Majetić, sociologist and senior researcher at the Ivo Pilar Institute in Croatia. While strong social support from family and friends can improve solopreneurs’ overall mental and physical health, he explains, “this support does not buffer specific stress-related health problems” such as exhaustion and headaches. Like many others, Fernando finds everything falls on him, and the constant context switching can be draining. “When you’re a solopreneur, you’re not just the strategist. You’re the marketer, customer support, designer, and operations manager—all rolled into one. You have to be self-motivated and resilient because there’s no one else,” he says. That’s especially the case if you’re not sharing responsibilities with a cofounder in your venture’s early days. But new research posits that this may be a good thing. Stranger danger Conventional wisdom would suggest that bringing on a cofounder with a vastly different network from your own leads to more potential funds, as the chances of overlap in who you know would be lower. While that may be true, an analysis of over 3,500 Kickstarter campaigns in a study titled, “The ‘Devil’ You Don’t Know,” reveals that new ventures that include strangers on the team are less than half as likely to deliver the product or service they pitched, and almost twice as likely to cease operations. advertisement Studies challenging beliefs that resilience is universally beneficial to entrepreneurial teams are gaining traction, suggesting the very advantages that seem so compelling on paper can also introduce friction—making teams less reflexive, slowing decision-making, and complicating execution. “While having people with diverse skills and experience on a founding team has significant benefits, their ability to work together effectively is just as important,” explains Kimberly A. Eddleston, the Schulze Distinguished Professor of Entrepreneurship and Montoni Research Fellow at the D’Amore-McKim School of Business at Northeastern University. “They need to be compatible, trustworthy, and able to communicate.” It’s one of business’s oldest truths: If you work with the right people, everything else falls into place. The problem? Nailing the people part of the equation is really hard. The limitations of going it alone “Solopreneurship can be a great starting point to get an idea off the ground. A single person can bootstrap with greater resource efficiency, greater control, rapid iteration, and hire-in capabilities,” Boddington says. But to scale, she explains, a team is critical. Founding teams are also more likely to attract funding in the first place, and the Kickstarter research revealed that teams comprised of strangers garnered more crowdfunding backers because they served as novel bridges to resources. Crucially, operational struggles (such as coordination breakdowns, delays in delivering promised products or services, differing work styles leading to relational uncertainty, misalignment of vision and goals, and potential early stage dissolution) appeared in teams with strangers in the boardroom, not businesses bound by strong family or friendship ties. Not all cofounders are a liability, Eddleston says. In ventures with family, for example, team members can rally quickly in a crisis, and “[they] have a ‘survival’ advantage because family members are willing to work for below-market wages, and even for free, to keep their business afloat,” she says. Still, entrepreneurs can thrive totally alone, without a cofounder or a team. “With AI revolution, the next wave of entrepreneurship won’t be about bigger teams, but smarter individuals—AI-powered solopreneurs who turn technology into their growth partner,” says Areti Gkypali, an assistant professor at Athens University of Economics and Business in Greece. The strategy has worked well for Fernando. By automating repetitive tasks and building systems to handle things like client communications, lead generation, and content distribution, he’s shaved 20 to 25 hours off his workweek, freeing him to focus on strategic priorities. Ultimately, for anyone eyeing a new startup, it’s worth being strategic about who, if anyone, to partner with. As Fernando says: “It’s a lifestyle that rewards focus and leverage more than raw effort.”
