What It Actually Takes To Build a Startup Solo | 6 VC-Backed Successful Solo Founders

0:00If you don't have an original insight, don't work on it. A big misconception with solo founding is if I'm solo, I don't need to listen to anyone. That's not true. It's like writing your jokes and performing them on stage. And if you just wrote jokes and you didn't go perform them, you miss out on the whole thing.

0:16Rahul Sonwalkar:Hey everybody, we are back with another episode of the Solo Founders podcast where we go through and we talk about some of the stuff that was mentioned in prior conversations that, you know, kind of went by in passing, but really we think deserves more of a highlight, more commentary, because these episodes, these conversations are so sort of full of incredible digressions, incredible toss away comments, these things that if you just let them go and you don't pause the episode and write it down and think, what does he or she actually mean? They might not actually get the amount of attention they deserve.

0:54Rahul Sonwalkar:So that's what we're doing today. We did one of these before. If you want to click back to the prior episode, we'll link to it in the show notes. People said it was amazing. We did it as an experiment. We had no idea, but they loved it. And we hope you'll love this one as well. It's going through a bunch of different topics that we think are really important for you to consider. The first topic of this session is about what being a solo founder means and what it doesn't mean. And oftentimes, I think that people start as solo founders for the wrong reason, actually. I think that sometimes people end up starting companies solo because they say, I don't want a boss.

1:33Rahul Sonwalkar:And ultimately, I don't want to have to try and convince a co-founder. And there's some validity in not wanting to convince a co-founder. But at the same time, just like starting a company in general is a bad idea to start one just because you don't want to have a boss. Well, ultimately, you do have a lot of bosses and you do have to convince a lot of people uh and we'll have rahul uh speak a little bit about what this actually means a big misconception with solo founding is if i'm solo i don't need to listen to anyone people just will listen to me and i'll tell people what to do and they'll just do what i say and because i control most of the company and that's not true you know ultimately smart people they're not gonna listen to you just because you told them to do something you have to convince people.

2:19And to get the best work out of people, they have to be excited about the thing that they're working on. It shouldn't just be, I'm doing this because the founder told me to do it. It's like, I'm doing this because hell yeah, this should exist.

2:30Rahul Sonwalkar:It's a really good point that Rahul makes that you really have to be able to convince a lot of different people on the startup journey. Investors, employees, partners, customers. Sometimes customers, they understand that they have a problem, but you still need to convince them that you are the people to solve it. There are other people who are trying to solve customers' problems, generally speaking. So I think something else here that this sort of leads to is the idea of what makes a founder convincing. And generally speaking, what makes a founder convincing to investors, to employees, and especially to customers is that they have a real unique connection to the problem that they're trying to solve.

3:12Rahul Sonwalkar:Now, it's very easy, and you see this all the time. There are companies, especially when they're going through an accelerator and they're trying to figure out what they can work on, they might just go and copy some other startup's idea. It's kind of gross. It's not great behavior. And really what it shows more than just bad behavior is that these people have no original ideas. And the reality is that many of the best companies come from some original insight. And it's extremely convincing when you go and you tell people about what you're working on, if you have a truly unique insight that's informed by your personal experiences, well, that makes it a lot more interesting to pretty much everybody, right?

3:56Rahul Sonwalkar:Customers, investors, teammates. So here's a really interesting clip from Sunil, who's building a company called Hamlet, about just this exact topic. The whole point of it is there's like an original insight. If you don't have an original insight, don't work on it. By original I don't mean you're the only one in the world working on it. By original I mean you have to have an original insight on that industry or that thing that you're working on that no one else has. And if you don't have that, you know, whatever. I wouldn't waste your time. It's so important that you have your own insight. Generally speaking that if you don't it's very questionable as to whether or not you should start.

4:39Rahul Sonwalkar:Now granted there are lots of counter examples to this. So I'm not saying that, um, that it's not possible that you can either copy an idea and be sort of the second mover, or you can, uh, you can have an insight that's sort of outside of your experience, especially by the way, if you have a co-founded company and you're the co-founder who doesn't have the idea, you know, by nature of being co-founders, like one of them may be closer to the insight than the others. But if you are a solo founder and this is what this show is about, you really should be focused on things that you have some insight into.

5:14Rahul Sonwalkar:And I'll tell you, we've seen people who've gotten really successful startups off the ground who had an insight from a high school internship. We've seen ones like a deal from Magic School where he was a high school principal. And by the way, lots of people have tried to copy Magic School and some of them have made some decent amount of progress. but nothing comes close. And the reason being is that you talk to founders who are copycats, and it's clear that they only understand the most superficial elements of the business very often. Now, there's a really funny story I heard a while back about these two companies, and they were actually copying each other constantly back and forth.

6:02Rahul Sonwalkar:One would copy one, the other would copy the other and it would just keep happening and then afterwards after all the dust settled and i think all the founders were working on different companies they actually got together and they said you know we were copying ubis we thought you had an idea of what you were doing and the other one said well we thought you had an idea of what you were doing and generally speaking none of them really had any fucking clue so i think it's really important to make sure that when people copy you, don't worry. Just continue to do the thing that's best for customers.

6:35Rahul Sonwalkar:And if you're copying people, realize that maybe they don't even know. And even if they do, you probably will only understand the superficial aspects of what you're copying, not the main deep down reasons for it. If you're enjoying this conversation, then perhaps you're starting your own company. And if so, you should apply for the Solo Founders Program. I've spent the last seven years working with startups and founders who are figuring things out. And I'll tell you that the ones that make the most progress are the ones who make sure that they have relationships that can help them go the distance.

7:07Rahul Sonwalkar:The Solo Founders Program is about bringing 10 solo founders together so that they can build solo together versus building solo alone. I'll work with you who will invest$100 ,000 and will make sure that you make the most progress that you possibly can in three months. If that sounds interesting, you should learn more and apply at solofounders.com slash program. I think that the next clip is a really important one because it's really about this idea of breaking against what Jimmy from Plug calls the orthodoxy. And I think it's a really relevant clip to the discussion that we're having. So we should just play it.

7:44But what's worse than business structure risk is not growing. And if you're growing really fucking fast, someone's going to be interested in that. And I kid you not, Julian. I went back to the office. I made the decision. We opened up an LLC subsidiary. I studied. I went to the DMV. I took a dealer license test, became a wholesale car dealer on paper, and we bought our first consumer car. And then you can see the chart of our unique sellers per quarter. We were stuck at about 16, 17. Last quarter, it was 429. It was like the first hockey stick chart we'd ever had. And it's not the only business model, but it's so ironic that the one that we were fighting to avoid and didn't even consider was actually the one that carried exponential growth underneath it.

8:38Rahul Sonwalkar:There's really something to be said about going and doing the things that a lot of people say you shouldn't do or say will fail. And it's not because they're always wrong, because obviously this comes from real experience. They do believe that things will fail for good reason, right? But at the same time, there is a chance, there is an opportunity to go against the grain. And when you do the thing that everybody else disagrees with, you need to be right. But sometimes you will be. And that's when you have these incredible businesses. Going back to the example of Magic School that I was talking about earlier, you know, it's a company that people just didn't believe had a real business.

9:25Rahul Sonwalkar:They said selling to schools is terrible. And maybe it is. But if you're a former high school principal and you also are building at the right moment in time for when schools need a certain product, maybe it's not impossible, right? Maybe you can build a great business. In Jimmy's case, he was leaving Tesla where he led the entire used car division, which is like a billion dollar division. And he went out and he was trying to solve used vehicles in America. And he used electric vehicles, I should say. And he realized that the business model that they had been trying to avoid was actually the one that was worth trying.

10:06Rahul Sonwalkar:and once they tried something that everybody said, oh, conventionally you shouldn't be doing this, they tried it, it immediately showed results. That's another thing that's worth noting is that when you have sometimes trying something and it's not working, it's not working, it's not working, but then as soon as you make the change and you actually find the right thing, it's always shocking just how quickly the right thing ends up proving itself. It's not always the case, but very often the little change or the tweak or the thing that you do to adjust ends up showing itself as results very quickly.

10:43Rahul Sonwalkar:I think the other thing that's really interesting about solo founding in general is just how much you can go against the grain because it's just you. You don't have to convince anybody else, but just how much you can last and outlast everyone else. If you have co-founders and things are going really poorly, the reality is not all the time will they actually stick it through. And that's not judgmental. That's not saying that they shouldn't leave. But when you're a single person and you really are dead set on building a business, the only thing that will stop you is you, right? So if you are so hard to kill that it's just you and you'll just keep going until you figure it out, well, that's pretty good.

11:36Rahul Sonwalkar:And it gives you a real fighting chance. And I think the thing is that if you are struggling or you're having a hard time, but you know that you're going to keep going, well, it means that you can actually be creative. And you can actually use the constraints that you're dealt as a solo founder, the limitations that you have. You can't do everything under the sun. You can't boil the ocean. You're just one person. You can use those constraints to actually go out and really build something special. And that's what this next clip is about from David Phillips. We had$40 ,000 in the bank. So going through that list of ideas, running it through the filter of which of these ideas can I do solo?

12:18You know, which one can I get off the ground solo without needing more than this 40 grand that we have where I'm really the domain expert and can empathize with the customer really well, can solve the problem really well and take the existing like what are all the tools that I have, right, that I can use to like build something from scratch. And then of all these ideas, which one do I have the highest likelihood of making work without, you know, needing to raise money? And so, yeah, then Fondo just came to the top. So I think just being forced to like run all these ideas through that filter helped, you know, surface this idea that I really was well suited to work on.

13:02Rahul Sonwalkar:It's pretty cool because if you actually look at the Fondo story and you should go and watch the full episode, we'll link to it just like we'll link to all of the episodes with all the people in this session here. if you look at the Fondo story all of the things that they worked on when he had co-founders weren't really that closely entwined with any of the co-founders they were just kind of random ideas in the scheme of things relative to what he ended up working on which is bookkeeping for startups and helping them prepare for tax season and things like that he had a background that lent itself to it in the same way that having a background in being a high school principal helped a deal.

13:45Rahul Sonwalkar:So if you have a background in something, it can really help you. But I think the other topic here that's really interesting is services businesses, right? Right now, there is this incredible pull towards service businesses. AI is sort of leading to what has been known as the SaaSpocalypse. I think that that is somewhat overhyped. But at the same time, AI now allows you to do services that would normally require many more humans in the loop. And Fondo is a good example of a company that started out without AI early on, and now they've added so many more components that make it even more effective and even more helpful to startups and to other businesses that use their product.

14:31Rahul Sonwalkar:But I think a topic that's really important is services. And the next speaker, Min Kim, who's the founder of Lighthouse, she will tell you all about why services are valuable and how they can scale in this day and age. I think it's extremely important to consider because services have this really unique component where instead of trying to force somebody to use software, you actually just remove the software entirely from them. You don't have to have your customers using the software. You can do all of the software internally and they can just interact with essentially the results at the end. So here's Min Kim from Lighthouse.

15:09Julian:Historically, the notion of professional services don't scale is because you have to add more people to be able to service more business. That didn't like that stopped making sense to me, I think, around 2021, where it was clear that there were so many different workflows and things that people did on the day to day. especially like knowledge work, that actually could be done by a computer much more consistently. Most of the U.S. economy is information services, right, where a lot of people are professional services, where a lot of people are delivering, whether it's like advisory, legal, accounting, whatever.

15:46Julian:And it's information that lives in people's brains because it's processes that live in people's brains. And then once you start to actually decouple those processes and break them down into their component parts, You can actually get knowledge work working like software. And that's, in essence, kind of like the backbone of how we built this company.

16:05Rahul Sonwalkar:Lighthouse is a tremendous company. They are scaling a service firm to help more incredible talent come to grow the American economy. It is wonderful. We've used Lighthouse many times. ODF and solo founders alike have used Lighthouse to get their O1s. it is fantastic. We can't recommend it enough. The service firm is such a good model. It's something that we're going to see so many more great companies built around in the future. And this leads me to actually my last clip from this video montage, this session that we have today, which is about sales. And if you're a founder and you're a solo founder, it's very tempting to try and bring people on who can help you with sales early on.

16:59Rahul Sonwalkar:You're one person, right? So in theory, you kind of figure maybe you need more help on the thing that is the biggest bottleneck and maybe the biggest bottleneck in your opinion is sales. I think that that is a generally bad idea. Now, sales can be good if you're sort of tag teaming it with somebody else, maybe who has some industry expertise. But really, I think that the temptation to step away from sales early is flawed. It means that not only are you stepping away from customer interactions, but you're stepping away from customer learnings. And if you look at all of the founders who are on this podcast so far, they will have tons of feedback and things that they've learned about their customers and about their businesses through doing sales themselves.

17:47Rahul Sonwalkar:Now, Michael Greenwich is the founder of WorkOS. He has done sales for longer than really any solo founder that I've ever talked to. And he's done a phenomenal job of it. And even today, when he talked about sort of going off and no longer being the only salesperson on the team, the lead salesperson on the team and he went out to bring in somebody who could lead sales, he made it explicit that I'm not handing off sales. What I'm doing is I'm finding somebody to be a core collaborator with me. So I think it's just useful to hear about Michael's take on doing sales by yourself. Sales is the ultimate distillation of like the company value to the market.

18:36It's the ultimate performance. It's like writing your jokes and performing them on stage. and if you just wrote jokes and you didn't go perform them you miss out on the whole thing you know it's like you you don't realize what you're missing out on without without doing that you know it's like it's like reading about sex or something and be like okay i got it you know it's like it's just it's it's it's so different than than actually what what the reality is and i think for so many founders you're like robbing yourself of the opportunity to like become really good at it and drive forward your company and just that it's part of the entrepreneurial experience to become great at this what what other job do you get to learn how to do

19:18Rahul Sonwalkar:this it's such an important point and really as a founder as a solo founder it is your most important job to be out there testing your stand-up comedy material uh making sure that it resonates, ditching the stuff that doesn't, and learning as you go what it is that gets the laugh, what it is that gets the confusion, what it is that people just genuinely don't want to hear about. And ultimately, the proof only comes from actually getting out there and getting on stage. So we hope you really enjoyed this second edition of this segment. This is something we'll be trying more in the future if you enjoyed it.

20:01Rahul Sonwalkar:So please just throw some comments our way. If you liked it, please give us props on Spotify or on Apple Podcasts. And yeah, this has been great. As always, you can reach us on solofounders.com and stay tuned because we have a lot more to come. If you enjoyed this conversation, we would love it if you could share Solo Founders with everyone you know, particularly people who are considering starting companies solo or who are already doing it. You know, the entire goal of what we do is to normalize solo founding, encourage more people to solo found instead of end up with co-founders of convenience.

20:36Rahul Sonwalkar:If you'd like, and we'd really appreciate it, you can go leave a review on Apple. You can go give us a thumbs up. You can subscribe on the YouTube channel. Anything helps. And of course, if you are starting a company or considering starting a company, you should go look at the solo founders program. We work together with you in San Francisco alongside of a bunch of other solo founders. The idea is it's much better to be solo together than to be solo alone. I'll spend a lot of time helping you. And we also invest$100 ,000 in your company. So if you're excited to learn more about that, go check out solofounders.com slash program.