Difficulties in Finding Cofounders

Harvard Business Review article: Why Cofounder Partnerships Fail — and How to Make Them Last

Academic article: Gray, S., Howell, T., Sackett, E. (2024). Talking past each other: Construal Level, Utilitarian Motives, and Entrepreneurial Team Formation. Forthcoming at Organization Science

Founding teams perform best when team members (1) have complementary skillsets/resources, and (2) fit well interpersonally. Yet, it is exceedingly difficult for entrepreneurs to find team members who fit both criteria. To help explain why this is so rare, we identify an asymmetry between lead entrepreneurs – i.e., individuals who identify a business idea and then form a team, and potential cofounders – i.e., individuals who evaluate whether to join a lead entrepreneur. Specifically, we show that during the team formation process, lead entrepreneurs prioritize resources, whereas potential cofounders prioritize interpersonal attraction. We further explain that lead entrepreneurs can overcome this asymmetry by communicating in ways that highlight interpersonal compatibility since it matches the preferences of potential cofounders. We find support for our theory across three studies with data from: 1) the Y Combinator Co-Founder Matching online platform, 2) an online experiment with entrepreneurs, and (3) a networking event hosted at a prestigious university incubator program. 

How Do Entrepreneurs Choose Cofounders?

Gray, S., Howell, T., Strassman, J., Yamamoto, K. (2024). Credentials or Chemistry? Entrepreneur Gender and Cofounder Selection. Forthcoming at Academy of Management Journal

How do entrepreneurs choose cofounders? How do entrepreneurs prioritize between the interpersonal fit and complementary skillsets of potential cofounders? And do women entrepreneurs prioritize different qualities than men entrepreneurs? In this study, we show that men entrepreneurs almost always prioritize skillsets over interpersonal fit. In contrast, women entrepreneurs adapt to situational factors, such that sometimes they prioritize interpersonal fit and other times they prioritize skillsets, depending on the situation they are in. In supplementary analyses, we find that entrepreneurs who prioritize cofounder skillsets are more likely to receive funding, but those who prioritize interpersonal attraction are more likely to form lasting teams. 

When/How Can Solo Founders Succeed? 

Harvard Business Review article: Don’t Buy the Myth that Every Startup Needs a Co-Founder


Academic article: Howell, T., Bingham, C. and Hendricks, B., 2022. Going alone or together? A configurational analysis of solo founding vs. cofounding. Organization Science, 33(6), pp.2421-2450.

The choice of whether to remain solo or find co-founders is one of the most important and fundamental decisions each entrepreneur must make. Past research finds that larger founding teams outperform smaller teams on average; however, it also suggests that conflict and drama among co-founders is one of the primary sources of failure. Using in-depth qualitative data collected over many years, we examine the conditions under which it might make sense to solo found rather than find co-founders. Our findings reveal how solo-founders strategically use co-creators rather than co-founders to overcome challenges, retain control, and mobilize resources in unique and unexpected ways. 

Do Founders Tune Out Their Teams?

MIT Sloan article: Do Founder CEOs Tune Out Their Teams? 

Academic article: Hendricks, B., Howell, T. and Bingham, C., 2019. How much do top management teams matter in founder‐led firms?. Strategic Management Journal, 40(6), pp.959-986.

As firms mature, their founders are often replaced with seasoned executives. When founders stick around, their surrounding team members are often viewed as necessary to help compensate for the founder’s managerial weaknesses. But do founders actually listen to the advice of the seasoned executives who surround them? Or do they shrug it off and march to the beat of their own drum? To better understand this, we collected and analyzed data on more than 2,000 companies. This examination uncovered surprising insights relevant for leaders of large and small organizations, which you can read more about at the sources below:

Coworking Spaces: What Are They?

MIT Sloan article: Coworking Spaces Offer a Post-Pandemic Alternative 

Academic article: Howell, T., 2022. Coworking spaces: An overview and research agenda. Research Policy, 51(2), p.104447.

In the past decade, coworking spaces have emerged as a new and promising phenomenon. Due to its prevalence, popularity, and potential for disruptive change, coworking is increasingly relevant to the workplace, yet its implications are largely unstudied given the rapid rise of the phenomenon. Overall, more data and analysis is needed to inform owners, policy makers, and remote workers regarding the effects of coworking. My research addresses this gap. Specifically, I explore whether coworking “works’, or in other words, whether (and how) it adds value for its members. You can read more about this at the link below:

Entrepreneurs and Heuristic Thinking

Bingham, C.B., Howell, T. and Ott, T.E., 2019. Capability creation: Heuristics as microfoundations. Strategic Entrepreneurship Journal, 13(2), pp.121-153.

While much research suggests that capabilities are critical for firms, little is known about the individual-level origins (“microfoundations”) of capabilities. Using in-depth nested case studies, we explore how firms develop an internationalization capability. The setting is six entrepreneurial firms from three culturally distinct countries. Our data show that executives begin by seeding the process with imperfect heuristics and then managers continue development by elaborating their understanding of what task to perform and how to perform it. Importantly, managers across hierarchical levels support the development of their firm's internationalization capability by abstracting key heuristics away from any one experience such that the capabilities become less routine over time. Overall, we contribute to the microfoundations movement in strategy and to the literature on organizational learning.

Under Review

Black Women in Entrepreneurship

Bermiss, S., Bingham, C., Howell, T., Law, C. (2024). Startups as Entrepreneurial Training Grounds (Revise and Resubmit at Strategic Management Journal)

Black women are underrepresented in entrepreneurship. However, using data from Venture For America (VFA), we find that Black women are much more likely to start companies after working as an employee in a startup. We suggest that this employment acts as a learning and apprenticeship opportunity that gives individuals the confidence to start their own companies. While this is true for all individuals (regardless of race or gender), we find that Black women that worked as employees in a startup were much more likely than any other group to found their own company afterwards. More specifically, Black women appear almost twice as likely to found their own company than other demographic groups, even the most historically dominant group - white males.  

Boomerang founders: What happens when the founder comes back?

MIT Sloan article: Boomerang CEOs: What Happens When the CEO Comes Back? 

Academic article: Howell, T., Bingham, C., & Kolev, K. (2024). Boomerang founders: What happens when the founder comes back? Reject and Resubmit at Strategic Management Journal, preparing for resubmission.

Founder successions represent critical junctures for firms. What remains unexplored, however, is what happens when the firm rehires a founder as CEO (e.g., a “boomerang founder”). To better understand the consequences of bringing back a founder, we collected and analyzed data on the performance of 167 boomerang CEOs of companies listed on the S&P Composite 1500 index from 1992 to 2017. We then compared their tenures with those of more than 6,000 other (non-boomerang) CEOs over the same period. This comparative investigation revealed some nonobvious insights and critical implications for leaders of large and small organizations, which you can read about at the sources below:

How do nontechnical entrepreneurs attract technical cofounders?

Howell, T. (2024). How entrepreneurs attract technical cofounders to their ventures (Reject and Resubmit at Strategic Management Journal, preparing for resubmission)

How can entrepreneurs attract technical cofounders to their new ventures? To answer this question, we rely on data from multiple sources, including in-depth interviews and large-scale data. The central argument in our study is that because technical cofounders have higher opportunity costs relative to other cofounders, entrepreneurs need to de-risk the opportunity in order to attract them. Thus, whereas most entrepreneurs talk about finding a technical cofounder, a better way to conceptualize the process is earning a technical cofounder.

Do founders need adult supervision?

Howell, T., Welsh, D., Hendricks, B. (2024). Founder leadership and corporate social irresponsibility: Do founders need adult supervision?  (Preparing for submission)

In this study, we argue that founders have a stronger tendency towards deviation rather than conformity to existing norms, making them more likely than other leaders to engage in behavior that diverges from existing norms – i.e., behavior that is considered irresponsible. However, we also argue that this effect is attenuated by the presence of a “second-in-command” who reigns in some of the founders’ impulses and helps them conform to existing norms. We test our predictions using panel data with over 4,000 firm-years. We find support for our predictions; namely, that founders are more likely to engage in corporate social irresponsibility, but that this effect is attenuated when a second-in-command is present. We also find evidence of various conditions under which a second-in-command is most effective at reducing irresponsible behavior. 

Are Immigrant Entrepreneurs More Likely to Start Unicorn Companies? 

Howell, T., Hendricks, B., Bingham, C. (2024). Immigrant Entrepreneurs and Unicorn Companies (under review at Strategic Management Journal)

This paper explores whether companies founded by immigrants are more likely to become "unicorns" – i.e., be valued at $1 billion or more. We perform multiple studies using different datasets and samples. Our findings consistently show that companies founded by immigrant entrepreneurs are much more likely to become unicorns relative to companies without an immigrant founder. 

When Do Solo Founders Succeed?

Howell, T., Hall, T., (2024). Solo founders vs. co-founders and entrepreneurial performance (under review at Strategic Management Journal)

This paper explores when and how solo founders can perform as well as or better than cofounders. We theorize (and find) that co-founded ventures will perform better than solo-founded ventures on average, but that solo-founded ventures can overcome these performance disadvantages through strategic action.

Working Papers

How long should a founder remain CEO?

Harvard Business Review article: How Long Should a Founder Remain CEO? 

Academic article: Hendricks, B., Howell, T., Bingham, C. (2023). The Founder Premium Revisited (Preparing for Submission)

Do founder-CEOs have an expiration date? With several high-profile founders recently stepping down from their companies, some have begun asking whether the move could herald a new era, in which founders voluntarily step aside rather than sticking around for decades or waiting to be ousted. To explore the value added by a founder-CEO, we analyzed stock price and financial performance data from more than 2,000 publicly traded companies. We found that on average, founder-led firms outperform those with non-founder-CEOs — but that the difference dwindles to zero just three years post-IPO, after which founder-CEOs actually start detracting from firm value. Given these findings, we offer three strategies to help investors, boards, and executive teams support founders in transitioning out of the CEO role when the time is right.