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With Friends Like These...


Here's some sobering news for overworked company founders: Having a small startup team isn't likely to bring much relief to a lone entrepreneur. In fact, entrepreneurs who are part of such teams put in more hours than those toiling away on their own.

In a March paper, Uschi Backes-Gellner of the University of Zurich, Alwine Mohnen at the University of Cologne, and Arndt Werner of the Institute for Small & Medium Size Enterprises examined data on startups from the Cologne Founder Study. That study tracked 790 newly founded businesses around the German city from 1992 to 1998. It included data on initial team size, industry, hours worked per person per week, profitability, and the gender and age of founders. The research trio found that entrepreneurs working on their own generally labored 50 hours a week. Those in pairs worked harder -- an average of 53 hours a week. It's even worse for teams of three, with each team member racking up 54 hours per week. The load eases off a bit for four-person teams, with each working 53 hours a week. Five-person teams put in about 49 hours a week.

Common sense would suggest that each person's workload should decline as team size increases -- the task gets split into more manageable parcels. If that were the case, however, a one-person startup would put in the most hours.

Instead, Backes-Gellner, Mohnen, and Werner believe two counteracting forces are at work: peer pressure and free-riding, or the ability to labor less while still receiving the benefits created by others. Peer pressure is stronger in smaller teams, while in teams with more than three members, it's easier to slack off. That's hardly the stuff of successful startups.

By James Mehring


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