The informative book, ‘The Startup Checklist’ offers 25 actionable steps for entrepreneurs to take their initial concepts to business scale, mapped onto three clear phases.
begins Bill Gross, Founder of Idealab, in the Foreword. “There are a thousand things you can do to unwittingly undermine success,” he adds – hence the usefulness of this book for entrepreneurs as a checklist of do’s and dont’s.
David S. Rose is the author of Angel Investing (see my book review), CEO of Gust, and Founder of New York Angels. He is a serial entrepreneur and has invested in over 100 companies.
David offers this book as a comprehensive guide to entrepreneurs once they have a creative idea and startup intention in place (for these earlier phases, see my reviews of the books $100 Startup, Little Bets, and Trend-Driven Innovation). He classifies typical mistakes founders make into four types – fundamental (eg. unneeded product), painful (eg. wrong team), tragic (eg. bungled equity allocation) and expensive (eg. legal, accounting).
Here are my takeaways from this 306-page book, summarised in Table 1 and in the points below. The appendix has useful resources (also accessible online) such as a due diligence request, corporation registration checklist, founder accord template, and sample term sheets.
Table 1: Phases, Steps and Tools for Startups
| Phases | Steps | Online tools and resources |
| Preparation | Learning, business modeling, lean business planning, competitive analysis, team formation, equity allocation, MVP, entrepreneur ecosystem networking | Business model canvas, lean business plan; Kompyte, SimilarWeb, eDataSource, Google Alerts; QuickMVP.com, InstaPage, LanderApp, Optimizely; SurveyMonkey; SelfPromotion.com |
| Launch and growth | Incorporation, lawyers, boards, accounting, credit profile, banking, tech platforms, analytics, hiring, stock option plan | Quickbooks, Concur, AccountEdge; Google Analytics, ChartBeat, KissMetrics, MixPanel; UpWork.com |
| Funding and exit | Understand investors, pipeline, crowdfunding, term sheets, investor relations, valuation, exit types | AngelList, SeedInvest, FoundersClub, CircleUp, OurCrowd; Gust Checklist |
I. Preparation for launch
David offers a list of useful books as starting resources (see also my pick of ‘Top 10 Books for Entrepreneurs’ for 2016, 2015, 2014, 2013, 2012). Founders should develop not just a product or service concept but also a business concept, plotted in the business model canvas. Scalable and high growth businesses attract investors if they are in a product or service category where the number of purchasers, market share, sale revenue, profit margins and competitive moat are attractive enough.
It is a misconception that business plans are no longer needed, but a lean business plan is more apt at this stage than a full-fledged business plan (see Tim Berry’s online tools). The lean business plan connects strategy, tactics (marketing, product) and concrete specifics (assumptions, schedule, milestones, metrics) in a three-layer pyramid. This forms the basis of the ‘plan, run, review, revise’ cycle.
Many founders erroneously assume that they have no competition, or that potential competitors are too far behind. Competitors should be mapped and assessed via their websites, marketing collaterals, online reviews, industry appearances, social media presence, and even employees. Competitive grids, quadrant charts and petal charts are useful visualisations in this regard.
The ‘dream team’ should have a mix of core creative partner and business-oriented partner. The key entrepreneur quality is one of vision, passion and risk-taking, and can reside in people with diverse backgrounds – tech, sales, design, or finance.
“Starting a business is one of the most emotionally draining activities you can possibly engage in, right up there with marriage and parenting,” explains David. Founders should develop a clear understanding of their roles, time allotments, financial contributions, and expectations of ownership, risk and control.
Frank Demmler’s…