Introduction
25 Key Action Steps (Plus One) for Every Entrepreneur

BECAUSE YOU ARE undoubtedly raring to go out and change the world with your amazing business concept, I'm going to open this book with a crash checklist in "starting smart" so that you can avoid the biggest bone-headed errors made by many bright-eyed and enthusiastic first-time company founders. I'll give you a quick overview of each of the steps that will take you from an idea to an exit, and I'll explain how to use this book as your companion along the way. Even if this Introduction is all that you read, at least you'll know what you should be doing, and where to find an in-depth discussion in the book on each of the following topics.

Now, off we go!

Prepare to Launch

0. Before You Start, Educate Yourself.

Just as you would not start a trek to the North Pole without reading at least Arctic Exploration for Couch Potatoes, you should start your entrepreneurial journey by getting oriented to the basics . . . and that's exactly what this book is about. Once you've finished, if you are typical of most hyperactive entrepreneurs, you'll be off getting your parka and snowshoes. But if you can eke out a bit more patience, among the other 93,210 startup books, a few have become known as classics for a reason. They deal with everything from "What is entrepreneurship?" to "How can I start cheaply?" and "How do I turn an idea into a company?"

Therefore, after you finish The Startup Checklist, the next thing I suggest you do is take the time to read a few of the other basic books on the "starting a company" thing. While this book deals with the hands-on, practical aspects of starting up, there are others that will provide invaluable context, advice, and theory, as well as detailed help with specific challenges many entrepreneurs face. I realize that the thought of reading even one book, let alone more, may seem boring or painful, or a waste of time. But when you stack the task up against the vital future of your enterprise, it begins to look like the best deal in town. In this book, I have pulled out a few gems of wisdom from the industry's leading thinkers and teachers to get you started, but I have also included in Appendix A my Startup Reading List of classics that are full of too much mission-critical information to cover here. Read them.

1. Translate Your Idea into a Compelling Business Model.

A business is created in order to execute on an idea. Not having a clear picture of that idea is guaranteed to result in an extraordinary amount of wheel spinning. While you will spend the rest of your business career refining your idea, there must be something at the core, or you'll have nothing to refine. In particular, it is crucial at the beginning to distinguish the business concept from the product concept. It is well and good to come up with an idea for a cool new widget, app, or website, but it's more important to understand what value the product brings to which customer, and to understand who will be willing to pay you for your work in developing it. At this point you don't need a full-fledged business plan, but you do need the ability to explain clearly what you're doing and why-and that's your business concept. In Chapter 1, I discuss creating a visual business model using the Business Model Canvas.

Once you have your business concept sketched out, I suggest you invest the time to get prefeedback. Take your nascent idea around and talk to domain experts in your field to see what they think about it. Don't worry, they're not going to steal your idea (they won't!). What they will do, however, is to give you a reality check to see if your idea makes sense to people who know the industry you're preparing to enter. Whatever they tell you shouldn't necessarily be dispositive (sometimes it takes a fresh creative look from outside an industry to make a conceptual leap), but it should absolutely be taken into consideration . . . and not just given lip service. It is far better to find out before you start that your idea has been tried multiple times with no success than it is to learn it after you've spent two years trying fruitlessly to smash a round peg into a square hole.

2. Craft a Lean Business Plan to Serve as Your "Plan A" Road Map.

Assuming the prefeedback you're getting indicates that you may be on the right track, now is the time to start organizing your business concept into a more detailed road map for your venture. In Chapter 2, I discuss how to prepare and use a Lean Business Plan. This is not a lengthy, text-heavy document, but rather the essential framework for everything that you will be doing down the road. It provides the context that will let you assess each new opportunity, product, option, and even employee in light of where you are trying to go and how you plan to get there.

While you will only produce a full written plan in the event that you are specifically requested to by a bank or other interested party, investors will be asking detailed questions of you . . . questions that you can answer only if you have already carefully thought through your business to the level of detail required to do a plan in the first place.

3. Find and Know Your Competitors, and Analyze the Strategic Landscape.

With an idea in hand that seems promising, take a look around to see who else is working on the same thing. That's because-as much as I hate to spoil the surprise-someone else is. Consider this: as of this writing, on the Gust online platform for early stage businesses, there are over 500,000 companies that have created startup profiles. Do you believe that there are 500,000 different business types in the world? No, there are not. How about 50,000? Nope, not that either. 5,000? Maybe, but I don't think so. 500? Yup, that sounds about right. So what does this mean to you? It means that, at this moment, as you are about to pour your soul into a new venture, there are between 100 and 1,000 other founders doing the same (or similar) things!

That being said, just because there are competitors is no reason to assume that they will succeed and you will not. Counterintuitively, experience has shown that a business arena with no competitors is considerably more difficult to conquer than one in which other people have paved the way for you (that's a lesson I learned painfully in the mid-1990s when I had a brilliant, breakthrough product for which we could never actually find a market.) But it is important that you are aware of what the competitive arena looks like so that you won't be unhappily surprised down the road. Chapter 3 is about the competition: who they are, where to find them, and how to analyze them.

4. Draft Your Founding Dream Team.

Talented as you may be, it is unlikely you have all the skills required to launch and build a successful business on your own. And even if you do, you won't have the time and energy to do so, especially as your company begins to grow. Sooner rather than later, you will need to identify a handful of other people who can complement your talents, forming a founding team that can help you launch your venture on a profitable, high-growth trajectory. It is important to consider the skills, background and knowledge that you will need to make the company a success, figuring out which ones you have and which ones you lack. Understanding the role of The Entrepreneur in a startup is the cornerstone of building a high-growth venture, and in Chapter 4 I talk about how to assess whether you are one . . . or need to find one, as well as how to set clear expectations among the members of your founding team.

5. Allocate the Equity in your Startup.

Once you've joined forces to create a founding team, you will need to have a discussion about equity-how much of the venture each person will own. In the same way that "good fences make good neighbors," a clear, rational, and mutually agreed-upon equity structure sets a company up for success, whereas a poorly thought-out one is a recipe for conflict and failure. I walk through the intricacies of equity allocation in Chapter 5, including why the logical 50/50 split is not in the best interest of the company. The important things to remember are that (1) "equity is forever," so once it's in someone's hands there is no easy way for you to get it back; and (2) equity is all about the future upside of the business, and thus should be held by those likely to be instrumental in making that upside real, rather than people whose services can be purchased on the market for cash.

6. Build a Minimum Viable Product and Validate Your Plan with Customers.

Up to this point, your business concept has existed only in theory. You haven't been trying to sell any products or services to real-world customers. Now it is time for the rubber to hit the road. Your goal is to see whether any of your potential users are willing to pay for what you want to sell.

In Chapter 6, I introduce you to the famous Lean Startup Methodology, and its most important tool, the Minimum Viable Product (MVP). This is a basic version of the product or service you plan to offer that is just "real" enough to make it testable with live customers. The MVP can be a bare-bones prototype, a web page advertisement,...