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55-Point Checklist for Grading Entrepreneurs

This article was originally published on Forbes.com. Access to the original article is available here.

The following checklist is my comprehensive criteria for how to grade entrepreneurs. I’ve developed it over the years by running Docstoc and helping thousands of folks start and grow their businesses. As I was once told in grammar school, the following exercise will test “your ability to carry out directions.” I, like many entrepreneurs, never followed directions that well. But sometimes there’s a great deal of value in Beginning with the End in Mind.

Vision/Strategy

1. See opportunity where others see issues (watch: You’ll See It When You Believe It).

2. Have a discipline for making decisions among various opportunity costs (watch: How to Make the Right Business Decisions).

3. Rapidly double-down on something when it starts to work and blow it out to its full potential (via Matt Coffin).

4. Balance “gut decisions” with of a love of data-driven decisions.

5. Focus on the one most important thing.

6. Stay attached to the problem they are trying to solve, but be flexible in the solutions to solve it (watch: The Entrepreneur’s Dilemma).

7. Know when to apply a Reality Distortion Field.

8. Protect their downside and prevent the organization from being put at risk.

Leadership/Management

9. Communicate expectations clearly, build buy-in and hold everyone accountable (most of all, themselves).

10. Encourage open feedback on what they can improve.

11. Put others in positions to make critical decisions and drive key initiatives forward (watch: Find the Leader in Every Employee).

12. Prefer to give credit than to take credit.

13. Do, or have done, what they ask others to do.

14. Remain organized and disciplined in any work habits that affect others.

15. Seek out and follow the council of advisors in and outside of the business (watch: court mentors).

16. Balance “Coaching and Cheerleading” vs. “Doing and Directing” (via Bob Walters).

17. Know when to set unrealistic goals.

18. Regularly thank and appreciate others for a job well done (thanks to my co-founder Alon Shwartz for reminding me).

19. Make themselves consistently accessible to their team.

20. Are honest and ethical in all their dealings.

Recruiting/Culture

21. At least 20% of their time goes towards recruiting top talent (tip: some say 50%, via Vinod Khosla).

22. Build a team of A vs. B players.

23. Define the most important qualities for hiring (watch: my 3 rules).

24. Counterbalance their weaknesses by hiring people better than them.

25. Hire Fast and Fire Fast (via Mark Suster).

26. Define what the culture should be (the master Tony Hseih on culture, via KissMetrics).

27. Create an ingrained culture, not one of platitudes (tip: read “The Four Obsessions of Extraordinary Executives).

28. Make the culture about something bigger than business (watch: 10 Lessons Startups Can Learn from Superheroes).

29. Build ownership and accountability across the entire organization (watch: How to Address Problems in the Workplace).

Fundraising/Capital

30. Put in their own capital before they ask others to put in theirs.

31. They sell ether, sell the dream.

32. Have mastered the investor pitch process.

33. They first sell themselves.

34. Understand “People, Product, Progress, Passion, Persistence” (watch: The 5 P’s to Fundraising).

35. Always ensure the business is properly capitalized (read: How Much Should You Raise).

36. Treat investor’s capital like a borrowed treasure to be protected and returned.

Product/Customer Evangelist

37. Know their product better than anyone else.

38. Regularly talk with customers to see what can be improved.

39. Have a vision for the product that gets translated across the organization.

40. Make their product different and better than the competition.

41. Build lean products iteratively and ship expeditiously (tip: read “The Lean Startup” by Eric Ries).

42. Genuinely care about the interests of the customer more than their personal financial gain (watch: The Value of a 100% Money Back Guarantee).

43. Focus on execution over ideas.

Sales/BD

44. Participate in key sales functions and deals (watch: The 5-Step Sales Process).

45. Spend enough time courting key relationships that move the business forward.

46. Great at generating PR and buzz for the company (PowerPoint: Marketing and Publicity for Startups).

47. Listen more than they talk (watch: 10 Tips for Better BD).

Intangibles

48. Stay scrappy as they grow (watch: The 9 Ways to Stay Scrappy).

49. Have a strong sense of demand and how to extract it (watch: put your big rocks in first).

50. Self-aware, willing to admit mistakes and take responsibility.

51. Fierce competitiveness, hate to lose.

52. Extreme sense of urgency and intense work ethic.

53. Have a big WHY (watch: this great Ted Talk by Simon Sinek).

54. Can sell the dream.

Now Disregard Everything on the Checklist Except…

55. Do they get results with integrity? That is the only standard by which entrepreneurs are eventually judged. Everything else is just a test; grades don’t matter, but results do.

 
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