55 Point Checklist to Grade Entrepreneurs

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 inBeginning 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. Counter-balance their weaknesses by hiring people better than them

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

26. Define what the culture should be (the master Tony Hseih on culture viaKissMetrics)

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 themself

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 (ppt: 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 (watch: lessons from the master Michael Jordan)

52. Extreme sense of urgency and intense work ethic

53. Have a big WHY (tip: 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.