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The Startup Checklist

100 tasks to build unstoppable momentum for your startup from Jason Calacanis and the team at LAUNCH. Click the titles to watch Jason explain each bullet point in detail.
Note: This is built on Coda a great all-in one doc. We don’t even scratch the surface of its capability here... if you want to level-up your team go to and they’ll hook you up with a $1000 credit

Episode 1 -

1) Are you solving a problem that has personal relevance?
Will you still care about your product, your company, and your customers after getting beaten down for a year straight?
Is the north star mission important enough to you that you will put potentially put everything else in your life second for it?
Examples of north star missions:
Robinhood's mission is democratizing finance
Calm's mission is normalizing self-care and meditation
Eight Sleep's mission is improving quality and tracking of sleep
Is the problem worth solving to YOU?
Not everyone is going to start a company that reduces carbon emissions across the globe like Tesla
It's okay if you're building a B2B sales tool, as long as it matters deeply to you!
But if you're just in it to get rich or get famous, it's probably not going to work out!
2) Can you build a great product?
Do you have these skills:
Developer (knowing how to build something)
Product manager (knowing what to build, and how to get there)
UX/UI designer (knowing what experience the user wants, and how to make it great)
If not, you can learn these types of skills for free on the internet → there are no excuses
Or you can try out no-code/low-code solutions, and see if you can get to a "Minimum Viable Product" or MVP without using hard code
We run a ton of low-code stuff at LAUNCH!
We use Notion, Zapier, Typeform, Bubble, Squarespace, etc.
3) Can you recruit elite talent to join your team?
Can you recruit one or multiple co-founders that balance out your skillset?
Example: if you are non-technical but great at sales and vision you probably want to find a technical co-founder that's can handle product
If you can't build a product, can you convince people to work for you that can?
Is your opportunity large enough that you can convince world-class engineers, designers, salespeople, etc. to come work for you?
Some things that attract high-end talent:
Equity: That's how you can compete with big tech salaries
Large opportunities: Uber, Airbnb, Stripe, Shopify
Meaningful work: Tesla (EVs), Blokable (Housing), etc.
4) Do you understand your ideal customer?
The first step in delighting your ideal customer is knowing who they are
Being able to identify the makeup of your most engaged cohort of customers could be the difference between finding product-market fit and running out of money
How is your customer solving the problem today?
What do you offer that is superior?
Why will they make the switch?
Things to look for: demographics, average time spent on site/in app, how you acquired them, are they likely to recommend your product to a friend?
Do you have domain expertise in your industry?
This is a controversial issues among investors:
Some investors look for domain expertise in a first-time founder
However, other investors () actually believe domain expertise is overrated and could be negatively correlated with outlier success
Keith thinks that the greatest innovations typically come from outsiders, since industry insiders are usually entrenched in a limited way of doing things
Jason calls this "fresh eyes on a problem"
Also: your ideal customer might wind up NOT being who you thought they'd be - if that's the case, are you flexible enough to pivot and still succeed?
5) How much personal runway do you have?
People underestimate how long it takes to either A) raise money or B) get profitable
Ask yourself: What is your personal burn rate? Can you optimize it to extend personal runway long enough?
How you can hack this:
Build a side project on nights and weekends before leaving your day job
If you aren't technical, try no-code solutions to see if you can create a minimum viable product
If you can get to any amount of revenue while still in "side hustle phase" - that's amazing!
Then you can start doing calculations like "When I hit X dollars in profit, that will be ~70% of my salary and I can quit my job and make up the difference"
6) How much are you willing to sacrifice? How resilient are you?
Before you quit your job to start a company, do a self-assessment on your personal resiliency
Here are ten tips for building emotional resiliency ():
1) Practice mindfulness (mindfulness helps with building self-awareness, which is key to emotional resilience, according to the CNBC article)
2) Breathe slowly and deeply
3) Build a robust emotional vocabulary (distinguish between different emotions in yourself and others so you are less likely to react without thinking)
4) Reflect on situations (take responsibility and articulate what you learned and how that will make you wiser in the future)
5) Reframe your mindset (view setbacks as challenges instead of threats)
6) Search for meaning (reframe suffering to create greater meaning for yourself and your team)
7) Forgive (break psychological ties that tie you to your past)
8) Engage your support network (the CNBC article notes that "research shows extroverted individuals tend to be more resilient because they’re more likely to reach out to others when they need help" so introverts should be extra mindful of this)
9) Express gratitude (gratitude can redirect negative emotions)
10) Take control of your outcomes (YOU control your destiny)
7) Do you have a bias towards action?
Complacent people do not make great founders
If you enjoy a casual working environment, don't like working long hours, prefer not to work nights and weekends... than being a founder is NOT for you
As a founder, you will be forced to put out fires from Sunday morning to Saturday night, and everything in between
8) Do you need a boss?
Some people need oversight, direction and someone else telling them what to do
Those people can still be good employees, and can knock off tasks and help your business once you start hitting scale
However many successful founders were NOT great employees, and in fact many were tough to manage
If you're somebody who takes comfort in having someone above you who could take responsibility and give you a direction, you might not be fit to be a founder
9) Do you make excuses?
There are a lot of people who think they have what it takes
But they tend to be hesitant in getting started - often coming up with excuses:
They are willing to start companies if you give them money
They will start companies if they find a developer to work for free
They are willing to start companies, but only if they can make the same money they made at Google
These are NOT signals of a great founder
Great founders start building now, no excuses!
10) Can you build the startup flywheel?
Product, Customers, Team
Can you:
Build a great product?
Is it well designed, or is the product clunky and ugly? Do you have a product at all?
Delight your customers?
Do you even know who their customers are?
Do you know the pain point they're solving?
Build a great team?
Can you recruit and hire a team?
If the founder can't do these simple things then this is probably not a founder that is going to win

Episode 2 -

11) Pick a business model that easily aligns with your product or service and customers
Your business model will depend on the type of product or service you're offering
Today we're going to go through the most popular business models for tech startups, which models investors love and which ones they avoid
Examples:
Imagine if Uber charged a monthly subscription for unlimited rides instead of a marketplace solution... would they have still succeeded?
Companies that sell business software should NOT sell it as a one-off, you should always sell it as a subscription so you can have recurring revenue and reduce your churn
12) Keep it simple: FOCUS on a single business model
One mistake founders make (besides picking the wrong model) is trying to do too much
When founders get unfocused, that's very dangerous for a startup
Businesses with multiple streams of revenue can get clunky with less chance of outlier success than focused business models from the start
Example of single business models (at the start):
Uber → marketplace, takes a percentage of every ride
Calm → subscription for meditation
Slack → subscription for messaging app
Spotify → subscription for music
Pro-tip: Here is one way in which you can use to different business models to prop up your startup in the early days:
You can use service-based revenues to build out your SaaS business
We see this all the time with early-stage startups, and it's a great way to get quick capital to grow your recurring revenue business
HOWEVER... make sure you differentiate "service-based" from "subscription-based" when you're talking to investors!
Competent investors will always ask about the "quality of revenue"
13) Do you understand why investors love SaaS (Software-as-a-Service)?
Because it allows startups to increase revenue on a recurring basis, while keep fixed costs relatively consistent
What is SaaS? It's when a business charges a monthly or yearly price per seat for business software
This business model creates "recurring revenue" for a startup, which investors love because you start every new payment cycle with almost 100% of your revenue from the last cycle
If you sell on a "bottom-up" basis (meaning you sell into an organization from the lower level employees, not top-down from the VP level) your product can spread through a company like wildfire
Example: Slack, Notion
With bottom-up SaaS, you also can have a "cross-pollination" effect, where employees that get addicted to your product move to other companies and then infect THOSE companies with your product
14) Do you understand why investors love the Fintech model (SaaS + Transactions)?
This model combines the best parts of SaaS and transaction-based revenues
What is the Fintech model? It's when companies charge a SaaS fee AND take a percentage of each transaction (if your product enables transactions)
This is a popular business model with Fintech companies like Stripe, Shopify, and Plaid
Why? Because 100% of revenue coming from transactions is not as ideal as having as a recurring SaaS component
These companies typically charge a relatively affordable monthly or yearly SaaS fee and takes a small percentage of each transaction
For example: In Q2 2021 Shopify had $334M in subscription revenue and $785M in transaction-based revenue (they call it "merchant solutions revenue")
Shopify had about a 30/70 split between SaaS and transaction-based revenue
Shopify's standard plan costs $79/month, and they charge 2.9% per transaction for merchants using Shopify's payments processor
15) Do you understand why consumer subscriptions are coveted by investors?
Subscriptions make a vertical with historically high churn rates much more investable by creating pricing lock-in and recurring revenue
Consumer subscription are when companies charge a monthly or yearly fee for a consumer software
Examples: Spotify, Calm, Fitbod
Interesting insight: Calm used to sell their app for a "one-off" price of $10 back in the early days
When they started to charge $5/month (or $60/year) instead of just $10 for life, they actually saw a jump in downloads and paying customers
Why? Because people love subscriptions, even though it makes no logical sense!
The brain thinks "Hey, I can cancel this whenever I want." even though you'll likely paying 10x-100x the original purchase price over time!
16) Do you understand why marketplaces are coveted by investors?
Marketplaces are hard to get started, but even harder to stop when they hit scale
Marketplace businesses take a percentage of each transaction
Marketplaces are two-sided, and the two sides traditionally consist of "buyers" and "sellers"
These buyers and sellers can appear in many forms, depending on the vertical:
Amazon has third-party sellers and buyers (obviously)
Uber has drivers and riders
Airbnb has hosts and guests
Rover has dog sitters and dog owners
Hipcamp has private land owners and campers
Marketplaces rely on the total amount of all transactions on the platform - typically called GMV (or Gross Merchandise Volume)
The GMV in a marketplace determines the revenue that company will make, since companies typically take between 5-20% of the total transaction cost
This differs by vertical as well:
Uber and Airbnb refer to this metric as "Gross Bookings"
In Q2 2021, Uber had $21.9B worth, and revenue was $3.9B (about 18% of Gross Bookings)
In Q2 2021, Airbnb had $13.4B worth, and revenue was $1.3B (about 10% of Gross Bookings)
Marketplaces eventually become "self-sustaining" once they hit scale!
Craigslist, Amazon, eBay, etc.
17) At the most basic level, why do investors love these four business models?
The four models: SaaS, SaaS + Transactions, Consumer subscriptions, Marketplaces
Because they allow startups to capitalize on the scale-ability and high margins of selling software
The power of software: Instagram sold to Facebook for $1B with only 12 employees
What advantage does this provide the founder?
Founders can keep fixed costs relatively similar while growing revenue rapidly due to simple and scaleable business models
Which means they can pour the profits back into building their business
Business models of Jason's outlier success:
Calm (Consumer subscription), Uber (Marketplace), Superhuman (SaaS), Thumbtack (Marketplace), Grin (SaaS), LeadIQ (SaaS), Fitbod (Consumer subscription)
18) Which business models do most venture capitalists stay away from?
Typically these are not "venture scale" businesses, meaning they can't get to $100M in revenue in under 10 years
Direct to Consumer or anything CPG (Consumer Packaged Goods)
Lower margins and scales slower than software
For DTC, you need at least one of these differentiators:
1) Elite product/brand (Ex: Eight Sleep, Warby Parker, Dollar Shave Club, Away Luggage)
2) Elite acquisition strategy (Mastery of TikTok/Instagram/Facebook advertising, or organic)
Hardware
Famous saying: "Hardware is hard"
Historically low margin, and scales much slower than software
Race to the bottom
Pro tip: If your hardware item has a software component, you can sell HaaS, or Hardware-as-a-Service, which is much more appetizing to investors
Ex: Density, Cafe X
Advertising
Making money through ads on your platform
This business model only works if you hit massive scale, which is why investors are typically skeptical
Example: Google, Facebook, Amazon, Yelp, Twitter, Snapchat
Advertising budgets are also dependent on the economy, as major advertisers cut their ad budgets FIRST after there is a down turn
Service-based
Not venture scale, usually bad businesses for everyone except the founder
19) How soon do you need to identify a business model after starting your company?
Most great companies know how they will make money from the start
However, your business model can change as new opportunities appear. Some of the greatest modern tech companies have changed their business model.
Example: Netflix
Netflix had TWO business model changes
First, they went from mailing physical DVDs for a monthly fee to selling streaming software (their margins and user base increased dramatically)
Second, Netflix used to "rent and distribute" 100% of their digital content when their streaming platform first launched
They would sign deals with companies that owned the rights to content and pay to list that content on Netflix
In January 2013, Netflix CEO Reed Hastings released a memo to employees and investors announcing a commitment to producing original content
From the memo: "We don’t and can’t compete on breadth with Comcast, Sky, Amazon, Apple, Microsoft, Sony, or Google. For us to be hugely successful we have to be a focused passion brand. Starbucks, not 7-Eleven. Southwest, not United. HBO, not Dish."
Netflix's first piece of original content, House of Cards, launched one month later in February 2013
In Q1 2013 (the same quarter that Hastings released his memo) Netflix had $1B in revenue and only $3M in net income
Eight years and three months later, in Q2 2021 (their most recent quarter) Netflix had $7.3B in revenue and $1.3B in net income
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