Readers of this column know that I'm a big fan of Guy Kawasaki in general and specifically of his updated classic The Art of the Start 2.0. After reading it twice, there are some parts that are not just useful, but gateways to deep business wisdom.

In the chapter on leadership, Guy points out that leaders must choose either to 1) pursue the fantasy of success or 2) take a long hard look at reality and adapt accordingly. Of the two approaches, chasing the fantasy is lots more fun, until you fail.

Facing reality is more challenging. To make certain that you aren't kidding yourself, here are Guy's "ten most important questions you can ask," along with my explanation as to why these reality checks are so darn important.

1. What is our top priority?

Knowing what's most important puts everything else into context. If an activity doesn't serve your top priority, it's a distraction. When there are multiple priorities (an oxymoron), your team expends their energy slowing things down.

2. When will we ship?

The release date of your product affects every activity of every individual and group in your company. If your release date is unrealistic, much of the work that's done to support that release will be wasted and need to be redone.

3. When will we run out of money if we don't ship?

While the previous question keeps you from setting a release date that is unrealistically soon, this question inoculates you, your team and your product from feature creep and perfectionism, either of which could push the release date too far into the future.

4. How much does it cost to acquire a customer?

Amazingly, many entrepreneurs don't fully think this through. A while back, I worked with a company that was spending $43 to acquire each "free for basic use" customer, assuming (wrongly it turned out) that almost all of them would upgrade into paid users.

5. What is our true, fully loaded cost of operations?

You'd think that this would be part of the business plan of every company, but in some companies leaders turn a blind eye, usually because they're afraid of the answer. That's how start-ups burn through $20m before any product is released.

6. Whom do we compete with?

I've many times seen companies enter a market that already has two dominant vendors (a leader and an alternate) and then are surprised when they can't get traction. I've also seen start-ups who don't know who else is developing similar products. Fatal errors, both.

7. What can our competition do that we can't?

Knowing what's unique about your product tells you what to emphasize when you're pitching it. That's fine, but if you don't know what's unique about your competition, you'll continually get blindsided when you're selling against them.

8. Who are our nonperforming employees?

This, alas, is a hard question since in start-ups those nonperforming employees can be your friends and family. Painful as it might be, if you can't figure out how to make these people useful, you've got to cut them lose--for everyone's sake.

9. What can we beg, borrow, or lease that we are buying?

This question is self-explanatory. I might add that today you can find free services that use to cost big money. Guy's new company, which helps basically anyone to create professional-looking graphics, is a case in point.

10. How good am I as a leader?

Finally and inevitably, being a real leader requires the self-awareness to know your strengths but also and more important, your weaknesses. Your strengths determine what you can achieve. Your weaknesses determine what you will achieve.