In the world of business, you only get one chance for a great first impression. The stakes are high – you are asking an investor for money, a customer for an order, or another executive for a partnership. Badly written letters, long rambling or emotional emails, or an obvious lack of spell checking will brand you as a poor business risk before the message is even considered.

No one is born with business writing skills, and everyone can learn them. Yet this seems to be one of the most common failures I see in business professionals. I get serious letters to investors, requests for assistance, and business plans almost every day which violate the basic rules of business communication. We both lose when that happens.

Thus, I thought a quick refresher on business writing basics might help you more than any tip on the next big thing on the business horizon:

1. Select clear purpose and focus. Before you start writing, it’s important to ask yourself what you intend the document to accomplish. What action you want the reader to take as a result of your message? Make every word focus on that purpose. Get to the point in the first sentence, and restate it in the last.
2. Tailor writing to your audience. The audience makes all the difference. People subconsciously tailor their conversation, and same rule applies to writing. Consider your recipient’s motivation, culture, socio-economic status, education level, gender, and relationship to you. If you don’t know this information, aim high rather than low.
3. Organize toward a specific outcome. Think about the conclusions you’d like your readers to reach by the time they finish your writing. In general, you will either inform or persuade, and you should have one of these two approaches in mind as you write. Always use the same basic elements of opener, body, and conclusion.
4. Make it look good. A poorly formatted document, unsightly fonts, and lack of white space will kill even the best writing. Place all the parts of the message in the correct positions. Use short paragraphs for readability and spacing. Put information where your reader expects to see it. Show your readers respect, and you’ll get respect back.
5. Action items should be highlighted and positive. Underline action items, or even separate them in bullets to give visual cues to their importance. Readers will focus better on positive words rather than negative, so state negative messages in the most positive light to make them more palatable. Focus on what is, rather than what is not.
6. Develop a friendly business writing voice. This will create a sense of familiarity for readers, making them more open to what you have to say. Inject confidence, and courtesy, always using non-discriminatory language to avoid offence and apparent bias. Write at the audience reading level or below.

In general, I don’t recommend phone text messaging or Instant Messaging for business purposes, unless the recipient already knows you well. Emails are acceptable, but keep these to one page, addressed to one person, with meaningful subject lines, and use that spell checker.

Always remember that even the best written message can’t convey the body language and emotions of the sender. If the subject is sensitive or the message can be easily misinterpreted, don’t use email or anything written, but pick up the telephone or meet in person instead.

Who you are and who you can be, depend on the image your writing communicates to the mind of the receiver. That image is set more by the way you write, than by the content of your message. For business, skip the story telling and the colorful language of Mark Twain, unless you want to date your company and your savvy to his era.

If you have a unique creation or invention, and you are not selling it around the world on the Internet, now is the time to start. The cost of entry has never been lower. Anyone can be an entrepreneur today, without a huge investment, bank loans, venture capitalists, or Angels.

In the early days (20 years ago), most new e-commerce sites cost a million dollars to set up. Now the price is closer to $100, if you are willing to do the work yourself. Here are the key steps for a personal home-based business website selling a few products (as an alternative to Ebay):

1. Go online to reserve a website domain name. Be sure it matches your business, and get a hosting agreement from one of the popular providers like GoDaddy. The cost for the domain name is maybe $10/year, and the hosting starts around $50/year. Start simple.
2. Download free website tools. Many hosting services offer free tools, or will build a default website for you. Other popular tools are available at low cost, with built-in e-commerce capabilities (pay via PayPal or credit card), including FrontPage in the Microsoft Office Suite, and DreamWeaver by Adobe.
3. Open an account with PayPal. This costs nothing, and allows you to safely collect money from customers all around the world. If you want to also accept all the popular credit cards, that will require a merchant services account for a low monthly fee.
4. Personalize a simple web site. Customize your website using one of the tools above, selecting one of the standard templates for design and layout. You probably want at least a home page, product page, order page, and contact page. The menu should include a link to your blog, separately set up on Blogger, WordPress, or TypePad, again free.
5. Publish the site and now you are in business. But don’t be fooled into expecting people to flock to your site after you tell a few friends. Now the real work begins – promotion, marketing, blogging, and all types of search engine marketing. But even these can be done for almost no cost, if you are willing to learn and do the work yourself.

Obviously, commercial e-commerce sites handling thousands of products and back-office functions are more expensive, and usually require professional help to do the custom programming and special site navigation features. All this may cost a few thousand dollars, but don’t get talked into an Amazon.com replacement just yet.

The next step in complexity is building a software product that you can offer as a service to your customers. A simple example might be mortgage calculator to add to your real estate sales site. Any credible software developer should be willing to tackle this kind of tool for a couple of thousand dollars.

Then there are full-featured software sites like Facebook. The logic behind all these features is millions of lines of code, and cost millions of dollars to develop and maintain. Don’t expect that you can create a new social networking site in your garage, and steal all the users away from Facebook. Facebook is making money today, but only after a $150 million investment.

But even Facebook started simple, and then developed more and more robust iterations as user interest caught on. I give this advice all the time “launch fast and iterate.” You can’t get it all right the first time, and the market will be gone if you try to include every feature in the first version.

The net is that if I see a website business plan today with a projected development cost greater than $200K, I suspect the founder must be including some fancy perks, or they don’t understand the market dynamics of e-commerce today.

Budding entrepreneurs and home-based businesses should be writing business plans before they start, so they understand and can manage the tasks ahead, but no outside investor need ever see the plan. Fund it yourself (bootstrapping) and do-it-yourself entrepreneurs are the best kind, because they can focus on the business, rather than fund raising, and have full control of their destiny. Life is more fun that way. Grab your shopping basket.

Many budding entrepreneurs struggle mightily with that first step – out of their comfort zone and into the unknown. They keep asking people like me whether the time is right, and the truth is that there’s never an ideal time to start your own business. It’s like starting a personal relationship, if you wait for exactly the right time, you’ll never do it.

I’ve talked to many experts, and everyone has his own view of the right personal attributes, and the right business conditions to jump in. In my own view, the recovering economy is ripe for new startups, but successful startups are more about the right person, than the right idea or the right climate. So the real challenge is looking inward to check your alignment with these clues:

1. Running a business is a passion you crave. This is a necessary, but not sufficient reason to start a business now. It’s not the same as “I want to change the world (volunteer for a good cause)” or “I’m tired of the corporate grind (take a vacation).” It does mean you have a compelling new business idea, and a willingness to face risk.
2. You know what needs to be done, and not afraid to make the decisions. This is the right context for being your own boss. You get great satisfaction from overcoming all obstacles, and you have no problem with living or dying by your own decisions. You have never had a problem putting together a plan and making it happen.
3. The opportunity to make real money excites you. You have read all the stories of Google and Apple hitting on a great idea, beating the odds, and being worth millions in just a couple of years. You like the idea that most of the money you make will be yours, not just merged into corporate profits.
4. You believe the economy has tilted the odds in your favor. The recent recession has definitely opened up opportunities for new products, and skilled people at lower costs are abundant. Many of the great entrepreneurs of the past started their companies near business recessions and depressions.
5. You get to set the deadlines, and manage your own priorities. You have always felt that you can do more than expected by current bosses, if allowed to do it on your own schedule with your own milestones. Your self-motivation is more effective for you than any arbitrary rewards and even salary increases.
6. You get to do the interesting things, for a change. First of all, the business you intend to set up is your dream, not someone else’s. Within that context, you can delegate or find partners for things that bore you, like marketing, rather than feel that you have been assigned to do the least interesting work.
7. A variety of challenges stretches your abilities to the maximum. If you love to learn new things, and are stimulated by change, you will love the new business environment. Every day is different, from dealing with creative elements, to financial challenges, marketing and sales, and customers of every type.
8. Your office is where you want it. Many entrepreneurs enjoy working from their home, where they are more comfortable, and can interact better with their family. Some like an old eclectic loft downtown, or a local coffee shop to minimize the commute. In these days of global links, you can actually run the business from halfway around the world.
9. What you envision doesn’t seem all that hard to you. In fact, the cost of entry into most businesses has come down greatly in the last twenty years. You can now start an e-commerce site for $100, or develop software applications for smart phones for a few thousand. The right reason to start a business is because you have done your homework, and are convinced that you have the skills and knowledge to do it easily.
10. You are really ready for a second career. This is especially applicable to Boomers and anyone who has had a successful career, but now ready for a new challenge, with a little time on their hands. The good part of having your own business is that you don’t even have to give up your first job to start the second.

If a few of these reasons are calling your name, now is the time to start building your business. There’s no better time, especially if people around you are hesitating due to an apparent fit to my other list. It means you’ll be facing a lot less competition. What are you waiting for?

Every new startup I know dreams of being funded by an angel investor. Yet according to the latest data from Gust (formerly AngelSoft), only about 3 out of 100 companies who initiate the formal request process actually get funded.

The Gust Deal Funnel from the last 12 months indicates is that 70% of the interested companies never make it past the initial screening process. Over half of the survivors remaining are eliminated during live presentations, and another 6.5% are eliminated during due diligence.

What is this daunting process, and what can you do to optimize your chances of surviving it? Over the past 10 years, I have had the opportunity to see how the process works, several times from the startup side, and more recently from the angel perspective (as a member of an angel group selection committee).

So what should you do to prepare for this stage in your venture, and optimize your chances of making it through the process? Here is my list of top ten action items to best prepare you for success in achieving a funding event with angels:

1. Incorporate the business now. If you expect to require external funding, you should first incorporate as an S-Corp, C-Corp, or LLC, rather than the more expeditious sole proprietorship or partnership. The corporate entity lends itself best to the concept of “sharing” equity required by investors, and unincorporated entities don’t get funding.
2. Line up an experienced team. Remember the old adage that “investors fund people, not ideas.” That’s why this item is so important, and is probably the biggest stumbling block I see in getting through the initial angel screening. If the founders are not experienced, find a couple of advisors from the business sector to fill the gap.
3. Get your Internet domain name and website. In today’s world, if you don’t have a web site up and running, you will not be perceived as a real company. Investors routinely go to candidate web sites to get a feel for the tone and scope of the company, as well as its maturity and offerings. Reserve the company name on social networks to protect it.
4. Define some intellectual property. File a patent and trademarks to show real intellectual property. Having a defensible competitive advantage or “barrier to entry” is another critical step to funding, and another common stumbling block during all phases of the funding process. Start early on this one, or you will lose the opportunity.
5. Build a prototype product. A conundrum for many frustrated entrepreneurs is that they need money from investors to design and build a prototype product, yet most angel investors expect to see at least a prototype before they invest. Use your own money or friends and family to demonstrate progress early.
6. Build an investor presentation and summary. Investors expect a one or two-page executive summary sheet for the initial screening, backed up by a ten-slide Powerpoint investor presentation. Remember to aim the content of both of these at investors, not customers. They must amplify your “elevator pitch” to investors, as well as key points from the business plan and the financial model.
7. Prepare an investment-grade business plan. Every entrepreneur needs a professional business plan for their own use, whether they intend to seek investor funding or not. As a founder, you may think that everyone understands your vision and plan from your passion and words, but it doesn’t work that way. It should answer every question an investor or associate might ask, including current valuation, funding needed, and exit strategy.
8. Finalize your financial model. Like the business plan, a financial model is required as much for your own use as to impress angel investors. In most cases, a Microsoft Excel spreadsheet is adequate, with projection formulas for revenue, costs, and cash flow over the next five years. Variables for “what if” questions add credibility.
9. Close at least one initial customer. This must be someone who is willing to pay real money for your product or service. Free trials don’t count. All the conviction and market research in the world are no substitute for real customers paying real money. This is called “validating the business model.”
10. Network to the maximum with investor connections. The last and possibly most important action item is to build relationships with investors and friends of investors BEFORE you need their help in building your company. A good start is taking an active role in relevant technology groups, trade associations, university activities, and local business groups.

In summary, being touched by an angel can lead you to your dreams of a new and successful business, but it doesn’t happen without planning, hard work, and careful preparation. Most angel investors are seeking psychic as well as financial benefit from their investment. Do your homework first to get their attention, but don’t expect anyone to swoop down and wave a magic wand.

When you have been on the startup firing line, you quickly learn that any insight from experts and entrepreneurs who have been there before you can make the difference between failure and success. Yet, many new entrepreneurs brazenly assume they are bulletproof, and march blindly into the fray. The result is that well over 50% of startups fail in the first two years.

I don’t think anyone proclaims to have any silver bullets, but there are common failure threads that appear all too often. There are many books written about failure in startups, and I don’t recommend any of them. I prefer the more positive approach of getting you better prepared up-front, like the new book “It’s Your Biz” by Susan Wilson Solovic.

Susan has years of experience in the small business trenches, and really focuses on what it takes to succeed, with realistic caveats, including an excellent summary of words of wisdom categories that every entrepreneur should review:

1. Don’t chase your tail. As you are building your business, take introspective looks at yourself weekly. How many days have you had lots of activity going on, but at the end of the day, you’ve accomplished nothing to move your business forward? Measure results to make sure you are not chasing your tail, like your favorite puppy dog.
2. Keep moving forward. Never let a day go by in which you haven’t done at least one activity that directly relates to a key business goal. Establish deadlines and milestones for yourself and track your forward progress. Keep you eye on the ball, and don’t be distracted by seemingly attractive options that lead you away from your core business.
3. Listen to your instincts. It’s important to ask and listen to others for advice and guidance, but measure these inputs against your own instincts as well. Blindly following someone else’s strategy doesn’t help as an excuse for failure, and doesn’t help you learn along the way.
4. Manage growth wisely. Overextending yourself and your resources by taking on too much too fast can kill your business. Growing a business is like a marathon, you don’t want your company to be a flash in the pan. Remember, according to Seth Godin, the average overnight success takes six years.
5. Look for collaborative opportunities. In business, it’s tough to survive on an island. Strategic alliances allow you to take on bigger contracts, offer more services, and cover larger geographic territories. In addition, two heads are better than one, so collaborative brainpower is a significant asset.
6. Expect the unexpected. You can’t predict natural disasters, and economic fluctuations. Yet too few entrepreneurs have a current list of business essentials, emergency contacts, or documented backup procedures. Even better, you need a “Plan B” for survival when the unexpected arrives.
7. Learn to manage your stress. The stress of growing your business will take its toll, unless you take care of yourself. Be realistic about what you can expect of yourself and don’t over-commit. Learn to say “no” and really mean it. Schedule some time each week that is just for you, and for your family.

Overall, we all emphasize that you need to keep purpose, promise, and principles as the cornerstones of your business. It’s amazing how many business owners and their teams go through the motions of running their businesses on a day-to-day basis without ever understanding the purpose behind what they’re doing.

Businesses without a purpose don’t have a heart. Or if the principles and values aren’t yours, then it’s not your heart. If it’s not your heart, then you will be making promises to your customers with your fingers crossed. Remember that if you don’t deliver for your customers, they won’t deliver for you. That can make the normal business trenches a deep hole. Read and heed.

Every entrepreneur needs to be honest about their strengths and weaknesses, and realistic about their reasons for choosing the startup route. For any entrepreneur, even the best business opportunities, if entered for the wrong reasons, will likely fail. Some of these reasons seem obvious, so forgive me for restating, but I still hear them too often.

Statistics show that at least 50% of new startups fail within five years, and many of the survivors eventually fail. If you don’t want to be part of these statistics, consider all the alternatives to starting your own business, especially if you have one of the following perspectives:

1. “I’m tired of working hard and being so stressed all the time.” Starting and growing a business is more work and more stress than any employee role should be. Perhaps you need to look carefully at the reasons for your weariness and stress at work. Health and personal problems don’t go away when you start a business.
2. “It’s my hobby anyway, so why not make it my business?” The problem here is that most hobbies cost money rather than make money. Just because you love doing it doesn’t mean anyone will love paying for it.
3. “I’m desperate, since I can’t find a job that suits me.” With the current recession, jobs are indeed hard to find. But don’t forget that businesses are failing at a higher rate as well. Desperate people don’t make good entrepreneurs, and probably don’t have the resources or fortitude to start a business.
4. “My family has always been in business, so it’s in my genes.” Good entrepreneurs do seem to have certain innate qualities, but it’s not clear that these qualities are automatically passed to offspring. If your passions are elsewhere, don’t try running the family business.
5. “I’ve inherited some money and starting a business should be a good investment.” You can’t start a business without capital, but having capital doesn’t mean you can start one. Learning is expensive and risky. It’s less risky to invest your windfall in someone with a proven business record, or put the money in the bank.
6. “I have some extra time, and I need a second income.” Being an entrepreneur is not a part-time job. A business startup is actually a second expense more than a second income. For supplementary income, you would be better served to take a part-time job with an existing company.
7. “I hate having a boss, and just being an employee.” Don’t start a business for a power trip. When you become a business owner, your customers, suppliers, creditors, partners and a lot of other people will become your new “bosses”. These people may be harder to please than your boss at the office today.
8. “All my friends own hot businesses and seem to be doing well.” You shouldn’t believe all the hype, or all the things said in social circles. Definitely don’t jump into trendy businesses you don’t know just to be popular. Even good friends tend to forget talking about the years of hard work and sacrifice, in favor of recent success.
9. “I’d like to be rich, so I’ll start a business.” Starting a business with a dream of riches is certain disappointment. There is no evidence that entrepreneurs make more money, on the average, than other professionals. There is much evidence that the risks of failure are higher on the business owner side.
10. “My primary goal is to contribute something to society.” This is laudable, but more effectively addressed after you have built a successful company, not before. If changing the world is your main motivation and money is not a concern, then do it, without allowing the building of a company to slow you down.

For anyone with entrepreneurial aspirations, I recommend you start by networking with peer business people and organizations before you commit to a startup of your own. Ask questions and do everything you can to make sure you are tackling the right business for the right reasons. Your entrepreneurial life depends on it.

It would be no fun if starting a business was simply plotting a straight line between your idea and success, with no challenges along the way. Zigging and zagging amongst the obstacles is the fun part of being an entrepreneur, and it’s what sets you apart from the average worker who knows exactly what he or she has to do every day to get paid. Relish it, or if it scares you, don’t try it.

That doesn’t mean that starting a business should be a random walk into the unknown. There are certain foundational elements that every entrepreneur must build on to succeed, as well as some critical tools we all need. I found these tried-and-true principles summarized very well in a new book “The Zigzag Principle” by serial entrepreneur Rich Christiansen:

1. Assess your resources. At some point financial capital is usually needed to meet business goals. But it’s not a substitute for the other critical resources, mental capital (domain knowledge, skills, and passions), plus relationship capital (friends and advisors). Money results from mental and relationship capital, not the other way around.
2. Identify your beacon in the fog. Start with a big audacious goal to guide you, so that every once in a while you can hit a smaller goal, to provide a break in the fog and catch sight of the beacon before those next steps into the darkness. Goals need to be written down, measurable, and realistic. Expect your fair share of zigzagging to get there.
3. Create a catalyzing statement. This is a key element of every elevator pitch, with enough specificity and fuel to keep you and everyone around you moving toward the beacon in the fog. This quantified big dream should be a long-term goal that your short-term zigzags are all leading to. Use your values as the foundation.
4. Drive your startup to profitability. A first zig of getting to profitability is important to every business, because being broke and always fighting for funding can cause a lot of pain. More importantly, profitability can drive you to find hidden assets, zag to interim revenue sources, and force you to pace yourself in getting to that final destination.
5. Define processes and add resources. After the initial zigs and zags to get profitable, it is time to formalize and document the processes that worked. Only then can you expand those things that led to your initial success. It also means that it’s time to stop micro-managing, hire some of the right people, and start giving up some control.
6. Scale the business. This is implementing a model that you can replicate, to get your product or service out across the country, and around the world. Scaling models charge by the transaction, or subscriptions, or have digital assets with no cost to reproduce. Switch to a mindset of working “on” your business, rather than “in” your business.
7. Stay within your guardrails. Set up some rules to constrain your zigs and zags to prevent “out of control” situations. Common controls include some spending limits, time commitment limits, financial milestones. These guardrails should be closely aligned with your values. Practice the art of saying “no,” and the discipline of delegating.
8. Develop reward systems. To keep you and your team from burning out, you need to define a simple system of motivators and rewards. Too much reward leads to an entitlement mentality. As you hit each zig, you need to take a break from the intensity, celebrate, and enjoy the fruits of your labor.

The alternatives to planned zigzags are a planned straight line, or a planned random walk. Neither of these are realistic for an entrepreneur seeking success, but I still see them every day, and I see the pain that results. Smart entrepreneurs are nimble and flexile, bootstrap to the maximum degree possible, and pivot for emerging opportunities. Be one.

It’s time for more entrepreneurs to reset their focus, and shift their thinking to completely different ways of doing things. Everyone talks about innovation, but the majority of business plans I see still reflect linear thinking – one more social network with improved usability, one more wind-farm energy generator with a few more blades, or one more dating site with a new dimension of compatibility. Serious changes and great successes don’t come from linear thinking.

In searching for ways to get this message out, I came across a no excuse, no apology, new book by Brian Reich, called “Shift and Reset,” which makes some excellent points on ways to increase the range of change in a person’s thinking, or an organization’s results. Here are some key principles that he espouses and I support:

1. Force and expect change. Everyone knows change is hard and messy, and occasionally painful. But unless we force ourselves to change, innovate, and experiment with different ways of addressing serious issues, we won’t find solutions that are needed. Major innovation won’t happen without real commitment, sacrifice, and hard work.
2. Measure ability and results, not experience. Move to a model where people are measured on their deliverables, not how hard they are working, or how many years of experience they have. For entrepreneurs, this may mean more learning from experiments, and for organizations it may mean dumping a stagnant team to start over.
3. Don’t settle, demand the best. If you want to perform at the highest possible level, you need to hire the best people, who have produced consistent exceptional results. More energy needs to be spent on how the teams are organized and how the individuals work together. Leading an organization or a movement requires skills not taught in school.
4. Launch fast, fail quick, and learn more. Indeed, even the most capable, passionate, and well-supported entrepreneur will succeed only if he or she has a clear plan to follow. But don’t believe that any plan will develop and must remain unchanged throughout the execution process. Plan in your plan for constant change, with learning.
5. The time is now to think bigger. Great new ideas are emerging from the massive and frenetic coordination of people online and through connections. Let’s make sure they aren’t lost or ignored as we head into the future. Now is the time when smaller, yet dedicated groups can communicate and work to bring together disparate ideas.

Reich makes the point that everyone has a role to play in solving major issues, and driving greater innovation. The Internet and social media facilitates cooperation and collaboration, which is what we need to shift our thinking, then reset our goals and ways of attaining them. It’s much easier to challenge everything we know, and turn them on their sides.

Especially for change in serious social issues and infrastructures, it’s now easier to motivate people to care enough and take action. We will never innovate quickly by following the same, old, tired patterns. We need to realize what being connected really means, and makes possible. Now is the time to change.

Innovation begins with knowing your customer, so that’s always the first place to focus. The shift and reset in thinking applies to finding the solution, more than in defining the problem. Linear thinking on the solution can doom a startup or an entrepreneur. A good step in the right direction is to build a team with diverse backgrounds and perspectives.

This helps break linear thinking, and greatly reduces the probability that you’ll solve a problem in the same old way, or just like your competitors. Another approach is to bring in team members from outside your domain to challenge your thinking. You as an entrepreneur can either take the lead to make real change happen, watch it happen, or wonder what happened. You decide.

What sparks paradigm-shifting innovation in any business? It’s a special mix of entrepreneur and company, regular in every respect except for having the courage and foresight to make an idea happen that was supposed to be impossible. As an entrepreneur in a startup, how do you know if you have this potential, and what are the steps to get from an innovation to a revolution?

The first step is to meditate on the examples set by others, like Steve Jobs of Apple, Jeff Bezos of Amazon, or Thomas Edison with the electric light. There are many others, like the one I just finished about Ratan Tata bringing out the Nano car in 2009 in India for less than $2,500. The book is called “Nanovation,” by Kevin & Jackie Freiberg.

These authors have studied many such examples, and summarize my own perspective on the characteristics of entrepreneurs they call “nanovators,” that produce true, life-changing innovations, which they call nanovations:

1. Get wired for nanovation. We all agree that innovation is an adventure into the unknown. If you want people to follow, you need to be able to convince them of three things: (1) your mission is worth supporting, (2) you have the competence to build a critical mass, and (3) you have integrity to look out for their best interests along the way.
2. Lead the revolution. Nanovators have more than the vision; they have the drive to lead, and the focus to stay on target. They are wired to win. Organizations don’t produce game-changing innovations; people do. They allow a leap of faith in their own ideas, as well as in the ideas and capabilities of their team.
3. Build a culture of innovation. You need a culture where restlessness is tolerated, curiosity is encouraged, passion is inspired, creativity is expected, and people are always talking about what’s next. Ultimately, the mind-set changes so significantly that innovation is natural, and no one is conscious of it.
4. Question the unquestionable. Outsiders ask a lot of questions because they don’t presume to know why something is done a certain way. Make your insiders think like outsiders. Provocative questions like “What if?”, “Why not?”, or “So what?” can help to get everyone outside the box.
5. Look beyond customer imagination. First-of-a-kind products empower customers to do things they didn’t even know they wanted to do, and now can’t live without them. The computer mouse, Tivo, and Teflon are examples. Listen to customers, but remember that they can’t always tell you what they don’t know.
6. Go to the intersection of trends. Nanovators pay close attention to the early warning signs that precede major cultural, societal, and market shifts. Where most people see an isolated trend, nanovators connect the dots by relating one trend to several others. They focus on next practices, versus best practices.
7. Solve a problem that matters. The key here is to resist the temptation to pay more attention to the technology solution than the problem. Some people create brilliant solutions to non-existent problems, like maybe Segway and satellite phones. These solutions may be nice to have, but won’t ignite a revolution to get there.
8. Risk more, fail faster, and bounce back stronger. When you pursue a creative idea that takes you beyond, fear tempts you to make compromises. If you can push through this fear and doubt, or bounce back intelligently from initial setbacks, you often arrive at something that has truly never been seen before.

Jeffrey Immelt of General Electric argues that the next big thing, like the Nano, could well be from “reverse innovation,” where instead of industrialized nations adapting their products for emerging markets, innovation in emerging markets will bring new paradigms to home markets. In any case, the future is defined by what we put off until tomorrow, so don’t wait too long to get started.

We can all dream about what it takes to make our startup a success. From recent survey feedback, it seems evident that the urban legends leading to success are wrong. The average entrepreneur is not the one who dumped a promising career, sketched his idea on the back of a napkin, and accepted millions from an investor to make billions of his own.

I was just perusing a more realistic report from the Kauffman Foundation for Entrepreneurship, titled “Making of a Successful Entrepreneur.” They surveyed 549 successful company founders across a variety of industries, and gathered their views on success and failure factors. Many are predictable, all were interesting, and a few even surprised me:

1. Stick with the business area you know. We all have a tendency to think that the grass is greener on the other side of the fence, but 96% of these founders ranked prior work experience in their business area as an extremely important or important success factor.
2. It’s the learning; not success or failure, that makes the difference. Successful founders try and try again. 88% attributed their success to prior successes; 78% attributed success to prior failures.
3. The management team is critical. In looking back on their success, 82% of the founders attributed their success to strength of the management team (not the idea, business plan, or money). No surprise here.
4. A little luck never hurts. Surprisingly, a full 73% said that good fortune was an important factor in their success. 22% even ranked this as extremely important. Perhaps we can discount this a bit for humility, but there is nothing like being in the right place at the right time.
5. Don’t discount the value of your network. Professional networks were deemed important in the success of 73% of the founders. 62% of the respondents felt the same way about their personal networks.
6. Dropping out of school is not recommended. 95% of these founders had earned Bachelor’s degrees and 47% had more advanced degrees. 70% said their university education was important, so only a few said skip it. Born to be an entrepreneur may not be enough today.
7. First-timers usually fund their own venture. Venture capital and private/angel investments play a relatively small role in the startups of first-time entrepreneurs. 70% said they had to use personal savings as a main source for their first business.
8. Advice from investors is not worth much. Of the entrepreneurs who received advice from their company’s investors, only 36% ranked it as important, and 38% said it was not important at all. Surprisingly, even in venture-backed businesses, 32% said it was only slightly important. It sounds like founders want to make their own mistakes.
9. Willingness to take a big risk. When asked what may prevent others from starting their own business, the highest ranked factor by 98% was lack of willingness or ability to take risks. Founders clearly found entrepreneurship to be a risky endeavor.
10. Huge time and effort commitment. Along the same lines as the previous item, 93% felt from their own experience that the work and time challenges were a major barrier (no support for the part-time, work from home, get rich quick crowd).

Hopefully, by understanding what entrepreneurs think and believe, we can foster more successes, fewer failures, and better guidance, to those of you who haven’t taken the big step yet. If you are already committed, take heed of the advice of those who have been there and done that. People who don’t learn from other’s experience pay a high price just to get to the starting point.