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.

Many entrepreneurs forget that their success is more about helping other people than about personally becoming famous, or overcoming the odds and getting rich. A successful business has to satisfy customers with a strong team, by helping them solve problems, save money, or experience more pleasure. That means more focus on helping others achieve their goals.

How and why this is true was brought home to me in a new book, “It’s Not About You: A Little Story About What Matters Most in Business,” by Bob Burg and John David Mann. This is a fictional story about how an aggressive young M&A executive comes to realize that his aggressive style is actually making it harder to reach his goals.

He concludes that there are five leadership elements that include him, but are not always about him, that lead to success. These are lessons that every entrepreneur should take to heart:

1. Hold the vision. Many entrepreneurs are able to come up with a vision, but far fewer are able to hold on to it through thick and thin, and communicate it effectively and continuously to their team and their customers. Keep your eyes on where the company is going, especially when nobody else does. Watch your use of personal pronouns.
2. Build your people. Give people on your team the means, authority, and the motivation to do the job, you will be surprised at the value delivered. Make sure that the essence of your influence is pull, not push. See people for who they are, realize what they can be, and help to take them there.
3. Walk the talk and do the work. Most startups begin their life as “one-person shows” that over time evolve to teams of people, interacting with customers and vendors. By virtue of the growing workload and stress, too many entrepreneurs isolate themselves from the hands-on as the team builds. Don’t forget to be a mentor as well as a leader.<
4. Stand for something. What you have to give, you offer least of all through what you say, and in greatest part through who you are. Competence and character are most important, and visible to everyone. I believe in the old saying: “If you don’t stand for something, you’ll fall for anything.”
5. Share the mantle of leadership. The best way to increase your influence is to give it away. Don’t get stuck thinking that you are the deal. Let others lead in their own area of expertise, and your power will be expanded many-fold.

As early-stage entrepreneurs, it’s natural for you to focus on you – what you’re doing, what you want, and what you need. As the business evolves, you must expand your focus beyond yourself to motivating the team and delivering value to customers. At that stage, you are still important, but it’s not about you any more.

One mistake many entrepreneurs make, especially with online businesses, is a fundamental misunderstanding of how interesting they need to appear to others. Yes, you are a fascinating person. You know how to bootstrap a business, build it from nothing, and burn sweat-equity for long hours to push your dreams to reality. Your business brand needs to quickly supersede you.

Online businesses have removed the convenience of geographic connections. Today, remote relationships are far more important. The best way to turn someone into your devoted fan is to go out of your way to make them feel important. Put yourself first by putting others first as well. It really isn’t about how great you are but how you make others great.

What have you done for your team and your customers lately? How did you make your product manager shine in the last meeting? Being an entrepreneurial success is not about grabbing information and power, it’s about helping others succeed.

I see more and more entrepreneurs who seem to have everything going for them – vision, motivation, passion, even a good business plan, product, and money, and yet they can’t close customers. Maybe it’s time to look harder at the mantra of a new breed of gurus and successful entrepreneurs, including Steve Blank and Eric Ries, called “nail it then scale it” (NISI).

You can review all the specifics of this approach in a new book by Nathan Furr and Paul Ahlstrom, appropriately titled “Nail It then Scale It: The Entrepreneur’s Guide to Creating and Managing Breakthrough Innovation,” but I will net it out here. I found their five phases of the process to be compelling, based on my own years of experience mentoring startups:

1. Nail the pain. Great businesses begin with a customer problem that has a big and monetizable pain point. Avoid the three big mistakes, of guessing but not testing the pain (on real customers), selecting a low customer pain (solution is only nice to have), or selecting a narrow customer pain (small number of customers willing or able to pay).
2. Nail the solution. Neither breakthrough technology nor maximum features will assure that “if we build it, they will come.” In fact, NISI recommends starting with the minimum focused set of features and technology that will drive a customer purchase. Success demands testing the solution early and quickly in the market, then iterating to get it right.
3. Nail the go-to-market strategy. In parallel with nailing the solution, you need an in-depth understanding of your target customer’s buying process, the job they are trying to get done, the market infrastructure, and a stable of serious pilot customers. Do real tests with real pricing to see if customers will pay you, without being pushed.
4. Nail the business model. Leverage your customer conversations to predict and validate your business model. For example, when you think about distribution channels, revenue streams, or the relationship with the customer, ask customers what they expect. Don’t forget a viable financial model of costs, margins, customer acquisition, and break-even.
5. Scale it. Don’t attempt to scale it until you have a proven repeatable business model that predictably generates revenue. Only then is it time to focus on the get-big-fast strategy, and the transformation of three key areas from startup to a managed growth company. These areas include market, process, and team transitions.

These pragmatics and points of focus can effectively counter three core myths which trap too many enterprising and capable entrepreneurs today:

• Hero myth: Why believing in your product leads to failure. All too often, founders fall in love with their products or technology, ignore negative feedback from customers, and spend years building a product based on a vision that no one else shares.

• Process myth: Why building a product leads to failure. Conventional wisdom is that after a great idea, the next steps are raise some money, build a product, then go sell the product. This doesn’t work when attacking unknown problems with untested solutions.

• Money myth: Why having too much money leads to failure. The old saying that “it takes money to make money” isn’t so simple. Money allows entrepreneurs to execute a flawed business plan far too long, rather than stay focused on the market and adapt.

At the heart of it, to be a successful entrepreneur you have to be totally customer centric, and learn to change and adapt as fast as the market. The pace of change in the marketplace is escalating, so entrepreneurs have to improve their ability to deal with change.

At the same time, more entrepreneurs are jumping into the fray, and less money is available from investors. It’s time for a new startup model. In my view, savvy “super angel” investors such as Mike Maples, Jr., and leading incubators such as Y Combinator, are already on this one. How far behind is your startup?

The popular view of a real entrepreneur is someone with a big vision, and a stubborn determination to charge straight ahead through any obstacle and make it happen. The vision part is fine, but successful entrepreneurs have found that the extreme uncertainty of a new product or service usually requires many course corrections, or “pivots” to find a successful formula.

This reality has fostered a popular new startup approach which dramatically improves the efficiency and speed of these corrections, pioneered by Silicon Valley entrepreneur and author Eric Ries. His new book on this subject, “The Lean Startup,” lays out how today’s entrepreneurs use continuous innovation to create radically successful businesses.

Eric espouses designing products with the smallest set of features to please a customer base, and moving products into the marketplace quickly to test reaction, then iterating. He does a great job in the book of making the case for management systems, rather than gut-level reactions, to make required course corrections (pivots), to dramatically improve the odds for success.

Pivots come in many different flavors, each designed to test the viability of a different hypothesis about the product, business model, and engine of growth. I agree with Eric’s summary of the top ten types of pivots to consider:

1. Zoom-in pivot. In this case, what previously was considered a single feature in a product becomes the whole product. This highlights the value of “focus” and “minimum viable product” (MVP), delivered quickly and efficiently.
2. Zoom-out pivot. In the reverse situation, sometimes a single feature is insufficient to support a customer set. In this type of pivot, what was considered the whole product becomes a single feature of a much larger product.
3. Customer segment pivot. Your product may attract real customers, but not the ones in the original vision. In other words, it solves a real problem, but needs to be positioned for a more appreciative segment, and optimized for that segment.
4. Customer need pivot. Early customer feedback indicates that the problem solved is not very important, or money isn’t available to buy. This requires repositioning, or a completely new product, to find a problem worth solving.
5. Platform pivot. This refers to a change from an application to a platform, or vice versa. Many founders envision their solution as a platform for future products, but don’t have a single killer application just yet. Most customers buy solutions, not platforms.
6. Business architecture pivot. Geoffrey Moore, many years ago, observed that there are two major business architectures: high margin, low volume (complex systems model), or low margin, high volume (volume operations model). You can’t do both at the same time.
7. Value capture pivot. This refers to the monetization or revenue model. Changes to the way a startup captures value can have far-reaching consequences for business, product, and marketing strategies. The “free” model doesn’t capture much value.
8. Engine of growth pivot. Most startups these days use one of three primary growth engines: the viral, sticky, and paid growth models. Picking the right model can dramatically affect the speed and profitability of growth.
9. Channel pivot. In sales terminology, the mechanism by which a company delivers it product to customers is called the sales channel or distribution channel. Channel pivots usually require unique pricing, feature, and competitive positioning adjustments.
10. Technology pivot. Sometimes a startup discovers a way to achieve the same solution by using a completely different technology. This is most relevant if the new technology can provide superior price and/or performance to improve competitive posture.

Every entrepreneur faces the challenge in developing a product of deciding when to pivot and when to persevere. Ask most entrepreneurs who have decided to pivot and they will tell you that they wish they had made the decision sooner. In fact, a startup’s runway is really not money, but the number of pivots they can still make. What are you doing to get to the required pivots faster?

A while back, when a startup founder mentioned to me that he wasn’t sure he had the personality to be an entrepreneur, I realized how important that insight was. My first thought is that if you are more annoyed than energized by expert advice, team suggestions, and customer input, then you should probably avoid this line of work.

Actually, it’s more complicated than that, but that’s a good start. After working with entrepreneurs for almost a decade now, I have developed a good “radar” to quickly recognize mentalities that will likely pass the test of investors, employees, and customers.

But it’s easier for me to look in from the outside than it is for you to look out. So here is a list of mentality characteristics which I believe are absolutely necessary for you as an entrepreneur to see in yourself. On the other hand, if you see any of these causing you stress and discomfort, you probably won’t be happy in the role of entrepreneur:

• You enjoy being the visionary leader. Being able to envision what the business and the industry will be like in years to come is a skill that can guarantee that you will be around for the long haul. What makes most success stories in business is not totally reinventing the wheel, but leading the charge to make the current wheel better.

• Sometimes you are creative, sometimes logical. A successful entrepreneur has to come up with innovative ideas, but also turn them into a value-creating profitable business. That requires good amounts of both “left brain” and “right brain” activities, with enough common sense to find the balance.

• Risk energizes you. To really enjoy the ride in the world of entrepreneurship, you need to be able to sustain yourself outside of your comfort zone and have a sense of adventure. Startups never ever go as you anticipated. This is why you need to be ready to go “off the script” and improvise, and enjoy the thrill of victory when it works.

• Actively seek others input. The quicker you learn not to take it personally (and it’s hard when it’s your business and your creation), the more successful you will be. You will always come across people that will criticize you, no matter how great or valuable your product or service may be.

• Motivated yet patient. When you start a business, you need to have the frame of mind that this is what you want to do for the rest of your life. Most people want financial freedom, but they want results immediately, and that is not the case 99% of the time. Most successful entrepreneurs understand that overnight success takes years.

• Jack of all trades. When running a business, you’ll be doing a little bit of everything. You have to be good but not an expert at everything you do, and you have to know when to be flexible and when to ask for help. If you are one to specialize in just one thing, then running a business might not be for you.

If you don’t fit into everyone’s personal view of an entrepreneur’s mentality, please don’t be totally discouraged. Winning businesses have been started by people of every type. Yet overall, the facts are that about two-thirds of startups fail, so think hard before you ignore warning signs.

I’m convinced that if entrepreneurs spent half as much time evaluating themselves and what makes them happy, as they do writing business plans, and visiting with attorneys and accountants, they would be winners far more often.

Finally, don’t forget that the most important mentality aspect is to always do something that you enjoy. Life is too short to be going to work every day unhappy. Beyond that, I believe success is a state of mind derived from confidence, self esteem, and what you really want in life. How strongly do you really want to manage a startup?

If you really want to impress a startup founder as a potential employee, or you want to be a smart investor, you need to know the right questions to ask. These are the questions that get past the hype of a founder “vision to change the world,” and into the realm of real business strengths, weaknesses, and current health.

Some founders try to deflect these questions by talking incessantly, so you often need to be calm, patient, and persistent to get the answers. My advice to founders out there is to not volunteer too much, but be open and honest in the face of direct questions like the following:

1. What is your burn rate and runway today? These are investor slang terms referring to how fast money is being spent, with an implicit question of how long the startup can survive before breakeven or another cash infusion is required. You need to know this as a future employee, since it probably gates how long your new job will last. If the runway is less than six months, with no new source signed, both you and the startup are at risk.
2. How much “skin” is already in the game? The intent of this question is to determine the level of commitment of founders, both cash and “sweat equity,” and how much others have already invested into this plan. Implicit in the analysis of the answers is how much progress has been made for the investment, and how stable the business is now.
3. What’s the total history of this company? Gaps in the history of a startup are big red flags, just like gaps in your resume. If the company was incorporated five years ago, and is still in early stages, with the same founding team, chances are slim that it will suddenly get back on track with you as an employee, or you as an investor.
4. How well do the founders get along with each other, and with the team? The smartest people are often the most eccentric, so some conflict in the ranks is normal. Excessive conflict, lack of communication, or lack of mutual respect is indicative of a dysfunctional team, and eventual failure of the startup. You won’t get this answer from the founder, but it’s not hard to get it by talking to other team members.
5. What’s in this deal for me? Investing in a startup, or joining a startup, is always a very big risk, so the potential return better be large. As an employee, you salary will likely be low, your job security low, so the job title better be large, and the stock options better be large. As an investor, look for an ROI that is 10x your initial investment, based on something more than a dream from the founder. What traction can be measured today?
6. Who do you have as outside board members? The only true outside board or advisory members are not family members, not current investors, but are experienced entrepreneurs with deep knowledge and connections in the relevant business area. They should be asking to speak to you if you are a potential investor or a superstar hire. If you talk to them, they better know the answers to the previous questions.
7. Who is a real customer that I can talk to? Real customers are ones who have paid full price for the product, have it installed and in use, and are still satisfied. Free trials don’t count, betas don’t count, and “excited about the potential” doesn’t count. If there are no customers yet, when will the product ship, and how many times has the date been set?
8. How solid is the intellectual property? Provisional patents, or lawsuits pending, don’t add up to a strong sustainable competitive advantage. You need to know these things before you put your money on the table, or bet your career and your family’s future on this startup.

Again, I’m not suggesting that you go on the attack to get answers to these questions. But don’t let management divert you with comments on your failure to understand “the vision and the big picture.” If you are a potential employee, it probably makes sense to get the job offer first before you tackle some of these, always staying calm and assertive.

In the parlance of an investor, asking these questions and getting answers is the heart of that mysterious “due diligence” process. Now you know. If you are a potential employee, you need to do the same due diligence before you sign on. Every good founder will have done the same on you, before they make you an offer.

If you want people to invest in your idea, then my best advice is first write a business plan, and keep it simple. Don’t confuse your business plan with a doctoral thesis or the back of a napkin. Keep the wording and formatting straightforward, and keep the plan short. For minimum content, see my article “Investors Expect Ten Essentials in a Business Plan.”

The overriding principle is that your business plan must be easy to read. This means writing at the level of an average newspaper story (about eighth-grade level). Understand that people will skim your plan, and even try to read it while talking on the phone or going through their e-mail.

But don’t confuse simple wording and formats with simple thinking. You’re keeping it simple so you can get your point across quickly and effectively to team members and investors. With that in mind, here are some specifics updated from an old article on simple plans by Tim Berry:

1. Keep the plan short. You can cover everything you need to convey in 20 pages of text. If necessary, create a separate white paper for other details and reports. The one-page Oprah plan is a good executive summary, but it’s not enough to get the investment.
2. Polish the overall look and feel. Aside from the wording, you also want the physical look of your text to be inviting. Stick to two fonts in a standard text editor, like Microsoft Word. The fonts you use should be common sans-serif fonts, such as Arial, Tahoma or Verdana, 10 to 12 points.
3. Don’t use long complicated sentences. Short sentences are the best, because they read faster, and reader comprehension is higher in all audiences.
4. Avoid buzzwords, jargon and acronyms. You may know that NIH means “not invented here” and KISS stands for “keep it simple, stupid,” but don’t assume anybody else does.
5. Simple straightforward language. Stick with the simpler words and phrases, like “use” instead of “utilize” and “then” instead of “at that point in time.”
6. Bullet points are good. They help organize and prioritize multiple elements of a concept or plan. But avoid cryptic bullet points. Flesh them out with brief explanations where explanations are needed. Unexplained bullet points usually result in questions.
7. Don’t overwhelm the plan with too many graphics and flashy colors. Pictures and diagrams can effectively illustrate a point, but too many come across as clutter.
8. Use page breaks to separate sections. Also to separate charts from text and to highlight tables. When in doubt, go to the next page. Nobody worries about having to turn to the next page.
9. Use white space liberally, spell-checker, and proofread. Include one-inch margins all around. Always use your spell-checker. Then proofread your text carefully to be sure you’re not using a properly spelled incorrect word.
10. Include table of contents. No investor likes searching every page for key data, like executive credentials, or exit strategy. Most word processors these days can automatically generate a table of contents from your section headings. Use it.

Investors hear from too many entrepreneurs that envision a great business opportunity, but don’t have any written business plan at all. They think they can talk their way to a deal. It won’t work. On the other end of this spectrum are entrepreneurs who present long product specifications with a few financials at the end. This is a failing strategy as well.

If you’re not the type who can connect with people based on a simple message, told succinctly, then hire someone who can. In fact, simplicity and readability is one of the most effective strategies for selling even the most complex proposal. A business plan that is easily understood and looks professional is already half sold. Simple is not stupid.

Your startup is gone, it’s never coming back, and you are in mourning. An entrepreneur whose business fails grieves similarly to anyone who has lost a loved one. The pain of losing a business is not only about a significant loss of income, but can send an entire identity into turmoil.

Most entrepreneurs define themselves by their business projects. They calibrate self-worth by what they accomplish or do not accomplish. In other words, if a project fails, then they are failures. If a project takes off, then they are wonderful. It’s the universal entrepreneur reaction.

The loss of a startup is very much like losing your job, as characterized by Debbie Mandel a while back, so don’t be surprised if you experience:

• Sleep disturbances, and difficulty waking up in the morning
• Eating and craving the wrong foods or stimulants
• Fatigue
• Irritability
• Cocooning at home
• Loss of ambition; the perception that there are no other opportunities out there
• Submissive or abusive behavior

The knee-jerk reaction is to ask, “Why me?” or to cast the blame on the powers that be: “The economy killed me,” “My partner was a jerk,” or “Investors stole my business.” However, the blame game is an energy drain and will leave you without the energy to move on.

We have to assume responsibility for our actions, rather than play the part of a victim. Try answers like: “My timing was wrong,” “I picked the wrong partner,” or “I’m better at bootstrapping.” Everyone will respect your integrity, and you will be ready to tackle the world again more quickly.

Similar to Dr. Kubler-Ross’ five stages of grief for a death, losing a business requires processing each stage in order to adapt to the changing daily activities. Everyone falls down, but not everyone picks himself up. Here are some suggestions to survive the normal stages and turn failure into triumph:

1. Denial: The psyche needs to protect itself and absorb what has happened little by little, instead of all at once. Recite the business loss story over and over to take the sting out of it; distract yourself with positive friends, outdoor activities or your community center.
2. Anger: Release anger in a healthy way through exercise, visualization and breathing. Exercise intensity or length of time should correspond to your anger level. Reinterpret the scenario with compassion; be kind to yourself, and everyone else.
3. Bargaining: This is “the what if or I should have” stage. Be aware of negative thought streams to objectify them, and have a logical discourse with your thoughts. Then you can invest your energy into moving on.
4. Depression: The sadness sets in and the feelings need to come out. Maybe you need to have a good cry. Laughter is always a wonderful pick-me-up. It will release feel-good chemistry. This will help reset a realistic optimism. Tap into positive friends.
5. Acceptance: This is the point where we think and feel that the loss really happened. We accept the blow to our self-esteem and the disappointment. This is the time when we are ready to rebuild our balance and confidence.

It is how we handle this failure that will determine our next success. Because we are acquainted with loss and failure, we will not fear it again like the first time.

The best way to stop mourning a failed business is to start another one, using all the lessons learned from the previous experience. You may even conclude that losing that particular startup was the best thing…

I’m not much of a television person, but my family loves one of the popular “reality” shows, called “So You Think You Can Dance,” so I’m sort of forced to watch it every week on Fox. Over time, I’ve concluded that even startup entrepreneurs can learn a few things from this one. Of course, you must ignore the pomp and circumstance of the TV staging.

I’m on the selection committee of our local angels group, so I know that every CEO approaching our group for funding goes through ten minutes of creative “dancing,” to give us a basis for selecting startups that are most qualified and “ready” to proceed to the next level. If selected, they go through it again in the real meeting of 20-40 investors. It’s tough and not fun for either side.

The business “dance” obviously has different particulars than TV dancing, but there is serious business and artistry involved in both cases. Here are some observations I can offer to startup founders looking for funding, analogous to the aspiring dancers on the show, hoping to move to the next level:

• Judges evaluate the person first. Investors want to look the CEO in the eye, and be convinced that he or she can lead the company to success – it’s more important than the creative idea. On the TV show, I’m sure you all see contenders that have lost before they start, just because they lack the enthusiasm, presence, and confidence of a winner.
• You only get a few minutes to make the case. In fact, your case is usually won or lost in the first couple of minutes. In business, as on the show, wins can turn to a loss if you bungle or skip relevant basics in the short time allotted. Everyone wants a longer time or second chance to win you back, but it would rarely ever change anything.
• Skip the bravado, but don’t be immobilized with fear. I subscribe to a quote from another TV show too old to mention, where the hero said “He who is not afraid – he’s a fool.” Let your adrenalin help you deliver an outstanding performance, but trying to wow investors with jokes or stories of unending success will not move you up a level.
• Play to the audience in front of you, and adapt your message. If the panel is looking for value and return for the investor, skip the technology pitch, or customer sales pitch. Some entrepreneurs give the same talk, no matter what the audience. If you have only one dance, don’t be surprised if it wears thin quickly with the judges.
• Dress appropriately and professionally. Under-dressed may impress on TV, but it’s better to be over-dressed in the business world. Business casual is the standard for investor presentations. Remember that most investors are from a generation where faded and torn jeans were on the wrong side of success in business.
• Practice, practice, practice. Even if you are an experienced dancer, you practice your craft with renewed determination before a big show. Business entrepreneurs need to do the same thing, maybe in “presidential debate” style with their team for critics, until they master the timing and can handle every unanticipated slip or challenge.

Even though I’m certainly no expert on dancing (I’ve taken Beginning Ballroom Dancing three times now), most of the reviews I have seen call the TV show realistic, with the panel of judges giving reasonable critical and technical feedback. That’s a welcome relief from Donald Trump’s pompous calls on “Celebrity Apprentice.”

Depending on one’s perspective, this is either the perfect time or an awful one to start a business. So, if you plan to face a business version of the dancing challenge soon, watch the show and check the recommendations above. Show some energy and enthusiasm, and don’t let the technical steps required overshadow your creativity. Break a leg!

Once you are able to achieve some real “traction” with your business (paying customers, revenue stream), it may seem the time to relax a bit, but in fact this is the point where many founders start to flounder. All the skills and instincts you needed to get to this level can actually start working against you, and you can fail to scale.

Investors often say that successfully navigating the early stages of a startup requires lots of street smarts, guts, and luck. For successful scaling of the business, there has to be a transition to “executive” mode in the more traditional business sense. Certain behaviors between these two modes are incompatible, and can cause real problems.

Way back in 2002, John Hamm published some early work on this subject in “Why Entrepreneurs Don’t Scale” in the Harvard Business Review. Here is my interpretation of that work, incorporating my personal experience, identifying some strengths of an entrepreneur during early startup stages which can become a problem for scaling:

• Perseverance. This is generally a required quality for a successful entrepreneur, but it can turn into an unhealthy stubbornness during the scaling stage. The key is to make decisions from data and feedback, once your business has real customers and real products. Trusting your gut at this stage isn’t good enough.

• Absolute control. During the early stages, you are the company, processes are not documented, you don’t have much help, so you need a fanatical attention to detail. To scale the business, you have to find people who can do the tasks, and delegate appropriately. Control freaks are doomed to failure.

• Individual loyalty. Most founders form very close relationships with the small team that gets the startup off the ground, and that is important. Scaling requires that you expand the team, probably with people you haven’t known. You also have to deal with the inevitable personnel challenges, even within the original team. Total loyalty can be toxic.

• Isolated and insulated. Working in isolation is fine during the creative phase of the startup, where the founder is often the designer and architect, as well as the builder. Now this same individual has to step into the spotlight, and meet with customers, analysts, and investors. Insulation from the real world will not work during scaling.

• Tactical versus strategic. Early stage startup founders have to think tactically. Even business school courses don’t teach you to operate strategically, deal with people objectively, and create loyalty within a diverse workforce. These are areas where past stumbles are the best teachers. Investors don’t want to fund your stumbles.

Every founder moving into the executive role has to step back and take a hard look at what works, and what doesn’t work. The best ones can do that, and they adapt. Investors and advisors see this as a critical part of their role, and often are the “bad guys” who ask the founder to step aside, while they bring in a “more experienced” CEO to take over the helm.

Unfortunately, some founders won’t adapt, and won’t step aside. Even if they are pushed out, they can cause terminal damage to the business by negative versions of their strengths, now seen as stubbornness, unwillingness to give up control, testing loyalty, and hiding from reality.

Thus my best recommendation, if you want to scale and to survive, is to open up and work closely with an “outsider” that you trust, such as a respected board member, a coach, a mentor, or an investor. The key is to expedite your learning, and take deliberate steps to confront your shortcomings. That way, you will become the leader your company needs, learn to stop floundering, and begin to fly.

A spin-off is merely a startup spawned by a mature parent (company), and conventional logic would dictate that it has a survival advantage over the lowly startup. Yet spin-offs seem to most often fail to launch in the real world. I was part of one myself a few years ago, and felt the pain, so the phenomenon has intrigued me ever since.

My first thought is that spin-offs are like struggling adolescents with over-protective parents. When companies spin off a division (sometimes called a demerger or deconsolidation), they naturally want it to grow and succeed on its own merits, just as they have. But like protective parents everywhere, they tend to shelter it in ways that stunt its growth in the long run.

Before we look at my specifics, I should mention some of the reasons companies make the spin-off decision in the first place. Contrary to popular belief, according to a report by A. T. Kearney, these go well beyond an organization getting rid of its “problem children:”

• Deconsolidate—shed non-core functions to focus on core competencies. An example would be Time Warner spinning off AOL—to end a disastrous, dot.com-era marriage.
• Mingle and learn from the startup culture and new technology – without losing control. Foreign companies in the US like to use spin-offs to find expansion opportunities.
• Unlock shareholder value, which the spin-off can do as an independent entity. They may not be so constrained by monopoly fears and Sarbanes-Oxley controls.
• Grow faster, which a spin-off can do outside the parent company. Airlines, for example, have difficulty scaling up through mergers and acquisitions (M&As), but they can spin off their maintenance businesses and let the spin-off do the M&A in its own field.
• Grow in new dimensions from the parent company. Service operations such as call centers can grow far beyond their parent companies, especially if their services are more generic.

In retrospect, as in the case I was part of, I believe there were several areas in which the parent company consistently fails in their discipline:

• Rewarding without earning. The parent company guaranteed the spin-off a revenue stream and provided incentive bonuses based on artificial objectives, rather than competitive or market driven targets. The guaranteed revenue and incentives were only loosely tied—at best—to the spin-off’s performance.

• Fostering dictatorial leadership. Effective management skills in a startup are actually quite different from those in a large enterprise. The dictatorial leaders who survived and prospered in the enterprise parent, were ill-suited for the collaborative and highly adaptive spin-off and startup requirements. Yet they had “earned” the right to run an autonomous unit, and were not easily dislocated.

• Supporting them for an undefined period. Parent companies provide services or infrastructure to the spin-off at below-market prices or for an excessively long period of time. In the reverse direction, this “support” carried the high overhead that is standard in the enterprise, but not financially sustainable in the spin-off.

In my view, fostering successful spin-offs, like raising adolescents, often requires tough love, embodied in the tough financial objectives and a firm timeline that startup investors impose on their charges. No free passes, and no bailouts.

In most other ways, the success of a spin-off depends on the same factors that are critical to a startup, but sometimes get forgotten or taken for granted as a corporation matures. These include a clearly articulated vision and business strategy, communicated from leaders in a way that heightens motivation and lessens team anxiety of the unknown.

For entrepreneurs, this analysis should be a positive message, but it should also be a wake-up call to the overriding value of leadership and effective communication. For all of you who all too quickly tie your business success or failure to funding, or the lack of it, think again. Sometimes it helps to be “hungry” in that respect.

Every so often a promising entrepreneur seems to freeze in the oncoming headlights and gets run over by his competition. Why is it that his idea which seemed so fundable only months ago fails to dazzle investors today? The team is the same. The company’s market is the same.

The only difference might be the start of another recession like the last one, resulting in a lower valuation for Internet ventures, and that makes all the difference. Herein lies a key principle of decision making – “Any decision is better than no decision.”

Even better than any decision is a good decision made quickly. What separates good decision-making from bad decision-making? H.W. Lewis, author of “Why Flip A Coin? The Art and Science of Good Decisions,” summarizes good decision making as:

• Identifying all reasonable actions.
• Listing the potential consequences of each action and the utility of each consequence.
• Evaluating the probability that each action will lead to a given consequence.
• Choosing the action quickly which has the best expected outcome or positive contribution.

These points may sound obvious, but the process is certainly contrary to the popular “shoot from the hip” approach that is practiced by some entrepreneurs. The idea here is following a process can actually force you to think. You don’t have to do it perfectly to stay ahead of the game.

Beyond not thinking, another failure is not really knowing what you want to achieve through the decision. This is a problem with many product-based companies. Their goal is to create profitable products, but too often they don’t research what their customers really want, and what they are willing to pay. It’s difficult to create a high-demand product by guessing.

In all cases, be sure to distinguish between ideas and opportunities. A business idea is not a business opportunity until it is evaluated objectively in the context of a specific business plan. I like focus, but if you focus too early on only one business idea without a plan, you are more likely to become attached to it, and lose your objectivity.

Some entrepreneurs seem to know instinctively that a certain product or service has great potential for success. This comes from much industry experience, and is not irrational. On the other hand many unsuccessful would-be entrepreneurs are unsuccessful precisely because they were irrational, so avoid that pitfall.

Decision-making in the face of risk is one of only a handful of unique characteristics that successful entrepreneurs possess. After all, the very nature of a true entrepreneur is one that embraces risk. Often this risk-taking is mistaken in part to be “the reason” the entrepreneur succeeds in their business.

Some decisions involve risk, at times a great deal of it, but there are a greater number of decisions that can be thought through and analyzed to determine on some basic facts, whether or not they are good or bad ideas. Smart entrepreneurs always use facts, when they have them, rather than their gut.

If you are someone who never uses your gut, and exhaustively researches a purchase prior to making it, you are most likely not cut out to be an entrepreneur. This type of decision making, careful and cautious, is certainly a great attribute to have in the corporate business world, but it’s a killer in startups.

Making no decision doesn’t work in any business. So your first test here is to see if you can decide which category of decision maker you best fit. The headlights are approaching…

You Never Learn Anything While You are TalkingBuilding a business is all about building relationships, and one of the most important elements of a relationship is effective communication. Communication doesn’t happen unless both parties practice the art of effective listening. Check to see if you are practicing the key disciplines of listening, as outlined by Brian Tracy in “No Excuses: the Power of Self-Discipline”:

• Listen attentively. Listen as though the other person is about to reveal a great secret or the winning lottery number and you will hear it only once. Since you always pay attention to what you most value, when you pay close attention to another person, you tell that person that they are of great value to you. You will be remembered.

• Pause before replying. When you pause, you avoid the risk of interrupting the other person if they are reformulating their thoughts. It also enables you to hear not only what was said, but what was not said. Then you can respond with greater awareness and sensitivity.

• Ask for clarification. Never assume that you automatically know what the other person is thinking or feeling. It is when you ask questions and seek clarity that you demonstrate that you really care about what he or she is saying, and that you are genuinely interested in understanding how he or she thinks and feels.

• Feed it back. The acid test of listening is to see if you can paraphrase what you heard in your own words. It is only when you can repeat back what the other person has just said, in your own words, that you prove you are really listening, and understood the message. For all feedback, be sure to mirror the other person’s pace and communication style.

Even good communicators average only about half their time listening. Yet experts assert that most people listen with only about 25 percent of their attention, hear about 25 percent of what is said, and after two months, remember only half of that. That’s not effective communication.

There are also things you can do to encourage others to listen to you, when you do speak, to improve the overall communication:

• Lower voice, no emotion. This causes the other party to listen more carefully, and facilitates a more pleasant and more effective conversation.

• Adapt to listener interests. Use analogies and terminology that are easy for the other person to relate to, and they will respond with attention and higher comprehension.

• Choose the right environment. Wait for the right opportunity, when you can be easily heard and understood, and the listener is in the right mood.

• Address people by name. This gets their attention and focus. Sometimes it helps to bring others into the conversation to support your input.

In business, you need to always be listening – to customers, to advisors, to investors, and to your team members. When you do talk, concentrate on making it effective. You don’t have the time to have things repeated to you four times before you really hear and understand them.

Responsible, effective listening is a rare skill that will give you a sustainable competitive advantage over your peers and your competitors. It’s also a skill that can be developed with practice. You can never know enough in business, so even top entrepreneurs find time to listen. Are you learning anything these days?

I’ve often said that creating and building a business is not a one-man show, even though it usually springs from the mind and determination of one person – committees don’t start successful businesses. But taking an idea to a business success requires many people to work together effectively, and that requires entrepreneurial leadership.

Leadership is not a skill one is born with, but it can be learned and honed from experience and failures. We all start with what researchers term the “knowing-doing gap.” We know what should be done, but we don’t know how to get it done. Many people assume the solution is to find the recipe, or leader’s checklist, and follow it methodically.

I think it takes a few more steps to “activate” the checklist and fruitfully engage in the activities that lead to leadership success. Michael Useem of Wharton, in his new book, “The Leader’s Checklist,” outlines 15 mission-critical leadership principles, and also includes six avenues of learning for new entrepreneurs to activate their leadership skills:

1. Study leadership moments. A first step is to become a self-directed student of leadership. This study can take many forms: reading leaders’ biographies, witnessing leaders in action, and joining leadership development programs. What’s critical is witnessing how others have worked with a full checklist or fallen short, often a powerful reminder to examine whether you yourself are employing all the necessary principles.
2. Solicit coaching and mentoring. Solicit personal feedback from individuals who can provide informed, fine-grained advice on not only the leadership capacities that you already exhibit but those that require better display. It is hard to correct what you do not know you are not doing.
3. Accept stretch experiences. Ask for and accept new responsibilities outside your comfort zone. By testing fresh territories and experiencing the setbacks they can bring, you can grow to appreciate the shortfalls in your own leadership style even as you learn to more consistently apply it.
4. Conduct after-action reviews of personal leadership moments. Look back on leadership actions just taken, asking what worked, what was not invoked, and even what was missing from the original checklist. Through such efforts, entrepreneurs who actively pursue feedback from their team and their customers are on the road to success.
5. Endure extremely stressful leadership moments. Transform a chilling experience into a learning opportunity. We often learn as much from setbacks as successes—sometimes we learn even more from setbacks than successes—and with unflinching study of the stumbles, you have a greater readiness to apply real leadership the next time.
6. Experience the leadership moments of others. The final step is to vicariously or directly experience a leadership moment of a mentor or peer. When you walk in another’s shoes during a critical test of leadership, you will build a better appreciation for when and how to invoke your own leadership elements.

The core principles of leadership for every entrepreneur include articulating a vision, think and act strategically, act decisively, communicate persuasively, motivate the troops, build relationships, and building leadership in others. Of course, these need to be customized for every culture and every business environment.

In every environment, there is a final and most vital leadership principle – common purpose comes first and personal self-interest comes last. In business, it appears in Jim Collin’s appraisal as one of the defining qualities of those who lead their companies from “good to great.”

Entrepreneurial leadership has its greatest impact in times of uncertainty and change, like the present. How wide is your knowing-doing gap, and how actively are you working to close it?

Everyone knows that that startups are risky, but they also expect that the job will be exciting and potentially very lucrative (think early employees at Microsoft and Google). Yet we have all heard stories about the high turnover, unstructured work environment, lower base pay, and unpredictable expectations from the top.

Assuming you are lucky enough to get hired, what can you do to survive, and even stand out above the rest in this environment? Here are some tips from a recent book by Harvey Mackay, titled “Use Your Head to Get Your Foot in the Door,” which work even better in a startup than they do in a bigger company:

1. Make yourself indispensible. The truly indispensible person in a startup is a problem solver, because every startup has plenty of problems. Very few people are willing and able to take on any challenge, and make it work. You can’t outsource that one.
2. Volunteer. This is related to the first item, but more specifically means the willingness to take on tasks that others could and should do, but hate to do. There will always be a place in this world for the person who says, “I’ll take care of it.” And then does it.
3. Stick out and shine. Many employees like to keep a low profile, thinking that will minimize their workload, but it also maximizes their risk. It pays to be visible in any way that’s positive for the company. It could be managing the company picnic, or being the office “go-to” person for computer questions.
4. Don’t hang out with gloom and doom. Some people love to gripe about management, the pay scale, and career opportunities. Even if you never utter a negative word, don’t tag along with this bunch, or you will be written off as a silent sympathizer.
5. Be a builder … and a rebuilder. When the organization changes, be the first to help the new organization work, even when it costs extra hours and sweat. If you see a customer service problem hurting the company, step up proactively with a proposal to fix it.
6. Always position yourself as number two to your next career opportunity. Initiate activities that improve your chances of being the chief’s backup. Then focus on ideas that will likely get your boss promoted. You will likely be the dark horse that fills the slot.
7. Persevere. In a rotten economy, it’s so easy to throw in the towel. Executives always have their eye out for people who do the opposite and engage themselves in tough challenges. These are the ones who stick with finding a solution even after many reversals.
8. Educate yourself one notch up. Study the resumes of managers on the next level and do your best to match or even surpass their career credentials. Not just degrees, but loading up on books, business journals, and blogs that your top executive favors.
9. Pay attention to your image. You attitude and the clothes you wear assert your authority to subordinates, peers, the media, and customers. Your company is spending real money on its image, so make your own personal “brand” an asset to the company.
10. Think big picture. Some issues aren’t worth winning. You can win the battle and lose the war. If you boss takes credit for one of your ideas, use it as an opportunity to point out how you think alike, rather than berating him in public for the lack of attribution.

In the real big picture, if your prime focus is keeping your current job, you are already in trouble. You should be thinking about your promotion to the next level in this company, the next level in the next company, and then on to starting your own company. The satisfaction of creating jobs is a lot greater than keeping this one.

A term I’m hearing more and more these days is “social entrepreneur.” In the simplest of terms, these are people who seek to generate “social value”, rather than profits, and use traditional business principles to create and manage a venture to make social change.

On the surface, this sounds like entrepreneurs who want to build a non-profit organization. Yet the term seems to be more often associated with people whose work is targeted toward long-term socio-economic change. Think Margaret Sanger (birth control) or Mahatma Gandhi (non-violent), as opposed to the leaders of the Cancer Society or Goodwill Industries.

Whether the objective is to generate profits or social capital, the common element for all entrepreneurs is the recognition that there is a problem which needs solving, or there is an opportunity to improve the status quo.

The vision is always to be a change agent, to invent and popularize new approaches, and to persuade people to take a leap forward. In every case this requires a committed ultimate realist with the determination to persist in the face of daunting odds.

Another way to distinguish between the two types of entrepreneurship is by identifying what social entrepreneurship is not:

• Not a fundraising strategy for nonprofits. A social enterprise may actually be profitable, or it may be non-profitable, but the generation of funds is deemed secondary to success on the environmental or social issues in the vision. Generating funds should not be the highest priority.

• Not about profit before social impact. A social enterprise must be financially sustainable only as a means to the end, which is its social or environmental impact and rate of change. The business entrepreneur mission is profit always, social impact maybe.

• Not a new definition for the nonprofit sector. The evident and real purpose of the social enterprise must be to make the world a better place, through the operation of the business. This certainly also has potential for enhancing the vitality of the nonprofit sector, but it doesn’t move it to a higher moral plane.

• Not an investment opportunity for business investors. I still get inquiries about how to find angel investors and venture capitalist to kick-start a social enterprise. Funding such an enterprise is in the realm of philanthropists, government grants, or bootstrapping. Business investors are looking for a financial return, not a social capital return.

• Not about entrepreneurship in the government sector. So far, the largest source of services and funding for social enterprises and social entrepreneurs has been federal, state, and local governments. Yet the enterprises are not government enterprises, and the process for success makes them good business enterprises.

• Social entrepreneurship is not socialism. The socialist doctrine dictates compulsory taxpayer contributions to finance social initiatives, while the social entrepreneur uses the standard business model and innovative approaches to attract customers, fund activities, and accomplish social change.

The common element in both types of entrepreneurship is that an entrepreneur rather than an administrator is required. This is someone who is willing and able to create a new enterprise, based on an innovative idea, and is willing to assume total accountability for the inherent risks and outcome.

So, if you are an entrepreneur at heart, but you are driven by a higher cause than making a profit, social entrepreneurship may be for you. It is an emerging field with diverse and shifting interpretations, but most agree it’s really about making the world a better place. There is certainly plenty of opportunity in that space.

I’m sure you have all been frustrated at least once at not being able to get the Internet domain name you want for your company. Who owns all of these names, and should you ever buy one for a premium? The simple answer is that if you want to be found and remembered on the Web, the perfect domain name can easily be worth several thousand dollars.

Snagging an unclaimed great one is almost impossible these days because domain investors gobbled up a lot of the catchy real estate several years ago. Kevin Ham was the most powerful dotcom mogul you’ve never heard of in 2007, reports Business 2.0 Magazine. Here’s how the master of Web domains built a $300 million empire of over 300,000 domain names.

Early on, he wrote software to snag expiring names on the cheap. He was one of the first to realize that people can register a name and return it without cost after a free trial. He grabbed hundreds of thousands of names, and returned many. He’s also the man behind the domain world’s latest scheme: profiting from millions of people who mistakenly type “.cm” instead of “.com” at the end of a domain name.

He also capitalized on the trend to try “direct navigation,” and millions do it. Need wedding shoes? Type in “weddingshoes.com” – a site that Ham happens to own – and you’ll land on what looks like a shoe-shopping portal, filled with links from dozens of retailers. Today there is big money in this aftermarket, where these valuable names are driving prices to new heights.

The difference is that hardly any .cm names are registered, and the letters are just one keyboard slip away from .com, the mother lode of all domains. Ham established a relationship with the Cameroon government and did the work to route the traffic his way. He is now on a campaign to win Colombia (.co), Oman (.om), Niger (.ne), and Ethiopia (.et) as well.

Frank Schilling, who recently moved into the number one spot in this arena, had the guts and foresight to sweep up names shed during the dotcom bust, and is now the landlord of some of the most valuable real estate on the Web, estimated to be in the $500 million range.

But that’s all history, and you have to live with it. So as an entrepreneur, here are the steps to get the name you need for your business:

1. Pick the right name. This is actually the hard part, and is easier said than done. Review my previous article on this challenge – “Ten Keys to a Killer Name For Your Company.”
2. Register the name if available. Domains cost between $7 and $15 per year at GoDaddy.com or Register.com, if nobody already owns it. It’s a good idea to also buy between three and 20 names that are close to your primary address or that could be confused with it.
3. Otherwise, find the owner. But with 105 million names already in use, chances are someone else already snagged it. First you have to find the current owner, using Domain Tools, or other lookup functions available on the net.
4. Negotiate for the name. The median price is now $5,000 for an average name, to $16 million paid for Insure.com a couple of years ago. For these prices, you should consider an intermediary like Moniker.com or Escrow.com – for a $250 to $500 fee – to help ensure that sellers truly transfer title to the address. If the name is perfect, pay the price.

Whether by crafting a great new name or wresting one from a previous owner, every new business needs to master the domain game. With the current explosion of sites, it’s usually better to leverage search engines than to build a new mountain on your own through advertising.

The measure of an entrepreneur used to be the number of real friends claimed, but times have changed. Now the measure is how many hits one has on a Google name search, factored by some formula, like the sum of all positive messages minus 100 for every negative message. If you don’t define yourself effectively, the Internet will do it for you in ways you never imagined.

That’s the reason every good parent should be coaching their child from birth to avoid posting all the naughty things on social networks that can come back to haunt them later. To illustrate the point, here is a true story posted by Seth Godin a while back:

“A friend advertised on Craigslist for a housekeeper.

Three interesting resumes came to the top. She googled each person’s name.

The first search turned up a MySpace page. There was a picture of the applicant, drinking beer from a funnel. Under hobbies, the first entry was, “binge drinking.”

The second search turned up a personal blog (a good one, actually). The most recent entry said something like, “I am applying for some menial jobs that are below me, and I’m annoyed by it. I’ll certainly quit the minute I sell a few paintings.”

And the third? There were only six matches, and the sixth was from the local police department, indicating that the applicant had been arrested for shoplifting two years earlier.

Three for three.

Google never forgets.”

It doesn’t take much imagination to extend this example into your own business world, with potential customers and business associates checking you out. Can you imagine how many positives and how many years it will take to offset the impact of three negative posts entered by the entrepreneur herself in some spirited moments?

In reality, it’s not just the Internet that captures everything we do – just look around you at the cameras in public buildings, banks, and everyone’s cell phone. Remember the news with the videos of the latest celebrity exploits, or the cell phone photos that are snapped of every public and private activity and printed in magazines.

There’s still a bit of the “wild west” left in the Internet, especially as it relates to social networking sites, so keep your wits about you as you explore and act. Don’t be tempted into thinking that can safely relieve your tensions or aggressions in the anonymous massive numbers on Twitter, Facebook, or LinkedIn.

In case you think the number of friends is a meaningful measure, remember that social networking has also totally destroyed the meaning of the word “friend.” Teenagers have hundreds of friends on Facebook by the time they are sixteen, most of whom they have never met face-to-face, and other people collect thousands on LinkedIn. Many of the top Facebook users boast proudly of their “whale” status (5,000 friends or more).

I’m not here to argue whether it is right or not. Just recognize that it is what it is. So do your business networking and social networking with your eyes wide open. In fact, if you live your business and personal lives that way, you might actually hope that someone is looking over your shoulder, and catches you in a glowing moment. Be known for your strength. Then you can be happy that Google never forgets.

It looks like women have caught up with men in numbers in the workplace. For the first time in history, women in the USA now outnumber men in the workforce, and there are now more women in supervisory positions than there are males. The question is whether they will handle the downside of working any better than men.

According to an article by Ella L. J. Edmondson Bell, PhD, titled The 21st Century Workplace — Are Women the New Men?, the economic downturn has hit men harder. They held nearly 80 percent of jobs that have been lost during what is now being called the “mancession.” Will women now inherit the stress, pressure, exhaustion, burn out and heart attacks commonly associated with male leaders in business?

Some predict that this new female-dominated workplace will mean a softening of the corporate culture, with more benevolent leaders. Others foresee just the opposite. Ella says many women don’t want to be seen as “soft” — and others simply aren’t. No one would call Carly Fiorina, the head of Hewlett Packard from 1999 to 2005, a wilting lily. According to her memoir, Tough Choices, she was sometimes referred to as Chainsaw Carly.

All this is especially relevant on the entrepreneurial side, since statistics show that women are starting businesses at more than twice the rate of their male counterparts. Some would argue that the growing success rate of women entrepreneurs shows that they are resourceful, and better able to succeed, despite the odds.

While I’m sure we will continue to see progress on the female side, I predict that they will struggle with the same major challenges faced today by men. These include:

1. Funding your dream. Raising money is hard, whether you are counting on friends, investors, or banks. I rarely see women at angel investment groups, either asking for money, or offering to fund new ventures. Men seem more focused on this one.
2. Need for increased confidence and mindset skills. Many women and men are paralyzed by perfection, plagued by pessimism, and the need to satisfy others, rather than themselves. We need more women leaders.
3. Motivation to succeed. Every entrepreneur needs to love what they do, and believe so strongly in their product or service that they can weather the tough times. On this one, it’s easy to spot the ones with passion, from either gender.
4. Manage time and priorities. Women, often more than men, try to do too much. It’s hard to balance the continual demands of the business, personal relationships, and home life. Every entrepreneur needs to prioritize the important tasks ahead of urgent tasks.
5. Never stop learning. After you start your business, the learning really begins. True entrepreneurs look at failures as their best learning experiences. Networking, and using your network is the next most important element of learning.

I don’t see any challenges which are so gender specific that they can’t be overcome by any entrepreneur. Yet I don’t think women should be convinced that the battle for equality is almost over. There is still the question of why there are so few women in high places, and why the average income for women in business is about 68% of men’s income.

What I am hoping is that women will not just be the new men, and suffer from the same maladies and limitations. I’ll be looking for women to create the “new business culture” that every worker wants – better role definitions, more effective and productive leadership, and better work-life balance. That would make women entrepreneurs the new women, rather than the new men!