Most of the entrepreneurs I know realize they have some bad habits, like maybe procrastination or not listening well, so they focus on dropping these. New studies indicate that a more productive approach would be adopting new good habits and behaviors that clearly move your business forward, like good time management and implementing customer recommendations.

These two approaches may sound similar, but actually require different skill sets. For example, learning to stop smoking may leave you with a gap to fill, but finding activities that remove your urge to smoke really gets you where you want to be. I recommend the following six techniques for solidifying good habits from “The Compound Effect,” by successful entrepreneur and writer Darren Hardy:

1. Set yourself up to succeed. Any new habit has to work inside your life and lifestyle. If you want personal healthy think time at a gym, don’t find one that is thirty miles away, because you won’t go. For better time management, tell everyone that you will be closing the door to you office during specific times of the day, and ask for their support.
2. Think addition, not subtraction. Instead of focusing on what you have to “sacrifice,” think of what you can “add in” to improve your business effectiveness. For example, most founders find that adding good customer discussions has a more satisfying payoff than just eliminating expensive marketing consultants.
3. Go for a public display of accountability. Put your commitments of a new good habit, like rewarding good performance, on public display by announcing a recognition event to be held each week in the office. Now you will be motivated to follow through, and the whole team will give you the positive feedback you need to keep it going.
4. Find a success partner. There are few things as powerful as two people locked arm in arm marching toward the same goal. If your bad habit is staying late at the office, link with one or more of your other key executives to retire to the gym at 5 pm sharp three times a week. You will all get out of the office, feel better, and make more decisions.
5. Use both competition and camaraderie. There is nothing like a friendly contest to whet your competitive spirit and immerse yourself in a new habit with a bang. It’s easy in a new business to inject a fun rivalry and a competitive spirit into improving your marketing programs, or improving production cycles.
6. Celebrate each small step of success along the way. All work and no play is a recipe for backsliding. You’ve got to find little rewards to give yourself every week or every day, even something small to acknowledge that you’ve held yourself to a new behavior. Measure results and promise yourself a real pot of gold at the end of the rainbow.

Change is hard. That’s why so many people don’t either give up their bad habits, or adopt new good ones. Successful entrepreneurs are the extra-ordinary ones that make the changes anyway. They just do it, and keep doing it, and the magic of compounding rewards them handsomely.

Another challenge is that your brain is not designed to make you happy. It is programmed to seek out the negative and optimize survival, and is always watching for signs of “lack and attack.” That’s why every entrepreneur spends so much time worrying about failures, lack of customers, and competition. We have to teach our minds to look beyond these, through discipline and being proactive about what we allow in.

But learning and discipline without execution is worthless. In the big picture, the habits you develop and nurture shape your destiny. Little everyday habits will take you either to the life you desire or to disaster by default. Spend more time instilling good ones, and the bad ones will disappear for lack of attention, making you a more savvy and successful entrepreneur.

Most startups dream of attracting a celebrity endorsement, and assume that it will take their startup to the stars. There have been some “famous” recent successes in this regard, such as Charlie Sheen using Twitter to promote Internships.com, as well as some failures, including MyFavorites.com using celebrities to promote the books they are reading.

Startups using celebrities is such a hot topic these days that Gary Vaynerchuck, noted author and entrepreneur, has coined a new term “star-ups” for the phenomenon. New books are popping up on the subject of how and when to seek celebrity endorsements, including one I just finished, “Will Work for Shoes,” by Susan J. Ashbrook, who has courted celebrities for twenty years.

She helps you decide if celebrity endorsement is a viable and reasonable alternative for your business, and how do you go about selecting and approaching the right celebrity. Following is a summary of the challenges that Susan and other “experts” have outlined:

1. Finding a match between your offering and a celebrity.That means finding the perfect person for your brand. Their values need to match your brand image, including the perception of quality, educational value, as well as recognition by your target demographic. Be sure the celebrity really believes in your product.If you are selling to young consumers, Miley Cyrus or Justin Bieber may be high on your list. For technology products, even well-recognized investors, such as John Doerr or Ron Conway, are seen as celebrities, and startups supported by these players are automatically elevated to a new level of credibility.
2. Funding the relationship.Celebrity endorsements don’t come cheap. Does your marketing budget allow you to roll out the red carpet to meet celebrity lifestyles, including the investment in appearances, videos, and perks? Big fat advance checks and long-term royalties are often the norm.On the other hand, maybe you can emulate Priceline.com, whose official spokesperson, William Shatner, agreed to do the spots for free in exchange for stock in the company. The arrangement turned out to be quite profitable for Shatner, who has since made approximately $600 million from Priceline.com, despite the dot.com bust.
3. How to find and connect with the celebrity you want. As with all aspects of business relationships, funding, and partners, nothing beats a pre-existing relationship, or at least a warm introduction. Beyond that, the place to start is with publicists, agents, and other handlers. Major groups include Rogers & Cowan, Baker/Winokur/Ryder, and 42West.One of the inside secrets of finding and meeting the right people is working with charities. Celebrities have a passion for giving, and they respect people and companies who share their passion.
4. Potential for celebrities funding you. More and more celebrities are jumping on the entrepreneurship wagon. For example, Ashton Kutcher not only has the most Twitter followers of any “entrepreneur” (8 million), but he has actively invested in several startups. For example, he has helped Foursquare raise over $21 million to date.
5. Make the endorsement part of a bigger campaign. Building a brand and a successful company is a lot bigger than just getting a celebrity endorsement. The endorsement relies on a major marketing campaign to get the message out and setting the context for a successful delivery on the promises implied.
6. Prepare to handle endorsement success. Customers are a fickle bunch. You must be ready with the right array of retail partners, manufacturing, and distribution arrangements before the demand hits. Marketing momentum fades fast in the face of disgruntled potential customers and long waits in line.

Many entrepreneurs and investors assume that the fascination with celebrities is a passing fad, and not worth the effort. But the evidence is just the contrary. With the advent of the high-speed Internet for videos, real-time messaging via Twitter, and everything going mobile via smartphones, I don’t see things changing any time soon. The world now has an insatiable appetite for anything and everything celebrity. Be there if you dare.

What happened to Generation X? They are generally defined as anyone born between 1965 and 1980, sandwiched between 80 million Baby Boomers and 78 million Gen-Y (Millennials). Gen-X has just 46 million members, but they continue to lead the way and set the standards in the startup world.

Gen-X is the group that will bridge the two larger generations of Boomers and Gen-Y. I guess the bridge isn’t as exciting as what has happened on one side or what might happen on the other, so they are often referred to as the “forgotten” generation, or the lost child demographic.

A book I spotted a while back, which humorously characterizes the issues, is titled “X Saves the World: How Generation X Got the Shaft but Can Still Keep Everything from Sucking ”, by Jeff Gordinier, 42. He has a big generational chip on his shoulder, and his tongue-in-cheek rhetoric is inspiring age-based debates in offices across the country.

What are the legacies that Gen-Y inherited from Gen-X? Aren’t Gen-X creations like YouTube and MySpace largely responsible for Gen-Y narcissism? Didn’t punk rock begat Rock Band? Gordinier says in his book “We’ve created all these great websites that now Millennials waste their lives on.”

In fact, one could argue that Gen-X actually created the Internet. The Internet then gave each person the ability to voice their own ideas and concerns, leading to new levels of group collaboration. Here are some additional characteristics often associated with Gen-X:

• Individualistic. Gen-X came of age in an era of two-income families, rising divorce rates and a faltering economy. Because they were the first “latch-key” children, Gen-X is independent, resourceful and self-sufficient. In the workplace, Gen-X values real responsibility and freedom.
• Technologically adept. The shift from a manufacturing economy to a service economy occurred during their watch. They were the first generation to grow up with PDAs, cellphones, e-mail, laptops, Blackberrys, and technology woven into their lives.
• Flexible. Many Gen-X’ers lived through tough economic times in the 1980s and saw their workaholic parents lose hard-earned positions. Thus, Gen-X is less committed to one employer. They adapt well to change and are tolerant of alternative lifestyles.
• Value work/life balance. Unlike previous generations, members of Gen-X work to live rather than live to work. They appreciate fun in the workplace and espouse a work hard/play hard mentality. Gen-X managers now sometimes incorporate games and humor into team work activities.

Gen-X is rife with entrepreneurs. In fact, they will likely make or break our country’s ability to transition to the new social Internet society. They have drive and independence. And they have a lot they can teach both the boomers and Gen-Y.

In fact, they currently make up 42% of the American workforce, compared to 32% Boomers (because some have already retired) and 26% Gen-Y (the rest are still at home or in school).

This generation felt the freedom to go into business for themselves, such as the many dot-com companies that emerged during the 90s. They were not as concerned with security, often returning to their parents’ home after experiencing college and work for the first time.

For at least the next few years, Gen-X will be the major facilitators of change. They are now or will be soon running your company. Indeed, in these times we really can’t afford to forget this particular group. Show your respect today.

Even though I love technology, I always cringe when an entrepreneur starts his pitch by touting his new technology. He has forgotten that new technologies are perceived by most customers as causing more pain than the problems they hope to eliminate. I chastise these startups to highlight the solution created by the technology, rather than highlight the technology itself.

I usually get pushback about the success of all the great technology companies, like Intel and Apple. Let me be clear – technology and market-driven need not be mutually exclusive! The best companies find a way to drive the market with a solution based on their technology, rather than push their new technology as the solution for the marketplace.

Yet we all know that many customers delay their adoption of the latest software platform, and fancy new hardware, for a year or two until all the “kinks” are worked out of them. In reality, new technology alone is often assigned a negative value, as startups push out alpha and beta products earlier and earlier in the competitive rush.

Of course, there are always a few early adopters who love change and need to have the latest technology, but early adopters don’t make the market. Here are a few thoughts on a process that will keep you on the right track for the majority of your real customers:

• Get real customer input. Is your product tempered with actual market and customer feedback? Everyone’s personal perspectives and interests are different, so the key is starting from market problems, and going from there to technology – not vice versa.

• Quantify the pain points. What are the major points of pain experienced by the intended users of your product or service? Users with no pain who say “nice to have” will not likely pay money or endure change for your product.

• Keep it simple and easy to use. Are the user problems being solved in the simplest possible way, with the fewest possible features? Or have many features been thrown in, just because the technology can deliver them?

The easiest way to start this process is by starting from the market drivers and working forwards, not backwards. Don’t make the mistake of looking at market needs or requests as an afterthought to verify what’s already been planned.

Companies that are market-driven are externally focused: they identify opportunities and then capitalize on them. Technology-driven companies are internally focused: they identify what is possible with the technology and then look for customers who might like the results.

Market-driven also means knowing the overall dynamics and forces in the marketplace and understanding how those forces might impact the business – marketing and sales driven. A technology-driven business is driven by engineers. A great company finds a balance between these two forces, but makes the business side the driver.

In fact, technology is neither intrinsically good nor intrinsically bad. We all know that very few customers will buy technology, simply for the sake of technology. Technology tools and platforms are hard to sell, because the people who love and understand them are not usually the decision makers, or the budget owners.

But how do you manage “disruptive” technologies, where people don’t even know they have a need? Many entrepreneurs are convinced that they have the greatest invention ever, and others will believe when they see it. Investors know better, since dramatic changes in technology historically take a long time and lots of money go gain a foothold – with a few rare exceptions.

If you are looking for external investors, my advice is to take a hard look at your business plan and investor presentation. If they highlight your technology first, you will likely be tagged as a solution looking for a problem. Start by quantifying a customer problem, and show how you are using technology innovatively to solve this problem. That’s market-driven technology providing solutions, and every investor and customer will want a piece of that action.

I have a friend who runs a nationwide “traditional” business, and business has been down, like it has been for most people. I suggested that he add some social network marketing initiatives, and his answer was he is “too busy.” He is not alone, according to a recent study, which concludes that only 47% of companies use social media today for marketing, despite the fact that 78% of executives polled feel it’s critical for success.

What’s the problem? It seems to me that there is abundant proof in the marketplace of the financial returns to both large and small businesses, the low cost of entry, and the ubiquity of social networks. Dell announced years ago that it had earned $3 million in revenue from using Twitter, and other businesses report daily on increases in web traffic up to 800%.

I suspect that a good part of the problem is that startup and small business owners still don’t know where or how to start. They don’t know if they should move to social networks for lead generation, branding, customer loyalty, or for direct marketing and e-commerce. My advice is to pick one, start slow, and spread out as you learn. Here are some specifics:

• Create a business profile on Twitter, LinkedIn, and Facebook. A business profile starts with a business account using your company logo as your picture (avatar), rather than your photo or a picture of your cat. If you are in consulting, you are the business, so use a professional headshot. Don’t mix your personal and business profiles or messages.

• Develop a marketing strategy specific to this media. Don’t use the same message on Twitter you developed for email blasts and postcard blitzes. Social media demands two-way communication, rather than outbound only. Read everything you can about viral marketing. It’s not free, so budget appropriately, but not excessively.

• Start social networking with peers. Pick a base, such as LinkedIn or Facebook, to be your community, and work the territory, much like you may have learned to work a room of peers at a tradeshow or convention, or local business organization. Find out what other people are doing, and what works for them. People love to share what they know.

• Experiment with social media tools. The basic tools are the platforms like Twitter and Facebook. But don’t stop there. There is TweetDeck to help you use Twitter, and YouTube for video sharing. A most valuable tool is WordPress or TypePad for blogging. You need these to add the human element to your business or service.

• Proactively learn from the experts. Maybe it’s time to sign up for a few free Webinars, or even invest in an expert consultant in this area. Successful people don’t wait for their kids to teach them about new technologies, or wait to be the last one on the block to try new things. It’s all available for “free” on the Internet, but your time is a valuable resource.

• Define relevant metrics and measure. That means first take some baseline measurements of, for example, lead arrival rate today, and costs associated with your current media marketing. If you don’t have this baseline, you will never know if you are making progress. Then continue to measure and learn what works, at what cost.

If used correctly, I guarantee you that social media marketing can improve your business with new leads, by bringing traffic to your website, creating a buzz around your product or brand, creating inbound links to increase your search engine ranking, and improving loyalty and trust with your customers. How could you be too busy to work on these things?

Of course, if you found this blog though your own initiative, I have to give you credit for being ahead of the pack. So print it off and deliver it to a friend who is not so high-tech. My challenge to you, then, is to kick it up a notch! When is the last time you produced a video for your business, or a podcast, or sponsored a contest with free gifts? Or are you too busy?

Entrepreneurs are usually highly creative and innovative, but many innovative people are not entrepreneurs. Since it takes a team of people to build a great company, the challenge is to find that small percentage of innovative people, and then nurture the tendency, rather than stifle it.

A while back I read a book titled “The Rudolph Factor,” by Cyndi Laurin and Craig Morningstar, which is all about finding the bright lights that can drive innovation in your business. The story most specifically targets big companies, like Boeing, but the concepts are just as applicable to a startup with one or more employees.

The core message is that real innovation and competitive advantage are more people-based than product or process-based. Every good entrepreneur needs a people-centric focus to ferret out creativity and innovation in his team, and to build a sustainable competitive advantage.

The authors observe that people who behave as mentors tend to have an uncanny ability to recognize and nurture people who have innate capabilities along these lines. Here is a summary of the characteristics they and you should look for:

• Thinkers and problem solvers. Innovators are naturally creative and love new challenges. Some may appear a bit eccentric to people around them. They generally promote unconventional ways to solve problems and have an easier time than most at identifying the root cause of a problem.

• Passionate and inquisitive. These team members are passionate about their work and light up when talking about their role or a particular project they are working on. They often ask “Why?” even when it is not the most popular question to be asked.

• Challenge the status quo. They believe that questioning is of value and benefit to the organization. This is also how they discover what they need in order to solve a problem, so they aren’t rocking the boat just for the sake of rocking the boat.

• Connect the dots. Innovators have the ability to quickly synthesize many variables to solve problems or make improvements. To others, it may appear as if their ideas come out of the blue or that there is no rhyme or reason behind their thinking.

• See the big picture. They tend to be natural systems thinkers and see the whole forest rather than a single tree … or just the bark on the tree. They may express frustration if people around them are having conversations about the bark, rather than the forest.

• Collaborative and action oriented. They are not loners, and have the ability and confidence to turn their ideas into action. They act on their ideas, sometimes without knowing how they will accomplish them. The “how” is always revealed in time.

Your challenge is to go forth with this new awareness and thinking, to find and mentor those bright lights that will drive innovation and competitive advantage. The next step after finding innovators is to integrate them into your team. A key aspect is establishing a team-based culture that is a safe environment to share and execute ideas.

In fact, this safe and nurturing environment has to extend beyond a single team to the highest levels of the organization. It should embody a style of leadership that is essentially a commitment to the success of the people around you. That opens the door for anyone in the organization to lead from where they are, rather than waiting for management to “do something.”

Innovation is at the very heart of every successful startup. Everyone wins when you look at things very differently and wonder “why”, not “why not.” What better way to extend this power than to surround yourself with more highly creative people? Then you can make the world a place of possibilities, as well as probabilities.

Do you think men make better entrepreneurs than women, and why? I did some research on this subject a while back, and I found some interesting perspectives. Everyone seems to agree that women think differently than men, and run their businesses differently, but there is a lot less agreement on which styles are better or worse.

First of all, it is evident that there are fewer women entrepreneurs today than men. Only one in four companies in the USA today are run by women. Yet, according to a study by the Center for Women’s Business Research, the number of female-owned firms is growing twice as fast as all the rest, so women are catching up. Here are key observations from this and other studies:

1. Leadership style. There are clear differences between males and females in their management and leadership styles, probably reflecting their genetics. Distinguishing traits of male leaders are autonomy, independence, and competition, while those of women are relations, interdependence, and cooperation. Both have their advantages.
2. Operational style. For operational purposes, men move quicker, are more analytical, more focused and concentrate more on the short term and on rules. In contrast, women generally gather more data, consider their context, think more long-term, and rely also on their intuitive and sympathizing characteristics. No comments on which is better.
3. Organizational style. Status and rank are important for men, whereas women are more comfortable working in a flat hierarchy. The structure of preferred by males resembles a hierarchy or pyramid, where authority stems from one’s position within the hierarchy, and emphasis is more upon goals and objectives than on the process.
4. Business relationship style. For men, business relationships are more competitive, and power is enhanced through control of information, which may be hoarded rather than shared. Women have larger social networks, for advice and resources, and relationships with other business women are more nurturing than competitive.
5. Emotional style. The biggest surprise for me was the finding that men seek larger “emotional” networks – the complex of associations that provide warmth, praise, and encouragement. Also men tend to show more emotion in business than women do, as a form of domination and intimidation.
6. Investment style. Most of the venture capitalists and angel investors I know are male. Women seem to network for the sake of relationships, and they will invest in support of these relationships, but have less interest in business opportunity investments. Men network for the sake of utility.
7. Motivational style. Women are more likely to be motivated to pursue an entrepreneurial career as a means to balance family and career, while men are more likely to be motivated by wealth accumulation and career advancement. According to a study funded by the Kauffman Foundation, women’s self image seldom includes entrepreneurship.

We know, of course, that in the real world, it all comes down to the individual, not how many X chromosomes that he or she has. As I contemplate the differences in style listed above, it seems that in fact they are complementary – yin and yang – like masculine and feminine, rather than right or wrong. Societal trends actually seem to be favoring the women these days.

The implication is that entrepreneurs of either sex would do well to find a business partner on the other side, capitalizing on the other dimension, rather than engage in a battle of the sexes. Wars are no fun for either side.

I’m sure that every one of us who has been out in the business world for a few years can look back with perfect hindsight and name a few college courses that we should have taken. What’s more disconcerting to me is that I can name a few that weren’t even offered!

I won’t even try to cover here the ones you didn’t find for your personal life, like managing personal finances and credit. But on the business side, here is my list of useful courses that we wish existed, but as far as I know, still aren’t generally available:

1. Basic Office Politics. Office politics involves the complex network of power and status that exists within every business, large and small. Don’t you wish that someone had prepped you on how to read the body language, interpret office gossip, and when to hit the delete key on your email rather than the send key?
2. Dress for Success. “You are what you wear” works in business, just like it did in high school. But no one tells you the business norms, so Gen-Y’ers come to work in jeans, baseball caps, tattoos, flip-flops and expect to be treated as executives.
3. Touch-Typing for Dummies. How many hours a day does the average professional and executive today spend hunched over a computer keyboard “hunting and pecking”? Throughout a career lifetime, just think of the return on that investment.
4. Business Writing Skills. Writing in business is not the same as in an academic environment. In school, you’re taught to stretch weak ideas to reach your page limit. The business world expects exactly the opposite. The challenge is to communicate your idea in one page, and relegate the supporting detail into an appendix.
5. Demystifying Business Logic. Another term for this is how to be a skeptic. Understand the ways people can mislead deliberately or accidentally with numbers, bad logic and rhetoric. There’s some untruth hidden in 99% of everything you’re told. Can you find it?
6. Business Budgets and Benefits. The focus here would be on the actual nuts and bolts of how things get budgeted and financed in business. This will pay big dividends in getting your favorite project funded, or justifying your own salary, or negotiating a bonus.
7. Business Sales Techniques. We can find tons of “marketing’ courses in colleges and universities but everyone must think that “selling” is intuitively obvious. The art of selling is complex blend of relationships, persuasion techniques, negotiation, and knowledge.
8. Root-Cause Problem Analysis. Business professionals need to analyze problems from a big picture perspective. Most classes in college focus on a narrow area of interest, which just teach students to focus on problems through one lens. That’s how unforeseen consequences go unforeseen.
9. Minimizing Business Workloads. In the office world there’s always way more work than there is time to do it. You need to be able to figure out what not to do, and how to not do it, by organizing and prioritizing, and still impress your boss with your thoroughness.
10. Job Hunting Basics. People need realistic expectations about how much effort and time it takes to get just about any job. Atrocious resumes and social network antics will kill your career. The difference between job descriptions and accomplishments seems to elude most people.

The real problem for many of these, I suspect, is finding qualified instructors to teach. Until then, the best alternative I can recommend is to sign up for job internships at every opportunity, while still in school. You might find on-the-job experiences more valuable than all your other courses, or you might change your major.

Amazingly, it seems that people in business are more highly educated these days, but less well prepared than ever before. What’s another course that you wish you had taken in school, but didn’t realize was missing until too late? There’s another generation coming that needs to know.

Cloud computing is still all the rage in the business world these days. Yet I find that most business people don’t understand and fully trust it, and I defy even the technologists to define it in ten words or less for business people. Many say it’s just marketing hype applied to old principles that have been around for a long time.

A typical definition (from Wikipedia) is that “cloud computing, is Internet-based computing, whereby shared resources, software and information are provided to computers and other devices on-demand, like a public utility.” That’s about 25 words which I’m certain doesn’t paint a very precise picture to the entrepreneurs I know.

Putting aside the acronyms and technical jargon, I think I can distill the essence of the cloud computing vision to the following five key points:

1. Buy service from a central utility, rather than buy assets. Now you can pay for a metered service delivering compute power, data, and storage, based on your business demand, through the Internet. No need to buy and manage these as assets. This is a great cost leveling advantage to businesses, which used to be called time sharing.
2. Maintenance and support are provider responsibilities. Small companies no longer need an IT staff, with the inherent costs and management responsibilities. That allows them to focus on their core competencies, reduce overall costs, and be more agile in responding to market changes.
3. Access to new services and data is instantly global. Employees don’t need to come to an office to do their job, and customers don’t need special software installed access a new application. International standards and localizations are assumed from the beginning, rather than added much later.
4. Availability is 24/7, just like your electric utility. No more down time on weekends, or during the nightly backups. The Internet is a huge power grid that services computing needs (cloud computing) of businesses and consumers, just like the electricity grid services power needs (cloud power).
5. Easy integration of customized applications. People have traditionally bought their own computers simply to provide a common platform where all their applications could talk to each other, even though customized, and share data. The cloud provides these transformations with security and integrity.

Make no mistake about it, these are the dreams, not the reality today. Even the pundits agree that cloud computing is still for “early adopters,” meaning it’s not all there yet. Many people can quote cloud computing successes, like businesses using Amazon Web Services for huge scaling, or failures, like the Google App Service major outage a while back.

Other gray areas include how to do secure credit card transactions in the cloud, tax considerations for international operations, multiple virtual machines in one cloud, and properly addressing differing geographic regional requirements in a single cloud. Then there is the connection problem of sharing data with standard applications not in the cloud.

When a vendor starts talking about his paradigm shift to a dynamically scalable and virtualized solution in the cloud, with SaaS (software as a service), PaaS (platform as a service), MSP (managed service provider), or web services in the cloud, tell him to skip ahead to the chart which shows you how well he does on the five points above, and the five gray areas outlined.

Even though “the cloud” is a familiar cliché for the Internet, cloud computing is still very much an opportunity for startups, with lots of room for innovation and better solutions. Now is the time to jump on board, but a cloud usually means you should expect a few storms ahead before you see the sunshine.

Entrepreneurs are always looking for “the next big thing,” when maybe in fact it’s a lot of little things that are only recognized after the fact as components of a big evolution or revolution. In my view, the Internet “connectivity anywhere” has already spawned several of these, but the global change has only begun.

Emily Nagle Green, in her recent book “ANYWHERE,” argues effectively that the future of the world and business is ubiquitous connectivity, the total interconnection of people, ideas, and products through a global digital network. Every person will have access to virtually anything in the world from virtually anywhere he or she happens to be at the moment. Key vehicles already include wireless for communication, and RFID for product location.

The implications for startups in this context are huge. On the hardware side we need better technology to provide a common digital network around the world, better broadband to satisfy the demand, and wireless ubiquity for connecting people, devices, and businesses. The needs for new software and services are just as pervasive.

So how do entrepreneurs train to lead the Anywhere Revolution, rather than be dragged along by its wave? Here are some principles I have adapted from Emily’s work:

1. Be eternally curious. You need to be an eager investigator, avoiding the temptation to write things off before you’ve opened your eyes to all the possibilities they offer. Don’t let yourself be talked out of powerful ideas. Develop a keen sense of customer appetites, as well as current solution strengths and weaknesses.
2. Be a ubiquitous connector. Some people are naturally “connectors,” using their links with others to create or promote opportunities between them. The Internet dramatically reduces the cost of being a connector. In fact, now we can all be connectors, and should be.
3. Be an analytic thinker. Already today, your skills in searching for information and then synthesizing that information, looking for patterns, and interpreting it, can be more valuable than the actual information you’ve amassed in your experience as a person and as an employee.

Entrepreneurs should be asking themselves for every consumer and business product, how can we add “anywhere” connectivity to this item? This is called the connectivity diffusion.

• If you can enhance the user’s experience with sending, or getting, real-time information, you should.

• If you can add value to the product with connectivity – perhaps contributing to the cost, too, and thus defraying the price of the product for the customer – you should.

• If you can extend the life of the product in the customer’s hands by providing service or updating it with new features, you should.

• If you can partner with a firm that can do any of these things to bring your service or message to more “surfaces” in the customer’s life, you should.

Also, put your marketing hat on and realize the wealth of new potential opportunities to create more awareness and consideration of your product or service in the future of ubiquitous connectivity. Whether it’s coupons, or advertisements on the mobile, the connected device with geo-location that’s always in a pocket or purse is literally a whole new world for marketers.

As an entrepreneur, don’t apologize for your self-interest and profit motivation. Be an optimistic adopter of connectivity. Be a connectivity evangelist and embrace the connectivity future that is opening before you. That’s a win-win for everyone anywhere.

Face reality. As an entrepreneur, you should assume none of your customers is like you, yet I find that most entrepreneurs assume just the opposite. Customers don’t have your technical base, the passion, and interest in your solution. In fact, even if they did, they couldn’t find you in the clutter. An underrated portion of every startup effort must be about communication and marketing.

By habit, people market to customers like themselves, because they know what they like and need. The challenge is attracting customers not like you, since that isn’t so intuitive. Kelly McDonald, who runs a top ad agency, takes on this challenge in “How to Market to People Not Like You.” Her focus is on companies facing change, which of course includes every startup. Here are my key recommendations from her book:

1. Get out of your marketing “comfort zone.” Go beyond the “spray and pray” approach to marketing (spray your message out there as widely as possible and pray it sticks). A better approach today is “narrowcasting” – learning as much as possible about your target audience, and communicating to them frequently, richly, and relevantly.
2. Get to know the customer you’re not getting, but should be. Don’t guess, or let your own biases be your guide. Go online and read everything you can about the group you want to target. Attend events, meetings, and gatherings of your potential customer observe and talk to attendees. Don’t forget to ask them what they want and need.
3. Tweak your product or service offerings. This process alone communicates validation that you are actively reaching out. It says “I see you, I value you, and I want you.” People will pay a premium for what want, so you need to accurately tune and relate your offering to their values, needs, and wants.
4. Make sales and customer service friendly. Little things make a big difference, so you need to tune your operational readiness and support to these new customer segments. Maybe your shopping bags need handles, or your employee attire needs adjusting. Don’t forget showing respect for other cultures, values, languages, and priorities.
5. Develop marketing messages based on their values. Make sure your message has relevance to your new customer target, and is authentic and sincere. Make sure it fits in with their life and lifestyle. As you move to new support new languages, don’t just translate, but “transcreate” (express the same meaning and nuances).
6. Use technology to reach your prospects. Everyone must have a web site that is complete, inviting, and easy to use. Create and maintain your own database of targeted prospects, and don’t rely on generic email lists for marketing. Use social media, search engine optimization, blogging, and mobile media. These will beat word-of-mouth any day.
7. Proactively deal with naysayers. As you expand your market, act to minimize negative feedback or backlash from core customers by explaining what you are doing, your motivation, and why it is good for all. Team members need to understand these things as well, and need to understand exactly what you expect of them.

An obvious place to look for customers not like you is in the generational segments outside your experience. You personally can’t be in all five of the core segments – Matures, Baby Boomers, Gen X (thirties), Gen Y (twenties), Gen Z (tween). Each has different interests, spending habits, and priorities. Focus on the most important one first, and broaden carefully.

Then there are women versus men, immigrants, and the unique cultures of 195 different countries in the world, with many more races, religions and political views. Obviously, most of your total potential market is not like you. It’s never too early to start going after it. Your long-term business success depends on it.

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!

Startups provide business leadership with new products, services, and new revenue models, but leadership startups can only be built by entrepreneurs who are leaders themselves, and incent leadership in the people around them. Leadership which incents other people to be leaders is called “contagious leadership.”

John Hersey, in his book “Creating Contagious Leadership,” describes nine required habits for inspiring a contagious leadership culture within a startup, as well as within other types of businesses, or even life in general. He and I believe that leaders have to make the overt decision to acquire these habits or skills, and don’t have to be born or trained into them:

1. Spotlight leadership acts of others. This is the habit of focusing attention, directly or indirectly, on leadership efforts and accomplishments of another team member or group. For managers and non-contagious leaders (contained leaders), the spotlight seems to always be on themselves.
2. Cultivate positive character qualities. Contagious leaders have a habit of highlighting effective choices about “how” things were accomplished, and not just “what” was accomplished. It’s not just about the numbers, but how character played a role, and who made the right decisions along the way.
3. Provide in-depth recognition. Don’t just articulate specific actions that deserve praise. Contagious leaders tell Harry why and how he did a good job, whereas managers and contained leaders just say “Good job, Harry.”
4. Emphasize strengths, leading to greatness. Conventional managers focus on people’s shortcomings and point them out as often as possible. Contagious leaders nurture the habit of recognizing others strengths, and help them extrapolate these to greatness.
5. Communicate often and effectively. The habit of constantly exchanging information, thoughts and feelings openly and honestly builds morale, enhances productivity, and fosters contagious leadership. Too many managers “tell ‘em only what they need to know and not a moment before they need to know it.”
6. Provide an unobstructed vision. Contagious leaders foster the habit of focusing actions on a clear and sensory-rich picture of the desired result. Managers tend to have only a vague picture of where the company is going, so they are unable to share a coherent vision with others.
7. Really touch people’s lives. Nurture the habit of truly knowing your most valuable asset – people. Managers avoid any real, deep involvement. Most don’t know if the people reporting to them are married or single, or anything about them. Contagious leaders know their people personally and do things for them, not because it’s good for business, but because they truly care.
8. Passionately support your people. Managers are always controlled, rather than being fully committed and willing to take a risk. Contagious leaders are quick to support their team, and always stick up for them, even in the face of adversity.
9. Mentor a permission mentality. Contagious leaders mentor their team to always assume they have permission to do things their way. They try to extend the concept of contagious leadership, rather than constrain it. Managers want a staff of imitators and followers. They want people to do what they want, and to do it their way.

In summary, leaders are not the same as managers. Managers focus on the process, while leaders focus on the people. Leaders influence people to make things happen, rather than tell people to make things happen. Contagious leaders create a culture that inspires everyone to be fully engaged in the startup. The result is that your whole startup will be the leader.

Traditional marketing says you have to “push” your message out to customers, over and over again, to get it remembered. A more effective approach in today’s Internet and interactive culture is to use “pull” technology to bring customers and clients to your story. You pull people in by providing new content with real value on your website at least every few days.

Guy Kawasaki, in his new book “Enchantment: The Art of Changing Hearts, Minds, and Actions” provides some in-depth recommendations on the “how to” of pull technology. Here are some of his recommendations for web sites and blogs that I particularly recommend to entrepreneurs and startups:

• Provide good content. This may seem obvious, but how many websites have you reviewed that are static and just plain dull? A website or blog without appealing or entertaining content for your market segment is not enchanting.
• Refresh it often. Ideally, you should update content at least every two or three days. Good content that doesn’t change isn’t good for long, and customers or clients will not return to your website or blog if you don’t regularly provide something new.
• Skip the flash (and Flash). You may think it’s cool that a sixty-second video plays when people enter your site, or pop-ups occur with every interaction. Most people come with a purpose, and if you won’t let them get to it immediately they won’t come back.
• Make it fast. It’s a shame when anyone can get right to your home page, but then has to wait for it to load. With today’s technology, there’s no excuse for a website that takes more than a few seconds to load.
• Sprinkle graphics and pictures. Graphics, pictures, and videos make a website or blog more interesting and enchanting. If you’re going to err, use them too much rather than too little, except for a Flash front-end and popups.
• Provide a Frequently Asked Questions (FAQ) page. People love FAQs because these cut to the chase. Figure out what the most common questions might be and answer them in one place to minimize hassle.
• Craft an About page. Visitors should never have to wonder what your organization does and why you do what you do. Provide all this information in an About page. Confusion and ignorance are the enemies of enchantment.
• Help visitors navigate. Enable people to search your website or blog to find what they are looking for. Also, a site map helps people understand the topology of your website. Forcing paging to complete a single message (to expose more ads) is not enchanting.
• Introduce the team. Few people these days wants to deal with a nameless, faceless, and location-less organization. A good “Who Are We?” page solves this problem, and is necessary to establish trust and expertise.
• Optimize visits for various devices. No matter what device people are using, your website and blog should look good. These days, 20% or more of your audience will be using smart phones or iPads, and they’re probably the most relevant customers.
• Provide multiple methods of access. Some folks like websites and blogs, and others prefer RSS feeds, email lists, Facebook pages, and Twitter feeds. Provide multiple methods to engage people and make these options easy to find.

Let’s face it, static websites are dead. You need a blog and social media interaction to keep your content fresh and responsive to the market. Interaction and repeated visits due to the pull of enchanting content will transform a potential customer transaction into a relationship. Everyone remembers a relationship.

Where did this pervasive sense of entitlement in our culture come from? I’ve written about this before, but I was surprised again recently at a conference for startups when a couple of entrepreneurs started berating investors for their low rate of funding for early-stage startups. It sounded a bit like other special interest groups crying for their entitled government programs.

As a society, we seem to think we’ve evolved to the point where we can fashion a large portion of existence according to how we wish it to be. We notice what we like and what we dislike, so we work to make society match our dreams. Somehow, these dreams and wishes have morphed in many people’s mind to an entitlement.

In later-stage businesses, entitlement is evident when employees treat customers with indifference, or feel they are entitled to their job by merely “showing up for work.” Here are some examples of people rationalizing their entitlements, especially when the fantasy serves to owe them money or power:

• “I put in more hours than most of the people here, so I expect a bonus.” A bonus should be all about results, not time worked. We all know people who seem to be always present and always working, but don’t produce results. People with entitlement expect bonuses because it is bonus time, not because recipients earned them.

• “We deserve our high pay since it was the other division that failed.” We heard this from many of the Wall Street groups that survived a couple of years ago only with government bail-outs. A company succeeds only if all the teams succeed. That’s the way capitalism works. Being really good at what you do doesn’t matter if your firm is broke.

• “The pay seems to be the same whether I work hard, or hardly work.” No business can afford to reward mediocrity or less. Watch for the signs of entitlement and let it be known that the behaviors associated with entitlement will not be tolerated. Executives need to show up be the model, communicate the model, and enforce the model.

• “I did my job, so don’t expect me to jump when customers complain.” Employees don’t see a connection between how the experience a customer receives today influences their feelings about buying from the company in the future. Make sure they understand the sense of urgency to address customer satisfaction and market needs.

• “I give my all to this company, so I deserve better healthcare coverage.” Health care is a need, like water or food, and not a right. And like water or food, it isn’t free. Every company needs to promote equity among all employee levels, and relate benefit levels to profit levels. But demanding benefits that sink the company is not the answer.

• “Someday this business will be mine anyway.” How many family businesses have met their demise because of this entitlement view? When heirs grow up believing that no matter how they act, the business will be theirs to run, they often end up with no business to run. Furthermore, once that seed is planted, it’s very difficult to stop it.

Entitlement beliefs that are left unchecked lead to selfish, even more entitled expectations. Most psychologists believe that entitlement comes from a deep inner belief that the world is not fair. In Gen-Y, this feeling seems even more common, perhaps derived from a life where their parents gave them everything, and they now expect the world of business to do the same.

We’ve got to remind everyone, employees and company executives, that true success and leadership is built on a foundation of personal responsibility and self-discipline. Companies which feel entitled about their position in the marketplace will lose, and entitled employees will kill a company.

Few things frustrate me more than dealing with people who feel they are entitled. No one is entitled to be entitled. Everyone shares the challenge of changing our culture of entitlement into a culture of merit. I do believe everyone is entitled to pursue success. But success itself, or even funding for your startup, is not an entitlement. But good luck does often come from hard work. Try it.

For survival, the objective of every business should be to bring in revenues which exceed their costs. Even non-profits have to do this to cover overhead costs, unless they rely totally on donations. Yet I continue to see business plans, or even talk to founders, and can’t find the specifics of the business model anywhere.

As Guy Kawasaki says in his book “The Art of the Start,” if you can’t describe your business model in ten words or less, you don’t have a business model. Avoid whatever business jargon is currently hip, like strategic, mission-critical, world-class, synergistic, first-mover, or scalable. Try something like, “the product costs $X, and we sell it for $Y.”

Guy also says and I agree that the smart approach is to copy somebody else. You can innovate in technology, markets, and customers, but inventing a new business model is a bad bet. Try to relate your business model to one that’s already successful and understood. Here is a summary of a half-dozen of the most common models:

• Facebook model. This is the most often attempted and failed business model today on the Internet – all the services are free, and you make money off the online advertising. This model only works once you have exceeded about one million page-views per month, and spent maybe $50 million to get there.

• eCommerce model. This was one of the first Internet business models, per Amazon.com, and still a popular one today. It’s the electronic version of a catalog and shopping cart, and today rarely involves any stock of product. Products are usually drop-shipped directly by the manufacturer.

• Shopkeeper model. This is the most traditional and successful approach in use for centuries. It implies setting up a store in a location where potential customers are likely to be, with products and services on display, being sold at some multiple of cost to cover the overhead and realize a profit.

• Bricks-and-clicks model. This is a hybrid of the shopkeeper and eCommerce models, in which a company integrates both offline (bricks) and online (clicks) presences. It is also known as click-and-mortar, as well as bricks, clicks and flips, with flips referring to catalogs. It’s great for big companies like Wal-Mart, but I don’t recommend it for startups.

• Razor-and-blades model. This one has been around for many years now, and is sometimes called the “bait and hook model” or the “tied products model”. The premise is offering a basic product at a very low cost, often at a loss (the “bait”), then charging compensatory recurring amounts for refills or associated products or services (the “hook”). I’m sure you can think of many examples.

• Subscription or licensing model. Here a customer must pay a contracted price to have access to the product or service on a periodic basis (monthly, yearly, or seasonal). The model works online, offline, through magazines, newspapers, and television. The advantage is recurring revenue without finding new customers.

There are many more, with descriptive names like the auction model, direct sales model, value-added reseller model, multi-level marketing model, and the freemium model. Take a look at Wikipedia if you want more details.

The point I am making is – pick one and provide specifics in your business plan. Define clearly who is your customer, what will the customer pay for, how much will he pay, and how much do you expect it to cost for that revenue.

Then as investors, we can argue other equally important parts of the model, like how big is the opportunity, how fast it’s growing, and who are the competitors. Don’t let your business plan be tossed before you are in the game. What are the ten words that define your business model?

Great startups these days start with innovation, and then take it up a few notches to make it a revolution. An example is Google, who turned a new search technology into a tool that most of us couldn’t live without. As an entrepreneur, how do you know if you have the potential to innovate, and what are the steps to get from innovation to revolution?

While digging into this subject, I came across a new book by Patrick J. Howie, called “The Evolution of Revolutions,” which makes the points that resonate with my experience. He starts with a discussion of the Big Five personality traits, used to explain individual differences across all walks of life. The following three seem to relate most closely to innovative potential:

• Openness to experience. Scoring high on openness has been found to be the top predictor of an entrepreneur’s innovativeness. Having a curiosity to learn about all new things increases the likelihood of “seeing” novel solutions.

• Hardworking and responsible. Innovation is hard work. Good entrepreneurs have to develop sufficient knowledge and enjoy the difficult problem-solving process to achieve real innovation. That requires a high level of commitment, and a high degree of ambition.

• Desire to communicate. If an entrepreneur creates an innovation but never talks and shares it, then the innovation may never be recognized. An entrepreneur doesn’t have to be a raving extravert, but working with other people and selling are required capabilities.

With the right personality traits, the next step is to follow a productive innovation process. The sad fact is that the vast majority of new products and new companies fail to make it to market or fail to turn a profit. Here the key steps of a process that good entrepreneurs espouse:

• Problem identification. Useful innovations are ones that solve a real human problem, rather than simply illustrating a capability of a new technology. Many entrepreneurs start with an impressive technology, but forget to relate it to a problem that affects large numbers of potential customers who have the means to buy it.

• Motivation to inspiration. The germination of an innovation is elusive. Overt attempts to motivate people to be innovative or usually counterproductive. Good entrepreneurs are usually intrinsically motivated by a dream or vision, or even money, or inspired by a personal challenge or opportunity to change the world.

• The new reality. Entrepreneurs need to critically evaluate their “habits of perception” to come up with new concepts of reality. This is called re-conceptualization, using the innovation they bring to the table. The hard part is bringing customers to that new reality.

The final step to successful innovation is to get it adopted by real customers, rather than simply being the subject of an academic report or technical journal. Patrick calls this “taking an innovation to a revolution.” This involves moving through the following three stages:

• Overcoming resistance. All new innovations are evaluated against the current option, which may be doing nothing. The reality is that most people have a natural bias against change and innovation, so your challenge is to get them to re-concepualize.

• Clarification and iteration. Most new products are not conceived or developed perfectly the first time. Thus resistance is a good thing, since it helps the entrepreneur to be more precise as they iterate on the definition, production, and selling of the innovation.

• Evolution to a revolution. Every innovative product needs continuous follow-on, meaning additional innovation, with a cumulative value much greater than the original. Failure to pass this stage means your innovation is a fad, or a ‘one-trick’ pony.

Notice that none of these elements mentions risk. Traditionally, the level of innovation is aligned with the level of risk, yet many entrepreneurs do not consider themselves to be risk takers at all. If your goal is to spark “the next big thing,” it has to start with innovation, but that is only the beginning. Can you make the evolution from there to a revolution?

With the advent of social networking sites like LinkedIn, Twitter, and Facebook, Internet usage has totally morphed, from a serious business medium, to a social and fun medium that still means business. Regular people now build business applications with “mashup” technology, rather than hiring programmers.

I’m a technology follower from the early days of the Internet, so a couple of years ago I decided to dive into this new world and check it out (who even heard of blogging or mashups ten years ago). I realized quickly that this new world isn’t just for the social life of Gen-Y – it is a sea change for everyone in business, especially startups.

After any earthquake event, the first thing I try to do is to step back, get the lay of the land, and derive some guidelines for getting around efficiently, while avoiding personal injury (I spent some years in California). Here are the current big three in social networking for business:

1. Facebook is biggest, moving from social to business. Currently, the biggest site in numbers is Facebook with over 500 million active users. 50% of active users log on to Facebook in any given day. Their primary visitors in the past have been Gen-Y socializers, but the fastest growing segment now is business people, and discussion groups for business, like “Facebook for Business” with 56,250 members.
2. LinkedIn caters to senior business professionals. The largest site traditionally targeted at business people is LinkedIn, with current numbers exceeding 80 million members. This one is a “must” for every serious business professional and executive out there today. You can join groups with your specific interests, participate in discussions or not, and highlight your business.
3. Twitter for business and networking is ‘hot’. This site is for text-messaging on the Internet, with about 100 million unique visitors per month, and was first popular for social updates and gossip. Now it’s the source of business leads and networking for thousands of people, and the source of the breaking world news for everyone. You need to be there.

Obviously, there are many others that you should evaluation, based on your geographic location, type of business, and personal interests. Here is my perspective on a few of them:

• MySpace is for tweens, forget it. The third biggest site (just passed by Twitter) is MySpace, with about 95 million unique visitors per month. They have groups for business and entrepreneurs, but the culture is primarily teen and pre-teen. You will find business advertising there, but minimal business networking.

• It’s not all about numbers. There are many more social networks which have good traction and a more specialized focus in the business networking world. Examples include Ryze, Plaxo, Orkut, RedWire, and Ecademy. In general, their membership is focused by geography, industry, or culture, so the value can be excellent.

• Business networking today starts with social networks. Social networking sites are more effective and efficient than attending all those boring business cocktail mixers and conventions. I’ll even be so bold as to say that if you aren’t on any of these sites, you are way behind the curve in business networking today.

• Protocols for each site are different. There is a hierarchy and a culture to social networking sites on the Internet, just like there always has been with professional business organizations and clubs. There are so many sites, so you need to choose wisely, and learn the rules for each. Most are free, so you can do serious business networking around the world without signing up for any of the fee services.

Maybe because the cost of entry is low, I see a swarm of startups today busy with add-ons, and building new offerings. It’s a brave new world, for me an exciting challenge and fun to explore. But like every good explorer, I’m asking everyone I meet what’s around the next corner. Are you there today, and what do you predict for tomorrow?

I was surprised when I read recently that Napoleon Hill, in his book “Think and Grow Rich” said that he looked at all the great entrepreneurs, and the one thing he found is that they all had a huge sex drive. On the business side, we all know that the sex industry is rife with entrepreneurs, so I wonder if there is a connection?

Implying a connection may be an over-simplification of Hill’s classic, but his chapter on “The Mystery of Sex: Transmutation” certainly goes into some depth about how the energy of the libido is often channeled by successful people to focus on achieving specific goals, creative, political, entrepreneurial or otherwise.

All this, and Hill wasn’t even writing about the entrepreneurs who founded and run businesses in the “exotic erotic” category. Considering that passion has always been a much vaunted trait for the founders of successful startups, it’s not hard to see a sublimated sexual drive at work.

In case you are assuming that this is an all male domain, a University of California survey not too long ago says that 70% of women check out pornography, 17% of women are addicted to pornography, and 13% of women check out pornography at work. And the number of women entrepreneurs in this industry is growing rapidly.

Let’s focus for a moment on the business elements of the porn industry, and what other industry startups and entrepreneurs might be able to learn from them. The underlying principle of any business — whether it be online or offline — is to build a business model that successfully generates revenue while limiting expenses.

In fact, this is one of the critical points to remember about the sex industry. You may not like the product it sells, but the fact is, the model used by the online pornography business is a proven commodity. For a very long time, pornography has proven to be successful in the offline world.

Online, the Internet is all about technology and using it effectively. And no one group has contributed more to refining Internet technologies than the porn industry. Developments in content creation, communications delivery, e-commerce, and security each underwent a trial by fire within the porn industry.

In the case of some technologies, such as streaming video, pornography delivery was one of the only initial places for its application. Not only did online porn entrepreneurs utilize some of these technologies, but they also understood their limitations and their business ramifications.

Successful porn entrepreneurs have pioneered new approaches to get people to give their credit card numbers and to visit their sites enough times to keep providing revenue. They introduced multiple interrelated web sites, cross-targeting, and exit interstitials well before any other online segment.

Although the online pornography industry has many helpful business practices for us to examine, it also has some bad business practices: things like spamming incessantly, having a billion exit interstitials on a site so it is impossible for someone to ever leave, and misleading people with “free” offers that still require payment via a credit card.

On top of all this, it turns out the adult entertainment industry is pretty much recession proof. Makes you wonder what kinds of innovations are going to flow down to us in the near future.

But I digress. Let’s get back to the concept of sex and the entrepreneur. You might assume that Hill’s concept of channeling sexual energy or ‘transmutation’ is a recent one, but he first published his classic book back in 1937, during the Great Depression.

Hmmm. I guess we all should take comfort in the fact that even though we live in a world of constant change, some things will always be the same.