Open up your mind and say, ahh...

There’s something special about entrepreneurs whose startups take off and those whose stay small–starting with how they begin.

In studying successful entrepreneurs for my new book, Breakthrough Branding, I was struck by a series of contrarian habits that set them apart. Here are five contrarian lessons that I learned from them.

1. Think “small” rather than search for a “big idea.”

Contrary to everything we’ve heard about finding a “big idea,” there’s a fundamental paradox in business. Big ideas are small–simple, focused and different so they can occupy a specific niche and dominate their category. Kevin Systrom was building a location-based mobile business like FourSquare, but found that only one piece of it, the photo app, was different and had real traction with customers. So he focused on the photo app, named it Instagram, and became insta-rich. If you can’t write your business idea on the back of your business card or explain it to a ten-year old, you probably have a big, bad idea.

2. Use the start-up phase–the so-called Valley of Death–to take risks and experiment.

Rather than follow conventional wisdom and be cautious at the beginning, brand-building entrepreneurs use the “the Valley of Death” to experiment and tweak their fledgling idea. You can die in the valley, yet growth entrepreneurs realize this starting period is the most valuable time because you can create tremendous value out of practically nothing. When Mark Zuckerberg launched Facebook, he thought small and experimentally. He began with students at Harvard and tinkered and experimented with the site to create a different user experience and then started expanding.

3. Realize that when people say, “You’re starting what?” that you’re on to something.

Most people will tell you that you’re crazy when you present a fresh idea, so you have to be a contrarian to forge ahead anyone. You need to realize that you have a viable business idea when you find the “white space,” which is just a new need in the marketplace that no one is filling. In 1980, Fred Carl Jr was designing a new home kitchen and his wife, Margaret, wanted a heavy-duty range like her mother’s 1947 Chambers range. They weren’t made anymore so Carl looked into restaurant ranges; but they weren’t suitable for homes. So Carl decided to make one. All the major manufacturers told Carl that no one would want a commercial-style range for the home. Everyone thought he was crazy. That’s when Carl realized he had a good business idea, and named his range, Viking, because it was strong and enduring.

4. Listen to their heart and emotions as much as their intellect.

Successful entrepreneur want to make money, sure, but your goal has to be more than just making money. Finding your business idea is about finding your purpose. Your goal must be tied to your deeper story, your sense of destiny for yourself and your business. Innocent was launched by three Cambridge University graduates who quit their jobs in 1998. The small idea behind Innocent is authenticity, as their tagline says, “The fruit, the whole fruit, and nothing but the fruit.” Its brand personality is playful and interesting, and in the early days Innocent experimented with labels listing ingredients such as “banana, orange. and a lawnmower” that got them tremendous publicity. After a few years Innocent became the top smoothie brand in the United Kingdom and recently sold a stake to Coca Cola.

5. Create a new trend or category rather than fit into the market.

Growth entrepreneurs keep a pulse on what’s happening but don’t try to fit into the market–they try to appeal to where their customers are heading. They have what I call an “outside-in” orientation. They begin with the larger context–the outside–and work inward. After getting his MBA from Stanford, Joe Coulombe acquired a convenience store chain called Pronto Markets. In the mid 1960s he was intrigued with an article in Scientific American about how many baby boomers were going on to college. That article gave Coulombe his small idea. He speculated that those well-educated boomers would want a more sophisticated–but offbeat and fun–food-shopping experience. His name was Joe, so he decided to call his high concept grocery store Trader Joe’s.

These five lessons are simple but contrary to the way most business owners operate. They’re not obvious to many business owners because they are counterintuitive. That’s why they are so important.

Image: Flickr user Zorin Denu

This is a big deal, as the firm’s philosophy is to focus on only the 10 or 15 companies it thinks are going to matter in the long run. (See: Facebook, Airbnb, and Groupon, among others.)

Back in December, we told you about Belly, a Chicago startup that created a new digital-based loyalty program for small businesses. At the time, it was just one of a jumble of startups crowding into the local commerce space. Today, though, Andreessen Horowitz is announcing it’s putting $10 million into the company. That’s notable since the firm’s philosophy is to focus on only the ten or 15 companies it thinks are going to matter in the long run. (Facebook, Airbnb, and Groupon are all in its portfolio.)

All of which leads to an important question: How did a startup, that’s barely a year old, that only has 1,400 customers, and whose founder is a first-timer become in a mere 12 months a company that the experienced hands at Andreessen Horowitz not only believe is going to be a game changer, but will be a leader in its class?

Would-be super startups, listen up:

Choose a big problem

Local stores are in a quandry. Customers can walk into their stores today, take a look at what they’ve got, and then, thanks to smartphones, figure out if someone else has their stuff for cheaper. “The Internet has enabled incredible transparency on pricing,” Andreessen Horowitz partner, Jeff Jordan, who’s joining Belly’s board, tells Fast Company. “There are a whole bunch of models that are providing pricing pressure, particularly to small merchants.”

If stores can no longer compete on price, they have to compete on something else. Both Belly and Andreessen Horowitz believes that means relationships–giving people a reason, other than price, to keep choosing particular merchants over cheaper alternatives elsewhere.

Don’t boil the ocean

There are myriad ways of strengthening the merchant-customer relationship, but Belly founder Logan LaHive, who started working on the business a year ago, didn’t try to tackle everything at once. Instead, he chose to focus on just one aspect: loyalty programs.

He’s come up with a system where merchants can get creative with the kinds of rewards they offer. It’s no longer the generic “buy 10, get one free.” Rather, merchants can choose to offer something unusual they think their customers would actually like. Some actual examples: A sandwich store will name a sandwich after you. A grocery store will let you cut in line. And a comic book store will let customers who make 50 purchases punch a store employee in the gut. (We’re assuming that’s been cleared with OSHA.)

But build in the foundation for a wider play

The Belly service is powered digitally–through an iPad in the merchant’s store and iPhone and Android apps for customers. (Customers without smartphones can track their purchases on a paper card.) That means Belly has a built-in launching pad for adding more services later that can further fuel the merchant-customer relationship–and further solidify its appeal to merchants.

“A by-product of what Belly is doing is putting a connected computer into soon-to-be tens of thousands of small merchants,” Jordan says. “We think that has very interesting potentials for strategic applications down the road.” (He declines to elaborate, though, saying, “We don’t want to telegraph where we’re going.”)

Gain traction quickly

Once investors bet on you, they’re going to expect you to be able to scale faster than you ever expected. A lot of the technology and ideas that are being developed today aren’t defensible on their own. It just doesn’t take that long to build a lot of the apps coming into the world today.

So investors are looking for other indicators that you’re going to be able to own your market. Getting rapid uptake is one slice of evidence that you’re the person they’re looking for. It means that you’ve developed an offering that’s appealing (as opposed to one that’s just OK or, worse, doesn’t actually work very well) and that you’ve figured out how to get people to adopt it rapidly.

Belly has 1,400 merchants using its system so far in six cities, with two more being added today. That’s impressive considering, again, that the system was barely a flicker of an idea 12 months ago. “We think the most important thing in this market is to be the first mover and to get out there fast,” Jordan says. “These guys probably added more merchants last month than any of the competitors have in aggregate.”

Take up residence with some of the hottest investor-operators of this generation

LaHive, who previously was in charge of new business at Redbox, got himself hired as a Founder-in-Residence at Lightbank, the venture firm belonging to Eric Lefkofsky and Brad Keywell, the original investors in Groupon and former entrepreneurs themseles. As part of the deal, he got to move into their offices and hammer out his idea while sitting mere feet away from Keywell.

LaHive says that helped him move faster. There were various things about getting a startup off the ground that he didn’t have to figure out on his own. He could just ask.

Plus, his proximity to Keywell and Lefkofsky gave Andreessen Horowitz confidence to invest in the otherwise unproven first-time entrepreneur. “Brad and Eric grew Groupon out to hundreds of thousands of merchants incredibly quickly,” Jordan says. “That DNA is critical in this model.”

Image: Flickr user Oregon State University

E.B. Boyd is FastCompany.com’s Silicon Valley reporter. Twitter | Google+ | Email

When you buy an Android phone, it means very little. The phone could be made by anyone. The case could be bulky, thin, sturdy or clunky. The screen could be one of the sharpest or blurriest on the market. And worse still, the software itself could be skinned to something unintelligible. Android is a fragmented mess.

Google has handed over the keys to their flagship mobile product to a bunch of companies who are often brilliant at engineering but rarely all that tasteful when it comes to design. So despite having every company but Apple making Google phones, Apple is still, somehow, making the most beautiful hardware. An iPhone might not have 4G like some Android phones on the market, but Apple has style and that counts for a lot.

Open hardware could once again become a huge advantage.

While Apple’s closed system offers covetable design, Google’s open line of phones only gets larger and more confusing. Google is ostensibly selling every phone in the world but the best one. But Project Glass could be very different. It could be the time where, like the early days of Windows PCs, open hardware again becomes a huge advantage. Why? Because Project Glass isn’t a gadget that’s tucked away in your pocket. It’s a fashion accessory that sits on your face. Fashion has its trends, sure, but ultimately, fashion is an expression of individual taste that’s fueled by an uncountable amount of options.

Right now, most of us are cringing at Google’s proposed Geordi-friendly geekwear. But imagine a scenario where Google offered Project Glass as a small hardware kit that any company in the world could use to make Google Glasses. (Somewhat like Microsoft, Google would could close the software and open the hardware–or at least parts of the hardware.)

While the typical electronics manufacturers would still produce Google Glasses, it could bring in a new wave of designer manufacturers, too. Instead of HTC, Motorola and Samsung, we could buy Google products designed by Ray-ban, Fendi and Gucci. Then, even retail stores like Target, who spend big bucks to subsidize designer labels for the masses, could get behind the technological platform to create whole new lines of the product. Every corner of the market is covered–from the techies to the moms to those who can actually afford high fashion.

Tom Ford’s Spring 2012 Campaign. Imagine the possibilities! Prada’s Spring 2012 Campaign

The result could be a refreshed paradigm for gadgets. A world once dominated by engineering decisions could be dictated by artistic tastes. Construction wouldn’t just be through milled aluminum or new composite plastics, but wood, textile, fur–any whim of the fashion industry.

And a company like Apple, who could conceivably release a competing product, would be in a much different position. Right now, Apple is the electronics design equivalent to Michael Phelps racing a bunch of children around the kiddie pool. But with every desirable fashion brand in the world behind Project Glass, Apple wouldn’t have nearly this margin on style. They’d finally have some decent competition, all arising from the smallest boutiques to the largest retail stores.

With Apple’s closed approach, their products would resemble a uniform at worst and a single label at best. And Google? They’d run the entire fashion industry.