(FORTUNE Small Business) – Few people have rocked Washington, D.C., as much as the fiery Newt Gingrich. In 1995 the history professor turned Republican rebel became Speaker of the House and launched his conservative and controversial reform package: the Contract with America.

After leaving politics in 1998, Gingrich started The Gingrich Group, an Atlanta consulting firm that works with small and large businesses. He now helps entrepreneurs plan strategy, raise capital, set up marketing programs, and deal with technological change. Recently Gingrich spoke with FSB editorial director Brian Dumaine about the current state of small business in America.

When you left your job as Speaker of the House in 1998, you could have gone in almost any direction. Why work with small businesses?

If you read Clayton Christensen's book, The Innovator's Dilemma, he makes the point that truly disruptive innovations almost always occur first from a small business. That's because big businesses find it difficult to implement truly new ideas. I wanted to see what real practitioners were doing in the real world to launch new ideas.

What do you do for the small businesses you work with?

I mainly act as an adviser on marketing and communications. When I first stepped down from Congress, I went to the board meeting of a startup, and I suddenly realized that running a business is a lot like running a congressional campaign. You have to have a selling proposition, you have to have an organization, you have to raise money, you have to meet payroll, pay taxes, meet regulatory requirements. Communicating with an investor is a lot like communicating with a contributor.

With the economy slowing, companies seem less willing to take risks. What's your advice to businesses trying to make it during this downturn?

For the last 400 years there has been a pattern of the human race getting substantially wealthier every year that there's not a major war. The long-term pattern over virtually every decade, with maybe two or three exceptions, is that if it's peacetime, the human race is getting richer. There are terrific companies out there that are going to make a lot of money.

What kinds of businesses do you work with?

We work with people trying to launch baby businesses rather than small businesses.

What's the difference?

A baby business is one that starts small but is meant to keep growing. A small business is a comfortable generator of revenue but doesn't have great growth potential.

How can you tell a baby business from a small business?

It's easy. The tricky thing is telling the difference between a baby business that's going to succeed and one that's going to fail. I look for companies with an entirely new technology or service that has a better way of solving a problem. Show me something that is a better solution or a better product.

Can you give us an example?

We have a firm called IdleAire Technologies, which is developing a device that allows long-distance trucks when they pull into stops to have air-conditioning, telephone, and Internet and cable TV in their cabs. Think of it like a drive-in movie. A device hooks onto your window, and in hot weather it cools the truck cab and allows the trucker to sleep without his diesel engine running (a big contributor to air pollution). So for about the same price as the diesel fuel they'd burn, they get a better quality of life and we get cleaner air.

Where do entrepreneurs go wrong?

Look, I lost two campaigns. So I sympathize with the fact that you can have a really good idea and it can be the wrong week. I am a disciple of quality expert Edwards Deming. He said producers create value. Customers define whether or not it is of value. The first thing a young business has to have is an understanding of whether or not it has a unique selling proposition. Why are you different? Is it the service? The quality of service? Is it a product? Why should a customer give you money instead of keeping it or giving it to someone else?

Does it help if your idea for a business is hard to copy?

Well, it depends. There are a lot of Realtors out there, and in a sense they copy one another, but you can still make a terrific living being a Realtor if you're systematic, methodical, and pay attention to what you're doing.

What about the situation where the customer doesn't really know what he wants, but once he sees it, he wants it?

Alexander Graham Bell went around towns in New England and attended public events to talk about the telephone because no one knew what a telephone was in 1876. If you had put people in a focus group back then, they would not have said, "I want a telephone." If you have a truly new innovation or product, you have to persist for a long time. It's not obvious that it's going to work immediately. Then you have to decide how much faith you have in yourself. I ran for office for five years because I really thought it was important for the country to have a Republican majority. I kept telling people for 15 years, from 1979 to 1994, that we could be a majority, and they thought I was nuts.