Tom outlined that there are 4 ingredients that make money fly to you.

Flying Money Ingredient 1: Know what pain your customers are experiencing, and ensure you can provide a solution that is better than the one the customer could come up with themselves, and better than your competitors. Be the best. This could be the cheapest, fastest, highest quality, most convenient, most fun, most admirable values – whatever sets you apart.

Flying Money Ingredient 2. Be the best solution for the pain, don’t under-price it – position yourself appropriately. Talk about your solution in the terms of your customer pain. All sales are emotional. Make sure your customer understands why you fix their pain as they know it.

Flying Money Ingredient 3. You have to have the best brand (not just the best features). This means people believe you have the best stuff (even if you don’t). Perception is reality. Make sure that your potential customers understand that you are the best.

Tom also told everyone a real truth – Kevin Costner in the Field of Dreams was wrong. “If you build it, they will come” isn’t true. You need to get customers aware of your product when they are feeling the pain. Advertise! Word of Mouth is through social networks becoming far more powerful. It’s timely, it’s strong. It uses someone’s existing relationships to help sell your product. And they do it because they love your product. You can’t buy their love. Be proactive and ask any customer who’s had a good experience to tweet, blog or Facebook about it.

Flying Money Ingredient 4. You don’t need a big ad budget, you need vocal, raving fans. The fans who will tell other people about their love for you and your brand. You build them not by pontificating but by conversing with them. You don’t get to tell them to love you, instead you need to give them a reason to love you.

Tom then described how these four ingredients form a circle. When you have a group of Raving Fans, they then lead back to finding more customers in pain (step one), helping you drive the business.

For anyone who missed the workshop, some video clips are below and you can also find the entire audio file here.  Thanks to Joanne White for guest blogging.

With those odds, entrepreneurs need to step into their customers’ shoes.  A lot has to be right for a successful product launch.  The concept should meet a real need, the design has to work and the product has to be positioned well.  You’ll get these decisions right, says Dr. Moreau, if you know your customer.

80% of product development costs get locked in on the “fuzzy front end.”  That’s because we get attached to our ideas.  The key is to challenge your assumptions and talk to your customers.

So how do you talk (or better yet, listen) to your customers?  “Abstract up” to hear what they need.  A customer might not pinpoint the solution, but they know when they’re dissatisfied.  The entrepreneur’s job is to fill that abstract need: The CEO of Revlon says they sell hope.

And – profitability depends on the diffusion of your product.  Will the early adopters convince the majority to buy it?  Word of mouth is powerful, but it depends on how similar the two groups of customers are.  The early adopters might be very different from the majority.

Who first adopted digital cameras?  Not professional photographers. Real estate professionals, early web developers and others who needed online pics, even if they were grainy.  Every product has to get across the chasm between early adopters and the majority.  How many of you own a Segue?

Finally, recognize the little ways you’re asking your customers to change by buying your product; it can be the difference between flying colors and stuck in the mud.  As one student put it, if you use Skype, now you have to “get gussied up” just to talk on the phone.  On the other hand, a new insulin pen reduced the prep time from 1 minute to 10 seconds: sales went up by 30%.

For anyone who couldn’t make it to the marketing workshops with Page, we’re posting the slides on the New Venture Challenge blog.  Thanks to Mark Wiranowski for guest blogging the event.

Jason Mendelson, Co-Founder and Managing Director of Foundry Group, a Boulder venture capital firm, kicked off the New Venture Challenge Crash Course series to a packed house last night.  His wealth of experience – software engineer, then deal attorney, then venture capitalist – came through in lively style.  He’s not afraid to call a spade a spade, either.  Take his advice on very early stage financing:

“Do you really need financing yet?  Early stage financing is very risky, and therefore, expensive.  I’m going to act more like a loan shark than a VC.  An angel investor will give you a better deal.  Create value and the money will follow.”

This was the first in an every-Wednesday “Crash Course” series put on by the New Venture Challenge.  Each workshop is presented by a seasoned entrepreneur or business leaders.  Mendelson’s talk, titled “How to Build a Company,” dished out advice and highlighted common mistakes:

“You need a partner who complements your skills.  The biggest red flag for me as a VC is someone starting a company solo.”

“Most people fall down on estimating the competition.  Lots of entrepreneurs say, “We are different.”  Are you really?  Take social networking sites; your competition might just be your customers’ time.”

“Marketing and advertising will not save you: Every marketing guy knows that half of his budget is wasted; he just doesn’t know which half.”

Mendelson also praised Boulder as a place to build a company.  Successful entrepreneurs are happy to mentor those starting out, and the city is one of the most socially-networked that he’s worked in.  Mendelson illustrated with a parting shot.

“What should you say to a Sand Hill Road venture capitalist?  Compliment him on his Ferrari.”

Below are the slides from Jason’s presentation.  Thanks Jason!  Here is the video of the crash course.

How to Pick a Business from Paul Berberian on Vimeo.

The 2009 CU New Venture Challenge began Wednesday night with a full house in the Wittemeyer Courtroom at the CU Law Building to hear Paul Berberian deliver the rousing and interactive session called, “How to pick a business worth starting.”

Paul ‘s first slide, “how to pick a winner,” set the tone for the evening. A kid with his finger up his nose, nearly up to the knuckle, brought lots of laughter. Paul continued to describe the essences of what types of businesses were worth pursuing, how to choose one that suits you, and a few hard realities of working in a startup. He talked about his failures. His personal reflections on one business experience selling plastic name tags which resulted in him marrying with a “negative dowry” was one many entrepreneurs see as a reality. Luckily, that experience appears to be humorous when it’s eclipsed by successes. And Paul has had a few, to say the least.

Paul is onto his sixth business (solar panels), and admits he’s the guy who wants to have lots of money raining on him. For him, that’s a key aspect of the type of business he chooses. He said though, that there are other factors that weigh in for consideration when deciding on a business to launch, and that the audience should look for something that suits and fits in all areas of who they were, and what they wanted to achieve. He described the process of looking at 14 different companies over the last year or so. One example was a company that produced bulletproof vests. “I’m a pacifist,” said the air force veteran, “I did that stage of my life and want to move on to other things.” So, while the bulletproof vest company might have been a strong one, it didn’t go further on his list to investigate.

In a highly engaging presentation, Paul invited the audience to ask questions and be interactive throughout – and they did. Numerous times Paul was asked to offer more detail on specific process, and simply to ask additional questions. Paul answered everyone, and kept a perfect balance of information, entertainment and informality so no matter where you were in your business journey, there was value in his message.

The broader message that while you have nothing is the best opportunity to go out on a limb and start a business was directly aimed at the students in the room. Paul’s encouragement was a great beginning to CU’s New Venture Challenge for 2009/2010. Following the presentation, everyone headed upstairs to network, enjoy some refreshments, and chat with some local startups looking for interns.

Paul Berberian was the perfect beginning to the CU New Venture Challenge and fired up the anticipation for next week’s pitch evening. A number of people have registered their intent to present their budding idea at the event, being held in the ATLAS building at 6pm on Wednesday 18^th November. All members of the campus, and the broader community are invited to come along, hear ideas (or present their own), and network with others to hopefully start something that could be the next big thing. As long as, according to Paul Berberian, it isn’t selling plastic badges.