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.

For instance, Niel gleaned the following lessons from his experience with the failure of Newmerix, a company he co-founded.  He underlined that choosing your business partner is a vital process; it needs to be the right person for the business (as opposed to someone whose personality meshes well with yours).  He said he also made the mistake of letting the management team take big salaries from the outset; it set a cultural momentum in the company that was hard to come back from.  Another problem with that company was that it was so insular.  In retrospect, they should have gone out to talk to customers.  Niel learned that it is best to bring people in and get their feedback throughout the development process.

A seasoned veteran of venture-backed startups, Niel had the following advice for fellow entrepreneurs:
On how to protect your crown jewels (IP) when getting advice from others on your entrepreneurial idea, he said that it is a myth that if you talk to people about your idea, someone will steal it from you.  This rarely happens. He recommended talking to as many people that matter as possible before starting your company.  Talking to people is cheap.  It is expensive to actually start your business, and you want to be sure you are approaching it correctly.

Neil also advised two things to never skimp on or do later: Legal & Accounting.  On using advisors, Neil said to take advantage of your advisors – have them come in to your company for a limited time on a regular basis (ex: once a week for 1-to-3 hours) for a well-defined purpose and compensate them by having food at the meeting.  On starting a business and getting funding, Neil has been successful by establish relationships with potential investors first (before pitching to them).