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.

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).