You have to copy to the flash drive. To do that, just right click the installer, navigate to Contents > SharedSupport and you should see InstallESD.dmg. Copy that to your desktop. Open disk utility and drag InstallESD.dmg to the sidebar. Click on the restore tab. Now insert your flash drive into your Mac and drag the InstallESD.dmg to the source box and drag the flash drive to the destination box. Finally hit restore and when it finished, boot holding the option key and select the flash drive. When you click the arrow under it, your Mac will start booting. Once it is done, click disk utility and then continue. Select your hard drive and click on the erase tab. Name it whatever you want and click erase. You can then quit disk utility and click reinstall os x mountain lion.