Hi, this is Wayne again with a topic “Dealflicks wants to be PriceLine for movie tickets – Small Empires S. 3 Ep. 2”.
Dealflix is a startup that partners with movie theaters to fill vacant seats by offering discounted ticket prices, it’s a business model that has worked for other industries. But what sets the company apart is their back-to-basic strategy for making partnerships? Can their grassroots tactics actually compete, though? So we went to this unsexy conference and we start pitching all the people from 500 startups. Everyone else is making a million in revenue or whatever it is, and then here’s our little thing – and i remember one person just says guys – your your company has no traction whatsoever, like you guys, suck anu nigam like a really nice, well-known investor in the silicon valley Area he he mentions this comment. How do you think you’re going to sell theaters anyways, so i just went crazy on him and then i started saying you don’t know who i am. This is what i used to do. I said the friars do this. I see that and my co-founder kevin living in a van right now man.
How dare you speak to me? My co-founder is living in a van when a company is bootstrapped, it’s starting without the help of outside funding so becoming profitable. Fast is crucial, so when you look at a bootstrap startup, your first thought might be. These people are at a huge disadvantage compared to a startup that was backed by millions in venture capital and you’d, be right that forces them to come up with a business model that works in a hurry. Shawn came to me one day, he’s like hey.
I have this great idea, like you think, about like uh hotwire priceline, but for movie deals, i’m like no, i didn’t, but let’s give it a shot. So it’s where i’m here at first, you have this idea and you just think you’re going to make a billion dollars. That’S kind of step, one with an entrepreneur’s mind about 88 of movie theater seats were empty and at the same time, over 40 billion dollars are spent every year, just on movie tickets, popcorn and soda and you’re just thinking. This can be easy. Let’S do this.
It takes more than just a good idea to be successful in order to compete. You either have to grow quickly enough or do something competitors aren’t doing those. We call those the dark ages right.
The dark cages constant rejection from theaters, constant falling apart with the team, constant frustrations with the website with everything just nothing works. Kevin comes to me and he said i have an idea, and he says you know the first 60 70 theaters that we’ve signed up all required some face time. Cold calls is not working, emails is not working, and so what i want to do is i want to trade in my acura for a minivan, and i want to drive across the country and hit up all these theaters, and that was just the first of many Man van trips, most of the startups that i write about, do not have a van based growth model being bootstrapped enforces a discipline that is often very helpful to a startup, because from the day one they’ve got a ticking clock. They’Ve got to get to profitability much faster than one of those venture-backed startups the first three weeks. It’S like, oh, my god. This is like camping with my buddies, like urban camping.
This is so cool. I get to see all these cities that i’ve always wanted to visit. It’S kind of like that for the first three weeks and the next three weeks, it’s like yeah, i’m just a guy that lives in a van.
This is kind of cool, but you know there’s all these extra things you need to think about when you’re coming from a man-man to a meeting that you normally wouldn’t need to think about, for example, tomorrow, when i have a meeting, i just go to the meeting Because i already know that i brush my teeth in the morning, i know that i took a shower in the morning. I know that i’m wearing an appropriate shirt and i’m wearing boxers, because it’s the day time, you know each time you wake up, you’re, just kind of like damn you know is this: is this really worth it? I mean the quality of life is so freaking poor. Just looking for you know the next gem to shower and looking for food and you’re, just like.
Oh my god, this is rough. So that’s that that’s. That was the toughest part for me, but i’m glad we did it because just you know looking at where we’re at now it definitely paid off.
It’S kind of old school meets new school. It’S silicon valley, saying: hey we’re not just going to type behind a computer screen or call you we’re actually going to show up and try to make a deal and a lot of the theaters too. They respect it a lot because they realize.
How did you find me here? You know i’m in a seaside organ, which is just way out there and you’re here. I remember that meeting because he’s like none of our other vendors ever come here and you actually came here. We ended up getting them to commit to sign for that thing. Yeah after that, we’re like we’re in seaside oregon.
Let’S go to the beach yeah. You have to admire their tenacity if you’re a movie theater owner – and you have some guy from silicon valley, calling you trying to sell you on their business and promising you that you’re they’re going to drive more butts to the seats. You’Re thinking yeah right. But if someone actually shows up to your your theater face-to-face, it kind of makes you an offer that you can’t refuse.
I think the face-to-face interaction probably helps them in some way. There’S been numerous startups that have been very similar to deal flicks. I mean chimp flicks movies. Now my movie deals movie mongoose, i mean there’s been so many of them. They just weren’t able to close deals and they’re an exact replica of what we do. I think the only reason why we’re able to be where we’re currently at is because the drive and the focus is just maniacal – i mean who thinks about living in a van for two years and going around the country yeah we’re just hustlers. You know we’re boots on the ground, make it happen, type of people paul, graham, who founded y combinator. The startup incubator here likes to say that at the beginning, you should do things that don’t scale, in other words, do things that software can’t do, because, if you’re doing that chances are you’re doing something hard and if you’re doing something hard, then chances are that somebody Isn’T going to come in right behind you and try to do the same thing from there? We learned a little bit about fundraising.
We got some cool investors in we’ve raised a little under 3 million about 2.9 million. Now that deal flicks is off the ground. Not only do they need to scale up, but they also need to face the challenges of a changing market going out and meeting people in your van is great, but what deal flicks needs is for people to come to them. Ultimately, they have to find value for their customers beyond saving two or three dollars for a movie ticket.
I think the question is how many people are willing to go through the rigmarole of going on to a website that you know maybe they’re just becoming familiar with. In order to save two or three bucks so we’re currently in about 600 theaters across the country, we definitely want to go international. We want to solidify you know bigger partnerships with a few of the bigger chains. Better deals improved deals.
We also want to try. You know, i guess different products and services, possibly something like deal flicks now, where you can watch movies um on our website. We really envision a full dynamically priced marketplace where just like priceline or hotwire, whatever it is. The prices are just constantly in flux, depending on supply and demand.
That’S how we think it should be with movie theaters in the long run, and that’s one of our big long term goals, there’s less incentive to really go to movie theaters. In fact, if you look at numbers from the summer of 2013 to the summer of 2014 box, office, revenues were certainly down, and this is a business that is really dependent on how well the movie theater business is doing in general. They’Ve picked something where sure there may be a lot of excess inventory, but if people aren’t going to the theaters, that’s not good for deal flex. Here’S what i would say i think, up until a certain point.
It’S a great idea to drive around the country and live in your van and make these deals face to face, but ultimately, the word of mouth that you’re getting from your existing customers has to be good enough. That you can stop driving around in your van right. If the business works, you should be able to just rent an apartment. You .