 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 five-hour in 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 company has no traction whatsoever. Like, you guys suck. Anu Nigam, like a really nice, well-known investor in the Silicon Valley area, 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 used to have a Ferrari, I used to do this, I used to do that. And my co-founder Kevin is 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. Sean came to me one day. He's like, hey, I have this great idea. Like, you think about like Hotwire, price sign, but for movie deals? I'm like, no, I didn't. But let's give it a shot. So that's where I'm here. 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 percent 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 is gonna 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 are we call those the dark ages, right? The dark ages. The early days. The tough days. Constant rejection of 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 FaceTime. 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 few weeks and the next few 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 van 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 daytime. You know, each time you wake up, you're just kind of like, damn, you know, is this really worth it? I mean, the quality of life is so freaking poor. Just looking for, you know, the next gym to shower and looking for food and you're just like, oh my God, this is rough. So 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, Oregon, which is just way out there. And you're here. I remember that meeting because he was 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 they're going to drive more butts to the seats, you're thinking, yeah, right. But if someone actually shows up to your theater face to face and 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 DealFlix. I mean, Chimflix, MoviesNow, MyMovieDeals, MovieMongoose. 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 on 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 DealFlix 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 DealFlix 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 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 bigger partnerships with a few of the bigger chains, better deals, improved deals. We also want to try, I guess, different products and services, possibly something like DealFlix now where you can watch movies on our website. We really envision a full dynamically priced marketplace where, just like Priceline or Hotwire or 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 summer of 2013 to the summer of 2014, box office revenues were certainly down. 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 DealFlix. 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. If the business works, you should be able to just rent an apartment.