Dealflicks

2011 was a good year for Adele, stem cell research, and royal weddings. It was not a good year for Sean Wycliffe. After creating his startup DealFlicks, talking to hundreds of theaters, and being dropped by multiple cofounders and employees, nothing was turning out well.

At certain points, giving up and accepting defeat became a feasible thought for Sean. But along the way, milestones like closing the first deal, getting the company launched, or selling the first ticket have kept him invested in an originally part-time project. These days, the company is thriving in its market and is almost unrecognizable from its scrappy beginning. In five years, there have been countless peaks and valleys, but each new experience has taught him something new.

The King’s Speech

Starting in high school, Sean began to watch more movies, becoming enchanted by the silver screen. Little did he know, this love for films would land him in a theater a decade later and become the inspiration for Dealflicks.

Graduation in 2001 brought him to UC Berkeley. During freshman year, he started a job at Excel Communications, a company selling long distance phone service. Starting out as a senior representative, he began to work his way up the corporate ladder, landing a position as an executive director in two years. Wanting to focus on this new profitable job, he dropped out of university in 2003.

Running multiple branches for the business became incredibly lucrative; Sean said, “We got over one million revenue by the time I was 21.” He was not well-equipped to handle this rush of money. The newfound success went to his head and his spending habits got out of control.

At the end of 2004, the company went bankrupt and he lost everything. Starting out high and rich then crashing down to being penniless was a humbling experience. Sean moved back in with his dad and began reconsidering his life choices. From 2006-2007, he got involved in his local ministry and studied the bible more. A new man, he returned to school in 2008 as an economics major. During graduate school, he started a student tutoring business and project Pueblo, a volunteer service to aid native american reservations. Come 2010, as graduation loomed around the corner, he considered getting a job and settling down with his girlfriend. After applying to numerous places and getting his application rejected at each one, Sean started to think about starting a business. He had a girlfriend. He wanted to settle down. He needed money. The idea of a startup wasn’t off the table, and looking back at his previous experience as an executive director at a billion dollar company, he thought the skills could translate.

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During December of 2010, after graduation, Sean went to a movie theater to watch “The King’s Speech”. While he was enjoying the film, he looked around and noticed many empty seats in the theater. What made it even more bewildering to Sean was the fact that it was only several days after the film had been released. That night, he went home and thought about the empty seats in the theater and wondered whether he could buy them for a cheaper price. After a long, frustrating search on his computer, he could not turn up anything. The more he looked into the issue, the more he felt like a business opportunity had fallen into his lap. Sean explained the statistics he discovered, “I found that over 40 billion dollars were spent on movie tickets and popcorn, and at the same time over 80% of movie theater seats were empty”. As he kept reading, this idea of a Priceline for movie tickets began to form in his head. This idea would eventually become Dealflicks.

An Empty Start

Because no company like Dealflicks had existed before, Sean thought the idea would sell itself. At the time, the only other companies selling movie tickets online were Fandango and movietickets.com, albeit at full price for the convenience. Sean envisioned a dynamically priced marketplace customers could open up on either their phone or computer to buy tickets. The costs would fluctuate based on supply and demand. Alas, it was a just a dream in the beginning.

Idea in hand, Sean went out looking for a team. Going through multiple friends, he finally found one who was a developer and was willing to try the concept out. At the same time, Sean began looking for theaters. He first pitched to the theater down the street. They agreed. In a strange turn of events, he explained, “I went back there a few weeks later, to learn that they fired the person I made the deal with…so that deal didn’t happen and even to this day we still don’t have that theater.”

After that first setback, things kept going downhill. Most theaters balked at the idea of his company because of disagreements over pricing. Sean’s first pitch was premised on just ticket discounts, but as he went through theater after theater, he realized that they wanted to include concessions into the pricing. Then he started pitching bundles. After pitches, Dealflicks would get quotes, but then the deal would somehow fall through and they would have to restart with another theater. At one point the revenue share was even cut down to zero, but even then, no theaters signed up.

At this point the first cofounder had pulled out, and the subsequent one got a job at Google and decided to leave DealFlicks. Sean also had to drop another cofounder who wasn’t doing his job. As Sean pointed out, “we probably went through roughly ten different co-founders before we had the three that stuck.”

This coming and going of cofounders created a weak team, and in the beginning, it hindered any progress that the company was making. Because of this, most theaters were reluctant to sign up because he did not have anything to show them except for a sales deck and an incondite rendering of what the product would look like.

Sean remembers one story in particular.

We  finally got a theater that wanted to sign up and the theater says, “Okay, I’ll sign up if you guys can integrate into my point of sale system.”…So at the time I was thinking that’s great. I go back to my engineers and they’re trying to build this thing and I work part-time and they’re still in college, so it’s really just not progressing at all…I realized we were not getting it done. It was not good at all. So right now I’m just working on  getting this thing up myself and we were never really able to get that up. The theater just eventually pulled out, and we didn’t really sign them up until two years later

Sean explained that the majority of the disappointing experiences went somewhat like that one. His team would be met with a challenge; they would try to address it; nothing would get done. Sean would then have to learn how to do the task himself. Most of these deals ended up falling through.

First Theater Problems

FirstTheater
Dealflicks’ First Theater

A year later, when they signed up their first theater, the marketing venture did not turn up any big profits. Realizing theaters served a mostly local population, the company experimented with a variety of marketing tactics to appeal to this target market. The first theater they signed up was one in the poor area of Gardena, California. To market, they had to meet two criteria: locality and cheapness.

They tried many ideas.

Sean said, “when we first got started we got some flyers printed and then we put them on cars and then handed them out to people who were near the movie theater…We went to a Walmart down the street of the theater and put them on cars and handed them out to people.” They even went to a high school. Sean and his other cofounder sneaked into the school and stuffed lockers full of fliers; they posted them on the walls of the locker room too. They were not caught, but they only manage to make one sale from the whole ordeal.

The amalgamation of these situations proved frustrating at the time. Sean admitted the passing thought of just throwing everything away and giving up came at times. Starting a company and having the first year-and-a-half be nothing but setback after setback can deteriorate the human spirit.

Sean stayed optimistic.

Even if he could not sign up theaters instantly and even when he could not come out with a product fast, he learned other important lessons. He learned from his mistakes. He also learned new technical skills like programming that he would not have learned otherwise.

Making Deals with Deal Companies

dealflicks team
(From Left to Right) Kevin Hong, Sean Wycliffe, and Zachary Cancio

Just as it looked like the company could not survive any longer, the final two co founders got on board. With a stronger team and better synergy, the company officially launched in April of 2012.

That’s when things started picking up.

Soon, the company was able to start signing up more and more theaters. Sean attributed this to the new team. With hindsight, he realized that Dealflicks could have been more successful faster if the new team was there first.

With a new, invigorated crew ready to go like sprinters on their starting blocks, they had to figure out the age old question of customer acquisition. Learning from his previous marketing failures, Sean tried out some new methods. They began to change their strategy, moving more towards media based marketing.

Before they had launched, they learned about another company that was doing a similar dynamic ticket sale system called Chick Flicks. Chick Flicks had gotten some coverage in publications like Killer Startups. Dealflicks played their cards and launched before them. Once they became official, they contacted these places and got some coverage there too.

The media started helping the business more after – in September 2012 – they got into 500 startups. In December of 2012, they got a segment on NBC and CBS bay area. They also got some pretty big coverage in the Oklahoma City Tribune.

Outside of the media, their most successful marketing strategy to date has been daily deal companies. The idea went something like this. Dealflicks would get their discounted tickets sold on daily deal companies’ sites. This way, they could sell their tickets and get the word out about their product better to the existing consumers of websites like Groupon. Even more ingenious, this idea solved for locality because people who wanted to buy tickets to a certain theater would see dealflicks on the site and know to buy it from there in the future.

Although the concept was tossed around in the beginning, Sean decided to call up deal companies and pitch to them in hopes that they would sell their discounted tickets on their websites. The first company to take them up on this was Dealchicken. When they first launched on Dealchicken’s site, they immediately sold 50 tickets, which to them at the time, was incredible. With this momentum, they were able to get bigger daily deal companies like Groupon to work with them to sell discount movie tickets. Sean considered this the company’s first big home run, and as investor money started flowing in, they were able to expand their market strategy to more expensive but targeted social media.

Staying True to Himself

Through this rollercoaster of emotions running Dealflicks, Sean’s cofounders have kept him grounded. Sean explained:

You have other co-founders, and you start to realize: this guy is really excited, he’s made a commitment to this thing, and I don’t want to quit on him or her. So you start to think about the people that you’re working with and you don’t want to let them down.

Sean further praised one of the cofounders, Kevin Hong, for helping him go all in for his company. When he first joined, he quit his job at an options trading firm. He woke up early every morning, dressed, and sat at a coffeeshop all day working on Dealflicks. For two years, he also lived out of a van pitching to theaters. The van sales strategy helped increase the close rate of deals and sparked national coverage from The New York and LA Times. Dubbed “Man Van”, Hong and some of the sales team traveled across the country and helped close 45 deals in three months alone. They showered and exercised and gyms, and they slept in the van. Seeing his team working hard and watching the company gain momentum has helped Sean stay confident about his path and his decisions.

These days Dealflicks looks different from the struggling startup of 2011, but the goal has not changed. From the beginning, Dealflicks has always been about the movies and dynamic ticket pricing. This objective has not shifted, but the methods they have used to achieve it have. They went from solely selling tickets to selling bundles to customers. They reconfigured software and their dynamic pricing system. These days, the company’s vision stays strong. In the future, they want to change the movie industry’s pricing methods by using demand, and become the one stop shop for movie tickets.

Entrepreneur Advice

Sean’s advice boils down to two concepts: Network and Learn. Sean realized that if he had networked better when he was younger, he could’ve fixed his cofounder obstacle much faster “because if you want to start something and you’re passionate about it, the first thing you’re going to have to do is build a team.” Furthermore, he said “learn a little bit about the stuff that’s not your core expertise…so you can understand that value that comes from it, and you can have an intelligent conversation with someone that’s not of your background.”

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