A Q&A with Dealflicks co-founder Sean Wycliffe. The San Francisco-based startup, which gives moviegoers discounts on tickets and concessions by partnering with theaters to help them fill empty seats during slow periods, announced the raising of $1.7 million in Seed funding last week. Investors include Sierra Maya Ventures, Mogility Capital, Be Great Partners, Wefunder and Rubicon Venture Capital. It was founded in 2011 by Wycliffe, Kevin Hong, and Zachary Cancio, and is a graduate of 500 Startups (Fall 2012) and Media Camp L.A. 2013.
SUB: Please describe Dealflicks and your primary innovation.
Wycliffe: Dealflicks is Priceline for movie tickets. Eighty-eight percent of movie theater seats are currently empty, but Dealflicks partners with theaters to get butts in these empty seats by selling movie tickets, popcorn, and soda for up to 60 percent off. Dealflicks is the first and only yield management platform for movie theaters.
SUB: Who are your target markets and users?
Wycliffe: Our target market and users revolve around anyone who’s near our 400-plus theater locations that loves to see movies. We have all sorts of people who fall into this category, but young families and couples are two of our biggest demographics.
SUB: Who do you consider to be your competition, and what differentiates Dealflicks from the competition?
Wycliffe: We don’t have any direct competitors, but there are some other companies that are in our space. Daily deal companies run promotions for theaters, but these are infrequent for users and they cost quite a bit for theaters to be super sustainable. Membership clubs such as Costco sell discount movie tickets, but these require a physical purchase from users—i.e. last minute is tough—and do not allow theaters to vary pricing and availability like Dealflicks’ yield management platform does. Online movie ticketing companies sell movie tickets, but they only sell full-priced tickets, charge convenience fees, and don’t offer concessions.
SUB: You just announced that you’ve raised a total of $1.7 million in Seed funding. Why was this a particularly good time to raise funding?
Wycliffe: As a startup, we needed some funding to get the ball rolling and make some initial hires. But as we reached our initial funding goal, things really started to pick up on the theater acquisition side, and we saw that we could speed up our growth by having a few more engineers and salespeople and a bigger marketing budget.
SUB: Do you have plans to seek additional outside funding in the near future?
Wycliffe: We’re considering doing another round of funding sometime in the near future, but we’re also getting close to breakeven and cash-flow positive. So this is an ongoing conversation that we have usually every few weeks.
SUB: What was the inspiration behind the idea for Dealflicks? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Wycliffe: I’ve always been a huge movie fan, and after graduating college I saw the movie The King’s Speech. It was a great movie, but the theater was empty. That’s when I had the idea for Dealflicks—a Priceline for movie tickets. I did some research and found that there wasn’t anything like this, so I decided to build it with my co-founders Kevin Hong and Zachary Cancio.
SUB: What were the first steps you took in establishing the company?
Wycliffe: I did some research on the market size, competition, the industry and the problem of empty seats. Once it seemed like there was an opportunity, I bumped the idea off of some close friends and family. I then made a list of about 100 movie theaters near Oakland, California, threw a PowerPoint together, and started driving around to see if I could pitch some of them. Through that process, I was able to get some meetings and iterate on the business plan and pitch. Concurrently, I was networking and pitching friends to join as co-founders.
SUB: How did you come up with the name? What is the story or meaning behind it?
Wycliffe: Initially, once I had the idea I thought I should try and get a domain name ASAP. I went to my GoDaddy account and bought about ten different domain names: Seeitcheaper.com, buttsinseats.com, a few other domains, and ‘Dealflicks.’ Dealflicks was the best by far out of all of the domains I had—people loved it, so here we are.
SUB: What have the most significant challenges been so far to building the company?
Wycliffe: Finding my co-founders was super hard. It took almost one-and-a-half years from the inception of the idea to the time both my co-founders were on board. That was super tough; there were five co-founders that I went through before Kevin joined, and another three co-founders we went through before Zach joined. Getting our first theater was really hard too; we had to speak to approximately 100 theaters over the course of a year before Kevin signed up our first partner—Gardena Cinema in L.A. All-in-all, the period before Dealflicks officially launched in July, 2012 was the toughest.
SUB: How do you generate revenue or plan to generate revenue?
Wycliffe: We take a percentage of the revenues we generate for our theater partners.
SUB: What are your goals for Dealflicks over the next year or so?
Wycliffe: We want to get to 1000-plus theater locations and sell one million-plus movie tickets and concessions per month by the end of 2015. We also want to get to cash flow positive by early next year.