If Jack Kerouac, author of the American classic On the Road, and his travel buddy Dean Moriarty were alive today they would work at a startup and it might be Dealflicks.
A 500Startups company we invested in at Georgetown Angels has two of four members from their cofounding team along with two new college degree minted sales associates, traveling across the country in vans (car jacked from their parents) and are signing up cinemas to their business which enables users to get instant discount tickets to movies from their mobile phone or the fixed web – think “Priceline for movies.”
The Sales Team is literally on the road sleeping in the van, showering at the gym or fast food restaurant sinks, probably meeting women 5 nights per week, and seeing the country while building an amazing startup business they own. The founder of a very successful online price comparison company once told me over drinks in Stockholm that the reason B2C is better than B2B is not that the valuation multiples of revenue to enterprise value are 3x to 7x better than B2B, but because he can explain his shopping business in a bar and women get excited about his shopping business rather than explaining the backplane of his ATM packet switched telecom signaling gateway router he hopes to sell to Cisco one day which puts everyone in the bar to sleep.
(This is a real photo of the Dealflicks guys on the road in the “manvan”.)
They literally calculated how much they are saving by not paying rent to live in San Francisco and spend that on gas while being on the road building their business. I feel honored to be funding these guys.
In recent years or maybe even since ancient times startups have been a young man’s game. Angels and VCs don’t like to see their cash burn up quickly paying expensive salaries and compensation packages that outbid large corporates, investment banks and consulting companies before seeing if the company needs to pivot twice before finding a business that works and is ready to scale.
The result is many startups are founded by very young men and women who sleep under the table they program on and live on Raman. It’s a shame if much of our talented and qualified population is shut out of startups for lack of investors willing to fund their more expensive families. I think some B2B plays require more experienced managers and do not have young founders eating Ramen and trying to close the big enterprise sale; so there is a balance, but sometimes it lines up with B2B being the older man’s game and B2C going to the younger founders. You can see this in the Valley as the mediatech startups are in San Francisco or close to SF in the northern Valley and the hard technology startups are further south often around Santa Clara, where there is not much night life.
Here is a story about one of our investments – Dealflicks – where these guys are writing the new book on Lean Startup (figuratively). These guys are making their funding last. Startup hustle: Why two men decided to sleep together in a van for months on end.