“The wisdom of crowds”: Why Perth startup Demand.film turned to crowdfunding for the Airbnb of cinemas
Friday, June 7, 2019/
Crowdsourcing cinema startup Demand.film has launched its equity crowdfunding campaign, in a bid to raise at least $150,000 to further expand its global reach.
Founded in 2016 by David Doepel, Andrew Hazelton and Barbara Connell, the Perth-based startup has launched its Birchal campaign, with a minimum investment target of $150,000 and a maximum of $400,000.
The raise gives the startup a pre-valuation of about $8.9 million.
Speaking to StartupSmart, Doepel says the funding will be used to fuel new growth and expansion plans.
The amount is “a good balance to enable us to get the next set of growth going, bed down the expansion we’ve already done, get more momentum … and keep looking at options for other expansion opportunities after that”, he says.
At the time of writing, Demand.film had raised $45,651 in investment, or 30% of the minimum target.
Doepel describes Demand.film as the “Airbnb of cinemas”.
Where Airbnb utilised unused space in homes, to the benefit of both homeowners and travellers, Demand.film utilises empty cinema screens.
Cinemas are “packed to the rafters” on Friday and Saturday nights, he explains.
“Monday nights, not so much,” he adds.
“At the same time, as there are literally billions of empty seats every week in cinemas around the world, there are hundreds of filmmakers who make great movies that are cinema-worthy, but can’t find their way to a cinema.”
The startup is designed to create a value proposition for screening lesser-known or independent films.
Users request a film and crowdsource other interested audience members. Once there are enough people interested, the cinema will schedule the showing.
“We’ve de-risked the decision for a cinema to have a film on, we’ve lowered the price of entry for filmmakers and we’ve increased choice for the general public,” Doepel says.
Currently, Demand.film is available in eight countries, and has 2,500 cinemas in its network.
Just this week the startup expanded into the huge Indian movie market, securing a partnership with Indian cinema-on-demand app Vkaao.
With about 95,000 users in its database, Demand.film has sold “hundreds of thousands of tickets”, Doepel says.
In the last financial year, the startup saw revenue of $1.9 million, he adds, and this year it’s seeing “good growth tracking thus far”.
“The wisdom of crowds”
Doepel says he’s “had a few careers” in his time, including working as a filmmaker in the US in the 80s and 90s.
Later, he returned to Australia and got involved in films as an investor.
“There was an opportunity to be a little bit disruptive in that space, and to think cleverly about what ways in which we can apply technology to the problem of distribution,” he explains.
Previously, the startup completed a small seed round, which included friends and family funding and a small amount of institutional VC.
However, this time the startup is opting for crowdfunding because “I love the democratisation of this model”, Doepel says.
Crowdsourcing is central to the business itself, he explains, and so it made sense to expand that ethos to its funding model.
“We believe in the wisdom of crowds … why not give the customers who have helped us build our business the opp to own a piece of it?”
It’s also a way to further connect with Demand.film’s customers, Doepel says. On Birchal’s equity crowdfunding platform, founders can see why people have responded to the expression of interest.
In this case, a lot of people said they were interested in investing because they’re customers, and they love the brand, Doepel says.
“That’s humbling,” he adds.
Startup advice from Russel Crowe
Perhaps appropriately, when asked what kind of advice he would offer to other founders, Doepel shared something he heard Russel Crowe say at a screening in LA.
“A young filmmaker asked a question about advice,” he recalls.
“[Crowe] talked about your capacity for rejection, and being able to manage when people say no.”
This stuck with David, who now advises other startups to be persistent, and maintain belief in their vision.
“You can be a 20-year overnight success,” he says.
“The number of times it doesn’t work is way more than the times it does.”
He also encourages founders to believe in their team, and create an environment that helps them stay resilient in the face of failure or criticism.
“Absorb the learnings and keep doing better,” he advises.
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