Dan Hermann: We attended a friend’s birthday party, which was at this painting studio where they were serving beer and wine. Both he and I recognized very quickly that there was a lot of power to the concept, which had a lot of visual implications. We could tell that it was just very social media friendly. It made for a natural camera phone picture and people were posting on their Facebook pages. It just carried very well across social media. We could also tell that it was a lot of fun. Both of us thought that it would just be a fun thing to start.
We both were the kind of people who enjoy putting things together and creating a business. We saw that it had the potential to really scale. One thing that I could say about the one in the painting studio was that they were very fixated on the quality of the painting class. It was so much more important than whether or not you learn something about painting. We went and put together a business model around putting this little painting class in an actual local bar versus in a studio. As we started to put pen to paper and think through the business model, we saw how we could minimize the overhead by going into somebody else’s bar.
Sramana Mitra: You basically booked a bar for the evening for the event that you’re doing. Then you bring in your paint supplies, the people show up there, and you hold the event at the bar.
Dan Hermann: Not quite. We basically would talk to the bar and book one night a week. We would go there every week. We would basically sell tickets for the events through our webpage. We were able to use a licensing model. My other company, as I mentioned, is an operations business. That company was growing through franchising. I had some experience with franchising and building a business that way. I took that experience and then we translated that across into this licensing model where we license local artists to teach these painting classes. Those will be in the local bars. That’s how we got started. We just set it up in a way where we didn’t have to outlay a tremendous amount of cash to get started. I think we started to run a very efficient business from there.
Sramana Mitra: What is the customer acquisition strategy? Who are the typical customers who are using these kinds of events?
Dan Hermann: Typically, we are acquiring customers through email marketing and different deal sites like Groupon. I would say 90% of our customer base is female. Most of them are Generation Y. We have customers between 21 through to 45.
Sramana Mitra: That’s a B2C business?
Dan Hermann: Yes.