Tired of scalpers reselling tickets at inflated prices, longtime concertgoers Joel Martin and Henry Vinson decided to develop a better system.
The Montana State University graduates created a web app, Sellout, to eliminate what the pair see as the biggest issues with modern-day ticketing. After buying a ticket, the app obscures its barcode until the time of the show, preventing scalping. Sellout also has its own built-in resale system, creating a waitlist for sold-out events where customers can pass along their tickets at face value.
Martin and Vinson partnered with a team of developers out of Missoula to help build their software, and in January scored their first partner — Bozeman venue Live from the Divide.
The venue’s first show using Sellout sold out in 45 minutes, what the 28-year-old Martin called a “really cool” moment.
Since then, the company has announced a partnership with Sweet Pea Festival to coordinate ticketing for the popular Bozeman celebration, and is in talks with a state film festival and several running race events.
“We’re working on a couple different verticals, because there seems to be a need for this functionality to exchange a ticket,” Martin said.
What the company needs now, the co-founder said, is money. While Sellout, like other vendors such as Ticketfly and Live Nation, charges a service fee for purchases, until it reaches a critical mass of clients, the company will need capital to hire more developers and sales people.
In a state operating with a relative trickle of venture funding, Martin’s refrain is one that’s echoed by many freshly formed companies in Montana. But a new program, formed by a collaboration of startup incubators and venture groups, aims to change the funding dynamics for emerging businesses.
In late May, Sellout was one of six tech companies to take part in a pitch competition at MSU. The competition was put on by Early Stage Montana, a nonprofit formed to assist regional companies by providing mentoring services and access to capital investment.
“The promise of the program is a better foundation and understanding of how to build a value proposition that resonates in the marketplace, how to finance a business over its various stages of growth and how to sharpen (companies’) vision of marketing, sales and financial management,” said Pat LaPointe, managing director of Frontier Angels, the regional investment group spearheading the Early Stage effort.
Presented before a panel of five judges, the MSU competition included lifestyle management software firm Alosant, Cowboy Cricket Farms, a cricket farming operation based in Belgrade, as well as Dugal Health, a software company aimed at helping people with Type 1 diabetes; Ncentive, an employee retention software company; and content creation app builder Vaytricks.
Sellout earned top marks, followed by Alosant, and both companies will participate in a hyper-accelerator program in Bozeman later this summer. The program, staffed by 30 educators and business owners, is part of Early Stage’s vision to provide companies with assistance with aspects such as business planning and financial projections.
In September, both companies will take part in a statewide showcase competition, joined by the winners of separate regional pitch events in Billings and Missoula. The winner of the final — held on Sept. 22 at the Museum of the Rockies — will score $50,000 in investment credit.
A dozen organizations, including MSU’s Blackstone LaunchPad, the Montana Manufacturing Extension Center, Next Frontier Capital and Prospera Business Network, helped bring the nonprofit to life. But that type of collaboration is what it will take to keep Montana startups on a level playing field with their national counterparts, LaPointe said.
“People ask me all the time about how Montana can compete with all these other places,” he said. “While we may be a small population state, pound for pound there’s as much innovation going on in Montana as any other state. Our challenge is to capitalize on that, come together as a community and knit together something of a foundation that entrepreneurs can build from.”
And for businesses like Sellout — ventures in their infancy and looking to take the next step — Early Stage has been nothing but a boon, Martin said.
“It’s still a big challenge to find capital here: We’re not in Silicon Valley where people are more willing to distribute capital,” he said. “This is such an infant ecosystem here, but we’re hoping in a couple years it will be even easier for a company like us to start from nothing and build up to be successful.”