Here’s a small business success story whose beginning sounds deceptively like the first line of a joke: “Two guys walked into a bar.”
Sean McGrail and Dan Hermann met at a trivia night at a Boston bar. McGrail, up and coming in the world of sales, had an arts background; Hermann had already co-founded an innovative Internet-based business. The two men riffed about how cool it would be to replace a drink-fueled trivia contest with a drink-fueled group painting session. Their first notes about a business plan for their idea—what became Paint Nite—were scribbled on the back of a paper napkin.
Connecting with the Inner ArtistThe idea is beautifully simple. A Paint Nite event is scheduled at a bar or restaurant, usually on an “off” night, when the place will welcome a take-over by a large, organized crowd. Each participant is given a paint-proof apron and seated before a stretched canvas propped up on a table easel, alongside a collection of paints and brushes. Painters buy their own drinks as they’re led by a pro through the creation (or re-creation), over two hours of communion with their inner artist, of something that invariably makes them feel surprised and proud. It’s sort of like getting to experience the joys of preschool all over again.
McGrail and Hermann had zeroed in on two unfulfilled needs shared by maybe most adults in our society: the social need to connect in person with others, and the need/desire for a creative outlet.
McGrail explained to Yahoo! Small Business Adviser, “I was always a lover of the arts, took many fine arts classes in college and toyed with the idea of being an artist. But after years of study and an honest assessment of my own artistic talent, I realized there was a strong likelihood that I would have to struggle to make a living. And so I started taking business classes instead.”
At about the same time, Dan Hermann began his first small business, Lazybones, a laundry delivery and storage service for college students, which he co-founded with his roommate shortly after graduation. Getting Lazybones up and running taught him how to code a website, and fine-tune the logistics of coordinating the delivery of diverse items to various locations.
Pooling their talent and experience allowed these two out-of-the-box thinkers to formulate the Paint Nite idea. Unlike the great majority of barroom dreamers, they had the tenacity and business smarts to follow through and see it to fruition. “The two of us divided the labor,” said McGrail. “Dan took on the task of creating a robust website that would schedule events, and I was responsible for marketing to bars and generating ticket sales. Each of our experiences has helped us navigate the past year and a half to go from a start-up to an international brand in 23 cities.”
How did they scale up so fast, so successfully? Recognizing that they were pioneers in a brave new world of Internet business opportunities, McGrail and Hermann made the decision to foster experimentation as they worked out what Paint Nite would be—and might become. “We were willing to try out anything,” said Hermann. “To avoid getting stuck on small things, we made it our philosophy that ‘perfect’ was the enemy of ‘good enough.’ We believed in a core idea—and we approached it as a game of strategy.”
Paint Nite’s business partners—there are 60 or them so far—are “starving artists”—accomplished art students and/or practicing artists who are not among the .001 percent (or whatever it is) of painters who actually earn a decent living from their art. Not surprisingly, their business model leverages the advantages of social networking. Paint Nite events are not only discovered but also documented on the Internet by participants, who tag photos of their paintings on Facebook and every other social networking site out there.
It was all about viral expansion. “We knew,” McGrail explained, “that there were market trends that only existed in the past two or three years—and worried that those forces might be gone in two or three years more. With low barriers to entry, we knew it was now or never, and that speed was the name of the game.”
“We saw it as a land grab,” added Hermann, “even though we didn’t have any competitors. We initially decided to open in ten cities. But word soon spread among artists and we were pulled into an additional eight cities.”
I asked what sort of things stood in their way. “The biggest challenge,” said McGrail, “going from Boston to national, was to give up control and find people in each city who also believed in the idea—and to let them run with it without trying to micro-manage them.”
Paint Nite’s founders emphasize that their business is based on a licensing model, not a franchise. “Franchises typically charge a fee of $10,000 to $100,000 and require someone to have a certain net worth,” Hermann explained. “They also dictate everything the franchise does, with very little freedom for the franchisor to ‘do their own thing’ without corporate approval.” Paint Nite doesn’t charge the artist anything for becoming a partner, apart from the cost of supplies, and has no net worth requirement. “We allow our licensors to use our brand name and website, but they are free to ‘do their own thing’ and run their business as they see fit.”
It’s a win-win situation—for Paint Nite and also for the “starving artists,” who are given a nighttime equivalent of an art-related day job that can help sustain their artistic career.
The model is allowing the Paint Nite brand to grow quickly, with a worldwide potential. “We’ve taken away all the barriers that would prevent [any artist, anywhere] from joining this phenomenon. We become their partner in their business, not the ‘mothership’ that dictates to them what to do. We share in the sales 70/30—they take 70% and we take 30%. We have 60 licensees currently on our platform and we aim to have 150 by year end in the U.S.” McGrail and Hermann have plans to launch Paint Nite in Europe this fall.
The mobile and social media factorSmart phones with cameras and apps such as Facebook, Twitter and Instagram have been key to Paint Nite’s spectacular success. McGrail and Hermann calculate that people tagging themselves and posting on the various social media sites account for 35% of their ticket sales.
Their three pieces of advice to would-be entrepreneurs wanting to capitalize on the possibilities offered by social media?
- Keep it fun.
- Don’t think it will make or break your business—it can have an impact, but it can’t be your only marketing tool.
- Birds of a feather flock together. Target your audience and engage with them—but don’t be annoying and they will share with other members of their group.