What do you get when an economist notices a near-empty Melbourne cinema on a Wednesday night? For Shane Thatcher and Sonya Stephen, it was the spark that led to Choovie – a dynamic pricing platform for movie tickets that went on to raise capital through equity crowdfunding and land a place in one of Australia’s leading accelerators.

Here’s how they did it.

That light bulb moment

When Shane and Sonya visited the Jam Factory cinema complex in Melbourne one evening, it turned out to be more than a night out.

It was where the idea for Choovie took shape. The pair noticed just two other people in their cinema and 32 in the entire complex.

“We did a run around the other cinemas to count how many people were at the movies that night. We ended up getting kicked out,” Shane laughs.

“I’m an economist by trade and I thought, ‘this just doesn’t make sense’. I banged on about the idea of starting dynamic pricing for movie tickets to Sonya for a while but she was just about to have our fourth child and didn’t want to deal with it.”

When a close friend in the entertainment industry agreed the idea had legs, the fun began.

Looking for a red flag

With Sonya on board, Shane started researching dynamic pricing as a business model – a well-established approach in hotels, airlines and airports.

“We thought there must be a giant red flag reason why no one was doing it for movie tickets,” Shane said. “We haven’t found one yet.”

The couple also had good reason to back themselves. Shane’s economics background and experience running a social enterprise startup combined with Sonya’s investment banking roots and her role as CEO of the Cathy Freeman Foundation made for a complementary partnership.

Shane was candid about the realities of co-founding with a spouse.

“It takes over your life but when you’re in it together, you both understand why each other is busy and there’s not that resentment that might otherwise exist if one person is working on a startup all the time and the other isn’t,” he said.

“A lot of startups fail because co-founders disagree or split up, whereas we have other reasons to work things out too. We have four kids! We do also work pretty well together because our skill sets are fairly compatible but not the same.”

Making it happen

Choovie launched in 2017 with a B2C offering, selling movie tickets directly to customers on behalf of theatres across Australia. Its dynamic pricing model makes tickets cheaper when seats are plentiful and adjusts upward – though never beyond the standard full-price adult rate – when seats are scarce.

The model is built around filling empty seats rather than discounting for people already planning to attend. More bums on seats through smarter pricing and a better customer experience.

Shane credited early financial support as a key factor in getting the business off the ground.

“We started using Standard Ledger for our bookkeeping early on and it’s been amazing that I don’t even have to think about that side of things. But more so, they’re a financial sounding board for us and they’ve worked with us on all our capital raising, including doing the financial modelling we needed to get our initial investor to back us in the beginning.”

Equity crowdfunding success

Choovie’s next funding round came through equity crowdfunding – making it one of the first Australian startups to use this mechanism after it became available locally.

Choovie raised almost $300,000 on the Equitise platform in 2018. Shane noted the level of preparation required.

“We needed an awful lot of support on that. It was a good experience because it made us get all our ducks in a row to be investment worthy but it’s not easy. It’s effectively as much paperwork as doing an initial public offering on the sharemarket.”

Sonya pointed to benefits beyond the capital itself.

“Equity crowdfunding gives customers the opportunity to become part of the Choovie family. It also works the other way – we get access to new shareholders who can become Choovie customers. You can’t get a more loyal customer than one who is also a shareholder,” she said.

A little pivot can go a long way

After a solid start with B2C ticket sales, Shane and Sonya took a closer look at their customer profiles and spotted a bigger opportunity.

“Our customers are people who want discounts and are flexible about when they go to the movies,” Shane said.

“They’re mostly buying movie tickets through corporate loyalty programs. So we looked into those and realised they were all manual, meaning there’s a space for us to take what we’ve built for B2C and use it for corporate partners as a B2B offering, improving their customer experience and meaning we don’t need to go and find ticket buyers.”

Choovie moved to launch its first B2B program with a major Australian insurance company, with several others to follow and plans to expand into the Asian market shortly after.

Accelerating in an accelerator

To support those growth plans, Choovie secured a place with Skalata Ventures – a Melbourne-based accelerator that selects around ten early-stage companies each year and provides funding, mentoring and services to help them scale.

The selection process is rigorous for good reason.

“Getting into Skalata involved a whole due diligence process, with everything that goes along with that,” Shane said. “You need to have everything in order in terms of financial and legal documents, and really know your stuff. I wouldn’t recommend going through it without the right support!”

For Choovie – past the initial startup stage but not yet at the venture capital threshold – the accelerator was a well-timed fit. A genuine example of how varied the Australian startup funding landscape can be, and what’s possible when founders get the foundations right.