It’s Friday, and PayTango cofounders Brian Groudan and Umang Patel are pitching. Over the next two and half hours they’ll hit nine cafés, three gyms, two corner stores, and a music center in San Francisco, from its tony Laurel Heights district to the sometimes-seamy Upper Haight. The goal: To interest small businesses in PayTango’s big idea, a biometric reader that will allow customers to make payments, or verify their ID or gym membership, with a quick scan of their index and middle fingers.
Groudan is wearing a yellow polo shirt and shorts that hit just above the knee. Patel is in a blue-and-white checked button-down shirt and a pair of Levi’s. “We don’t have any empirical data, but if you walk in to a fitness club with a suit on, people are going to look at you funny,” notes Patel.
“You have to be careful,” Groudan adds, then pauses for a beat before finishing, his voice lowered slightly: “not to sound like a salesman.”
Local urban problems and the needs of small businesses are increasingly becoming inspiration for start-ups, and selling door-to-door — that icon of 1950s entrepreneurialism — is back with a new, digital face. Putting on a show for investors is one thing; facing off with an endless stream of bartenders and cash-register attendants over the shop counter is an entirely different proposition. Yet that’s exactly where many members of the newest crop of innovators are winding up as they try to bootstrap their billion-dollar ideas, one customer at a time.
In San Francisco, ground zero for the lean start-up movement, the competition is already pretty stiff. Even the tiniest mom-and-pop shops might already be outfitted with an all-in-one loyalty card and several mobile-payment solutions. Breaking through requires more than just a good in-person pitch; it means finding a way to set your business apart from the flood of other ones trying to get the little guys onboard. And it takes lots of shoe leather.
“The process of going door-to-door was pretty strenuous,” says Donnie Dinch, a founder of WillCall, an app that offers last-minute tickets for a curated list of music shows. When he and his cofounders moved to San Francisco from Seattle in the summer of 2011, the group brought with them zero experience in the music industry. They had to just keep knocking. “I have a lot of empathy for people who do it,” says Dinch. “We just got lucky to find a couple of venues to work with us in the beginning.”
Inderpal Singh, the founder of Coaster, an app that allows users to order an old-fashioned (or their drink of choice) without waiting in the crowd at the bar, moved west from Chicago to launch his business. “We thought that, being in the Bay Area, people would be receptive. But the problem is, there’s so much noise.” Coaster finally caught its first break with a bar that hadn’t yet opened. But Singh remembers, “Local business owners get so inundated.”
In the earliest days of PayTango, its four founders cast a wide net. In their first few weeks of pounding the pavement, Patel estimates they hit around a hundred places, from frozen-yogurt shops to exclusive country clubs to gyro spots — basically, any physical storefront where easy payment or identity verification is a regular need of the business. “We try to at least have a conversation with everyone,” he says.
They borrowed a 1995 Toyota Camry (with shot brakes and windows that had to be taped shut) and planned to hit every red marker that showed up in the search results on Yelp. When they rolled to a stop at a place called The Little Gym, it turned out to be a children’s playground — but they pitched their idea there anyway. Patel laughs, explaining, “We had already made eye contact, and then it was too late.”
Danny Leonard, the director of merchant growth at OrderAhead, an app that lets cafés and restaurants know to prepare an order before the customer who wants it arrives, understands that making sales can be tough, so he doesn’t hire salespeople for the job. Instead, he seeks out aspiring entrepreneurs. Even though there might be rough days, he finds that his team overall is performing surprisingly well, perhaps because they see the job as a stepping-stone to something bigger. “They’re definitely pounding the pavement,” explains Leonard. “But they’re thinking big picture.”
PayTango kicks off its recent Friday sales push at a large community center and gym on California Street. The founders approach a twentysomething guy behind the desk. The pitch is easy and earnest, but another employee, a woman, overhears the conversation and shuts them down. “We don’t do that here,” she says. When the pair asks if there is anyone else they could contact at a later date, she shoos them away.
The reception is gentler at the Pilates studio a few blocks west. “That’s really awesome,” says a woman behind the desk wearing a glittery, bow-shaped black barrette. “Did you guys make it?” It’s familiar praise, but her delivery is a little as though the pair had just stopped by to show off their winning science-fair entry. No sale.
Experience has already taught a few tough lessons. After one encouraging gym owner asked whether their parents were waiting outside, the PayTango crew decided to dial up their pitch by including pricing, bringing along a physical prototype, and dressing ever-so-slightly more formally (read: no more T-shirts).
Back on the road, they drive from Laurel Heights to the Upper Haight in a rented white Chevy Captiva — a temporary upgrade from the Camry, which proved untenable. After just a few stops, it becomes clear that other next-gen payment solutions have shimmied up here from the Valley a while ago. One tiny sandwich place employs two different types of mobile-payment systems, and a nearby coffee shop offers an all-in-one loyalty program and payment method via a phone-based QR code. Neither place offers PayTango a warm welcome.
The next stop is a busy liquor store near the intersection of Haight and Masonic — the heart of the Upper Haight. They start to explain their two-finger activation system. “That’s dangerous,” interjects the middle-aged man behind the counter. “Someone could cut off your fingers, and you could lose everything. Seriously. It could happen.”
From the front line of plastic-wrapped muffins, chocolates, and an assortment of gum, Groudan and Patel consider a response. “Ooh, that’s deep,” an older woman weighs in, delivering her opinion as she scopes out scratch-off tickets. “You should link it to the DMV,” the man suggests, having had a sudden change of heart. Facing the store’s two large closed-circuit TVs, he explains that finding a surefire way to verify that customers are over twenty-one would prove immensely valuable to businesses. “Then everybody would want it.”
As it turns out, PayTango is already working on the capability. But the founders don’t interrupt. They’ve learned that it’s helpful to hear exactly what potential clients need in their own words. Earlier, at a health-food restaurant in the thick of its lunch rush, they’d listened to concerns about privacy amid orders of quinoa and vegetarian curry, and at a Bed and Breakfast Peace Center (without a functioning café, despite the sign), they endured a flip comment about the government seizing data.
By two thirty, PayTango hadn’t gained any notable leads. They decide to bring their biometric reader to one last liquor store before capping off the day’s sales session. The room smells of incense, and man behind the register says they will need to talk to the owner. Patel clutches the smudged prototype with his left hand, and turns to leave. “Right on,” a middle-aged man in a Hawaiian shirt and a Giants cap calls out, encouragingly, through his toothless gums. “So it’s a simple little thing. Now keep it up, and get that patent!”