Founder Spotlight – Harnessing Technology to Ease the Stress of Airport Security with Flippit
Welcome to the Gust Launch Founder Spotlight! Gust Launch supports a variety of exciting founders doing amazing things. In this ongoing series, we’ll highlight the experiences of Gust Launch founders, in their own words, as they navigate the challenges of early-stage entrepreneurship.
Want to share your story? Reach out at firstname.lastname@example.org.
The Founder, the company, and why we’re excited
Richard Cacciato & Natalie Yates are not only startup co-founders but have known each other since college, are married and have worked together for many years. Today, they are sharing their unique story in their own words about how they came up with their idea, researched and evaluated its viability and successfully launched their business. Their new company Flippit focuses on helping air travelers save their prohibited items rather than surrendering them at security checkpoints.
What is Flippit?
Air travel can be stressful, especially, when going through TSA security checkpoints, your important belongings are flagged as prohibited in the plane’s cabin, forcing you to surrender or (re)check them as baggage. You may feel frustrated, disappointed, even angry– increasing tension for all: fellow travelers, as well as TSA, airline and airport staff. Flippit provides a solution to this, offering a service that uses mobile technologies to allow you to keep your belongings on the spot.
Before getting on a plane, everyone must go through Security. On a good day, you leave yourself enough time for the line; you take off your shoes, your belt, empty your electronics into the bins; your person, your pockets, and your bags are scanned; and you’re ready to proceed to the gate. But sometimes, you goof up.
It is common for travelers to accidentally bring along items that are prohibited. They may have something of sentimental value that they forget is in their carry-on bag or pocket. Or they include something they thought was fine only to find out that it is prohibited. Some might even tuck a fragile item in their hand luggage for safety — only to face the choice of relinquishing it at Security or risk missing their flight.
But with Flippit, this is no longer an issue. At participating airports, all you need to do is make your way to the red Flippit Dropbox conveniently located at Security, grab a Flippit Envelope, slip the item into it, seal it, tear off the receipt and deposit the envelope in the Flippit Dropbox. And you’re all set to clear Security. Crisis averted!
Anytime after Security, at your leisure, you can place your order with Flippit by using the camera app on your smartphone to scan the QR code on the receipt— then a few simple taps confirm address and payment information and you’re done! Your item (or whatever can fit in the envelope) is on its way—packed, insured and tracked—for a flat fee of $29 at most airports.
Flippit’s patent-pending “quick-drop” system marries the convenience of smartphone technology with an easy user experience and a sophisticated proprietary order processing system that tracks and alerts customers on the progress of their shipment. Their package arrives at its destination within 7-10 days. No need to download an app, register, create a username or password, and customer service representatives are available for those who need help.
This is not the first business you owned or started, why Flippit?
Richard and I met in college and have been working together ever since: partners in business and in married life. We were running Blue Iceberg, our digital consultancy, when our son, a Scout, went on a trip by himself and forgot to take his Swiss Army Knife out of his backpack. A TSA officer at Dulles Airport found it, and he was forced to give it up. The knife wasn’t expensive but it had sentimental value— we had given it to him when he was 7 and it went everywhere with him.
There had to be a better way and we were going to build it. We conducted market research, and the results confirmed that this problem creates multiple pain points: people are upset about the stress, frustration and inconvenience it causes—even when another passenger is the subject because of line delays. They want a solution, and they’re willing to pay a fee to keep their belongings.
When we speak to airports, TSA, customers, potential investors, their reaction is almost universally: “Brilliant! Why didn’t I think of that?” or “Where was Flippit when I had to give up my…(insert precious item here)?”
We incubated Flippit through Blue Iceberg, developed our MVP and our brand and began to file patents and pitch our first airports. Once our first airport was ready to sign with us, Wilkes-Barre/Scranton which is operated by two counties in Pennsylvania, Flippit needed to become its own legal entity– and one that was suited to outside investment. We quickly learned that we wanted to use SAFEs and needed to form a Delaware C Corporation, and we evaluated a number of avenues to accomplish that– from doing it ourselves, to hiring counsel, to working with other technology platforms.
We kept coming back to Gust: the subscription price was right for the initial formation, and we were drawn to the comprehensive back-office and compliance support for the first year. We haven’t looked back.
What were some unexpected challenges?
Everyone we tell about Flippit intuitively understands it, so we initially planned to only have to market to Airport management to sign on and to TSA for their blessing. In other words, a B2B strategy. But now we know that we are creating a new category of service because harried travelers don’t even realize Flippit is an option. That means we also want to reach the traveling public with a B2C strategy, so passengers ask for Flippit and create momentum and buzz for the company. In addition, we need communications plans for the airport staff and TSA and airline employees. There are several audiences to reach and we are developing plans tailored to each.
How has Gust helped along the way?
We already had a long track record running bricks and mortar and technology-focused businesses and all that that entails—the complex decision-making; budgets and projection; the need to get multiple stakeholders on board before a contract can be signed; and the confidence that we are capable of managing logistics, production environments, human resources, and integrated marketing and communications plans. Before Blue Iceberg, we ran a furniture design and manufacturing company together, and Richard started his career at Procter & Gamble and Bristol-Myers Squibb, so we were familiar with finance, marketing and strategy. But we had never before turned to outside investors.
Gust Launch made it easy to form a Delaware C corporation, the standard structure for attracting investment, and Gust helps us stay compliant with Delaware and state to state regulations, and provides tools to manage our cap table, and numerous legal agreements.
It was only once we got going with Gust that we realized the offering was so much more. Gust’s Office Hours act like an opt-in accelerator, but without the pressure to perform or participate. Gust’s leaders, COO Ryan Nash and CEO Peter Swan, seasoned founders themselves, invite Gust’s community of fellow founders to join them twice a month for a congenial discussion about the various issues founders face. They act as sounding boards and guides to answer our big and little questions, accompanying us on our startup journeys. We have access to tools and resources to model equity splits and valuations. There are workshops and webinars with potential strategic partners that help us stay on top of new developments in technology and respond to challenges in the startup space.
We were happily surprised to discover—about nine months into our subscription—that we were dealing with only one side of Gust’s coin: the Founder side. When we signed up, we didn’t realize that Gust also provided a framework to create an online investor portal to talk to investors. The Gust Company Profile provided discipline and guided us in building our story for investors, as well as access to an Angel investor community.
Have you fundraised yet?
Yes, we completed a Pre-Seed Friends & Family round. Our first investor was a surprise:
Richard went seeking advice on fundraising from a friend, and over lunch, he said, “I like this idea! I’d be willing to invest in it.” He contributed our first outside investment, which was significant, but we needed more to scale the business.
When they first heard us describe Flippit, a number of friends said they’d like to invest, but we knew they wouldn’t be writing $50K checks, so that prompted us to find a way to accept smaller investments. We explored Crowdfunding, but determined that option wasn’t appropriate for us because we weren’t comfortable with the public disclosure requirements. We thought about pooling investors into a fund and had heard of Special Purpose Vehicles (SPVs), but were daunted by the legal compliance.
Ryan Nash of Gust opened our eyes to Sydecar as a solution. The Sydecar technology-driven platform assumed the burden of legal and reporting compliance and allowed us to gather multiple Friends and Family investments into a single SAFE to reach our investment goal and keep our cap table clean.
To fund the launch of our national expansion to more airports, we are starting to raise our next round. We are continuously working to improve our Gust Company Profile to tell our story to investors, and we are eager to uncover and leverage the other side of Gust’s coin: the Gust community of Angel Investors and related pitching opportunities.
What are some interesting lessons learned that you want to share with other founders?
- Stop planning and just do: It was time to stop doing projections and start talking to airports. Sometimes it’s hard to know when to stop imagining and to test your idea in-market to gain data and observe the user experience. Some of the most valuable lessons come from biting the bullet and going to market.
- Your new idea/product/technology may be easily adaptable for other uses you hadn’t first imaged. Take that opportunity. We learned at our first airport launch, for example, that Flippit’s user-friendly technology-enabled shipping system can be applied to solve problems at airports and in other verticals we hadn’t thought of. Nothing beats being in-market and talking, listening and gathering intelligence to inform your startup’s trajectory.
- In this environment, seek funding from all relevant sources and don’t be reluctant to pool small checks into a larger investment vehicle (such as an SPV with Sydecar– thank you, Ryan!) alongside your anchor investors.
Where can we learn more about Flippit?
This article is intended for informational purposes only, and doesn't constitute tax, accounting, or legal advice. Everyone's situation is different! For advice in light of your unique circumstances, consult a tax advisor, accountant, or lawyer.