A serial entrepreneur with an obsession for cars, Scott Painter started his first business before he could even drive; he was only 14 when he founded Scott’s Auto Detailing. “I never detailed one car myself,” he says. “I was like Tom Sawyer and had all the neighborhood kids working for me.” He was still on his learner’s permit when he used his detailing profits to buy his first car, an Audi Quattro.
Painter has been through 37 incorporations; he’s an incorrigible—he used the word “pathological”—launcher of companies. He transferred from West Point to the University of California, Berkeley, then dropped out to get to work. He immediately started a buying service called AUTOAccess that eventually sold for $3 million. Another company he started as CarsDirect.com was recently sold (as the expanded Internet Brands) to private equity firm KKR for $1.1 billion.
Painter’s latest venture, TrueCar, represents the culmination of his “23-year crusade to bring upfront pricing and transparency to the auto industry.” He now has more than 400 people working for him, including ex-Hyundai CEO Jon Krafcik as president.
TrueCar could be described as an online, negotiation-free, one-stop shop for your dream vehicle. The website provides free access to what others paid for the same model and then points you to a nearby dealership that will sell it at that price. More than a million customers have saved over $3 billion off the official manufacturer’s suggested retail price, the company says, and it’s processing 3.7 percent of all U.S. auto sales.
Revenue for the California-based company comes from more than 9,000 dealers (one in four in the U.S.) that have signed up with TrueCar to pay a commission only when an actual sale is made. It’s a great model that led to a successful $70 million initial public offering in 2014.
Painter’s advice to young entrepreneurs is to, well, follow the money. Most entrepreneurs are fairly naïve when it comes to raising money, he says. “They’re not trained to read cash-flow statements or balance sheets, but you need to know which number to look at on the page. Without that, you won’t know how to talk fluently to prospective investors.”