The Story of Melissa and the Problem of Unseen Work
This article is a part of the book, “Information Architecture & Entrepreneurship: Building Patterns for Successful Startup Ecosystems.”
An entrepreneur who I will call Melissa for privacy reasons, started a company we will call Thistle & Rose that brought transparency to the funeral industry. The funeral industry today is massively exploitive to people in some of the worst moments of their lives. Many funeral directors will claim that embalming and concrete slabs over caskets are legally mandatory (they’re not) for loved ones to be buried in a cemetery. While funeral homes are legally mandated to show consumers all of their available casket options, many funeral directors will push the more expensive options first and not disclose that people can use caskets purchased elsewhere at no charge. In an issue of Funeral Services Insider a funeral director encouraged their peers to reach out to generic casket makers to provide them with private labelling for the same caskets to sell in-house, writing “It will have a different model number, and the family won’t know it’s the exact same option available at another firm.”Part of the reason why funeral directors can be so shady is because there is no central database of costs across different funeral homes. In one study of ten major cities across the U.S. it was found funeral homes can differ 164% in price within a 5 mile radius for the same services.
But the funeral industry is not “cool.” There is no blockchain that needs to be created in order to disrupt the industry, and not a single NFT to purchase in sight. This lack of “cool” in the industry made it so Melissa had an incredibly hard time finding a developer to help her.
What’s more, women are more commonly known in funeral homes for being the people who arrange the funerals. This meant investors, largely men, were uninterested in investing in her idea. Unlike space tech, bio-tech, AI, and Fintech, the funeral industry could be massively upended with a simple website that creates a database of prices in the area, display the costs of all the items at the funeral home, and allows people to check off what they do and do not want to purchase without duplicitous sales tactics. For a fairly simple website the potential profit is huge, with the funeral industry estimated to be worth 20 billion in 2020.
Melissa was a woman whereas seventy percent of the incubator was men, a business major where most were in tech. She was a solo founder, and the only person who was accepted without a fully built minimum viable product (MVP). Technically she was not supposed to be in the accelerator without an MVP, but within five minutes of speaking with Melissa, you were not only convinced that she should be here, but one day she would be one of the great entrepreneurs to come out of the university.
Whereas most of the incubator participants glossed over the user studies, Melissa knew the pain points of every person she spoke with. She had a deep sense of empathy with her customers that translated into a strong understanding of how they made purchasing decisions. She could recite her Customer Acquisition Costs and her Return on Investment by heart and understood at every point across her supply chain how interruptions would impact these numbers.
Yet, she was a non-technical solo female founder. This meant Melissa did not measure up against many of the categories — founding team, male, technical — that mentors and investors alike saw as indicators of future success. Here the information problem is not solely with the founders, but between founders and the ecosystem of mentors, investors, and developers around them.
Measurement Defines Success
What we choose to measure impacts in turn how we define success. Sometimes, the measurement of one facet of an object gets confused for success of the thing as a whole. Take for example the Red Delicious apple. In the 1870’s a farmer named Jesse Haitt discovered a rogue apple tree on his farm in Peru, Iowa with especially delicious and beautiful apples. After Hiatt won a competition that Stark Brothers’ nursery held to find the next great apple, the Stark company quickly bought the rights to this apple and spread the seedlings across the country.
So began a process throughout the 20th century of amongst growers to develop the most apple-like apple. Plus, with its coke-bottle bottom, Red Delicious apples are easy to transport while their tough skin gives them a long shelf life. But most people who bite into a Red Delicious apple will find that its texture mealy and lacking in taste. Though at one point the Red Delicious was the most popular apple in the United States, it has now been unseated as number one by the Gala apple. This change in consumer preference has created a venerable business problem for apple growers. Since apple trees can live for many years and cutting them down to plant new varietals is very expensive (to the tune of 50,000 an acre vs. 4,600 to plant from scratch) Red Delicious apple growers are essentially stuck producing apples no one wants.
The story of the Red Delicious apple is much like the problem in the startup ecosystem. Investors will see some elements of a successful company, and in an attempt to repeat past successes, they will push for those elements instead of look holistically at the success of the company.
Nowhere has this been more apparent than investors’ advice on the number of appropriate co-founders to have. For the better part of the decade, investors believed that two founders are better than one solo founder.
How this played out for solo founders like Melissa is that when she went to an investor or mentor, she was told the most important thing for her to do was to find a co-founder. A decade ago, it was hard for non-technical founders to create a website. But with the proliferation of platforms like Wix, SquareSpace, Webflow, and Shopify, being technical is no longer the limiting factor it once was. But the bias towards starting a company with code developed in-house persists, and with it bad advice on where founders should spend their time.
This advice takes solo founders’ time away from building their product with existing platforms and demonstrating market traction. Often, it leads to rushed co-founder pairings that create friction later on.
More recently the pendulum has swung to the belief that no, a solo founder is actually better than a team. In a working paper by Jason Greenberg and Ethan Mollick entitled, “Sole Survivors: Solo Ventures Versus Founding Teams” they found that two founders can bring more expertise and bigger networks. But what this additional founder added in human capital often does not outweigh “all sorts of social frictions that can occur when there’s more than one individual.”
In the quest to quickly analyze which companies will and will not succeed, investors want to find shortcuts to create reproducible wins. Since the top entrepreneurs of the 2000’s were overwhelmingly technical, white males with computer science degrees, the technical aspect of having an MVP built by in-house developers is seen as still the best way to create a product.
What this meant for Melissa was that there was a very clear ceiling she could not surmount. She either needed to find a technical co-founder or pay to have her MVP built. She could not afford to build her MVP, and no co-founder was found. Melissa has since gone on to become a successful consultant, and the problems in the funeral industry remains unchanged.
In the next chapters we will understand how to develop entrepreneurial ecosystems that can better help all founders from a variety of disciplines. These design suggestions are in a sense the opposite of each other.
The first design suggestion is the development of a Tactical Design Lab. This lab would specifically focus on helping founders who are non-technical utilize various platforms to set up their products and services without the need for technical developers.
The second solution suggestion is the Startup Efficiency Index, a framework that can help measure currently unseen work that non-technical founders currently do in order to help them be evaluated more equally with technical founders.