Innovation In The Funeral Industry: Should You Avoid Start-Up Companies? – Ryan Thogmartin

Are funeral industry start-ups beginning to scare you? Historically they have been few and far between but, as our industry continues to change and progress, more start-up companies are venturing into the funeral industry. Lets face it, funeral directors are not the most open-minded people when it comes to using a new product, technology, or company. What does it take for a company to survive in this industry? What are some key things you should look for in a start-up company before working with them?

Many companies coming into the funeral industry strive to offer that ?wow? product the funeral director would like to provide to his client families. Many of these companies have a product that is technology-based (online or computer related), which is what the consumer wants but is hard for the funeral director to embrace.

Technology is not something that has been heavily tied to this industry. In the past, funeral directors have never had to deal with families requesting or even open to purchasing these types of products. Those of us who know this industry understand the lag time for these products to catch on. Some funeral homes still do not have a website or email address. These new products may be made available in the funeral home, but getting the funeral director to embrace the product and sell it can be a very tough battle for the company, a battle that they must be prepared to embrace. If not, then a slow start and poor sales will quickly lead to their downfall.

I want to talk about two different funeral industry start-ups, one company provides a service to funeral directors, Eagle?s Wings Air, the other is a start up that was providing an online product to the funeral director to sell to families, EternalSpace. As most of you may know, EternalSpace folded just 30 days after their official launch at the 2009 ICCFA Convention. I want to look at both companies and compare what is making Eagle?s Wings Air successful and what caused EternalSpace to fall so fast. I also will provide guidelines on what you should consider when thinking about working with a new industry company.

Start-up #1: Eagle?s Wings Air Six years ago, Frank Kaiser was tasked with forming a human remains airline-based transportation program much like Delta Airline?s ?Delta Cares? or American Airline?s ?Jim Wilson Desk.? Through this experience Frank was able to become intimately familiar with the needs of funeral homes and shipping services across the country (from the airlines perspective). It was also through this experience that Frank began to build a relationship with one of his (now) clients, Dave McComb, co-owner of D.O. McComb & Sons, Fort Wayne, IN.

This client-customer interaction resulted in a business and personal relationship that exists today. Both Frank and Dave saw a desperate need and seized the opportunity to introduce innovation to the shipping segment and forever change the way funeral directors and the death care community interact with the airline industry.

Frank and Dave worked diligently on the business planning process for fourteen months before ever handling their first client transaction. Both Frank’s and Dave?s separate areas of expertise and industry contacts played vital roles in the development of the EWA service model.

Operational in March 2008, EWA introduced its complimentary service model in a strategic and targeted fashion. Leveraging Dave?s death care industry contacts across the country, Frank and Dave convinced leaders of independent funeral homes to join the launch and help refine the service model. Regional shipping services also slowly began to support the launch, especially Florida Mortuary Services, a leader in Florida shipping since 1967, who was an early adopter and innovator in this portion of the business.

The 2008 NFDA Convention was EWA?s official launch after seven moths of operational experience. At the convention EWA also announced a strategic partnership with Wilbert Funeral Service, the foremost leader in burial vaults. The response from funeral directors was phenomenal and, since their launch, EWA has expanded their operation and staff to meet the needs of their clients. EWA now embraces a rapidly expanding nationwide customer base of funeral homes and shipping services.

As EWA continues to grow and evolve they have introduced a new service model within the shipping segment and have a number of strategic initiatives underway. Frank Kaiser has been traveling the country forming genuine personal relationships that serve as the foundation for a successful and growing business.

Start-up #2: EternalSpace

Another start-up company made its debut at the 2008 NFDA Convention ? EternalSpace, the most innovative online memorial solution our industry has experienced to date. With panoramic scrolling landscapes and graphics that seemed as though they were plucked directly from a Hollywood production set, ES created a tremendous amount of buzz…enough buzz that they even won best of show. Their booth alone was unbelievable: flat screen TV?s, white carpet, retro couches, and even a gentleman pouring champagne to attendees during the opening reception. It was easy to see that money was flowing into this company from somewhere. Problem?

ES didn?t have a working product when they started in 2008, just a breath-taking demo that got everyone talking and anticipating what would come next. What came next was six months of creating and refining a (what appeared to be high-dollar) online memorial site that encompassed videos, pictures, social networking features, and even an ongoing revenue stream for funeral professionals through tribute gifts, an industry first.

Leading up to the ICCFA Convention in April 2009, ES had tested their almost-finished product with a few funeral homes in preparation to their official launch at ICCFA. When the convention arrived it April, the buzz created around the ES launch was huge. Every newspaper covering the ICCFA convention did an article about ES; they even landed a ?featured article? on the CNN.com homepage. The chatter from funeral directors was noteworthy as well, but more funeral directors were concerned with the complexity of the product.

Following the ICCFA Convention, ES and its investors expected the product to take off like hotcakes but, as those of us ?in? the industry know, it takes time for funeral directors to embrace new product. So, like most new technologies in the funeral industry, the product did not take off as fast as expected. Families and funeral directors who did sign up experienced numerous bugs on the site, and ES was spending an excessive amount of money to deal with the problems. Thirty days after the official launch ES was forced to shut down by the investors. The investors (who were also entrepreneurs themselves) expected to see immediate returns on their investments. When that did not happen they did what good entrepreneurs do…they cut their losses and consequently all funding to EternalSpace.

EternalSpace had an amazing product that pioneered a new road in the funeral industry. They brought new technology and a new business model, through tribute gifts, not seen before in the industry. They also had leaders and funding sources who were not ?industry insiders? or familiar with the progression speed of the industry. In the end this seems to be the deciding factor that shut down the company.

Eagle?s Wings Air and EternalSpace are two industry start-ups that took two totally different approaches to introducing their products and services to the funeral industry:

* EWA started with partners who each know a specific side of the business. Frank Kaiser is experienced in the airline sector, and David McComb brings experience and expertise from the funeral industry side.

* EWA was patient and tested their service for 7 months before officially launching it to funeral directors.

* EWA formed genuine personal relationships with funeral directors serving as a foundation for a strong business.

On The Contrary:

* ES was built around great business leaders, but not around leaders who knew the funeral industry.

* They quickly created a lot of hype and buzz without having a working product.

* They had a niche product that required technical skill, and they didn?t have the time necessary to help funeral directors embrace the new technology.

With the speedy rise and fall of EternalSpace, some funeral directors have become apprehensive about working with start-up companies. To help ease your fears and rebuild your confidence in industry start-ups, I would like to provide you with a guideline of things to evaluate when considering whether to work with a new start-up company:

* Are the leaders of the company ?industry insiders,? and do they have a good sense of where the funeral industry is and where it is heading?

* Will the leaders of the company and their sales people take the time to help you embrace their product and fully understand it?

* Is the product something that fills a niche or void?

* Is the product innovative but not too advanced for your client families?

* Is the product relative to your market place? (What sells in Los Angeles, California might not sell in Small Town, Indiana)

* Will the company provide you with the necessary tools to effectively market the product?

* How will working with this company benefit you, your firm, and your client families?

Start-up companies are good for our industry. Their existence shows that funeral directors and the funeral industry are progressing and evolving. By using the guidelines above you will be able to choose a company and product that is right for your market and will help you better serve you client families.

This article was not written to promote Eagle?s Wings Air or to criticize the leaders and product of EternalSpace. It was written to provide an example of two different start-up companies, one that was able to sustain and grow and the other that wasn?t, and to provide funeral directors with a guideline of what to look for when deciding to work with a start-up company. As the funeral industry continues to progress, more start-up companies like Eagle?s Wings Air and EternalSpace will debut at industry trade shows. Some will succeed and others may not, but funeral directors should not be afraid to work with start-up companies. After all, at one time Batesville Casket and Wilbert Burial Vaults were small start-up companies!

*This article also appeared in the July/August Issue of Funeral Business Adviser*

Author Bio:

Ryan Thogmartin is the Founder and CEO of ConnectingDirectors.com. ConnectingDirectors.com provides the only online gathering space where funeral professionals can visit to read daily articles, funeral industry news and ideas shared through a funeral industry discussion board. In addition, Mr. Thogmartin works in sales for his family’s burial vault company, Hupp Stiverson Wilbert Vault Inc.