Mike Belsito on how he found a contemporary niche in an antiquated business...providing a morbid service... and launching a tech start-up in Cleveland. by Vince Grzegorek
What were two 30-something software experts thinking when they left their stable jobs to jump into a start-up, let alone a start-up that is basically the Yelp of the funeral home world? Basically, there was a niche, and Mike Belsito and Bryan Chaikin had a solution. At least they thought they did. But would anyone use it? Could they support their families? And is Cleveland the right city for a tech venture? Flying in the face of conventional wisdom, they now run their venture out of downtown Cleveland, helping people suddenly faced with a serious problem that arrives with no warning. Mike Belsito talks about taking the leap into eFuneral.
How did you come up with the idea for a website that provides funeral reviews?
About two years ago, my cousin died unexpectedly. He lived in Parma, and none of us had really planned a funeral in that area. We found out that there were 12 funeral homes in a two or three-mile area. How were we supposed to know who provides the best service, or one that's in our budget? We could have visited every one if there was time, but that wasn't an option. Besides, who wants to visit 12 funeral homes?
Trying to make the decision, I remembered my dad saying he'd used Angie's List for contractors. But gosh, there wasn't anything like that for funeral homes. While there are funeral service directories online, there wasn't anyplace to learn more. So we had to pick one and hope for the best.
So, you identified a problem. When did it crystallize that you could do something about it?
I remember being at dinner with my wife right after the services, and the only reason we were [at that restaurant] was because of Yelp reviews. That's when it dawned on me: We have more information on where to go for dinner than planning a funeral.
What were you and your partner, Bryan Chaikin, doing at the time, and how did you convince someone to give you money for a Yelp version for funerals?
We were working at a local tech company. I'd been there since 2005, and Bryan had been there really early. We were both running product innovation. So we started getting together before and after work to see how we could go down this road and use tech to help people.
The state of Ohio was launching a tech accelerator program at the time. We thought, hey, if we apply and Ohio validates the idea, then maybe we should think seriously about quitting our full-time jobs. We were one of ten companies that got asked to join the program. June 10 of last year was our last day working our full-time jobs.
And efuneral seemed like enough to make a living on?
The grant was enough that we felt we could keep paying our mortgages. At the end of the program, we would decide whether there was a business there or not. Then we raised money from angel investors and through other programs — innovation funds, grants and loans — and we built a small team and launched it.
Seems like a pretty morose business, no?
Most people probably think of it that way, but we don't view ourselves as a funeral-related company. We're a company that's helping people who can use a lot of help. At its core, it's a tech company.
The stereotypical image of the funeral business is old men in suits, waiting around the corner from the couches.
It's an industry that hasn't seen a ton of innovation in how people get connected, and we're trying to change that. We think that funerals are a really important service, and funeral directors do a really important job. We just think people should have all the info.
A funeral is something every single person is going to have to deal with. It's not like we wanted to get into funeral planning our entire lives.
Part of the site offers links to discounts on funeral-related items, sort of like Groupons. That feels sort of strange.
We try to report deals. Funerals are the third-largest expense most people incur. They average over $7,500. And it's an expense people have to pay right away.
Has anyone been in touch to tell you how valuable the service has been? It seems like something that people wouldn't think about until they need it, then be entirely grateful that it's there.
We do, and when we get those e-mails or phone calls, it's great. Frankly, if we never got those, the radio silence might get to us. But they energize us a bit.
Cleveland is not exactly a tech startup hotbed. Why have you stayed here? And what do your tech buddies think of your morbid venture?
I happen to be friends with people who are starting tech companies, people who are moving their companies from New York to Cleveland — there's definitely positive momentum here. I don't think Cleveland will ever be, or wants to be, Silicon Valley. But the talent that's here in Cleveland, you can use that to build companies. You don't have to move away to do the kind of things we want to do.
Friends probably think it's weird or crazy or both for us to have quit our full-time jobs at a place that was growing to launch a funeral startup in Cleveland. But when we explain it — that we're doing something of actual value instead of a fun app — they understand.
Did your families support the idea?
My wife has been supportive, and so has Bryan's. Once we got in the accelerator program and had to decide whether we'd accept it or not, the four of us went to breakfast and went through everything — the market size, the budget, etc. Our wives were basically being venture capitalists. And within the last two months, both of us have had our first children. It's been a wild experience, running a startup with new babies.
Maybe that will lead to a baby app next?