If there was one market that might be presumed immune to ‘digital disruption’ by a young, nimble tech company shaking up the business model, funerals would probably be high on the list. But that would be a mistaken assumption. Tulip, established by Essex-born entrepreneur Tom Harries, has quickly grown into one of the biggest funeral operators in the USA. And it achieved that rapid growth by adopting the now traditional approach of tech-based disruptors – offering a traditional service online, direct-to-consumer and at a much lower cost than rivals.
In a feature covered by The Times newspaper, Harries, originally from Shenfield in Essex, this week told the story of how he established Tulip and why he believes the death and funeral market is ripe for disruption.
Harries’ first steps into building a digital-first business in the funerals sector came after one of his grandparents passed away while he was still a student at Bristol University, where he was working towards a degree in French. The outdated systems he saw in place around how people were informed about the death and funeral arrangements of loved ones and acquaintances inspired him to found Funeral Arrangements – an online obituary service. It did well enough for him to sell it on to Dignity, the London Stock Exchange-listed funerals company.
Bitten by the entrepreneurial bug, he subsequently moved to California, where he believed his new ‘DeathTech’ idea would be best placed to attract investment and grow:
“If you’re a cricketer, you want to play at Lord’s. For a rugby player, it’s Twickenham. If you’re an entrepreneur, San Francisco is where it happens.”
Harries managed to raise $10 million to grow Tulip, which offered a low-cost alternative to the average $6000 cost of a funeral on the USA’s west coast. Explaining why he saw the opportunity for disruption in the funeral market, he describes how it traditionally works:
“Funeral homes more or less look someone up and down and charge them based on their perceived wealth. It’s one of the only industries in which you get a multithousand-dollar quote, and don’t get a second quote. It’s a pretty broken customer experience.”
Tulip started offering no-frills direct-to-consumer cremation from as little as $700. The price is able to go so low as the service does not involve a funeral home. When a customer signs up online, a van is sent to pick up the body and bring it to a crematorium. The deceased’s ashes are then returned by post, or delivered personally for a slightly higher fee, for the family to hold their own private remembrance service. Tulip also offers to scatter the ashes at sea if preferred.
Tulip’s growth story was halted after Harries appointed one of his board of directors as CEO. He had believed an experienced, professional CEO was necessary for the company to continue growing quickly. But the move didn’t work out, eventually leading to the sale of Tulip to Foundation Partners – a larger group also trying to ‘disrupt’ the funeral market by offering lower cost services.
However, Harries remains convinced the death and funerals markets remain largely antiquated and ripe for disruption. And digital-centric start-ups, likely to dubbed ‘DeathTech’, are starting to do so. In the UK, start-up Fairwill now offers wills and funerals at much cheaper rates than industry averages. But they can’t replicate Harries’ U.S. Tulip model completely:
“You can’t legally send cremated remains to the UK post because of insurance. If you lose them, they’re not that replaceable.”