Over the past year, Covid has had an immense impact on families everywhere. This pandemic has been particularly difficult for the tens of millions of families with young kids where all parents are working — which is true of more families than ever before. Mothers, especially, have been disproportionately affected: COVID-19 has reversed decades of progress for women on the work front. With women losing 5.4 million jobs since the onset of the pandemic, the percentage of women in the workforce is the lowest it’s been since 1988 according to the National Women’s Law Center. Mothers have turned down promotions, reported higher stress levels and less job flexibility, and have left their jobs to care for their children.
There’s been so much written about this problem. If you’re reading this as a parent, especially a mom, you get it. I know I do, as a mom of two kids under three, including a baby born in 2020 at the height of the Covid pandemic. But where there’s a major trend and severe pain point, there’s a massive opportunity to build and fund technology companies to solve it. Where are the startups serving families, saving their productivity and their sanity? They’re starting to emerge, and there’s a huge opportunity to build and fund new companies in this category, dubbed “FamTech.” Here are a few of the major gaps in the market, highlighting opportunities for innovation:
Managing the Mental Load. Mental load is the behind-the-scenes work of household management. It’s the organization, planning, and execution of how things get done at home, from booking doctor’s appointments to remembering important dates to planning transportation and childcare. The mental load is a heavy burden, and it’s often because of this burden — not because of work — that women are leaving the workforce in droves. The mental load that parents bear on a daily basis, as explained by Dr. Lauren Knickerbocker of NYU Langone, often leads to “resentment, burnout, and frayed patience, especially when it is outside of others’ awareness or shared responsibility.” With over 30 million families in the U.S. with children and at least one working parent, startups that help parents handle mental load will have a tremendous market opportunity in front of them. This can include offerings like scheduling and delegating tasks, or management tools to help outline and share the often invisible work of the mental load. There is some early startup funding in this space, including startups like Maple and Milo, but it remains limited and ripe for innovation.
Creative Care Models. The childcare crisis in America was well-documented before Covid, when childcare was already unaffordable for 63% of parents. Then the pandemic required parents everywhere to balance child care and schooling on top of other professional and domestic responsibilities, quickly exposing the severe inadequacies of traditional child care models. Consequently, the opportunity for creative care models has never been more obvious. Traditional childcare is one area of family tech with many venture-backed companies like UrbanSitter, Winnie, and Brightwheel — yet there’s plenty of room for more innovation in an area where families spend $42B per year on early childhood alone. More startups are emerging to target employers, expanding the market for childcare as an employee benefit, such as Kinside. This sector is poised to grow, as companies with policies and tools that support parents have a leg up in recruiting, retaining, and promoting their people. Beyond the shift in traditional childcare — either adding tech to the existing paradigm, or changing who pays for it — there’s an even bigger opportunity to rethink family care. One of the challenges with the existing childcare model in the U.S. is that it represents a huge share of wallet for parents, who often spend at the very top of their budget, yet caregivers often still struggle to make a living wage (and provide childcare, if needed, for their own kids). Startups will win when they can push the world from where it is, to where it could be — providing great care for families, and increasing supply and access to high-quality childcare, while building a business model that is fair and equitable to care providers. In today’s world, this also includes caring for family members with medical needs or aging parents, further underscoring the size of the market opportunity and the need for solutions.
More Hours in the Day. There might not be more than 24 hours in anyone’s day. But so many billion-dollar companies have been successful in building productivity tools to help make the most of our hours at work, from Slack to Zoom to the proliferation of “future of work” tools. Roles like executive assistants, office managers, and chief of staff exist in droves. With family life more complex than ever, there’s an opportunity to adapt these models to the home, allowing families to delegate, outsource, or otherwise leverage new services or platforms to help manage their homes and families while making the most of their 24 hours. This category is just emerging, with new entrants like Strongsuit, Villo and Bozzy attacking this huge opportunity.
Parenting Tools and Resources. Parents are more informed than ever before, with an immense amount of research and expertise at their fingertips. New startups are emerging to help deliver what parents need when they need it, whether it’s sleep training their babies or providing e-learning for older children. This is a category where new entrants about, yet many leaders have yet to emerge. According to Chian Gong, a Partner at Reach Capital with expertise in the early childhood education market, some of the opportunities include parent support and education as well as tools and services for home learning, empowering “families as a child’s first educator.” Examples of early-stage startups in this category include Lovevery, BümoBrain, Beanstalk, and Epic! (disclosure: my fund Maven Ventures is an investor in Epic!)
The need for innovation in the space is striking a chord with gender equity experts, investors, and celebrities alike. In late 2019, author Eve Rodsky published Fair Play, “a time-and anxiety-saving system that offers couples a completely new way to divvy up domestic responsibilities.” The book was a result of her recognition of all the unpaid and unnoticed work she was doing for her family. Fair Play has helped shine a light on the severity and prevalence of unequal labor in the home, which has been exacerbated by a lack of technology, tools, and services to help strike a better balance.
“Women’s unpaid labor at home has increased by 153% during the pandemic. What if we treated our home as our most important organization?” says Rodsky. “There would be a lot more tools that focus on boundary setting, systems, and communication.”
Covid isn’t the only factor amplifying this sector. Startups building solutions for parents might benefit from political tailwinds in the near future as campaigns for gender equity in the home receive increasing support from all angles. In late January, 50 high-profile women, including Whitney Wolfe Herd, Gabrielle Union, and Eva Longoria, ran a full-page ad in the New York Times demanding newly-inaugurated President Biden to enact a “short-term monthly payment to moms depending on needs and resources,” and “pass long overdue policies like paid family leave, affordable childcare and pay equity.” Just weeks after, 50 men in Hollywood, professional sports, and Silicon Valley ran a similar campaign in the Washington Post to show their support. Many states are instituting more generous leave policies, and if any federal administration shows that family-friendly policies are a priority, it might be this one.
While research and policies are a start, more tech-oriented solutions would likely unlock far greater results for parents. Considering under-innovation around many of the day-to-day issues that plague parents at home, many of the smartest consumer venture investors are more focused on the space than ever before. The industry tailwinds coupled with massive consumer needs are causing leading VCs and other leading experts to notice.
Where are the investment opportunities, according to the experts?
Kanyi Maqubela, Managing Partner at Kindred Ventures:
“The market opportunity for family tech companies has become a matter of national crisis, as almost every American family now has first-person evidence that without childcare, you don’t have an economy. I like the idea of companies sponsoring more family-first benefits, particularly in financial services. Paid leave in the US is at minimal levels compared to global standards, and the costs of early parenting can be subsidized by employers in B2B2C models, with win-wins for every participant.”
Julie Wroblewski, Managing Partner at Magnify Ventures:
“We’re starting to see promising, emerging solutions but overall the area of household management innovation is still nascent and much further behind the pace of productivity innovation we’ve seen in the workplace. We’re now at a point where technology is poised to produce the next wave of labor-saving technology in the home that addresses both physical labor as well as the mental load that working parents and mother, in particular, are dealing with.”
Chian Gong, Partner, Reach Capital
“I am excited to invest in the family tech space. This is not only a huge market opportunity, but also a critical engine to economic growth. The companies that build trusted brands with families will have significant influence over the $4.3T in family spending.”
Eve Rodsky, author of Fair Play:
“Gaps in the marketplace have stemmed from the fact that we don’t treat our homes with any respect or rigor. The trends that are exciting me the most are solutions to help recognize that the home is the most important organization.”
These leading experts and venture capital investors — many of them parents themselves — see a huge opportunity for new startups to tackle big consumer problems. We have more work productivity tools at our disposal than ever before, yet we’ve made few strides with in-home productivity, leaving a bulk of the 30 million working families across the United States craving creative care models, more hours in their day, new ways to manage the mental load, and better parenting tools and resources. The Family Tech sector is just at the very beginning. As more companies launch and grow, there’s a wide open opportunity for founders and investors to create new consumer software and tech-enabled services companies beloved by parents everywhere.
Forbes – Entrepreneurs