Many startup products tend to tamper with existing customer workflows and behavior.

Except, the majority of startup founders have no clue about how their proposed product experience affects that behavior.

✅ When Tundra Angels invests, we often analyze startups betting on the workflow that will prevail.

For the startups that Tundra Angels invests in, we believe they have the escape velocity to overcome the behavioral friction in the market. But sometimes, if we pass, we may in fact be concluding that the existing, current state of the art will continue to prevail.

The startup can have the best product in the world but complete lose by a bad workflow decision. ✅

I as an investor ultimately care about workflows because it’s in observing current customer workflows and the startup’s proposed workflows that I assign a likelihood of change to that situation. I make a judgment call on whether or not that startup has enough escape velocity to overcome the behavioral gravity to gain traction and to win in their market.

The product that tends to win is the one that the customer can integrate into his or her workflow the easiest.

That’s why I don’t like the word “disruption” of Silicon Valley lore. Successful companies tend to not disrupt anything. They actually tend to be completely accommodating to the existing workflows! 😀

As a founder, I lacked a framework to help founders understand where their product sits and to help founders map where their product experience sits from a behavioral change perspective. So, I created such a framework 😀. Here we go.

The end to end process that the user goes through. The full transaction loop.

Milestones are moments in a workflow that unlock the next sequential milestone. I use the word unlock intentionally because often times there is data needed or communication needed to move to the next milestone in the workflow.

The action steps taken that are required to accomplish each milestone.

👇 Here is the key👇

✅ Workflows can be measured by their degree of waste that the user experiences.

Milestones rarely change, if ever.

The steps are the variables that either add waste or reduce waste to the user.

As the steps change, what changes is the degree of waste to accomplish each milestone. Thus, ultimately what each milestone costs the user is drastically different. ✅

Let’s understand with a practical example.

In June 2022, Tundra Angels invested in a company called DropCap.

DropCap exists in the book publishing market and specifically, within international rights licensing.

For context, licensing international translation rights for books is an arduous process. This picture below, shown by the DropCap team, shows how translation rights are completed right now. In huge book fairs, publishers from around the world met other publishers and sit across the table. One publisher might ask, “I’m looking for a book on elephants,” and the other publisher takes a massive catalog of their books, flips through it, and highlights a few options. The two people then exchange contact info and go back to their respective countries, later emailing PDFs of the full book to one another, manually creating contracts, etc. In DropCap’s words, the process happens as advertising was sold in the 1960s. In sum, acquiring the international translation license rights for a book can take weeks to months. 

Contrast the market status quo with DropCap. Specifically, in the pitch but also in due diligence, the DropCap team mapped out the process (really, in this context, milestones) to us as investors. I do not recall all of the milestones, but they were something akin to:

Book discovery → communicating with the author/agent —> getting a full copy of the book —> negotiating the license and getting mutual agreement —> drafting and executing licensing agreements

In due diligence, I slowed down the process to understand the old and new steps to accomplish each milestone, and to contrast the waste generated between each milestone.

My analysis was similar to the following. Here are the five milestones with the steps underneath:

Suddenly, after that analysis, I had clarity on the opportunity.

The “a ha” moment for me was when the team said, “Through our DropCap platform, we can go from book discovery to an executed license agreement in five minutes.”

DropCap, as excellent products tend to do, shrinks the time to get through a full transaction loop and experience the "a ha" moment.

From an investor perspective, it does not have to take much effort to see that if this process is happening over weeks or months elsewhere and within DropCap it can be five minutes, then that is a 10-100x better experience than the current state of the art.

I then had unequivocal line of sight to the escape velocity that DropCap’s solution gave to the current behaviors of the market.

Frankly, measuring contrast like this creates allows me as an investor to see a potential investment in it’s true light. In this case, it approaching the category of a no-brainer.

The milestones in the process are the same. The user still needs to discover books, communicate with the author/agent, get a full copy of the book for review, negotiate the license and get mutual agreement, and draft and execute licensing agreements.

The steps to achieve those milestones are different. Instead of me discovering books at the conference, I discover them via the DropCap platform. Instead of me paying a lawyer to draw up or even review licensing agreements, DropCap has that baked in to the platform.

As the steps change, what changes is the degree of waste to accomplish each milestone. Thus, ultimately what each milestone costs the user is drastically different.

Let’s get another example about why workflows are important in investing decisions.

In April 2021, Tundra Angels invested in a Milwaukee-based battery technology company called COnovate.

COnovate possesses very exciting breakthroughs on battery technology whose early results are very promising. COnovate’s discovered material, eCOphite, is a nano-material discovered by Founder and CEO, Dr. Carol Hirschmugl. eCOphite is a material evolution from another material called graphene, which itself is an evolution of graphite, which is required to build lead-acid batteries everywhere in the world.

That chemistry detail is technical, but incredibly necessary. It all comes down to workflows.

For innovations in batteries to pick up steam and start to produce at a mass scale, users, say car companies as an example, have to adjust their supply chain completely to accommodate the changes. What we learned is that lithium-ion and other novel battery technologies require massive overhaul of buildings, equipment, logistics, etc. away from assets compatible with lead-acid in order to make the assets compatible with lithium-ion. Lead-acid and lithium-ion are chemically very different.

Thus, making a decision to implement a battery technology or not is not based on performance alone. It means that the technology must be so far superior that the company commits to spending tens to hundreds of millions over many years to retrofit their facilities to accommodate that change.

With that in mind, here is the wild thing about COnovate. In my early discussions with the team, I honed in on one thing that they said. Carol said, “Because it is an evolutionary material from graphite, which is what lead-acid is made of, eCOphite is a drop-in solution to existing battery supply chains. No overhauls necessary. No tens to hundreds of millions of dollars in cost to the company to implement our material into their supply chains.”

Wow.

Similar to DropCap, in my head I went through measuring the likelihood of success of this.

Here is a battery technology whose implementation risk is nearly zero. In other words, the workflow challenges are nearly eliminated.

I will share with complete candor that this one fact tipped me over the top on my interest and passion for this company to invest.

To recap,

✅ When Tundra Angels invests, we often analyze startups betting on the workflow that will prevail.

For the startups that Tundra Angels invests in, we believe they have the escape velocity to overcome the behavioral friction in the market. But sometimes, if we pass, we may in fact be concluding that the existing, current state of the art will continue to prevail.

The startup can have the best product in the world but complete lose by a bad workflow decision. ✅

Heed the gravitational pull that existing workflows create.