With a high number of employees with young children, the leaders of health tech startup Cleo understand the needs of working parents. The company, which offers a platform for employers to provide family benefits and resources to their employees, was particularly attuned to the expanded needs of working parents in the time of Covid-19. In the months since the coronavirus pandemic hit and subsequently forced schools and most businesses to shift operations to the home, Cleo experienced a swell in demand for supportive tools and information from its member base.
In turn, Cleo responded with new products such as Cleo Care, a platform developed in partnership with Urban Sitter to support child care, and launched the Invest in Parents Pledge, an initiative to find and develop more ways to support working parents. The pledge is organized by Cleo and a coalition of nonprofits and tech businesses and has been signed by companies including Salesforce, Okta and PepsiCo.
Cleo CEO SJ Sacchetti sat down with us to discuss how the company is quickly iterating products and services to meet the needs of working parents in the time of Covid-19 and beyond. SJ also shared her experience as a working parent and new CEO, and how adapting to a crisis has helped focus the Cleo team. Listen to the podcast here:
Key highlights from the conversation:
The Immediate Impact of Covid-19
“It was an ice-cold pail of water on everyone’s heads. Even though parental benefits are now in massive demand, for the first few weeks of Covid there was nothing happening. All of our meetings [were] canceled, because our buyers are benefits leaders. And essentially overnight they were anointed as the benefits and Covid czars of their company. So all of a sudden, even our most willing and excited buyer got given the hardest job they’d ever had. They had to tell us, ‘Listen, we love Cleo, we love family benefits, but we can’t talk to you right now because we’re thinking about really urgent responses to this pandemic and our workforce as health benefits leaders.’ So that was pretty scary. So what we did first and foremost was really look at our top line goals. We had some hard conversations and really focused on what we can accomplish this year. We made some bold decisions about how we would go after that.”
Identifying the New Problems, and Finding New Solutions
“Our best signal is from our existing customers. So we started to spend a lot of time there, and have informal as well as formal fireside chats with them, study them, ask them what they needed. From a market perspective, about two or three weeks after the first crisis hit, we started to hear a signal that our early parents needed more from us. So I started to make some big decisions there on how to support them while also educating our customers about why that was so important. The second thing we started to hear was obviously about the lack of childcare, the challenge of homeschooling – all of what we were dealing with and now still are, so many months later.”
“All of a sudden we had this collective awareness. For some reason, it took the Covid-19 crisis to realize that working families are really, really overwhelmed and underwater. But we already were. We were already at that party, we were already offering employers a solution. “
How to Respond to a Surge in Demand
“Cleo was already in a growing category right before Covid hit, and then it just accelerated that category. There’s been a new market entrant every couple months – for instance, some of our competitors are raising new rounds. So we’re in a good category, and right before Covid hit we saw a really clear signal of that – we had triple the amount of RFPs from large market customers in January 2020 versus January 2019, and there were more market polls happening. I think it was a great moment to call people to action and get attention and to change the conversation from, ‘we have a problem,’ to ‘who’s going to do something about it?’ Knowing that we can’t wait for government reform in this environment, we actually have to do something about it now. So that’s where the whole concept of the Parents’ Pledge came from.”
Being a Working Parent Speeds Up Product Development
“Everyone says we have to do something about this and no one knows what to do. And that’s exactly the point. It’s a very different thing to launch a product and marketing campaign than to just say let’s get people together and call people to action.”
“Five of our seven team members at Cleo on the leadership team actually have kids under seven. So we were really hard hit as well. And so we were realizing we were with a reflection of what the market needed. In some ways we were really ahead of those needs because of how acute we were hit as parents and leaders of our companies. So we started from a market perspective study and moved on to create a product that it was really tailor-made to for us. This was not just to get attention from these benefits buyers, but to solve this new problem that didn’t even exist before.”around parental benefits. There was this realization that this is just something that makes sense for buyers to adopt. Then Covid hit and pushed us all forward faster. ”