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Summary:

From their founding teams to their target audience, startups tend to be all about youth. But the AARP says 50+ market has huge potential.

senior entrepreneur
photo: Yuri Arcurs

One evening earlier this month, I was at a entrepreneur-packed, outdoor party in Austin. The beer was flowing, the music was blasting, but here’s the thing: It was co-hosted by the AARP.

It’s not an organization you’d expect to see courting young tech founders and Silicon Valley venture capitalists. But if you’re a startup, particularly a health startup, get ready to see more of the nonprofit, which is on a mission to both bring more innovation to the 50+ crowd and sow some entrepreneurial seeds among people in that demographic.

To twenty-something startup founders, building services and products for silver-haired seniors might not seem as sexy as taking on messaging apps like Snapchat. But the AARP has some strong statistics on its side: every day, 10,000 more Baby Boomers join the 50+ demographic, which includes more than 100 million people, and, as a group, they spend $3.5 trillion a year.

Among policy wonks in D.C., addressing the needs of older Americans is seen as a burden, said Jody Holtzman, AARP’s SVP of thought leadership.  But for startups and investors? It’s an opportunity, he said. “You’d really have to be an idiot to turn your back on the only humongous growth market that exists,” he quipped.

The ‘Longevity Economy’

In 2011, the non-profit launched its “Innovation@50+” campaign at the DEMO startup conference, with scholarships for startups that either target the 50+ market or included a 50+ founder.  In April, it will host its second annual Health Innovation@50+ LivePitch event, in which selected startups pitch in front of investors and a voting crowd of AARP members.

But this year it also partnered with the Ewing Marion Kauffman Foundation for a startup training program for Baby Boomers, funded Oxford Economics research into what the AARP calls the “longevity economy” and, this October, will back a Bloomberg conference exploring the costs and opportunities associated with longer life expectancies.

Some of the startups it has supported have gone on to attract attention from other accelerators and venture capitalists: Carelinx, for example, the winner of its Live Pitch event last year, went on to join the Startup Health Academy, and NeuroTrack, which graduated from health accelerator Rock Health, recently took the health prize at the SXSW startup accelerator.

Overcoming the youth bias

When the AARP first launched its campaign, Holtzman said, they were the ones making cold calls to health tech accelerators. Now, he says, they’re on the receiving end of that communication. In the not so far off future, as it looks for additional ways to encourage innovation to benefit those over 50, it’s possible that the AARP could sponsor an entire class at one of the new incubators for health startups.

Its efforts are being aided by growing interest in general digital health startups, many of which target senior needs. But getting venture capitalists to embrace older entrepreneurs could be a different kind of challenge. A couple of years ago, investor Vinod Khosla said at a conference that “people over 45 basically die in terms of new ideas.” And, judging from all the recent college grads (and college dropouts) that get venture funding, he’s obviously not the only investor to favor younger favors.

“The bad news is that most traditional VCs have a youth bias that they will state very overtly,” said Steve Jurvetson, managing director at venture firm Draper Fisher Jurvetson. “You always wonder if that’s a self-fulfilling prophecy or if it’s something about the nature of those businesses.”

Are younger founders really more successful?

Despite Silicon Valley’s preference for young entrepreneurs, the research may not be on their side. A 2008 study led by columnist and Singularity University vice president of innovation and research Vivek Wadhwa looked at 502 successful engineering and tech companies. It found that the average and median age of successful founders was 39 and that twice as many founders were older than 50 as were younger than 25. It also found that there were twice as many founders over 60 as under 20.

Jurvetson has long talked up the value of the 50+ demographic and his firm has invested in several companies with applications for, and/or led by, those who are 50+. Posit Science, for example, provides brain-training software that can be used as part of elder care (as well as for anyone hoping to sharpen their mind), and its co-founder and chief scientific officer, Michael Merzenich, was over 50 when it launched. Other companies include Rethink Robotics, founded by 58-year-old Rodney Brooks, and Synthetic Genomics, founded by 66-year-old Craig Ventner and 81-year-old Hamilton Smith.

According to the AARP, hundreds of new startups are founded by seniors — one of the first startups to benefit from its DEMO scholarship, called OhMyMeds, was co-founded by a 71-year-old (it later went out of business). And it makes sense that after decades in a given industry, older professionals would have the experience and perspective to start their own business. To date, the majority do so without ever looking for venture capital. But, in the future, it’s possible senior startup founders could find that they have another source of investment: the AARP.

“I hope that down the road, we’d be in a position to invest or invest in funds looking at opportunities in the space,” Holtzman said. “But we’re not there yet.”

  1. Michael Sinsheimer Tuesday, March 26, 2013

    Supporting gray hairs to target gray hairs for great solutions seems to make sense. Those in the demographic can articulate needs plus have more experience inherently which can lead to sound execution.

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  2. Ki Mae – We suggest you look at Told4Ever.com. The founder is 50+ and works with seniors to help the preserve their life stories & family heritage with this site.

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  3. davidleearmbrust Tuesday, March 26, 2013

    Hi Ki Mae, this is Dave Armbrust, the founder of Told4Ever.com. I cannot tell you how excited we get when we read these articles. 90% of our focus is on the 50+ crowd (of which I am a part of). We strive to create a platform and a process that allows anyone to “Re-Live Forever” using our approach and site.

    If there is anything I can provide you to assist your coverage of this topic, please don’t hesitate to contact me at your convenience.

    Best Regards,

    Dave Armbrust
    Dave@Told4Ever.com

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  4. Ajay Pal Singh Tuesday, March 26, 2013

    we are building products for elder people. Second Light in Startup Chile

    2nL.co

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  5. Here’s an idea… …seniors establishing a venture fund to capitalize senior entrepreneurs.

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  6. Chumbuggy is developing a product for those that are willing and looking for a challenge. Look for launch in early May!.www.chumbuggy.com @bugsomeone

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  7. We started http://www.controlmyfuturetoday.com last year.

    Wish us luck

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  8. Would someone post the contact information for prospective Senior entreprenuers to find out how and where t pitch our potentially profitble ventures? Exactly what role is AARP playing in this program?
    Thnak you.
    An over the retirement senior!

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  9. It’s great to hear about opportunities opening up for people that have a lot of experience and knowledge to contribute.

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  10. I am based in Edmonton, Alberta Canada. I help Seniors(50 Plus) who want to become more active, creative and productive through business and/or social entrepreneurship. I congratulate the Kauffman Foundation, Fast Trac and especially AARP in this new initiative to get more seniors looking at entrepreneurship opportunityies in their retirement life.

    I also offer to help in this area through my website: http://www.seniorpreneur.ca. It must be pointed out that the economy is still in trouble worldwide and because of this reason people assume that the breakthroughs will be achieved mostly with the help of the younger (18-34) entrepreneurs. However; let’s remember that it’s the older, mature person that already possesses the ingredients of maturity, wisdom, knowledge, skills, contacts and
    resources that are essential for successful entrepreneurship projects. As a result, it would be a great tragedy if we didn’t bring in the new 50+ Entrepreneur who is very capable to contribute and make this society the best that it can be.

    Joe W.
    Seniorpreneur

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