Most venture capitalists obsess on the latest shiny object for the 18-34 demographic. That’s remarkably shortsighted. The aging U.S. population is a potential gold mine for entrepreneurs who can build technologies to help this huge demographic remain active and stay in their homes as long as possible.
The cohort of Americans over age 55 is massive. “This is a huge market — $3 trillion in annual disposable income,” said Jody Holtzman, SVP of thought leadership for the AARP.
Holtzman was one of a panel of experts who spoke this week on The Rise of the Grey Market an event hosted by Redstar, a Cambridge, Mass. company that’s somewhat like an incubator. Redstar focuses on the older demographic and a few other underserved markets. So why is Redstar keen on retirees? Here’s what the panel had to say:
1. Technologies and services to foster “aging in place” will be huge
The number-one desire of most aging Americans is to stay in their homes. That age-in-place trend represents a $10 billion to $20 billion market opportunity in and of itself, Holtzman said.
Still, it’s a thorny problem. Most senior citizens aren’t wild about having surveillance cameras or other intrusive technologies tracking them at home. And yet many of them live alone (42 percent of women over the age of 65 in the U.S. live solo), and have distant children who worry about their well-being. So research must be done to make technologies that are acceptable to them and let family members know whether they’re okay or not. The AARP estimates the unpaid value of care provided to family members by children or siblings is $450 billion annually.
“If we can blend monitoring and managing with social media tools and sharing or connecting with other people, that might be more attractive,” said Joe Coughlin, director of MIT’s AgeLab, which is working on the e-Home project, which uses wireless sensors to signal potential problems, like a stove being left on for hours.
2. When tech products hit big with older Americans, it’s often by mistake
The Wii and Apple’s iPad are big hits with aging Americans, but that was a happy accident. “Wiis are huge in nursing homes, unbeknownst to Nintendo,” said panelist Joe Coughlin, director of MIT’s AgeLab.
Smart companies will design products for older people while not condescending to them. For example, car companies should focus on personalized dashboards that will help older people drive safely longer. Similarly, car doors should be designed to allow easy entry and exit, and seats should be crafted with stronger lumbar support.
“Connected health” efforts, like Vitality’s smart pill bottle cap, could be big. That product alerts pharmacies when a refill is needed and reminds the patient to take her pills. “The challenge for these connected health initiatives is to embed things in everyday objects,” said David Rose, CEO of Vitality.
Also, those who design things need to make them look good. Many elderly people don’t wear their emergency alert devices because they’re ugly, panelists said.
3. Target market: baby boomer care givers
Baby boomers — people between 47 to 65 years of age — face a dilemma. Many are still caring for children while also assuming more care for aging parents. A huge percentage of that group is both willing and able to pay for services and products that will keep their parents safe and happy — and give the caregiver peace of mind.
“As parents age, life is more complex. When you turn 50 to 55, that’s the in-between stage, and your life gets exponentially more complex. How do you take people in my situation and make their lives simpler?” asked Frank Moss, director of new media medicine at MIT’s Media Lab.
4. Think services, not just products
SilverRide, a Bay Area company that started up to help retirees get to doctors appointments, quickly found its users wanted more. “They found demand pull from people was not just for rides but to introduce customers to other customers,” said Coughlin. “People want to connect — they want social interaction and activities. SilverRide now promotes and hosts group events.
Home delivery and check-in services, and add-ons around them, could be very big.
5. Research, research, research
The findings may surprise you — and force you to rethink your game plan. Coughlin mentioned one research project that wired up people’s medicine cabinets to monitor their use of prescriptions. “What they found was very few people keep their meds in a medicine cabinet. It’s all about bags, baskets and boxes,” Coughlin said.
Panelists recommended talking to social scientists and anthropologists as well as senior citizens themselves to gauge behaviors and preferences. AARP makes a lot of its information public as does the MetLife Foundation, Holtzman said.
But the biggest takeaway from the event remained that this “huge bulge of people getting older is a huge opportunity for entrepreneurs and investors,” said RedStar co-founder Jeet Singh.