“Washington DC calls the needs of 100 million people an unaffordable cost, but for entrepreneurs, addressing the needs of 100 million people is called an opportunity.”
That’s a quote from Jody Holtzman, Senior Vice President of Innovation at the AARP, an organization making an all-out push to connect the innovators of the nation with the needs of people over 50 who make up AARP’s constituency. Those of the Twitter generation may not like to admit it, but these are the people who have your destiny in their slightly more veiny hands. Ignore the market power of the Boomer generation and those beyond at your peril.
On September 21, 2012 AARP held their annual convention in New Orleans and one of the key programs was called Health Innovation@50+ Live Pitch. The event was intended to bring together innovative start-ups that have set out to serve the needs of people 50 and over. Nearly 45% of American citizens are over age 50 and these people collectively spend 9-18% per year of their annual income on healthcare-related products and services every year. And yet the products and services that are often generated by entrepreneurs rarely derive from an intentional strategy to address this population.
George Bernard Shaw once said that youth is wasted on the young. It is easy to feel the same way about healthcare technology given how much of it is invented by 19-year-old ingénues for their 27-year-old elders. It is this gap in new product innovation that AARP wishes to solve. Every marketing guru on Earth reminds companies they should listen to their customers and AARP has set out to ensure that it’s constituents’ voices are in that mix.
It is an interesting time in the evolution of the healthcare marketplace, as the voice of the consumer is, for really the first time, being heard loudly and more reliably. Too often those that sell us healthcare products and services have taken the “trust me, I’m a doctor” approach to marketing. In other words, they have told their customers and patients to take it and like it, their opinion be damned. But in an age where social media meets economic pressure, circumstances have put consumers right in the middle of more healthcare purchasing decisions than ever before.
As a result, the mantra is turning from “trust me I’m a doctor” to “caveat emptor–buyer beware.” And that is a great thing, because who cares more about the healthcare we receive than we ourselves, or our family members or at least our Facebook friends if no one else. Seriously though, the consumer voice is getting through for the first time and helping shape the next generation on products and services in a big way. Forbes writer Dave Chase recently wrote an article in which he said patient empowerment is the blockbuster drug of the next decade and I think he is absolutely right.
Given the immense need of America’s over 50 population for new technologies that make the healthcare world a kinder, more effective, more high value place (75% of those over 50 have at least one chronic disease), nothing is more important than entrepreneurs who recognize this opportunity and who are committed to engaging consumers and other healthcare system participants in a partnership to make the world a healthier place. At the Health Innovation@50+ Live Pitch event this week in there were a number of such entrepreneurs in evidence, along with an entire ecosystem of people focused on this booming (pun intended) market sector. I was fortunate enough to be asked to emcee this event and thus I got to interact with a number of entrepreneurs who have decided to bet their futures on serving Jessica Lange not Jessica Alba.
To fulfill the “Live Pitch” part of the program, AARP selected 10 companies from a field of 80 applicants to pitch their business plans, giving them an opportunity to elicit audience feedback. Just like in Project Runway, one would be the winner and the rest would be out, but in this case there were actually two winners: one selected by venture capital judges and another selected by an audience of consumers.
The pitching companies (and their founder/CEOs) included:
- 1DocWay (Samir Malik)
- Abilto (Michael Laskoff)
- CareLinx (Sherwin Sheik)
- CareTree.me (Carl Hirschman)
- Evermind (Dr. Dave Gilbert)
- GenieMD (Soheil Saadat)
- GeriJoy (Victor Wang)
- LivWell Health (Alex Go)
- MedClimate (Tim Barnes)
- QMedic (Sombit Mishra)
I and four other judges (Andy Donner-Physic Ventures; Brandon Hull-Cardinal Partners; Clayton Lewis- Maveron; Jeff Shoemate-United Health Group) were asked to watch the companies present, grill them for eight minutes and then vote on which we considered “the best” based on these criteria:
- Functionality – Is the product easy to use and does it get the job done?
- Potential – Includes profitability, size of the market and growth potential.
- Team / People – What experience does the team have and can they make the product or service a success?
- Creativity – Originality of the product or service.
In addition, the entrepreneurs were asked to pitch again for an audience of AARP and other consumers who would pick their own winner based on more personal questions:
- Would you use and/or recommend this product to friends and/or family?
- How unique is this product compared to others in this area of which you may be aware?
- How significant is the issue or problem addressed by this product?
The event was particularly entertaining because the entrepreneurs were poised, very well coached and had clearly prepared for the no-holds barred questions that we, the venture avengers, heaped upon them. Simon Cowell has nothing on us VCs, who stake our reputation on cynically attempting to stump the entrepreneurs by asking oh, so intelligent questions. In this case, the CEOs did a pretty great job of responding. Most of them even had bona fide business models. Go figure.
In the end, the winner as judged by the venture/strategic judges was Abilto, a company that uses a comprehensive program of behavioral health counseling interventions to help patient more effectively (and thus cost-effectively) cope with major health transitions, such as post-cardiac interventions. The consumer-selected winner was CareLinx, a company that helps families to connect directly with vetted and well-matched professional home caregivers without an intermediary agency, thus improving caregiver revenue and expanding their reach.
Both of these companies address fundamental and highly complex systemic needs of the over 50 population and effectively demonstrated that customers have demand for what they have to offer. The winners got a plethora of prizes, including private business meetings with AARP representatives and others potentially able to enhance their business prospects. They also got a specially engraved Louisville Slugger bat from Louisville-based InnovateLTC, which the CEOs will undoubtedly want to use to tame their venture capital board member representatives down the line.
The other 8 presenting companies were also well worth watching. While not the winner, Gerijoy was a crowd favorite for its weird and wonderful online companion virtual cat/dog program for people with Alzheimer’s. Demonstrating their prototype software, which looked more like a zombie guinea pig than cat or dog, it created the strongest audience reaction with broadly split opinions on whether this is the hands-down patient engagement service of the future or something that would make seniors feel that some odd virtual creature had been unleashed in their living room, sending them running for cover. My guess is that there is something good here, as I have seen how attached young people can get to their online pets. Gerijoy’s CEO, an MIT student, told me that a key reason they need to raise money is to add someone with design skills to their mix who can make their animated character look less like a possessed Scooby Doo and more like Lassie.
As I reflected on the day, which had a really wonderful upbeat feel about it, one thing that nagged at me was whether the time was really yet right for some of these innovative products and services. It struck me that I had seen essentially every one of these ideas before in one form or another over the 14 years I have been in the venture capital world. Tens if not hundreds of similar companies have come and gone already, unable to build market share or achieve scale. It is a worry I have for some of these companies, which rely on Smart Phone-savvy elders and a world comfortable with social networking. Again, if you’re 27, it’s a no-brainer. If you’re 72, not so much. At least not yet.
But someday, yes. We will eventually have widespread home monitoring and social networks of grandparents that live inside the walls of a computer, not inside the walls of the assisted living facility cafeteria. Home caregivers will be armed with technology, not pens and notebooks and “cloud-based” will mean technology, not what to expect when you get to heaven. I hope that some of these excellent entrepreneurs and their companies find that their time has come and that they will establish the next “I’ve fallen and I can’t get up” mantra with which everyone in the over-50 crowd is so familiar. Until then, watch your back—zombie guinea pigs are on the loose.