Why Isn't Innovation Booming for Boomers?
Most people think that tech and people 65+ don't mix. Not true.
(This essay is the 16th in the Milken Institute Center for the Future of Aging series, The Business of Aging, running on Next Avenue weekly. The essays are a companion piece to the center’s new report, Silver to Gold: The Business of Aging.)
Boomers (born between 1946 and 1964) have and will continue to reshape the population. We should be reshaping business to meet their changing needs as they age.
We are completely underinvesting in, and underserving, older adults in this country and around the world — and it’s wild because the opportunities for great social benefit while building large, sustainable businesses are massive. The question is, why?
An Exploding Market and Opportunity
We all know that the over-65 population is rapidly growing. Today, there are approximately 46 million people aged 65 and over living in the United States. That population is projected to more than double to 98 million by 2060. The market is exploding and so is the opportunity.
You don’t have to look 40 years ahead to capitalize on those opportunities.
About 10,000 boomers are turning 65 every single day — and will through 2029. They’re more active than ever with massive spending power, controlling 70 percent of the nation’s disposable income.
But there’s very little innovation for that population happening now.
Spending By Older Adults: Nearly 6 Percent of GDP
In 2014, only 0.7 percent of venture capital (VC) funding went to companies developing products or services for older adults. Yet, $1 trillion of our $18 trillion Gross Domestic Product (GDP) comes from those over 65. That’s almost six percent of GDP! Given the population growth, we’re underinvesting in older adults by a mere 20x.
Why isn’t new business and innovation booming for aging boomers? Two simple problems — that are easy to fix.
2 Problems That Are Easy to Fix
Venture investors need businesses to grow quickly, and tech makes it happen. Unfortunately, most people think that technology and the 65+ population don’t mix. That’s just not true.
Think of the automobile, telephone, ATM, and microwave — these are just a few examples of new technologies that were rapidly and widely accepted because they fulfilled a real need: making people’s lives better every day. We’ve got to change how we think about our older population and their willingness and desire to adopt new technology. If technology doesn’t feel like technology, but rather a much needed service, that’s better for everyone — regardless of age. The technology needs to disappear into the background.
The second issue is that most entrepreneurs are in their 20s, 30s or 40s, decades away from 65. They’re not seeing this enormous business opportunity because they haven’t lived it yet. Usually, people build to solve their own problems. They’re looking at their own lives and ways to innovate, then developing new products and services for themselves and their friends.
Building Products and Services for Segments of Older People
Men and women over 65 have very unique needs and desires.
If you just spend time with older people, go into their communities and really talk with them, observe and listen, you can figure out many of their real problems and needs. And real innovation comes from addressing those needs.
It’s also important to know for what segment of this market you’re building.
It’s too broad to say, “I’m building a product for older people.” People in their late 60s have different needs from people in their 70s or 80s. And each one of those population segments is looking for its own products, its own solutions. There’s no substitute for spending time with your customers.
What Older Adults Will Need As They Age
We started Honor, an online marketplace for home care workers and clients, because we saw a clear and urgent need: much better care for people who want to stay in their homes as they age — often called aging in place. But there are so many more things that older adults will need as they age, everything from fun social activities (because wellness is all about staying active) to better safety and security innovations and even new education opportunities.
There is real venture capital available for entrepreneurs who have a good idea and solid business plan. I hope that Honor’s presence has helped open up this category. And I sincerely hope that we’ll continue to see new and innovative product built for our collective audience.