Coming of Age… Tech (Full Length)
This is the full-length version of my August 2022 series on AgeTech.
You can find the broken out (and more digestible) posts HERE.
The confluence of a few events initiated my interest in this space: my grandparents aging, reading Being Mortal by Atul Gawande in Point Field’s book club, and learning about the Techstars Future of Longevity Accelerator in DC.
AgeTech refers to technology being built for the aging population, loosely understood as people over the age of 65. Today, technology doesn’t adequately address the needs of this population. And with it rapidly growing — 10,000 baby boomers turn 65 every day— the resulting individual and societal problems are becoming more acute. However, now presents a unique moment in time for companies to build solutions that address these problems: seniors are becoming more technologically adept, there’s white space in the market because few products and services have been built specifically for them, and Medicare has opened the aperture of what it’ll reimburse to include non-medical expenses.
The simplest way to frame the AgeTech market is by bifurcating it into two categories: involving care and direct to older adults. Within each, there are key themes — like aging in place—that highlight areas where innovation is needed. And as a nascent space, the success of AgeTech companies will be due, in part, to the strength of the surrounding ecosystem. The existence and engagement of anchor stakeholders — like Techstars Longevity — is foundational to supporting entrepreneurs, garnering attention, attracting capital, and creating a flywheel that results in innovative technology.
The aim of AgeTech is to positively touch the lives of the aging population and also address the problems an aging society presents. And with this population growing and these problems surmounting, the need is becoming more urgent.
It’s time for AgeTech to come of age.
Table of Contents
- Introduction
- The Grey Tsunami
2.A. Overview of the Tsunami
2.B. Problems
___2.B.a. Caregiving
___2.B.b. Financial Security
2.C. Summary - A Unique Moment in Time
3.A. Intro
3.B. Size & Growth
3.C. AgeTech’s Moment in Time
___3.C.a. The Digital Divide Is Narrowing
___3.C.b. Technology Has Not Been Designed for Older Adults
___3.C.c. Non-Medical Expenses Are Now Reimbursed by Medicare
D. Summary - Themes and Companies
4.A. AgeTech Is More Than Healthcare
4.B. Framing AgeTech
4.C. Specific Themes and Companies
___4.C.a. Involving Care
___4.C.b. Direct to Older Adults
4.D. How We Understand the Purpose of AgeTech Matters - The AgeTech Ecosystem
5.A. Introduction to Ecosystems
5.B. AgeTech Ecosystem
5.C. AgeTech Stakeholders
5.D. Optimistic for the Future - Conclusion
1. Introduction
Everyone experiences aging. People themselves age, and they see the people around them age. Aging is something we all do every day. Our day-to-day aging, though, is distinct from what is commonly referred to as the aging community. People over the age of 65 are considered members of the aging community. In the United States, people qualify for Medicare when they are 65. According to the U.S. Census, in 2020, there were roughly 54 million adults in the United States over the age of 65. That number is only increasing. 10,000 baby boomers − the post-World War II generation born from 1946 to 1964 − turn 65 every day. The needs of society are changing as we get older, and our outdated infrastructure is not built to address them. Technology has swept across the world in the 21st century, yet it has largely missed the aging population. For most people, technology built for the aging population brings to mind products like LifeAlert (“HELP! I’ve fallen and I can’t get up”) and electric stair lifts. These technologies are helpful in their narrow use cases, but they do not sufficiently address all of the needs and desires of the aging population. AgeTech refers to technologies built for the aging population. In recent years, as more startups and investors have entered the space, AgeTech has gained more attention. As our society gets older, tech-first solutions will need to be built to address the problems and opportunities that will arise. AgeTech can help.
2. The Grey Tsunami
2.A. Overview of The Tsunami
The Grey Tsunami is a term that describes the emergence of a large and rapidly growing aging population in developed countries, specifically the United States. Keren Etkin, in her 2022 book, The AgeTech Revolution, writes that by 2050, we’ll have two billion people over the age of sixty living on this planet, which is twice as many as we had in 2017. This increase is largely attributable — particularly in the United States — to two factors: 1) an increase in life expectancy and 2) the aging of baby boomers. According to Statista, in 1950, life expectancy in the United States was 67 years; today, it’s 79. Right now, in the United States, baby boomers − historically the largest generation in the U.S. (only recently passed by millennials) − total 70 million, and by 2030, will all be over 65. Baby boomers − the parents of millennials and the generation encompassing the likes of Meryl Streep, Barack Obama, and Michael Jordan − are becoming the seniors of our society.
The Urban Institute, a nonprofit thinktank, charts the increase in the size of the overall aging population, as well as the subgroups within it. In 1960, 180.7 million people lived in the United States and 18 million of them were over the age of 65 (roughly 10%). In 2020, 329.5 million people lived in the U.S. and 54 million were over the age of 65 (roughly 16%). By 2040, it’s projected that 380.2 million people will be living in the United States and that 80 million will be over 65, representing roughly 21% of the total population.
The increase in the percentage of the overall population that is older than 65 is primarily attributable to two trends: 1) an increase in life expectancy (as previously mentioned), and 2) a decrease in the birth rate. According to Macrotrends, in 1960, the birth rate in the United States was 22.7 births per thousand people. In 2020, it was 11.9. In 2040, it’s expected to be 11.3. As Etkin says, these trends “mean we’ll not only have a larger-than-ever number of older adults alive, but they will also represent an increasingly growing portion of the population.” We must reckon with the fact that the societal structures currently in place are no match for the problems the Grey Tsunami will cause.
2.B. Problems
The two most obvious places where an aging population strains society are in caregiving and financial security in retirement.
2.B.a. Caregiving
As people age, their level of independence diminishes. Simple tasks like going to the grocery store or scheduling a doctor’s visit become increasingly burdensome. With life expectancy increasing and the birth rate decreasing, the need for caregivers has outpaced the supply. One proxy for this mismatch in supply and demand is the caregiver support ratio, which is the number of potential caregivers aged 45 to 64 for each person aged 80 or older. According to AARP, an interest group focused on issues affecting those over the age of fifty, the caregiver support ratio in the United States is getting smaller: in 2010, there were seven potential caregivers for every person in the high-risk years of 80-plus. In 2030, it’s expected to fall to four to one, and in 2050, three to one. As baby boomers age alongside a smaller subsequent generation, there will be fewer middle-aged people to care for them.
There’s no alternative to aging − all of us age every day. And the importance of caring for the individuals who have aged the most in our society − who are the most vulnerable and the most dependent on others − is something, as surgeon Atul Gawande reinforces throughout his book, Being Mortal, that must be core to our society. But as the relative number of people positioned to provide care declines, living up to that ideal is becoming more challenging.
2.B.b. Financial Security
Another area where society is strained by an aging population is in paying for the services these people require. One of the core provisions of the Affordable Care Act (ACA), which was passed by the Obama administration in 2010, was the individual mandate. The individual mandate required all people to have health insurance or face a tax penalty. The rationale for the individual mandate is an economic one: if everyone is required to have insurance − especially healthy people − the risk pool is broad enough to lower premiums across the board. As people age and their needs for care climb, the individual mandate can serve as a buffer and ensure that premiums for the aging population (among others) don’t escalate in parallel.
In 2017, however, the Trump administration reduced the tax penalty for not enrolling to $0, thereby eliminating the incentive for healthy people to get health insurance. The Kaiser Family Foundation predicted that this would result in a 6% increase in premiums. As healthy people left the health insurance market, insurers took on a riskier pool of patients, readjusted prices, and passed along the higher costs.
Key to the individual mandate example is understanding that for groups reliant on government services — like those on Medicare and Medicaid, and aging individuals in general — maintaining as large of a revenue-generating base as possible is fundamental to minimizing costs for those most in need.
And the problem with financing an aging society is this: what if the absolute number of people in society contributing the majority of government revenues — those aged 26 to 55 — declines relative to the aging population? There’s not an equivalent to the individual mandate in this context — you can’t simply create more taxpayers! Government is reliant on revenues from people 26 to 55 to provide critical services to the aging population. Pension systems also make payments to those no longer working largely through receiving payments from those currently working. As our society ages and the number of those contributing to the system decreases while those reliant on it increases, it will become increasingly financially strained.
2.C. Summary
The coupling of the Grey Tsunami with the shrinking population of young people presents the following problem: an increasingly large number of people dependent upon an ever smaller number of people. The problems resulting from this demographic shift are clear. In 2015, Kathryn Schulz was awarded a Pulitzer Prize for her New Yorker piece “The Really Big One,” which outlined the existential threat of an earthquake-induced tsunami that has the capacity to wipe out much of the Pacific Northwest. In recent years, legislation has been introduced to build tsunami protection sites but has been voted down. Society has struggled to identify the tsunami as a “when,” rather than an “if.” While not a physical wave, the Grey Tsunami also has the capacity to disrupt society. And it − like The Really Big One − is not an “if,” but a “when.”
3. A Unique Moment in Time
3.A. Intro
In March 2021, the World Economic Forum posted an article titled “Ageing: Looming Crisis or Booming Opportunity.” The article title presents a false dichotomy; rather, the looming crisis informs the booming economic opportunity. The dwindling caregiver support ratio and tax base are a looming crisis, but as the Grey Tsunami arrives, there’s an incredible market opportunity to build products and services to improve the lives of the aging population and those that support them, as well as make an incredible return on capital.
3.B. Size & Growth
Generator Ventures, a venture firm specifically focused on the aging population, outlines that the longevity economy, defined as the sum of all economic activity serving the needs of Americans over age 50, is pegged at $7.1 trillion today and is expected to reach over $13.5 trillion by 2032. While this sum includes a cohort that reaches into what’s called the “active aging” population (50 to 65 years old), it is clear that this market is large and growing. Alexis Ohanian, the founder of Reddit and an early investor in one of the largest companies in the AgeTech space, Papa, also sees great opportunity in the space: “I’m telling you, this [Papa] is just the start. There are over 11,000 boomers retiring every single day. We need technology to support them.”
The longevity economy — despite often being misconstrued as a segment of the healthcare industry — also includes industries beyond healthcare. While certainly not all aging individuals have excess purchasing power, Cake Ventures, a San Francisco-based venture firm focused on investing in AgeTech, outlines that, in aggregate, the roughly 75 million baby boomers in the United States make up the wealthiest generation. In total, they hold $3.2 trillion in direct spending power and more than 54% in household wealth. As one would expect, not all of this is spent on healthcare, either. According to Cake Ventures, baby boomers spend $157 billion per year on travel (pre-pandemic) and over $36 billion on pets, making up over 46% of the entire pet market. From this, the market opportunity is clear — the aging population has money and spends money, and it will continue to do so.
3.C. AgeTech’s Moment in Time
Will Gaybrick, Chief Product Officer at Stripe and co-founder of Thrive Capital, believes five principles are key when analyzing an investment in a startup: 1) economic moat, 2) big market, 3) great management team, 4) strong margin profiles, and 5) motivation of the market — why now? The first four are the factors that make a business investable in isolation. The final principle is what makes it investable in practice. A business ultimately exists to serve the needs of its customers, and customer demands change as markets evolve. A business well positioned to succeed must not only address customers’ demands today, but also anticipate their demands tomorrow.
This notion − investing at a unique moment in time − is true on an individual business level as well as on a market level. Putting capital behind defining tailwinds − and not just companies − has been a thesis of notable investors. Kyle Harrison, a former investor at Index Ventures, Coatue, and TCV, explained in a blog post that 50% of venture funds underperform market indexes. One reason, he said, is because “indexes are built to ride on one big wave rather than several highly-opinionated waves” and “if you’re building an index of something, you don’t have to pick winners. You just have to pick trends.” Additionally, Chamath Palihapitiya, interviewed on the podcast “Invest like the Best,” outlined that if you are in a major growth industry, you do not have to back the industry-defining company to be a winner. A large industry can host multiple major winners. AgeTech — given the underlying trends — is a major growth industry and index bets on it are likely to be successful.
By 2030, all baby boomers will be over the age of 65. This decade — as the Grey Tsunami arrives — presents a unique moment in time for products and services to be built to cater to the needs of the aging population. The demographic shift, however, is not the only compelling reason to pay attention to this space.
3.C.a. The Digital Divide Is Narrowing
Historically, younger people have used digital products and are more digitally savvy than the aging population. A 2019 TechCrunch article titled “We are leaving older adults out of the digital world” outlined that nearly one-third of adults aged 65 and older say they have never used the internet and that 40% do not have basic digital literacy skills. This, however, is changing. Two Pew Research reports from 2017 and 2022 have shown a steady climb in tech adoption by older adults in recent years, with 67% of Americans over the age of 65 using the internet in 2017 and 75% in 2021. This figure has also almost certainly continued to grow through Covid remaining present in society.
In addition to a greater number of older people using the internet, younger, more tech savvy baby boomers are increasingly aging into the 65+ population. Monique Woodard, in her Cake Ventures report, writes that a boomer’s likelihood to use a smartphone has increased more than 2.5x over the last 8 years (as of 2020) and has likely accelerated through the pandemic.
3.C.b. Technology Has Not Been Designed for Older Adults
Despite the digital divide narrowing, the number of digital products intentionally built for older adults has remained small. Etkin, in The AgeTech Revolution, writes that most of the current technology available is not designed with older adults being understood as the potential end users, despite the fact that they hold a significant portion of the world’s wealth. She goes on to talk about her conversation with Don Norman, the author of The Design of Everyday Things and a user experience architect at Apple from 1993 to 1996. A thought leader in designing solutions for older adults, Norman told Etkin that “new technologies tend to rely on display screens, often with tiny lettering, with touch-sensitive areas that are exceedingly difficult to hit as eye-hand coordination declines.” Norman believes that aesthetically pleasing design does not always equate to functional design, especially for older adults. AgeTech can change that.
3.C.c. Non-Medical Expenses Are Now Reimbursable by Medicare
In 2019, the Centers for Medicare and Medicaid Services (CMS) approved new supplemental healthcare benefits that had never been offered before, including transportation for non-emergency medical care, home modifications, respite care, adult day care, and nonmedical home care. As the number of payers increases in AgeTech, the number of businesses that will find product-market fit with sustainable economics will grow. Additionally, given the difficulties and high costs of acquiring senior customers due to limited and outdated marketing channels, providers for Medicare populations will now be able to serve as effective go-to-market and customer acquisition channels for startups in the space.
3.D. Summary
Overall, as the digital divide narrows and people’s reliance on technologies increases, businesses that put older individuals at the forefront − and design products and services with their needs in mind − are well positioned to ride the tailwinds of the AgeTech market and capture this unique moment in time.
4. Themes and Companies
4.A. AgeTech Is More Than Healthcare
A large portion of the AgeTech ecosystem revolves around the healthcare system. The 65+ population is the largest recipient of healthcare by a wide margin, so technologies built for this population necessarily include healthcare products and services. AgeTech is not synonymous with healthtech for an aging population though − it includes it, yes, but it also includes products and services across industries like finance, social media, and entertainment. Etkin writes that people tend to think of older adults as this “monolithic group of people,” when they should be seeing them as a group with diverse preferences. In Woodard’s report, she outlines the results to a survey that asked what baby boomers care most about:
While health is top of mind for almost every older adult (77% of respondents said yes to this), Woodard’s results suggest that the preferences of boomers stretch far beyond healthcare. Woodard also explored the five top areas that people aged 55–70 currently use technology for:
1. Accessing medical information
2. Monitoring their health
3. Accessing healthcare
4. Buying medicine and prescriptions
5. Retirement savings
Apart from retirement savings, all areas of technology pertain to healthcare. Overlaying what boomers care about with what technology they currently use allows us to see the unmet needs in the AgeTech market. That is why it is important to migrate away from a healthcare-first to a demographic-first perspective when thinking about the AgeTech market opportunity. Looking at the world through the lens of an older individual allows one to see which needs are being currently served and which ones are not.
4.B. Framing AgeTech
Over the past few years, the AgeTech ecosystem has grown − investors, thought leaders, strategics, accelerators, and startups have all emerged. Each stakeholder in this market views the AgeTech ecosystem a little bit differently. Keren Etkin has a comprehensive market map. Primetime Partners, a VC firm led by Abby Levy-Miller and Alan Patricof, has six core pillars. One of the simplest and most intuitive framings of the market that I have heard came through my conversation with Keith Camhi, the Managing Director of Techstars Future of Longevity, a Washington, DC-based AgeTech accelerator backed by Melinda Gates. Keith outlined that there are three primary categories in this space: 1) technologies for older adults, 2) technologies for caregivers, and 3) biotech/pharma products. The Future of Longevity Accelerator focuses on the first two. The way that I like to frame the market is a slight tweak on Camhi’s: 1) involving care and 2) direct to older adults.
4.C. Specific Themes and Companies
4.C.a. Involving Care
Stats on Caregiving
A 2020 report from AARP outlined that one in five Americans provide unpaid family care, totaling 53 million people. This figure includes elder care, child care, and all other types of care, and equates to $470 billion in unpaid labor. Within family care, caring for aging adults is the fastest growing segment − it accounted for 14% in 2015 and 17% in 2020, or just under 10 million people. Unpaid family care − which often pulls people away from their jobs without compensation − can lead to crippling financial outcomes. A 2020 Wall Street Journal article titled “Caring for Older Relatives Is So Expensive That Even AARP’s Expert Filed for Bankruptcy” outlines the magnitude of financial strain people can feel when providing care for older family members. According to the article, the cost of in-home care has risen 18.5% in the last five years alone.
With costs of care rising and the caregiving ratio declining, family members will increasingly be forced into caregiving roles, likely giving up paying jobs right when they need the money the most. And poor financial outcomes are not the only negative outcome. According to a report published by the CDC in 2021, 70% of unpaid caregivers report adverse mental health conditions. Additionally, paid caregivers in the United States have historically high turnover, reaching a high of 82% in 2018 according to HomeHealthCare. Turnover figures have dropped since 2018 but remain high due to a variety of factors including low pay, weak benefits, and few training opportunities. Article headlines like “These Self-Care Strategies Can Help Caregivers Cope With Burnout” are common. Caregiving − both paid and unpaid − is in a crisis and needs to be reimagined in order to adequately address the wave of aging adults.
Caregiving Needs to Change
Caregiving − whether paid or not − is difficult. It is physically and emotionally draining. In the context of caregiving, it is often easy to forget that there is a recipient of care, and that good care leads to better outcomes. Bad care, conversely, leads to worse, and can oftentimes deprive the recipient of their dignity. Keren Brown Wilson, the founder of the first assisted living facility and the pioneer behind the now $30 billion industry, believes that her original idea − a place where older people could live with autonomy and freedom − has been thrown by the wayside for more profitable solutions, like bigger buildings in dense areas and with fewer services. As Wilson saw her original idea be supplanted by alternatives, she also saw the aging people receive worse care. Gawande, in Being Mortal, asked her why she thought poorer care was being delivered. Wilson saw several reasons:
“First, to genuinely help people with living ‘is harder to do than to talk about’ and it’s difficult to make caregivers think about what it really entails. She gave the example of helping a person dress. Ideally, you let people do what they can themselves, thus maintaining their capabilities and sense of independence. But, she said, ‘Dressing somebody is easier than letting them dress themselves. It takes less time. It’s less aggravation.’ So, unless supporting people’s capabilities is made a priority, the staff ends up dressing people like they’re rag dolls. Gradually, that’s how everything begins to go. The tasks come to matter more than the people.”
In Wilson’s eyes, assisted living communities − and the caregiver’s role in them — are not providing older people with the sense of dignity she imagined. While this inadequate treatment cannot be extrapolated to encompass all caregivers, it is likely common. And after learning about the difficult situations both paid and unpaid caregivers find themselves in, it is hard to fault them directly either. Caregiving clearly has systemic issues.
One way to address this problem is to break caregiving into distinct subtypes. In software, vertical solutions target specific industries. Squire is a vertical software solution built specifically for barber shops. Caregiving, similarly, needs to be verticalized. Doing so will allow us to better discern the needs of aging individuals and supply caregivers that can appropriately address them.
Verticalizing Care
Verticalizing caregiving will expand the definition of care and those that can deliver it. While not comprehensive, below are different areas of care where vertical solutions could be built.
Vertical 1: Familial
Now and into the future, family members are likely to be one of the primary care providers and coordinators for aging adults. Startups that enable family members to easily become educated on the type of care they need to provide and how to best provide or coordinate it are well positioned to meet the market demand. Grayce, an SF-based startup, provides guidance for family members on their relatives’ care journeys. Grayce’s go-to-market strategy involves onboarding employers so that they can offer it as an employee benefit. Grayce cites that “74% of all employees would stay longer if offered more caregiving support.” Ianacare, backed by Greycroft, is another startup targeting this space. As the need for caregivers increases and the cost of care climbs, the burden that will fall on family members to provide care will go up. Solutions that enable family members to provide care more easily are likely to find a strong audience.
Vertical 2: Companionship
Loneliness amongst the aging population is a common and unsettling affliction, but one that can be reversed. A report from the National Academies of Sciences, Engineering, and Medicine (NASEM) points out that more than one-third of adults aged 45 and older feel lonely, and nearly one-fourth over 65 are considered socially isolated. As anyone who has experienced social isolation at any age knows, isolation and loneliness have negative effects on health and well-being. According to NASEM, social isolation significantly increases a person’s risk of premature death from all causes, is associated with a 50% increased risk of dementia, 29% increased risk of heart disease, and 32% increased risk of stroke. In 2018, Britain appointed a Minister of Loneliness to address the loneliness epidemic in the country. At the time, Britain’s population was 65 million, and 9 million people of all ages felt lonely. And with that figure being calculated prior to the Covid-19 pandemic, one can assume it is much higher today.
Gawande, in Being Mortal, highlights how an older individual’s priorities change as they age in life, with companionship being near the top. He writes that “when we perceive life to be short, we want to be close to family.” In referencing the Russian writer Leo Tolstoy, Gawande writes
“…that Tolstoy recognized this [changing set of preferences]. As Ivan Ilyich’s health fades and he realizes that his time is limited, his ambition and vanity disappear. He simply wants comfort and companionship. This simple but profound service — to grasp a fading man’s need for everyday comforts, for companionship, for help achieving his modest aims — is the thing that is still so devastatingly lacking more than a century later.”
This need for companionship among older adults − as evidenced by the changing preferences of aging people and the number of people feeling a sense of loneliness − is clear.
In 2017, Andrew Parker built a solution that looked to solve this. A young adult with a grandfather who needed companionship − like going on walks and sharing stories — rather than medical care, Parker knew that he was capable of providing the care but could not be the sole provider. He had time to spend with his grandfather, but not enough to sufficiently make his grandfather feel as if there was always someone there for him. So, Parker sought alternatives to himself and founded Papa. Papa is a platform where younger adults connect with older adults to provide companionship. In other words, a “grandchildren on-demand” service. “Papa Pals” − Andrew alternatives − provide companionship, technology assistance, meal preparation, light housework, and other services to older adults looking for companionship. Papa Pals have resulted in better health outcomes for the aging population, and as of November 2021, is available through 65 health plans across all 50 states. The company raised $150 million in Series D funding from SoftBank, Tiger Global, Canaan, and others at a post-money valuation of $1.4 billion in late 2021, and serves as one of the breakout stars in the AgeTech ecosystem.
Vertical 3: Activities of Daily Living (ADL)
Activities of Daily Living include driving to the grocery store, making meals, doing laundry, getting out of bed, and other rudimentary activities that people do every single day. These activities — which often do not even constitute an activity in the mind of the younger and more able — become tedious and difficult tasks for people as they age. Having caregivers to support ADLs is crucial, especially as people continue to age in place. Duos, a company backed by Forerunner Ventures and Declaration Partners, the family office for David Rubenstein, focuses on connecting these ADL caregivers to older adults. The company’s website reads that “Duos help older adults live to the fullest by pairing them with personal assistants, or ‘duos,’ who help them with the little things that make a big difference.”
Vertical 4: Home-based Care
Home-based care is one of the defining and fastest growing segments of the AgeTech ecosystem and is at the intersection of another major trend in AgeTech: aging in place. As seniors age at home, they increasingly need care services delivered to their doorstep. Tomorrow Health, which raised $60 million in a round led by Bond Capital in May 2022, was started by former executives at Casper and Oscar Health to address the need for care at home. Tomorrow Health is a platform that pairs patients with care advocates and gets them the medical equipment and supplies they need.
Vertical 5: Chronic care management
According to the CDC, 90% of the United States’ $3.8 trillion in annual healthcare expenditures is for people with chronic and mental health conditions. And according to Generator Ventures, two out of three people over 65 have two or more chronic conditions. Delivering solutions that prevent chronic disease or better manage symptoms that reduce these costs is critical to both health outcomes and minimizing expenditures. Welldoc, a Columbia, MD-based company founded in 2005, is using a digital health platform to manage chronic care. More recently founded companies, like Sweetch, are targeting this same area through AI-based chronic care management.
Vertical 6: Rehabilitation
Unsurprisingly, the aging population is the largest consumer of healthcare. Seniors are the most prone to injury from falls, disease, and illness from old age. Technologies that provide rehabilitation services to common injuries and illness can address large populations in the aging community. One of those companies is Axem Neurotechnology, which provides rehabilitation services for those who have suffered from strokes.
Vertical 7: End of life
David Hall, Managing Director at Revolution’s Rise of the Rest, stated that betting on dignity is always good. If you provide people with dignity, you are providing them something of value. End of life management can empower those not far from passing to feel a sense of dignity in how they die. Better Place Forest is one such solution. Better Place Forest wants to change the way we talk about, plan for, and create end of life experiences. Better Place Forest allows individuals and families to pick a spot in designated forests to lay their remains. It is a powerful service and one that many have turned to. The company has also attracted investors to expand its offerings — it recently raised $20 million at a post-money valuation of $320 million.
Surrounding Care
Verticalizing care allows us to see the different ways care can be delivered to the aging population. Within care, there are also areas for opportunity beyond those covered through verticalization. By analogizing care to software and data − two industries that have dominated the venture capital landscape − other areas in care where startups can deliver innovation emerge.
Software and data engineers, like caregivers, have been and are heavily in demand. To address this mismatch in the supply and demand of software and data engineering talent, three primary routes have been taken:
- Build tools to make software and data engineers more efficient
- Train more people to become coders
- Make coding more accessible by lowering the barriers to entry
Caregiving and software or data engineering are not the same job. Caregivers are typically moderately educated and have modest wages; software and data engineers are often the opposite. Despite these differences, imposing the software and data engineer framework on caregiving reveals potential avenues for alleviating the mismatch in supply and demand:
- Enhance and make caregivers’ jobs more efficient
- Allow the onboarding of new caregivers
- Lower the barriers to entry for caregivers
Surrounding Care 1: Make Caregivers’ Jobs More Efficient
— Software/Data Engineering
Tools that enhance and make software and data engineers more efficient are large, venture-backed companies. GitHub, which was bought by Microsoft for $7.5 billion in 2018, is one such company. GitHub is a version-control platform that allows software engineers to write, edit, and publicly share their code. It also has a repository of open-source code that allows engineers to borrow the code of others instead of always creating their own. GitHub also recently introduced GitHub Copilot, an AI program that provides suggestions for whole lines of code or entire functions inside a coder’s editor. GitHub makes the lives of programmers easier and more productive.
— Caregiving
Carewell − a marketplace for care products − is one example of a platform that makes a caregiver’s job more efficient. It alleviates the burden of combing through a multitude of physical stores and websites to find the exact care product. As patient profiles are increasingly updated by the caregiver, Carewell will be able to train its site to make product recommendations increasingly consistent with the needs of patients, thereby decreasing the amount of time caregivers need to spend on this task.
Birdie and Honor are two additional companies that give caregiving agencies and individual caregivers the ability to manage their businesses and clients more effectively. Each company provides back-end care management products that streamline processes and allow agencies and caregivers to address the needs of their patients more readily.
Surrounding Care 2: Onboard More Caregivers
— Software/Data Engineering
As programming and data engineers have become in-demand, high-paying jobs, companies providing training have taken off. Startups like Lambda School and CodeAcademy, both focused on training people for tech-oriented jobs, are valued in the hundreds of millions.
— Caregiving
In caregiving, CareAcademy is one of the prominent tech-first training platforms for caregivers. The company has received investment from Rethink, Revolution, and Techstars, has 78 employees, and is working with a variety of caregiving agencies to supply them with talent.
It’s important to mention, again, that caregiving and software/data engineering are not the same jobs. Software/data engineering jobs are highly paid positions, so in addition to training platforms making it easier to enter the space, the economic incentive has also drawn people to it. Caregiving, of course, does not have that same incentive, so solutions beyond easy-to-use training platforms will need to be developed to attract a greater supply of talent.
Surrounding Care 3: Lower the Barriers to Entry
— Software/Data Engineering
In coding, one of the biggest trends has been the emergence of no-code and low-code solutions − solutions that obfuscate much of the technical work and allow less skilled individuals to code. Companies like Retool − which allow people to build internal tools without a deep knowledge of coding − is one such solution and became a unicorn in 2021.
This trend has also been prominent in the data engineering space. Companies like Fivetran and Redox Engine, which sell off-the-shelf data pipelines, allow engineers to plug these into their data stacks instead of programming the pipelines themselves. This makes their jobs more efficient, which is the first trend, but it also lowers the barriers to data engineering given that constructing pipelines is one of the most technically demanding aspects of a data engineer’s job. In outsourcing the construction of pipelines, less technically proficient individuals are now qualified to be data engineers.
— Caregiving
The verticalization of caring, as previously discussed, is the primary way to target lowering the barriers to entry for caregiving. Papa, a startup already noted, is an example of this. Not all caring is medical caregiving. Some caring can simply be companionship, which anyone can provide. Papa connects “Papa Pals” or “grandchildren-on-demand” to older adults that are seeking companionship, and in doing so, has opened caring to a much large population.
Summary of 4.C.a. Involving Care
Care is a massive space in the world of AgeTech, and there are many ways to approach it. Analogizing care to tech-first industries, like software and data, allows us to impose frameworks on the space and understand the most impactful and critical areas for innovation.
4.C.b. Direct to Older Adults
Background
Care is fundamental to AgeTech, but AgeTech is also much more. AgeTech is a lens that lets us put the preferences of the aging population at the forefront. Below are a few areas where innovative technologies should be built to positively touch the lives of the aging population.
Aging in Place
In her book The AgeTech Revolution, Etkin writes that “aging in place is arguably the most important concept in aging today. It is a term used to describe the preference of living in one’s own home rather than moving into residential care.” Generator Ventures outlines that 92% of older adults state a preference to age in place.
In an article by Crunchbase, Chetan Parekh, senior brand director and innovation portfolio leader at P&G Ventures, estimated that 80% of dollars are going into business-to-business institutional care space — like nursing homes − yet only 3% of older adults live in institutional care facilities. As more and more of the aging population decides to age in place, capital will need to be allocated to support new solutions beyond nursing homes and retirement communities.
Aging in Place 1: Housing
Housing is one area where innovation will need to take place. As boomers age and shun retirement communities, or cannot afford them, alternative solutions that appeal to their preferences are well positioned to capture customers. Better Coliving and Upside Hom, both graduates of Techstars Future of Longevity, are two such examples. Better Coliving is a version of Airbnb for aging adults. Aging adults with an open room are connected to other aging adults looking for a roommate. The company solves a number of issues confronting aging adults, including financial security and companionship. Its solution provides excess income for owners and cheaper rent than a mortgage for the renters, and also allows each party to have a companion they previously did not have. Upside Hom provides apartments fitted to the needs of the aging population coupled with a platform that provides a host of services and community. Both startups are seed stage and nascent but are targeting a large and growing market where a clear unmet need is present.
Aging in Place 2: Tech-enabled Home Features
In addition to providing new housing solutions, businesses developing products and services that allow individuals to age in place by accommodating their newfound needs are suited to drive value. In 2015, AARP released a “HomeFit Guide” to support people as they convert their homes into being more compatible with aging in place. Ruby, a provider of tech-enabled home safety assessments, is one company targeting this opportunity. Whether it is a new housing solution or a mechanism for converting an existing house, opportunities for innovation across the aging in place space are large.
Financial
As people age, their ability to manage finances and handle once-simple money management tasks slowly deteriorates. Woodard determined that 78% of seniors identified financial stability and living on a reduced or retirement income as their number one concern as they age. The coupling of financial security concerns with the inability to effectively manage finances creates a large opportunity.
Retirable, backed by Primetime Partners, is one such solution being built. From the outside, Retirable’s solution does not look revolutionary − its website reads “we’re combining the results orientation of traditional retirement planning with the convenience of modern technology to make professional advice accessible to everyone.” The product is clean, simple, and straightforward, and as tech-adept boomers age, they will expect user interfaces and design to accompany the products and services they consume. Retirable is likely to capture customers by way of this consumer demand.
Health and Wellness
Health and wellness is consistently a top priority for people across all ages, including older adults. Woodard writes that over 77% of the boomers surveyed chose “maintaining overall nutrition, fitness, health, and mobility” as their number two aging-related concern. Within the health and wellness space, there are two main areas for innovation: 1) wearables and devices and 2) fitness.
Health and Wellness 1: Wearables and Devices
The internet of things has bridged the physical and digital worlds, and one of the direct byproducts of it has been the emergence of wearable devices. Wearables − from the Apple Watch to Fitbit to Whoop − are internet-enabled devices that allow us to track everything from our heart rate to the number of steps we have taken in a day. As connectivity between the physical and digital increases, the opportunities in the wearable space are only going to increase, especially in the AgeTech space. Siren is a startup developing internet-enabled socks that track diabetic foot complications. The socks send information to doctors to help them diagnose injuries and illnesses that the patient may not physically feel. Developing products like Siren that passively track aging individuals and alert the necessary people if complications arise is vital to improving people’s health and wellness.
Health and Wellness 2: Fitness
Maintaining fitness, especially during Covid, has been extremely difficult for those in the aging population. Digital solutions have been built, like Peloton and Mirror, but their target customer skews much younger. Fitness programs like Vivo and Balanced, which put the aging population at the forefront, are solving an unmet need.
Engagement
In Gawande’s Being Mortal, he outlines the story of Bill Thomas, the medical director of a nursing home. In Thomas’s first months as medical director, he became dejected by the absence of energy and enthusiasm in the home. He articulated it as “the three plagues of nursing home existence: boredom, loneliness, and helplessness.” In response, Thomas introduced a proposal to bring life into the space − something he thought could “attack” the plagues. He put green plants in every room, tore up the lawn and created a vegetable and flower garden, and brought in animals. The energy of the home immediately changed. A later report outlined that psychotropic drugs for agitation, total drug costs, and total deaths fell during this time. While those drops could not be directly attributed to his changes, Thomas saw it as the “perfect demonstration of what living things can provide. In place of boredom, they offer spontaneity. In place of loneliness, they offer companionship. In place of helplessness, they offer a chance to take care of another being.” Creating solutions that engage and give greater meaning to older adults − like the solutions that Bill Thomas provided − is the essence of value creation. And while providing life is a suitable option in some contexts, like Thomas’s, it may not always be. Technology can play a role here as well.
One company building engagement is a startup backed by Forerunner Ventures called Revel. The company − which focuses on women over 40 (a broader demographic than aging population) − has over 18,000 members and hosts over 100 events a week. GetSetUp is another online community targeting this space. It hosts classes, like “Art Discussion — Name That Masterpiece” and has reached four million older adults in over 160 countries.
One large opportunity in this space is entertainment more generally. When I think about my grandparents and how they spend most of their time, I see that it is largely rooted in technologies that have existed for decades, like cable news. In Pitchbook, a startup database, when you type in childcare and senior/elder care as keywords, the number of companies returned for childcare is 2,525 and 2,790 for senior/elder care. When you look up children’s entertainment, there are 1,011 hits. When you look up senior/elder entertainment, there are only 5 hits. Very few companies are creating entertainment options specifically for seniors. Yet, opportunity is out there. For example, as a golf fan, many of the stars of today, like Jordan Spieth and Viktor Hovland, will not be stars when I am 65. I imagine that my grandpas, as golf fans, are also fans of long-lost golfers. If there was a Clubhouse-like platform where old-time professionals could recount their experience at the 1970’s Masters tournament, I’m sure they would tune in. I know I would when I’m their age.
4.D. How We Understand the Purpose of AgeTech Matters
Opportunity for innovation is everywhere in AgeTech, and it is important how we think about it. It is an opportunity to drive innovation towards improving the lives of older adults and not just innovation to drive returns.
Jane Caro, a feminist social commentator and writer, gave a TED talk titled “Growing Old: The Unbearable Lightness of Ageing.” In it, Caro argues that the world wants us to hate and deny this stage of our life and spend our money to postpone and avoid it, through anti-aging products and other means. Technologists today often view aging as a biological problem and seek ways to “fix” it. While from a different lens than the one Caro disdains, the undercurrent to the technologist’s view is the same as the one she is critiquing, and that is that aging is undesirable.
One of AgeTech’s primary goals needs to be inverting this narrative — to proclaim that aging is both inevitable and desirable. Many in the space are already thinking about how best to do this. Generator Ventures writes that in “recognizing that aging and care are very personal experiences, we believe that the most successful companies will strike the important balance between high-tech and high-touch.” The products and services developed for the aging population have to be tech-enabled, but that tech must not supplant the humanity of the user. In Being Mortal, Gawande writes that studies find that as people grow old they interact with fewer people and concentrate more on spending time with family and established friends. They focus on being rather than doing and on the present more than the future.
The ultimate goal of companies building in the AgeTech space should be to address and simplify the problems of aging individuals so that they can focus on what matters most to them.
5. The AgeTech Ecosystem
5.A. Introduction to Ecosystems
Ecosystems are complex networks of interdependent relationships. Each member of an ecosystem relies on and is supported by the presence of the other members. Ecosystems exist not only in the biological world but also in other arenas, like the economy. Cities that have been left out of the technological wave have largely turned to “entrepreneurial ecosystem development” as the solution to local economic development. The Brookings Institution regularly publishes papers supporting this thesis. Startup accelerators, like Techstars and Plug and Play, have established place-based accelerators to support startup formation in specific cities, like Baltimore and Tulsa. Accelerators are powerful mechanisms for ecosystem development because they convene key stakeholders. The more members and the deeper the interdependent relationships are in an ecosystem, the richer it is. In a place-based entrepreneurial ecosystem, the key stakeholders are typically corporations, foundations, universities, government, startups, and investors. Each is additive to the ultimate goal of the entrepreneurial ecosystem − startup creation − through the capabilities it provides, including investment capital, non-dilutive capital, pilot programs, strategic advice, and others. As stakeholders convene and add to the ecosystem, startups form, mature, and ultimately give back to the ecosystem, creating a positive reinforcement mechanism that results in compounding growth. Starting the ecosystem, or getting the right stakeholders around the table, is the hardest part, but once done, a self-sustaining system can result.
Ecosystems surrounding industries, like regions, are similarly important to producing successful outcomes. Cryptocurrency is one such example. Tyler Cowen, while on Ezra Klein’s podcast, outlined that he was slowly converted into believing in cryptocurrency primarily through seeing the magnitude of talent entering the space. One item he did not hit on was the underlying infrastructure in the ecosystem that allowed this talent to convene and build. Products like Ethereum serve as a mechanism− like Techstars − for talent in the cryptocurrency ecosystem to convene around. These places to go, build, and connect have served as landing spots for new entrants into the cryptocurrency world and helped to create a robust and reinforcing ecosystem.
The success of AgeTech, like regions and other industries, is tied to the strength of its ecosystem. The AgeTech ecosystem exists and is growing but still has a greater capacity to include new members, expand, and support itself. The development of the AgeTech ecosystem should be one of the primary considerations of the current players within it.
5.B. AgeTech Ecosystem
In talking to startups and VCs in this space, it is clear that the ecosystem is coalescing but that there is much more work to be done. One of the reasons the space has been slow to come together is because of the diversity of companies in it. Healthcare is the dominant industry, but AgeTech companies can also be in real estate, finance, fitness, online communities, and many others. AgeTech is unlike most investment areas because it is focused on a demographic. Older adults have typically been seen as second principle considerations − target customer profiles for a particular product or service. One of the ongoing challenges for the AgeTech ecosystem is articulating the value in making older adults a first principle consideration − looking at industries through the lens of older adults. As more successful startups and venture firms pop up with specific AgeTech theses, that challenge has been and will be addressed head on.
One of the best examples came from my conversation with Ray Jang, an associate at Primetime Partners. One of Primetime’s core focuses − as is the case for most AgeTech VCs − is healthcare. I asked Jang how he thinks about competing with traditional healthcare venture firms and whether he thought Primetime had any advantages given its AgeTech lens. Jang did not see healthcare VCs as competitive. The best way to think about Primetime, he said, is as a marketing firm with deep expertise in reaching older adults that also has a venture fund attached to it. Customer acquisition costs are typically higher for older adults given the current digital divide and their reliance on physical marketing channels, so the expertise Primetime has in effectively using these channels is a unique value add. As more players demonstrate the value of having an AgeTech lens, the AgeTech ecosystem will further develop. And to date, through the emergence of different venture firms, from Primetime Ventures to Generator Ventures to Third Act Ventures, and unicorns like Papa and Honor, as well as accelerators like the Melinda Gates-backed Techstars Future of Longevity, the buy in from prospective players has increased and the ecosystem has started to mature.
5.C. AgeTech Stakeholders
Stakeholders in AgeTech stretch far and wide, ranging from aging adults to caregivers to investors to entrepreneurs to interest groups, like AARP. And there’s no one thing that constitutes being a “stakeholder” in the AgeTech ecosystem. The underlying theme is simply engagement in it. Whether it is being a customer, investing in startups, providing mentorship, making customer connections or any type of connection, anything that supports other members of the ecosystem is valuable to the ecosystem as a whole, and to ultimately delivering enhanced products and services to the aging population.
Some of the key stakeholders in the ecosystem are players in the healthcare space, like health insurers and providers. Others like funeral homes and particularly retirement communities, which can serve as strategic limited partners for venture funds given their captive customer base, are key. Thought leaders like Etkin and academics like Johns Hopkins biostatistician Karen Bandeen-Roche, who is also the interim director of the Center of Aging and Health at Johns Hopkins, are important to helping the ecosystem frame the needs of the aging population. Startups, venture investors, and accelerators are fundamental to the ecosystem and can be supported by the other players. Aging influencers on social media, like Woodard mentions in her paper, can serve as marketing channels for new startups. Government programs, like Khazanah, the sovereign wealth fund of Malaysia, hosting an AgeTech pitch competition, will help grow awareness and support efforts. There are AgeTech stakeholders in every corner of the economy. Building mechanisms to engage them will be the hardest part. Efforts like Aging2.0, a global network of AgeTech innovators, are doing incredible work, but more will need to be done.
5.D. Optimistic for the Future
One of the fundamental needs of any ecosystem is the presence of an inclusive culture. An ecosystem is as strong as the number of its members and their willingness to give and not just take. As I have connected with people in this space, like Max Zamkow at Third Act and Eric Dobosh at Route66, my outlook on AgeTech has climbed for that reason − people in this space give. Techstars, the startup accelerator focused on entrepreneurial ecosystem development, has a simple philosophy at its core: Give First. David Cohen and Brad Feld, the founders of Techstars, explain that “Give First means simply trying to help anyone, especially entrepreneurs, without any expectation of getting anything back.” In AgeTech, I have experienced the same Give First mentality. Every investor I have talked to views my entrance into the ecosystem as an opportunity to collaborate, not compete. Max Zamkow, the founder of Third Act Ventures and someone that has been an investor in this space for over seven years, expressed how excited he was that I was paying attention to the space. In his eyes, the more interest − especially from investors − the better for the entrepreneurs, existing investors, customers, and the ecosystem as a whole.
6. Conclusion
10,000 baby boomers are turning 65 every day. The demographic make-up of our society is skewing older and will continue to do so. This shift will create new challenges, from providing care to the aging population despite a shortage of caregivers to ensuring financial security despite a smaller tax base and increased healthcare costs. These challenges are not unsolvable, but they must be identified and addressed. The market moves to where economic opportunity exists and outsized financial returns can be found. The magnitude of the Grey Tsunami is creating unparalleled opportunities for innovation. The next decade and beyond present a unique moment in time for companies to develop tech-first products and services that more efficiently and effectively address the needs of the aging population and those that support them. AgeTech is beginning to take shape. Rallying people and organizations that currently touch the lives of the aging population around the notion of AgeTech and creating a robust, positively reinforcing ecosystem, is vital to sustaining focus on building tech-first solutions that address the problems and opportunities that will arise. Aging is inevitable but creating technologies that enable a better life while aging is not.
It’s time for AgeTech to come of age.
