Corporate Entrepreneur Interview Series — Jody Holtzman on innovating for seniors
Innovation can often feel like a bunch of millennials solving the superficial problems of other millennials, with a never-ending stream of new photo-sharing or dating apps. Seniors, on the other hand, are a section of the population that get little love from innovators. We wanted to understand what it’s like to design new products and services for older consumers, so we spoke to Jody Holtzman, Senior Vice President of Market Innovation at AARP.
AARP is a non-profit organization whose mission is to enhance the quality of life for all as we age. It has 38 million members. Their Market Innovation team is focused on sparking innovation and the development and launch of new products and services by entrepreneurs, the venture capital community, and the broader private sector.
Why do you think innovation is important?
When it comes to business strategy, people get into these highfalutin debates. I’ve always felt that while the answers are very difficult, the questions are simple. The first is what are you going to sell? The second is who are you going to sell it to? And the third — and most difficult question — is why anybody should buy from you and not your competitor? The answer to this last question is all about differentiation. And that’s where innovation comes in. Making sure that you stand out from the competition.
How has innovation changed at AARP?
We’ve come a long way over the past few years. The tipping point was really the new CEO — Jo Ann Jenkins. She got the importance of innovation and really kicked things up a notch.
She put innovation at the top of the agenda for AARP. She created a new department called Enterprise Strategy and Innovation, which my group is a part of. She made sure that everybody across the organization was being trained in innovation tools and techniques. We’re doing contests. We have an app for people to submit ideas. We also have a new physical space called The Hatchery — an incubator that is working on a number of pilots with startups — something we weren’t able to do before. The sort of progress we’ve made simply wouldn’t have been possible without support from the top.
Tell us more about how you’re working with startups?
A few years ago we realized that startups were a great untapped source of innovation in the 50+ category. And if were going to spark innovation in the startup community we had to get closer to them. We had to be part of the ecosystem in which they operate.
One of our big initiatives is the Health Innovation@50+ event — a pitch event for startups focused on the 50+ market. This dual-pitch event is the only one of its kind, bringing together startups pitching before expert judges, along with their actual intended end users whose feedback is gathered and shared in real-time.
We’ve had five events since 2012. All together we’ve had 828 companies wanting to get on stage and participate in a shark tank run by AARP. Of our first 45 finalists, 23 have raised over $145 million, and four have exited through acquisition. Who would have thought it!
What do you see as the big opportunity areas in the 50+ market?
Caregiving is one of the areas where we see a big opportunity for technology. If we look a little down the road — maybe three to five years — we’re going to really start to see the convergence of technologies like voice activation, facial recognition, artificial intelligence, the internet of things and machine learning. Amazon’s Echo is probably the first product that gives us a glimpse of the future in this area. This will completely change how caregiving is delivered — for both those that are receiving care and those that are administering it.
What are the barriers to innovation?
The biggest barrier to innovation in the 50+ category is a lack of understanding of the day-to-day challenges facing seniors. It’s very difficult to come up with new products and services if you don’t appreciate the current pain-points. Very few kids working in startups or building apps are exposed to these challenges. The same goes for many venture capitalists. Many of the VCs we spoke to weren’t prepared to back startups in this space without a better understanding of the market and potential returns.
We wanted to help bridge this gap. To provide insight and research to help identify some of the unmet needs and opportunities. But really good ethnographic studies are expensive. So we created a research consortium. We call it Project Catalyst — and we brought in large organizations that generally had parallel interests in this space. It consists of Pfizer, UnitedHealthcare, the Robert Wood Johnson Foundation, and MedStar Health. The research has really helped to increase understanding of the 50+ market and kick-start innovation in this space.
What advice would you give to companies entering this market?
One thing that makes the 50+ category unique is that there are often two customers. One being the senior and the other being a family member. Their needs are different, and sometimes conflicting. The family member wants peace of mind. They want to make sure that their parent is safe. At the same time, the senior desperately wants to maintain their freedom and independence. That means you need two different value propositions — one for the senior, and one for the family member.
How did you get into the innovation game?
I’ve had a very eclectic career. I dropped out of school and went to Chicago to join a rock and roll band. I loaded trucks for UPS for four years. I did political organizing in Chicago. I produced a report on the Exxon Valdez spill. I did background papers for the US delegation to the 1988 Montreal Protocol on protecting the ozone layer. I was a futurist. I did brand consulting. I worked on the merger between Price Waterhouse and Coopers & Lybrand. The range of different jobs and experiences has served me very well. Being able to see a challenge from different perspectives is vital when it comes to innovation and coming up with new ideas.
What company do you admire from an innovation standpoint and why?
Great Call. Great Call is the maker of the Jitterbug cell phone. It was the first cell phone specifically designed for older consumers, reflecting both physical limitations and the need for bigger buttons, but also a more intuitive interface. Since then, Great Call has rolled out additional products (e.g. a smart phone) but also has wrapped healthcare-related services around these devices. The company now has revenues of $200 million and 1,000 employees.
What book would you recommend?
“Visual Intelligence: Sharpen Your Perception, Change Your Life”, by Amy Herman
What advice would you give to someone getting started in corporate innovation?
Identify an area that is both strategically aligned with the company’s goals, but is either not an area of activity or is a minor area of activity. Then, design a course of action for breakthrough success, by keeping the goals small and achievable, but “sexy” enough so it has the potential to raise an “aha” from senior management.
