AARP Talks Startups’ Opportunities
1776 recently sat down with Jeffrey Makowka to discuss innovation in the health industry and how innovators can maximize their impacts in such an entrenched industry. Makowka is director of AARP’s market innovation group, which aims to spark entrepreneurial activity and innovation across public and private sectors. His insights into the 50-plus demographic are valuable for startups looking to address the needs of the caregiving population.
What market opportunities exist for innovators, startups, and entrepreneurs within the AARP population?
There is really a myriad of different opportunities in the space we call the “longevity economy” — with over 100 million people over 50, there are many different unmet needs and wants. That said, my work has focused on digital health and wellness innovations that can improve the quality of life as people age. We decided to focus on health because we felt that there was huge opportunity to impact not only the quality of life of individuals, but also try and bend the cost curve of the health system because people over 50 (and more specifically people over 65) consume a greater proportion of healthcare resources.
Over the years, we identified nine areas of health innovation opportunity with a revenue forecast of close to 100 billion dollars by 2020. More recently, we’ve been exploring technologies and innovations related to caregiving and empowering caregivers to deliver the best care they can for the ones they love. We size this market at 45 million caregivers delivering care to 117 million people by 2020 — with a revenue opportunity of up to $279 billion. The need and potential impact on the quality of life is really quite staggering.
We define “caregiver” and anyone that is providing assistance, care, or support to a loved one, whether it be family, friends, or neighbors. Our findings show that there are about 40 million people that are providing unpaid or non-professional care, which people often refer to as “informal” care, but that doesn’t do justice to the amount of time, effort, and stress that surrounds caring for a loved one. The average unpaid caregiver is typically woman in her late 40s, however over a quarter of people providing care for someone over 50 are millennials. The market refers to the sets of needs and wants of caregivers for tools or solutions that help them both provide better care and manage their lives as caregivers.
What is the AARP innovation team working on right now?
It is an exciting time for AARP. We have a new developed Enterprise Strategy and Innovation group, which I am a part of, and the call for innovative solutions to achieve our social mission have been communicated throughout the organization. In addition to our group’s efforts to stimulate innovation in the marketplace, AARP has recently stood up an innovation workspace/lab, and we have developed our own innovation process and framework. It’s very exciting.
What are the AARP innovation team’s priorities for 2016?
While we are continuing to track and work with innovators focused on health and wellness tech, our primary focus is around caregiving technologies and products and services. Our group is also starting to explore the needs and wants of people in relation to savings and planning — with an eye to finech and digital solutions to ensure people have economic security and flexibility as they retire.
Can you tell us about AARP’s experience with Challenge Cup?
We’re huge fans of the Challenge Cup — I don’t know of another program with the scope and reach both in terms of the types of companies that participate nor the reach internationally. For us, it’s a great way to quickly scan the sorts of innovations that are happening in the different sectors and industries on which 1776 focuses, and the pitch events are always a blast!
What interests do AARP’s innovation team have outside of the U.S.?
AARP has had a small but dedicated group focusing on macro trends and how different governments and regulating bodies are approaching aging outside of the U.S. As we look outside the U.S., we see a tremendous amount of innovation happening in different national and international markets. We’re just starting to develop a more coordinated strategy on how to best approach different pockets of innovation and when appropriate, bring that innovation back to the U.S. market.
Given the clearly defined market segments, what can startups, innovators, and entrepreneurs do to create positive, lasting change while also capitalizing on the “caregiving market opportunity that’s expected to reach $72 billion in 2020 alone?”
I think the basic but still essential first step is to just consider the caregiver in the first place. There are so many solutions that either focus on the recipients of the care or their medical/health teams, and they don’t even consider the role of a loved one that is likely to manage the care of the recipient. Simple features like dual/multiple logins or profiles for different services or applications can make a world of difference.
How does the digital revolution and Internet of Things make caregiving businesses, products, services, and tech solutions possible in ways that weren’t possible before?
I think we are at a turning point where the sensors and wearables that previously have been targeted at the Quantified Self audience have been refined enough and the cost is low enough that it is realistic to deploy them in caregiving and home settings. I think we will soon see solutions that will be tracking the care recipient in a dignified and respectful manner while providing predictive analytics and warnings. This information will be distributed to local and remote caregivers as well as care professionals.
Which of the “six key areas ripe for disruptive innovation” is AARP seeing the most advancement in? What trends are emerging?
We are currently seeing a lot of activity in technology platforms that make it easier for caregivers to find professional caregivers that come into the home to provide care — especially in time increments that were not economically feasible in the past. We’re also seeing a lot of activity from home services and delivery platforms that are pivoting to be more inclusive of the needs of caregivers. This is great because ideally these services will ultimately help to lessen the burden on caregivers that are in the workforce or balancing other responsibilities. There is still a huge education and awareness hurdle to overcome, but we are seeing some progress.
Where is the funding coming from?
Funding is coming from the traditional venture capital and investment industry — we’re starting to see more “mainstream” VCs back companies relevant to the 50-plus and to caregivers. We’re seeing large organizations such as payers and providers providing both funding and other resources to caregiving related startups by way of pilots and other programs. There is still a lot of work to be done to get the space better funded and supported.
What challenges do innovators and startups face in the caregiving market, and how can they best navigate and overcome those?
I think access to and educating the actual caregivers is a huge challenge. Many people don’t even know or consider themselves caregivers — they are just “doing the right thing.” In this state, they can’t look to tech or other solutions for help, if they don’t consider themselves as potential consumer of the solutions. AARP is doing a lot of outreach and education through our “I heart Caregivers” program.
Companies are still looking for the right business models as well. Much of these services will be paid out of pocket for the foreseeable future, startups should be creative in how to find consumers and have their services paid.