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COTTAGE INDUSTRY: Many homes with stairways to entry will need to be redesigned to accommodate seniors who want to age in place in coming years.
Irina88w/Dreamstime
Those over 50 account for more than one-third of the U.S. population, half of all consumer spending, and 83% of household wealth. That should make catering to the aging population a lucrative opportunity for entrepreneurs and investors—one that could be akin to investing in the software boom in the 1980s or internet in the 1990s.
That was the takeaway from aging experts and investors at a virtual panel discussion on Monday at the 2020 Century Summit held by the Longevity Project and the Stanford Center on Longevity.
The 50-plus set represents an $8.3 trillion market opportunity in the U.S. and $22 trillion globally, said Susan Golden, a former venture capitalist and public health expert who is now an adjunct professor at Stanford University and director of dciX at the Stanford Distinguished Careers Institute.
Business currently has been designed for a population that doesn’t exist and companies are going to have to design, build, and manufacture for an older population, said Paul Irving, chairman of the Milken Institute Center for the Future of Aging, during the virtual panel.
Irving and other panelists highlighted opportunities in health care, real estate, and services, especially those that allow people to live at home longer and address isolation or challenges with paid caregiving. Another area of innovation: Financial services, with companies coming up with a hybrid between full-service advisors and robo-advisors. Fintech aimed at preventing financial fraud and platforms that use voice are two other areas of potential opportunity.
Only 1% of U.S. homes have the five basic universal design criteria recommended for those aging in place—like no-step entries and levers instead of doorknobs. Yet 80% of older adults want to stay in their homes, Irving says, which means U.S. homes will have to be redesigned.
On this front, the panelists noted opportunities in innovative new companies creating a home sharing model geared for older adults, like UpsideHom, and businesses trying to integrate housing with lifelong learning on university campuses.
Covid has accelerated the willingness for the government and insurers to pay for health-care services, said Maria Thomas, former chief executive of Etsy, who now works with early-stage companies. As a result, startups focusing on services, like those targeting isolation with companionship, as well as transportation, see a way to go to market and get paid.
“We are seeing A-level entrepreneurs coming in and reinventing areas that were the purview of mom-and-pops and nonprofits,” said Robert Chess, chairman of biotech Nektar Therapeutics, who also teaches at Stanford Graduate School of Business. “For entrepreneurs that get in now, it’s the best you can want for an opportunity: You know the market is there and there is very little competition.”
He likened the opportunity to that in software in the 1980s and the internet in the 1990s. “I think this opportunity is bigger—and more certain,” he added, given the demographic trends of a graying global population.
It isn’t without challenges, primarily around the affordability of products and questions about who is going to pay for the services. Often with services geared toward older Americans, the payer is the government—or plans like Medicare—or employers. Chess’ advice to entrepreneurs and investors trying to sell a service that could get covered by Medicare plans: Make sure you can prove the economic advantage of the service—within 12 months.
The opportunity isn’t limited to startups. While
BMW
(ticker: BMW) hasn’t changed its marketing, its average owner is 56 and the company has stealthily redesigned its cars, with its dashboard and controls for older people to navigate, according to the panelists.
Even youthful brands like
Nike
(NKE) are focusing on older customers, with panelists noting the company’s new Cruiser shoe that features a flexible back heel that is easier to get on, has more stability control, and more padding to offset the padding lost in the feet with age.
Corrections & Amplifications
Susan Golden is a former venture capitalist and public health expert who is now an adjunct professor at Stanford University and director of dciX at Stanford Distinguished Careers Institute. An earlier item incorrectly said she taught at the Stanford’s Graduate School of Business.
Write to Reshma Kapadia at [email protected]