What is the toughest job in the world? President? Nope, too many perks. The PR-person for a lewd politician? Nah, fabulous resume potential. Fireman / Navy Seal / Assassin? No, too cool. For my money the toughest job in the world is being a demographer. Why? Because every day you must go into the office and say, OK, I knew about these figures yesterday, and last week, and I need to come up with something entirely new and innovative to say about them.
The numbers, they're not changing. Barring accidents, wars, diseases, emigration and alien abduction, someone who's born today will be 65 in 65 years time. Likewise, the arrival at that age for the first crop of baby boomers has been
1. Sloppy segmentation: There is no "aging" market.
It would be strange to say that you're making a product for 'sick' people - the obvious rejoinder would be what kind of sick people? Same with aging - as I'll suggest in a later post, there are many different aging markets. It would be helpful to segment the market from the perspective of the user's needs, and it's clear that the elderly have a range of needs from fixing their health issues, to security, housing, enjoying more productive social lives and growing through education and travel.
We're suffering from a set of confusing definitions. It's unlikely that Boomer (45-65 year old) focused products will resonate with the seniors (which I could take to be 65 and over). Yet aging, seniors, boomers and the silver market (and any number of other euphemisms) are all jumbled together (and for simplicity this site will continue to use the terms loosely, when convenient). What about the hot concept of 'aging-in-place? Ask 5 aging experts and you'll get 6 different definitions.
Will this change? Yes. Terminology choices tend to be determined by the winner in the market, however, AARP and trusted intermediaries could all agree on simple definitions around demographics. Meanwhile, the more specific we get about which of the segments we're talking about, the better.
2. Limited number of passionated, tech-savvy, self-interested tinkerers
One of the major categories of big hits in today's world is scalable, social web platforms. When Zuckerberg created Facebook he did it to impress women. He was tinkering for fun, and only later for profit. He had the computer skills to write good code cheaply, and the predilection for a social service that was instantly viral. Energetic college kids with time on their hands do stuff that appeals to them, and the aging demographic seems so far away. We need a surfeit of ideas, execution talent and capital to make things happen, and the more of each the better, with talent being the most important. Will this change? Yes. New tools and services are making it easier for people without coding expertise to find technology, partners and build businesses. Also, the population of seniors is getting savvier every day as boomers join their ranks, and more entrepreneurial, adult-children will be exposed to the challenges faced by their parents.
3. Lack of identifiable big exits
That the lack of identifiable big exits should be a reason for the lack of big exits is not a tautological error, but the reality that the VC business has, in their words, a herd mentality. As one of the leading Bay Area VCs pointed out in a recent lunch discussion, the most cutting edge, tech savvy, disruptive-loving industry (VC), which is looking for the next big thing, has a massive need for social validation and doesn't want to be the first to make the leap. Just a couple of Big Exits will push these opportunities up their priority list.
...and some unfortunate wipeouts
Another VC told me that they'd been burned badly by aging-focused biotech and were now wary, but even if we remove the naturally volatile biotech deals, we're still left with a number of expensive losses. The poster child here is probably Eons - started by the founder of Monster.com, it raised $32m but recently fired most of its staff, and sold for an undisclosed (ie. small) sum to a consultancy. There are a number of other aging-focused startups in the services space that are struggling to make an impact, and the investors their money back, and an autopsy on each failure would be a very useful exercise to establish lessons learned. Will this change? Yes. This will correct itself over time, as the current cautiousness places a high bar on quality, so big exists will emerge.
Overall, it seems like a matter of time before some breakout successes by smart, committed entrepreneurs will put this space more on the map. Am looking forward to seeing in what area they will be.