The longevity economy, representing all economic activity serving the needs of Americans over 50, is expected to top $13.5 trillion by 2032, according to Oxford Economics. This opportunity isn't lost on savvy entrepreneurs.
Out of a total 290 entrepreneurs who attended the annual Boomer Summit last month in Chicago, 40 percent were entrepreneurs hoping to pitch their products to potential investors and get ideas on how to best appeal to this demographic. That was twice the amount as the previous year, and for the first time, they came from many different countries.
Katy Fike, co-founder of Aging2.0, a start-up accelerator program, and founding partner of Generator Ventures, a venture fund focused on aging and long-term care, said the industry is attracting graduates from top-tier business schools. Some entrepreneurs have already developed particularly successful products geared toward the demographic shift. Many of these ideas sprung from a personal experience and a desire to solve a problem endured by a loved one.
Here are 8 business owners who have already found millions in the longevity economy.
—By Julie Halpert, special to CNBC.com
Posted 08 April 2015
A former newspaper reporter and corporate lawyer, Zimman was asked to partner with Michael Merzenich, a scientist and co-inventor of the cochlear implant, to launch the company in 2004. Merzenich was at the forefront of discovering the brain's plasticity—that it's capable of change, even in older people.
San Francisco, California-based Posit Science focuses on brain fitness exercises; 110 peer-reviewed published articles have shown that exercises in Brain HQ, the company's flagship product, significantly increased processing speed and improved memory and attention. Zimman, now the company's chairman, said as people age, the brain slows down, but those in their eighties can develop a processing speed just as fast as those in their twenties after the brain training. The training also leads to lower rates of depression and better health outcomes—even better balance, Zimman said.
Posit Science has partnerships with many organizations, including AAA, AARP and State Farm. It also has 10,000 subscribers who pay either a monthly or annual fee for the brain training. Annual revenues "are over $1 million but under $1 billion annually. I can't get more specific," Zimman said. The company has 40 employees.
Zimman's secret to success: "There's been a focus on what works and what people want to do. We spend money on research studies instead of advertising. Every day we try to make it better."
De Vilmorin's grandmother suffered from Alzheimer's and was left alone all day in her nursing home in France. "The conditions are even worse in the U.S.," he said.
De Vilmorin, age 36, previously worked for Mattel's interactive division in France, specializing in Barbie and Rugrats products. Now he's designing interactive, customized video content for seniors in nursing homes—a former accountant can tap into information on balance sheets; a resident interested in sailing can access slideshows on the sport. It's difficult for a "burnt out" staff person in charge of 100 people to become a valuable assistant, De Vilmorin said. The program provides access to interactive games, trivia, cognitive exercises and music for music therapy. There's even access to a library of nostalgic songs from the residents' younger days. De Vilmorin said the product often results in reduction in the use of antipsychotic drugs to control aggressive behavior and improve mood. The company is now coordinating with an electronic health record software platform for additional clinical value and family engagement.
Linked Senior has more than doubled in the past two years, with annual revenue last year at $1 million. That number is expected to double within the next 18 months. Currently, more than 200 nursing facilities with over 30,000 residents use the service.
De Vilmorin's secret to success: Having a long-term vision, sticking to that vision without getting distracted and innovating all the time.
Theisen's desire in starting Minneapolis, Minnesota-based Lifesprk was to change the caregiving experience so that it's less reactive and focused more on the root causes of why problems happen. A nurse by training, he launched the company in 2004 after working for a geriatric-care management company for seven years. "We're not thoughtful about how we help people who are living longer," and the result is unnecessary rehospitalizations, he said.
Lifesprk provides each client with a dedicated life-care manager, a registered nurse who serves as their personal advocate and gets to know them and provides proactive care. Theisen recalls a woman who had been hospitalized 23 times in three months before becoming a client of Lifesprk. As the care manager got to know her, it became apparent she suffered from anxiety due to loneliness and depression. Reconnecting her with family, her community and what engaged her made a significant difference. Over the next four years, her confidence returned and she was admitted to the emergency room only once.
Lifesprk's revenue reached $12.5 million in 2014, up from $10.5 million in 2013. Revenue is expected to reach $15 million this year. The company employs 570. Currently, clients are just in the nine counties in the Twin Cities area, but Theisen's goal is to scale nationally.
Theisen's secret to success: "We're committed to changing the experience for people. The idea of preventative and holistic medicine is resonating with people."
Andy Cohen (pictured left with Bankrate CEO Kenneth Esterow), now 51, had been in marketing for a variety of Silicon Valley companies when his mother, living in Chicago, was diagnosed with lung cancer in 2006 and he began regular cross-country trips to see her. "The whole caregiver experience was awful emotionally and logistically," he said, with no websites available to help those caring for aging parents.
After his mother passed away, Cohen, who previously worked at Intuit and ran Quicken.com, decided to start a site for the many adult children caring for aging parents. Forty-three million people are caring for someone over 50 in the U.S. San Mateo, California-based Caring.com was launched in 2007. The site provides emotional support, answers to questions about care and high-quality local resources, including ratings of assisted-living facilities in the U.S.
The site gets 3 million unique visitors a month—double the traffic from the previous year—mostly women in their fifties and sixties caring for parents in their eighties and nineties. Caring.com's annual revenues were $15 million in 2014. The company has doubled its growth within the last two years. Bankrate bought the company for $54 million in May 2014.
Cohen's secret to success: "Everyone here has their own caregiving story" and is passionate about helping others going through this, Cohen said. "We don't try to be the sexiest company in Silicon Valley. We're very focused on helping people."
Sheik, age 37, was motivated to start his business after his mother, unable to find reliable caregivers for his sister—who suffers from multiple sclerosis and is blind and quadriplegic—was forced to leave her job as a research scientist to care for her. At the same time, his aunt "basically was running an ICU out of her house" to care for his uncle, who suffered from ALS and required round-the-clock care. Sheik, who formerly covered the health-care sector for Capital Markets, a hedge fund, launched San Bruno, California-based CareLinx in 2011.
Each family is assigned a dedicated family advisor to help them navigate the caregiving search—everything from a caregiver's nationality and personality characteristics to their experience and budget. All caregivers undergo regular background checks and are bonded and provided with $1 million in comprehensive liability insurance.
CareLinx provides caregivers to more than 1,000 families a month. Its caregivers are located in 3,000 cities and the top 50 metropolitan areas. There are now over 20 employees; revenues exceed $1 million a year. The company grew 160 percent from 2013 to 2014, and Sheik expects to grow three to four times that this year.
Sheik's secret to success: A personalized approach. Staff come to the job "from a place of genuinely wanting to help, not just trying to profit off this huge opportunity."
Inns, age 46, was running the consumer division of Bell Mobility in Canada, a wireless company, when he was brought in by San Diego, California-based GreatCall founders Arlene Harris and Marty Cooper to help launch the company in 2006. He wanted to be a part of the new venture because he realized that "the older population was being left behind by technology."
GreatCall's first product was the Jitterbug, a phone that's designed for older customers. That was followed by the Jitterbug touch, a simplified smartphone with a large font. The phones filled a special void for older consumers to help get them connected. Since then, GreatCall has expanded into many different directions, starting a digital health service in 2008. It's been offering new products, like a mobile version of a medical alert device, unveiled in 2011 and an app that provides alerts to family caregivers, as well as the Splash, a waterproof medical alert device.
Inns said annual revenues are "several hundred million a year" and that the company has been experiencing 20 percent growth year-to-year over the past three years. It's gone from zero employees in 2006 to 1,000 today.
Inns' secret to success: A customized experience from top to bottom, including required "sensitivity training" for customer service agents, where they use the products while wearing glasses that simulate glaucoma and gloves that simulate arthritis.
When Nudd's father was struggling to take care of his own mother who lived 1,200 miles away, Nudd, age 36, created a simple Google document for him where caregivers would report back to the family on the tasks they completed. That became the basis for San Francisco, California-based ClearCare, which he launched in 2010.
ClearCare allows home-care agencies to communicate more transparently and efficiently with caregivers. A caregiver can get an instruction of daily tasks either by calling from a landline of the senior they're caring for or by logging in through an iPad or tablet. At the end of their shift, they report back what they did, and that information is available in real time to both the home-care agency and the family. Nudd said previously caregivers relied on paper logs that would often not be collected for a week or two, often when it's too late to catch a brewing health problem.
ClearCare now provides other services to home-care agencies, including billing and payroll, so all activities can be integrated. ClearCare's revenues in 2014 were $10 million. The company has more than 90 employees and 2,000 home-care agencies as clients.
Nudd's secret to success: Tap into a fast-growing market with a crucial need for your product. Home care is the lowest-cost institutional provider segment serving the nation's highest-cost patient population, and there will be a "tidal wave of aging adults entering the system," Nudd said.
Khan, age 44, said Caremerge's goal is to "get the right information about the right patient at the right time to the right provider so they can make the right decisions." He launched Caremerge in 2012.
His idea was shaped by the frustration he encountered when his mother faced a health emergency as his parents were volunteering in rural Pakistan. He found it hard to believe that the medical industry still relies on the antiquated practice of faxes and telephone calls to communicate medical information. Khan, who formerly had a global leadership role with GE Healthcare, saw the merits of solving the care coordination problem.
Under his system, all the information for patients in senior living facilities is collected in one place and is easily accessible to both clinicians and family members. Using an app, staff members can easily input a patient's activities that family members can track. They're alerted via their phone when they need to be aware of new information about the patient.
Caremerge now employs 30 and is used in 130 senior living facilities, with 15,000 patients in the system. Its annual revenues were $60,000 in 2013 and $600,000 in 2014; it's expected to well exceed $1 million this year.
Khan's secret to success: Solving a real-world problem. "There's tremendous value in centralizing communication around patient care in one place," Khan said.