Older adults want tech companies to focus more on their needs.
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Silicon Valley VCs ignore older adults -- true or false?
Start with the premise -- Silicon Valley VC firms matter for entrepreneur success. Is this true? And especially, is it true for early stage companies, with founders that are known to VCs; or do angel investors or startup money from friends and family matter more? Instead of speculating, consider the leading Silicon Valley VC firms -- and examine their online featured list of investments. Note mention in this article that the venture 'industry has gone back to its IT- and IT-enabled services roots.' So let's take a look at their historical successes. Sequoia Capital -- health-related investments are disease oriented, big hits include LinkedIn, PayPal, Instagram, Kayak, and eHarmony. For sure, the full list contains many useful tools for people of all ages, but unless we're talking diabetes and glucometers, nothing much that is age-related for seniors.
Benchmark, Accel, Emergence -- see lots of investments in tools for all ages. Snapchat, GlassDoor, Quora, NextDoor -- all useful, including for older adults. I like NextDoor -- a social network for neighborhoods -- never mind about its un-neighborly hit-and-run CEO. But NextDoor is like the rest of the portfolio, which includes nothing targeting older adults or those who care about them. Accel Partners -- on the one hand, there's the age specificity of Baby.com, Diapers.com. There's the useful Etsy and DropBox. And who knew that the Angry Birds tune could be much loved by 91-year-olds, since the target market was single young men. What about investments that are about, seem near, or really relevant to seniors? Go ahead, you scan the list -- hint, there's no sector even for health-related investments.
Lots of me-too imitator investments by the young, for the young -- only a teeny-tiny sign of recognition that seniors exist. Cruise through the Emergence Capital portfolio (plenty of Health IT). Consider Trinity (yay, there's Care.com!). Look at Greylock -- well, I guess, there's LinkedIn…used by many senior-focused businesses. Consider Pandora -- and Facebook -- okay, boomers and seniors like it. Sadly, Facebook, without your permission, is now selling the product of you and your browsing history. Both of these represent use by, and are even popular with older adults. But to put it succinctly, there was and is no sign of intentional inclusion of older adults within the target user markets for any of these tech companies -- or their VC investors.
What does this lemming-like investment pattern indicate? Some, like Generator Ventures and the Zeigler Link-age Longevity Fund see this gaping yawn from the Silicon Valley VC investors as a problem. Perhaps one element of the problem is the absence of women investors -- and outright sexism -- not just about the VC team, but about what companies the team chooses for investment. This sexism may be related to ageism -- that is the over-age-30 ageism of both startups and investors -- for example, note commentary from that so-and-so ageist Vinod Khosla. (In that context, Ideo's recent 90-year-old designer hire is exceptional.) So if you're a 26-year-old guy in a sea of arrogant 26-year-old guys, are you going to be attempting research about $3 trillion of spending power of older adults? Did you pause to notice this market potential of products and services for seniors? Did you know that even though the 50+ age group represents only 38% of Florida's nearly 20 million people, the segment generates 58% of the state's consumer spending to the tune of $364 billion? Now back to you, Silicon Valley investors.
Comments
Ageism in Silicon Valley
Laurie:
75% of AliveCor's patient customers (not physicians, nurses or EMTs) are over 55 years old and I am 59. Khosla Ventures is our lead VC (I am one month older than Vinod). Rules ALWAYS have exceptions but the scope of the perceived opportunity will outweigh the age of the entrepreneurs and the focus of the venture. There are few real medical ventures started by 25 year-olds because of the knowledge needed of medical science.
More than half of our customers are over 60 because patients with heart disease (thank God) are older.
Dave Albert, MD
Founder, AliveCor
Thank you -- health-related investments leverage age
I did not go through the Khosla Ventures portfolio -- only quoting his public comments about looking for disruptive ideas from the under-25.
From Ryan Dougherty
VCs aren't "early-stage" any more
VCs have shifted up-market and are no longer investing in early stage companies. During the dot-com bubble they invested in early stage companies because it took millions of dollars to get a company off the ground. Now a company can get off the ground for a fraction of the cost. However, VCs need to write checks of the same size (7-figures). That means they are investing in later stage companies that have made it past the early stage round and are now using the capital to scale.
If you define VC as being ‘early-stage’ investors, friends and family and wealthy individuals are the new ‘VC’ then. They’re the ones willing to put up the smaller dollar amounts required to help a company get off the ground.
It is all about the Early Adopters
Why aren’t there more startups and VCs targeting the aging population? It’s a complaint that this blog and others in the aging space post frequently on. There is a very simple answer: the aging and healthcare markets aren’t early adopters at the same level as younger generations are. Sure, you can point to increasing broadband, smartphone, and social media adoption. But that’s coming AFTER the younger generations are already at 90% adoption and the underlying companies have become successful.
Senior housing and healthcare could be the vanguard of adopting new technologies, but instead they’re innovation departments ask for unpaid pilots, studies that take years to do, and ask “who else is using it” first. If aging individuals, senior housing, or healthcare started adopting in mass the many innovations for them that entrepreneurs have developed, then you’d see the big name VCs calling.
So how does a startup get to the point that it is interesting to big name VCs and the big checks they need to write? They have to go after early adopters rather than healthcare or the senior directly. Wearables are incredibly useful for seniors and healthcare, but have found their success in younger early adopter individuals. Care.com and A Place For Mom targets the younger family member (early adopter) who is looking for service for their aging parents. Telemedicine providers like Cardiocom have found huge success with going after home health instead of hospitals or senior housing.
As a founder of CareTree, I learned these lessons early. We’ve been targeting the children of seniors because they’re the ones adopting technology to help mom and dad.
Carl Hirschman
Founder of CareTree.me