I shlepped my laptop to the Silicon Valley Boomer VC Summit at Santa Clara University this morning to live blog for you, but I couldn’t get a password into the SCU network, so I had to be present and actually listen to the presentations. Bummer. I found out that at about age 60 your attention, memory, and visual skills decline sharply. I didn’t want to know this; I’ve NEVER had any visual skills, and I am notorious for my limited attention span, but now my memory as well? Adds insult to injury.
It was quite an interesting Summit, a business plan competition dedicated to products and services for the huge Baby Boomer market, with panels of judges that included the Brand Officer from AARP (trust and navigation were his key words), venture capitalists interested in genomics, physiological shoes, and diagnostics, and brain fitness companies, and representatives from the American Society on Aging.
Partner Bill Elkus represented Clearstone Venture Partners, which has invested in paid search engine Overture, recently launched people search tool Spock, and Presto, which delivers email and photos to people without a computer. Andy Donner is a founder of Physics Ventures, a new fund that invests only in health, wellness and sustainable living.
This was a new kind of conference for me, because it wasn’t about horizontals like social media or wireless, but about a specific vertical or target market: the Boomers. But the VCs investing here were like VCs everywhere — looking for very large markets, entrepreneurs with domain experience, personality, and a team built around them, defensible competitive boundaries and addressing need (curing a toothache, not a vitamin).
The biggest opportunities coming down the road, of course, are in health care, where the current annual
$2 trillion in expenditures represents 16% of our GDP. This will become 20% of GDP by 2020, and will break the bank, so everyone is predicting structural changes in health care, with the market moving to self-care.
New solutions seek to provide information to the consumer who must undertake this care, and novel ways of delivering solutions such as natural function foods that promote sleep and reduce anxiety.
Yes, some of the common truths of marketing also apply to the Boomer segment: you have to be a brand that listens to customer needs, and you have to identify the right opportunities. It’s almost hilarious how many of the companies whose pitches I listened to have a distribution strategy that includes AARP.
We listened to the pitches of finalists for a $10,000 business plan competition. Here are my summary thoughts:
1)no matter what market they are in, most entrepreneurs are poor presenters. In fact, today the people with the products serving the most pressing needs had the least effective pitches.
2)MBAs from Stanford, Harvard, McKinsey and Silicon Valley have very tight presentations and teams, despite relatively uninteresting business models. One in particular, Celery, sells a fax-to-email service for the offline elderly that I found especially lacking in potential, but the presenter killed it by knowing all about what VCs look for.
3)People with domain expertise are likely to take a business to the first level (customers and revenue) but not beyond (global scale). That requires those special MBAs that may know nothing about Boomers, but everything about how to create a new shoe to minimize knee osteoarthritis symptoms.
This was my first day back in the Bay Area after decamping from Arizona for the summer, and I can see the difference very clearly from here. There’s no place like Silicon Valley to start a company.
,
{ 4 comments… read them below or add one }
Wow, I’m wounded and so are our satisfied customers… ; )
Sorry you didn’t like the product Francine. The feedback I received from experts and marketers in the senior boomer space was extremely positive.
Fact is, there still remains a huge communications divide in this country and we solved that problem by making it incredibly easy to communicate at a very low price. What’s not to love?
Thanks, Andrew
Andrew, I’m your market. I’m a senior Boomer. I don’t have one friend my age or even ten years older who is not online, unless they are very poor, and as a foster mom, I know that this device wouldn’t be appropriate for my foster kids’ parents either. I just wonder who those marketers are sampling. Most seniors I know want more than email and photos; they want to search the web for health information. That’s the real need in the older age group. That and chat for compantionship.
Francine, we’re not pretending to be a computer. Believe me, I wish my 79 year old mother would get one. My four brothers and sisters and I have been trying to get one for her for years.
The Celery service gives her the ability to receive important and fun family communications, including color photos. She feels more connected and so do we. We developed the system on her terms (ease of use, handwriting, etc).
The two major internet behavior research firms Pew and Park Associates cited that there are 55-60mm users (almost 30% of US households) not online in the United States. We’ve discovered that it isn’t a rich/poor divide. Many of our users are wealthy and many are not. Many come from a generation that didn’t learn how to type. Our customers just loathe the complexity and usability of computers.
We are here for the people who want to communicate simply and affordably. our customer satisfaction metrics are excellent.
I hope you are right. I never want to be right about things like this, because I am always the advocate for the entrepreneur. Lord knows entrepreneurs have enough to struggle through without my comments :-) If you have customers and they are satisfied, I’m happy to be wrong.