The Best Start Ups for Baby Boomers: How Technology is Bridging the Generation Gap
Written by Francesca Gottardo
Technology //September 05
When was the last time you thought paying with a paper check was easy? While I may be an older millennial, I am a millennial nonetheless, and if you told me that I had to pay for something with a paper check, I would not even know where to begin. My checkbook is like the fire extinguisher in my apartment, something that my parents told me I had to have, but something that I will never use. I do not even know where my checkbook is and to be honest, I do not even know how to balance a checkbook.
But it is not just me or my generation, to be frank! Only 13 percent of baby boomers who are older than 60 still write checks, according to the Federal Reserve data; in fact, the site’s experts predict that paper checks will be extinct by 2021. Surprisingly, the site reports that about 80 percent of consumers between ages 55 and 65 use debit cards to make payments.
With the technological advances of recent years, paper checks are dying along with snail mail, while online payments are becoming a convenience today’s shoppers demand. And despite millennials being the driving force of the digital age, they are no longer the only ones taking advantage of all the benefits technology has to offer.
People aged 60 and older are the only age group whose participation in the workforce is actually increasing. Concerns about how to fund retirement play a major factor in explaining why boomers want to work longer. The 2008-2009 recession was a perfect storm in terms of widespread layoffs, pension funds depletion and plummeting home values. But even though these financial concerns mean that boomers have to stay in the workforce longer, boomers are a generation defined by a strong work ethic. This positive attitude and engagement with their jobs is also cited as contributing factors for delaying retirement: Those who expect to retire after age 65 report being slightly more engaged (34%) in their jobs than boomers overall.
As boomers stay in the workplace longer, their spending habits also appear to be changing. For one, they are making more purchases online via computers, smartphones and other devices, suggesting they are visiting traditional stores and using a physical card less frequently. These card-not-present (CNP) transactions now represent 40 percent of credit spending on Visa for consumers aged 60 to 69, which is only slightly lower than the overall average CNP of 40.3 percent. The bottom line is, consumer spending is holding up despite slowing population and labor force growth and baby boomers are the ones who deserve most of the credit.
You never would think that technology would be the unifying factor between generations. The very idea sounds preposterous! But since boomers are continuing to work and defer retirement much later than before, they are engaging with current trends and technologies more than ever. They are comfortable paying online, requesting a ride via a mobile app and renting someone else’s home for their vacation.
A generation of increasingly tech-savvy baby boomers is a segment of today’s consumers that companies cannot afford to ignore. Many companies these days are shifting their target demographic from millennials to aging baby boomers, focusing a demographic whose annual economic activity is roughly $7.6 trillion today, according to AARP. The first boomers turned 65 in 2011, and the number of Americans aged 65 and older is projected to keep growing until 2030, at which point, that number is estimated to peak at around 71 million. And, these companies are not only selling to this important generation, but making that a focal point of their sales strategy.
Here are a few companies leading the pack:
Have you seen that bike whizzing past you to only wonder why the cyclist was not pedaling? That is an electric bike and it is the perfect combination of exercise and form of transportation for a boomer. Evelo is specifically targeting this demographic by making the act of exercising less daunting. Created by two brothers who saw how easily their parents were using their electric bike. “Electric bikes are an equalizer,” said Mr. Mordkovich, one of the founders of Evelo. “They let the rider decide how much or how little they will pedal.”
Electric bikes offer people the ability to get out of the house and exercise without worrying if they will have to rely on their own two feet to get back home. Not only is Evelo practical but it is profitable! They just doubled their revenue to $4 million. As the exercise industry remains an all-expanding one, to all generations, the thought of being able to set out for a day’s journey on the open road, without the commitment of having to pedal back home seems very appealing, even to the nimble millennial.
We’ve all heard the phrase “it takes a village” but as families are moving further apart and venture outside of the proverbial town, where generations live and work close together, there are fewer resources and trusted people to rely on. I live a minimum of 3,000 miles away from my family and when simple tasks and errands need to be done to help out, hiring someone is the only option.
In comes Envoy – a startup helping families to find reliable handymen and caretakers for a wide range of responsibilities like grocery shopping, picking up prescriptions and rides to the doctor. They offer a trusted local person to work with the person who needs help, senior or otherwise. They mandate that excellent customer service is maintained and match each customer with one familiar envoy face who is recruited from a pool of stay-at-home moms, former caregivers and retirees.
And, to ensure this company appeals to the majority of users, there is an app and a concierge phone team to monitor and share all activity. “It’s basically, you’re living at home, mom and dad are getting older but they start needing a little bit of help,” CEO Justin Lin said. “They’re not ready to hire a full-blown caregiver, they don’t need help getting dressed, they don’t need someone to come every day, but they need a little support. And they need that personal touch and trust factor — that’s actually a long period of time.”
And, never forgetting how scary the internet can be, especially to boomers, Envoy mandates a vigorous application and interview process to ensure that every caregiver is suitable for the position. These middle men offer the perfect solution for those that are in that “in-between” stage before a senior needs full time care! Envoy offers just that little bit of support for aging families.
It seems like every day there is a new social media site you should be on to connect better with the world. Stitch fits that arena for older generations such as boomers and seniors.
The subscription based site was formed to address isolation in older adults. Through Stitch, boomers can socialize, travel, and find companions as many older adults have many burgeoning interested and things they want to do but no one they want to do them with! They support meetups of many kinds and people come to the site looking for partners, friends and companionship.
Additionally, Marie Rogo, one of the two founders, had noticed that boomers are actually a more economically viable group to market to since they do not mind spending money on fees. And, in true keeping with their target audience, Stitch’s marketing tactics remain “old school.” Posting flyers, visiting senior centers and word of mouth all have been the most successful forms of marketing for them.
“(Baby Boomers) are also brand loyal,” said Rogo. “This is what I love about them. They like the real talk. If they trust you as a brand, they will stay with you. They’re not going to hop around like millennials.” And, understanding that older generations are wary of social media and anything online, Stitch takes the time to perform an identity verification check, keeping fraudsters out, and the 50+ people in!
An additional measure Stitch takes to cater to older adults is including a phone-based customer service platform. This small detail is a huge differentiator with a generation who is more comfortable communicating with a voice. Technology like Stitch allows for boomers and seniors to maintain independence on a social front.
With the “caregiving” market expected to reach $72 billion by 2020 outlined in a recent report by AARP, it should come as no surprise that there are two of these companies on this list. Honor touts itself as the “uber” of home care and connects older adults with caregivers for short term jobs. They utilize technology to better screen and assign caregivers according to the senior’s specific needs.
While, at first glance, the audience most affected by Honor is clearly seniors, the app’s technology actually helps fill a growing issue that pertains to many boomers who are caring for their senior family.
The caregivers also log their visits and activities so that family members can keep tabs on their loved ones’ activities and care. “Our mission is to help seniors stay in their homes as long as they want to by providing excellent care,” said CEO and co-founder Seth Sternberg.
The idea for Honor arose after a visit to see his mother in Connecticut and realized she was not able to drive herself, severely limiting her ability to take care of herself. “I looked at current solutions (for helping her) and they’re very bad,” he said. “I’d have to fly to Connecticut, interview 20 people, randomly pick one, fly back to California and be completely in the dark about the care she was getting.”
As of 2015, there were 43.5 million families who care for an older relative, and 14.9 families that care for a relative with a disease like Alzheimer’s or dementia. Easing the burden of care for families dealing with elderly family members with a vast array of diseases through technology like Honor allows families to ask for help when they need it and provide their loved ones with transparent care.
According to the Kauffman Foundation, baby boomers are twice as likely as millennials to start their own business. How did this happen? Modern medicine increased the average life expectancy in developed countries from 50 to 75 years. In addition, the economic downturn left many experienced boomers out of a job; in 2008, retirement accounts lost $1.6 trillion (18.3 percent of their value).
This group is too young for retirement but too experienced for many of the available jobs. Boomers want to work hard and thus, they not only created a need for startups that targeted their lifestyles, but also they spurred a series of new fledgling companies.
Take Scrub Daddy, for example. One of the popular hit series, Shark Tank’s, more successful ventures, Scrub Daddy was created by Aaron Krause. He built up a successful car wash business and in 1992 and patented a car buffing pad for the mechanic and auto part industry. In 2011, after selling off many businesses, he returned to his original sponge idea and translated its use into a sponge for the regular person’s most arduous chore – cleaning dishes.
His sponge offers a smiley to help you get through mundane chores and is more hygienic than your average sponge. This product has sold over 10 million sponges and made over $50 million dollars in sales. Scrub Daddy is one of many smaller companies started by boomers who desire to take their financial future into their own control.
The over-50 segment of the population wants practical technology: apps that help make their lives easier from companies that they can trust. Given the spending power that boomers have, it is no surprise that more and more companies are stepping in to fill the void.
For any millennial that has had to explain to their parent how to work some new app, technology can typically be viewed as a hindrance. But once those first hurdles are past, the basic education has been given and this generation will become more and more accustomed to transitioning their life onto their smart phone. Convenience does not discriminate against age and boomers are the perfect audience for a slew of new technology.
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