Which consumers represent the biggest economic opportunity for today’s entrepreneurs? Is it “Generation Z,” just entering the workforce? Or perhaps Millennials, settling down to take care of young families? According to Joseph Coughlin’s latest book, The Longevity Economy, the answer lies elsewhere. Hint: they’re older than we might think.
First, some stats:
- In the US 10,000 people turn 65 every day.
- By 2035 the number of older people in the US will have grown from 46 million, today, to 78 million.
- By 2035 people 65 and over will outnumber those 18 and under for the first time in US history.
- By 2050 the worldwide proportion of those over 65 will have doubled from 8.5% today, to 16.7% (roughly the makeup of modern day Florida)
Okay, so the world is getting older. But do older consumers buy things? Again, some figures:
- Consumers age 50+ control 83% of US household wealth
- The average older adult spends $39K per year (about $10K more than their younger – age 30-44 – counterparts)
- In 2015 spending by people 50+ came to $5.6 trillion (vs $4.9 trillion for those 50 and under)
- By 2030, BCG estimates that the 55+ population will have been responsible for 50% of the US consumer spending growth since 2008.
It’s numbers like these, Coughlin argues, that makes the “longevity economy” (read: products for older people) foolish for entrepreneurs to ignore. Moreover, these consumers are under-served. Enter the market, and you’ll find competition that’s either missing the mark on what older people want, or simply missing in action. The reasons for this are twofold:
Systemic Bias: Behind many of our generation’s most successful tech products (e.g. Uber, Airbnb, Facebook, Twitter) often sit founders and engineers who are predominantly young and male. As such, he argues, it’s difficult for them to relate to the needs of older people and so they ignore them or, if they do pay attention, they design products based on shallow assumptions of what they want. (Remember: “I’ve Fallen And I Can’t Get Up“?).
Entrenched Narrative: The government and the private sector developed, and then perpetuated, a narrow view of what it means to be an older adult. In short: “needy and greedy.” Government programs such as FDR’s Social Security program – structured around peoples’ age rather than their abilities – solidified the notion that older people are not valuable economic actors (“needy”). Private sector companies, in turn, developed the highly lucrative concept of “golden years” – implying that meaning in old age is derived mainly from consumption, i.e. golf outings and cruise ship buffets (“greedy”). This messaging has created a one-dimensional view of being older, which implies that there are limited ways to serve the needs of older people – if they deserve to be served at all.
The truth, of course, is very different. According to a 2009 Pew poll, only 35% of people over 75 said they felt “old.” A growing number of people elect to “work into retirement” (a beautiful contradiction – and testament to how dysfunctional our narrative around aging has become). Eight out of nine older brains are unaffected by dementia or Alzheimer’s, with perfectly capable cognitive function. Not to mention that as you speak to older people, you find that they have many of the same aspirations that younger people do: to have a sense of purpose. To express oneself. To connect. To learn. And to contribute.
So how do entrepreneurs take advantage of this opportunity?
According to Coughlin, it starts with employing better methods to understand the underlying needs of older people.
One such method is walk-a-mile immersion. The MIT AgeLab has helped facilitate this by developing the AGNES (Age Gain Now Empathy System) suit. Designed with features such as tinted lenses, reduced range of motion, and trickier footing, it helps younger designers personally experience the physical changes one experiences when they’re older, and design accordingly. This is especially helpful for designing products such as cars or retail spaces, where physical restrictions are most at play. The best designs, Coughlin states, are “transcendent” – they meet the needs of older people so effectively that younger people covet them (e.g. the OXO line of kitchen products).
Another method is to design through a psychological framework, such as Maslow’s Hierarchy of Needs. With its delineation of needs into escalating categories such as friendship, family, sexual intimacy, self-esteem, confidence, self-expression and spontaneity, it can serve as fodder for a new generation of products not typically associated with older people. Such as Stitch – a social network for adults 50 and over. Or a job matching site to enable older people to put their experience to good use as consultants. Herein lie some of the most interesting possibilities to develop a new class of products.
* * *
As the world ages, Coughlin argues, there’s an incredible opportunity to serve a new class of consumers and rewrite the narrative of growing older. That said, there’s also a risk that we stick with the status quo, and growing older is for many people something that’s dreaded, versus looked forward to. Worse, an older population shut out of the workforce – and thus forced to depend on a shrinking pool of younger people for its well-being – may create a conflict between generations. Evidence of which is already surfacing.
Inspired in part by Coughlin’s book, last weekend I attended the Aging Into The Future summit in LA, one of several age-related events now sprouting up across the country. From call-lines to help older people find connection, to stylish clothing that can be put on and worn even with people with disabilities – it’s clear to me that the drum beat for new products and services for older people is starting to be heard. As these products come into market, and we see older people showing up in society in profoundly novel ways, what an opportunity – I think– to redefine what it means to grow older into something more enriching, sustainable, and dare I say – fun.
// As published on LinkedIn.
