Sept. 18 (Bloomberg) -- Silicon Valley entrepreneurs are finding their next big idea in the elderly capital of America.
While the world’s biggest firms have struggled to develop products targeted at older consumers, a group led by former Apple Inc., Microsoft Corp. and EBay Inc. employees yesterday unveiled Lively. The system of tiny sensors helps the elderly maintain their independence, letting far-flung relatives know whether they take their pills on time or exit the house.
Lively marks the first result of an effort by Sarasota, Florida -- which boasts the highest concentration of elderly people of any large U.S. county -- to transform the region into a test market for companies eager to tap into the $8 trillion buying power of seniors. The Institute for the Ages, a Sarasota nonprofit, played a key role in Lively’s creation, connecting the San Francisco-based company with residents who provided feedback to improve its product.
They included Bill Tavolga, a 91-year-old self-described tech geek who helped Lively’s developers find bugs in the system. The outcome was a tool that helps shrink the 350-mile (560-kilometer) distance between Phyllis Bek-gran, 89, and her son by letting him know when she doesn’t pick up her TV remote.
To Sarasota’s elderly, “we’re saying we want to capture your voice, so that any issue that you’ve got insights on, we’ll find the connections that can make that voice valuable,” said Tom Esselman, 52, a former Hallmark Cards Inc. executive who now heads the Institute for the Ages, which is part think tank, part market research company.
For years, businesses have conducted trial runs in cities such as Columbus, Ohio, where the population breakdown mirrors that of the U.S. overall. In an aging world, Sarasota is seeking to become the new Columbus -- and, in time, the new, innovative Silver Valley counterpart to Silicon Valley in what is called the “aging space.”
With the massive baby boom generation beginning to move into the ranks of the elderly, companies are trying to front-run the trend by figuring out the next hot products for seniors. So far their search has remained largely unfulfilled because of a marketing conundrum: Graying boomers, even more than previous generations, don’t want to be identified as elderly.
The idea for the Institute for the Ages emerged after Scope, a nonprofit community group whose name stands for Sarasota County Openly Plans for Excellence, sought advice from hundreds of residents on the topic of aging in 2008. Sarasota County Commissioners approved $1.2 million to get the institute off the ground, and a recruiting firm found Esselman. He was 22 years into a career at Kansas City, Missouri-based Hallmark, where he had helped invent talking greeting cards and served as director of innovation.
Meanwhile in Silicon Valley, Iggy Fanlo was looking for opportunities in large, growing yet neglected areas of business. He had spent the past dozen years at Internet companies, including San Jose, California-based EBay.
“What jumped off the page was aging,” said Fanlo, 51. Finding the existing market for passive home monitors for the elderly expensive and clunky, he decided to start there.
At a forum early last year sponsored by Maveron LLC, a venture capital firm that Starbucks Corp. founder Howard Schultz helped create, Fanlo met David Glickman, 42. Glickman, then an entrepreneur-in-residence at Maveron, had worked at Apple, where he helped develop the Newton, a 1980s precursor to the iPad.
Soon after, Fanlo and Glickman, along with Keith Dutton, a former software engineer at Microsoft, founded Lively, and its eponymous first product was born.
In the startup’s hunt for market-research firms, Sarasota’s institute stood out. For one, it was cheaper -- at about $25,000. Yet its primary appeal was the promise of qualitative feedback through hands-on access to seniors, Glickman said.
“There’s nothing more valuable than putting things in front of people and actually being in peoples’ homes to talk about it,” he said. Between him and and Fanlo, they visited all 30 pilot study participants -- chosen because they lived alone - - after arriving in Sarasota in February.
One was Bek-gran, whose husband of 68 years died in 2010. Lively sensors throughout Bek-gran’s two-bedroom condo now log when she opens her refrigerator and exits the front door. The data is then transmitted to a secure website for her youngest son, Peter, to view from his home in Key West, Florida.
“I also had one on my TV remote, because we all know if I didn’t pick that up, there’s something wrong with what’s going on in the world,” Bek-gran recalled with a laugh.
One day, Bek-gran didn’t open her pillbox by 11 a.m. An e-mail alert popped into Peter’s inbox, and on Lively’s website, a red, frowning face replaced a green smiling one next to Bek-gran’s medication icon. Her phone soon began ringing; it was Peter, with a reminder to take her pills.
For Bek-gran, who’s been active all her life and still shows her paintings at art exhibitions, maintaining her independence is crucial. Lively helps her do that, part of the growing “aging in place” market for products and technology, such as walk-in bathtubs and higher toilet seats, that assist people at home as they get older. The market is forecast to rise 10-fold to $20 billion by 2020, according to a report by research firm Aging in Place Technology Watch.
Fellow participant Tavolga, a former marine biologist, wasn’t shy about pointing out the system’s flaws.
“I added a sensor on the front door,” Tavolga wrote to Glickman in a Feb. 26 e-mail. “Works O.K., but I cannot change the name from ’Custom #4.’”
Three days later: “O.K. I found out why the label change would not take. It would not accept ’Front Door’ as two words.”
Sensors throughout Tavolga’s home often failed.
“The Medication sensor is still red-face” online, which indicates inactivity, he wrote. “This time I took my pills before 7 a.m.” On March 26, he noted that it needed to be “strongly shaken” in order to register.
“It was fun; for one thing, I’m a computer geek,” recalled Tavolga, who e-mails his “sweetheart” every morning from a Samsung tablet, reads books on a Kindle and updates the online music archives of a local library twice a week.
In addition to logging a senior’s daily routine, Lively solicits news and photos weekly from designated family members and friends via e-mail. It compiles them into a booklet, called a LivelyGram, and snail mails it to the senior’s home. The concept was developed with Glickman’s late grandmother in mind, he said. She wasn’t online, and when family members mailed photos to her, it made her feel more connected.
Peace of Mind
The system gives both sides peace of mind without feeling intrusive, users say.
“It doesn’t feel like monitoring because it’s not the specifics of what I’m doing -- it doesn’t say where I’m going or what I’m doing,” Bek-gran said.
Next year, Lively plans to add a feature that could detect falls or allow the senior to call for help in the event of an emergency -- the most-requested add-on during the trial run, including by Bek-gran, Glickman said. Lively now sends two pillbox sensors, up from one initially, after learning in Sarasota that most seniors use more than a sole dispenser, he said.
Located in southwest Florida on the Gulf of Mexico, Sarasota -- the name shared by the county and its second-biggest city -- has long been known as a go-to place for retirees after their working years have ended.
One in three of its 386,000 residents is 65 years or older, the highest proportion of any county with a population of at least 250,000, according to the U.S. Census Bureau. That’s a snapshot of what the rest of the developed world will look like by 2050, according to RTI International, a nonprofit research institute based in Research Triangle Park, North Carolina.
Sarasota has advantages as a research center: It’s wealthier, healthier and better educated than most retiree hubs, according to data compiled by Bloomberg. Worldwide, 60-and-older consumers spent more than $8 trillion in 2010; by the end of this decade, they will spend $15 trillion, according to data tracker Euromonitor.
When Sarasota County approved $1.2 million in development grants in 2011, it was based on the promise that the Institute for the Ages would help create 840 jobs and contribute $159 million in economic impact for the area within 10 years. The institute will also measure itself based on the size of its volunteer senior database. It’s currently at 1,500; by 2016, it hopes to have as many as 10,000 and, eventually, 50,000.
In July, the institute signed a deal with a joint venture between Intel Corp. and General Electric Co. to test a product called Connect Caregiver, which helps keep track of an elder’s doctors’ appointments and diet, among other things, via an online portal. Juvent, a device to boost bone density made by Palm Beach Gardens, Florida-based American Medical Innovations LLC, will be next, Esselman said.
Instead of money, the men and women who took part in the Lively study were offered a free yearlong subscription for the product. They also attended a pizza party with 10 pies Esselman made from scratch using his Italian family recipe.
“We couldn’t think of a more genuine way to thank them in a personal way -- these people had become like family,” Esselman said. “At one point, three of the older ladies came up to me while I was punching the dough and shared stories of them baking bread in their kitchens with their mothers.”
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