When Liz Emery, age 32, became the primary caregiver for her 88-year-old grandmother who suffered a stroke, she found it “heart wrenching” to see the once-fashionable and mentally acute businesswoman reduced to wearing bibs and diapers in a nursing facility.
The indignity of the situation bothered her long after her grandmother passed away. So in August, 2011, Emery launched Liz & Ett (adopting the nickname of her grandmother, Ethel), a line of fashionable apparel for those suffering from a disability.
PHOTO GALLERY: 12 Startups Looking to Profit from Aging Boomers
Emery is one of many entrepreneurs seeking to respond to needs of aging boomers who control more than half the nation’s worth. Laurie Orlov, an industry analyst who specializes in technology related to aging “in place,” or in the home, estimates that the market alone will be at $20 billion by 2020. Those age 50 and older spend roughly $3.5 trillion per year, according to the Bureau of Labor Statistics, and outspend other generations by some $400 billion each year.
“When you have that amount of spending, those markets are ripe for disruption,” says Jody Holtzman, AARP’s senior vice president for thought leadership. He said much of the activity is motivated by personal stories, where would-be entrepreneurs become more sensitive to the challenges that the aging face. “And if you’re an entrepreneur, there’s nothing like finding a good problem to find a solution for,” he says.
Holtzman says that while people of all ages are launching businesses to tap into what he calls “the longevity economy,” a significant percentage of those starting these types of businesses are boomers themselves, a cohort predisposed to entrepreneurial activity. A February study by Monster.com found that 45 percent of boomers consider themselves to be more entrepreneurial, compared to only 32 percent of Gen Y.
This generation is large, and many of them are risk takers, resulting in many boomer-led aging-related businesses, says Matt Thornhill, president of the Boomer Project, a marketing, consulting and research company. He says another factor fueling the trend is that many boomers lost their jobs and discovered that the only way to earn an income was to start their own company. Capitalizing on the aging market seems to be a no brainer. “Any company that can help boomers maintain their vitality until they take their last breath is destined to be successful,” Thornhill says.
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One of the boomers starting this type of business is Gary Kaye, age 64. A former journalist who covered technology, Kaye, in May, 2011, launched intheboombox.tv, which reviews technical products with an eye towards how usable they are for the 50-and-over set; for example, it evaluates how easy devices are to read and manipulate. “You have this huge demographic of 79 million boomers with disposable income, and for the most part the consumer electronics industry has been ignoring them, even though they’re responsible for 40 percent of all tech-related spending,” Kaye said.
Jonathan Schwartz, 47, former chief executive of Sun Microsystems, was looking for a way to better manage the care of five aging parents and in-laws – four of them over the age of 80. In February 2010, he launched CareZone.com, providing an app that allows those involved in a person’s care to share information in a secure, online setting.
The product has attracted just under a million users in 100 countries. “We view our market as equivalent in scale and scope to Facebook and LinkedIn,” Schwartz said.
Click here to see a sampling of some recently launched businesses that cater to the needs of America’s aging population.