By: Uma Veerappan, MBA Associate
From the COVID-19 pandemic to school shootings to the murder of George Floyd, the headlines below capture some of the contributing stressors that have intensified today’s youth mental health “emergency.”
Coupled with the already stressful life transition during adolescence, there is a clear need to act now to better address teen mental health. The numbers confirm this narrative: From 2019 to 2020, there was a 31% increase in mental health-related emergency department visits for children between the ages of 12 and 17.
Funding for the broader mental health market is expected to reach nearly $3B by year end and increase to $4.77B by 2026. However, the adolescent mental health space remains relatively untapped. While some behavioral health companies such as Ginger have recently expanded offerings to include teens, there is still only a limited number of solutions specifically built for the Gen Z teen consumer.
The time to explore digital mental health solutions for Gen Z teens is now:
- For Gen Z, promoting mental health is top-of-mind: Nearly 75% of Gen Z says managing stress and mental health is their biggest health and wellness concern. Gen Z has grown up in a world where it is considered a strength to ask for help, with public figures such as Simone Biles and Naomi Osaka using their spotlights to normalize this conversation.
- Gen Z is not satisfied with the current state of mental health care: Only 50% of Gen Zs feel they do enough to manage their stress and 73% say they could have used more emotional support in the last year.
- As digital natives, Gen Z has a high bar for the user experience with apps that support mental health: 74 percent of Gen Zs indicate that most of their time outside school and work is spent online. As a generation that grew up with devices in hand, digital mental health solutions that enable a convenient care experience are a “must-have” as opposed to a “nice-to-have.” They also seek solutions that are personalized, and this will significantly influence care models looking forward.
Teen mental health lies at the intersection of two of BBGV’s core investment areas of focus:
- Health & Wellness: Technology is enabling powerful shifts for patients as well as new care delivery mechanisms. BBGV has made investments within mental health including Spring Health, a precision mental health company that uses AI to match patients with the right care; Real, an on-demand mental health platform that offers “pathways” to address specific care topics; and Shine, a daily self-care mental wellness app.
- Underserved & Emerging Consumers: Gen Z will overtake Millennials as the largest generation in 2022. This demographic will drive changes in values and consumer behavior. As Gen Z begins to command greater purchasing power, we make investments knowing that this will become an increasingly important group for platforms and brands to target.
With all of that said, the question becomes: What should mental health startups consider when building for the Gen Z consumer? In this piece, I will share my perspective on: i) which categories of mental health solutions best support Gen Z, ii) existing startups within each of these categories, and iii) what investors such as BBGV look for when analyzing investment opportunities within each category. I have also included insights from my conversations with physicians Dr. Mark Lo, Medical Director of Telehealth and Digital Health at Seattle Children’s Hospital, and Dr. Michael Levin, psychiatrist and author of Brainfulness, to offer a clinical perspective.
Mental Health Solutions Built for Gen Z
Gen Z takes a holistic approach to mental health. Gen Zs spend more time and money on preventative measures (56%) than episodic reasons (44%), placing their attention on integrating wellness into daily routines to avoid health concerns from arising in the first place. As such, I focused my research on understanding solutions outside of traditional provider relationships that prevent uncontrolled mental health concerns from escalating into issues that require more extensive evaluation by a physician. Early movers building mental health solutions in this space fall into three categories:
- Self-Care Programs: Focus on holistic wellness through programs that can be integrated into daily routines, such as meditation and music therapy
- Text-Based Support: On-demand texting with a trusted care professional for convenient access to advice
- Social Communities: Online healthy social networks that allow users to share with and respond to others on the platform
Below is a map of a few first-mover startups currently operating in each of these categories — all of which have offerings that include or exclusively service teens. Read on to see why each of these areas is crucial to delivering mental healthcare to Gen Z consumers.
1) Self-Care Programs
ClassPass memberships, Lululemon, and Goop are just a few ways Gen Z integrates mental wellness into daily routines. While these brands were not built exclusively for Gen Z, they have been widely adopted by this demographic and represent the first iteration of mental health solutions for teens. Gen Z’s interest in wellness creates an opportunity for apps offering fitness, nutrition, sleep, mood tracking, and mindfulness solutions.
Companies we have seen building solutions in this category include:
- SoundMind, a music therapy app offering a modern solution to reduce symptoms of PTSD, anxiety, and depression;
- Shine, which helps create self-care rituals through meditation, community, and reflection; and
- Open, a platform offering meditation, breathwork, and movement.
Some companies have already applied their understanding of Gen Z behaviors to attract users by connecting with potential Gen Z users via social media. Breathwrk, for example, has gone viral through help from its “Share a Breath” feature on TikTok.
KPIs for self-care programs: There is no doubt this is a crowded market; however, the key to winning over Gen Z consumers is to provide a differentiated offering and promote strong virality, similar to lifestyle brands like Lululemon. Seed-stage investors will look for a unique and effective approach to acquiring customers, high and repeated engagement from early users, and data that indicates the programming benefits mental wellness.
2) Text-Based Support
Convenience: In situations where teens desire advice from a live, trusted professional, on-demand care will be prioritized. Given Gen Z has grown up in a world of convenience and accessibility at their fingertips through apps like GrubHub and Uber, it may be unrealistic to expect Gen Z teens to schedule an appointment several weeks in advance to connect with a mental health professional. Convenience is now table stakes, and mental health solutions that prioritize this are best positioned to succeed.
Efficacy: Research reveals that mental health improvement rates with text-based therapy are consistent with improvement rates with face-to-face therapy. There may also be opportunities to scale the impact of support with the help of Artificial Intelligence or Natural Language Processing to interpret customer needs and deliver customer care.
Dr. Mark Lo, Medical Director of Telehealth and Digital Health at Seattle Children’s Hospital, recommends text-based medicine given it offers teens both autonomy and privacy. He also highlights that frequent and short touchpoints through text can effectively introduce behavior change. Additional benefits to text-based therapy include the ability to track progress, comfort in communication for socially anxious teens, and low-stakes for teens who are new to therapy.
Affordability: Most telehealth companies currently rely on video to provide services. However, text-based therapy is uniquely poised to address healthcare equity and affordability concerns because it requires less data than video-based therapy, resulting in fewer accessibility barriers.
A few companies providing text-based therapy include:
- TalkSpace, which enables text, video, and voice messaging with therapists anytime;
- Ginger, which offers text-based behavioral health coaching; and
- MindRight, which provides culturally responsive text-based coaching.
Most players, including TalkSpace and Ginger, are not exclusively focused on Gen Z. Thus, there is room for solutions built specifically with Gen Z mental health concerns in mind to capture this demographic.
KPIs for text-based startups: Companies that promote frequent user engagement by providing an exceptional experience through high-quality care recommendations, appropriate matching of users with coaches or therapists who have relevant experience, and quick response times will be favored in the market. As care continues to shift virtually, it will be critical to stay ahead of the curve by establishing loyalty from Gen Z early on through capitalizing on the previously mentioned opportunities.
3) Social Community
A majority of Gen Z is comfortable building online-only relationships. Whether it’s through Twitter or Clubhouse, 56% of Gen Z is friends with someone they only know from online interactions. As it relates to mental health, 78% of Gen Zs believe that technology supports them by providing an opportunity to connect with others who may be struggling with similar issues. Given this generation is more likely to turn to social media and friends than physicians, there is an opportunity to create an online community that promotes mental wellness.
Examples of companies that incorporate elements of community include:
- Alms, a social network that promotes wellness through user participation in creator-led challenges in areas including personal growth;
- Blue Fever, an anonymous social network platform for expression and support of emotions; and
- Inpathy, a healthy social network for users to share audio or video content with each other.
This is a nascent space. The most effective online communities will have established guidelines for moderating content in a manner that is scalable, such as written rules for user engagement, a dedicated process to screen content, and an option for users to report content.
Potential Concerns to Watch With Communities: Dr. Michael Levin, psychiatrist and author of Brainfulness, explains the importance of carefully monitoring communities with user-generated content. Considering parents typically begin to lose authority when a child enters adolescence, peer groups become highly influential. While negative behaviors such as self-harm may be more easily screened for, platforms must pay careful attention to content to avoid peers teaching unfavorable practices to one another.
Personalization Can Help Address These Concerns and Increase Engagement: Dr. Levin points to personalization as one way to ensure appropriate content is delivered to users (research confirms that 75% of Gen Z is more likely to buy a product if they can customize it), suggesting that this can help promote engagement and help avoid “falling on deaf ears.” He shares that the needs of teens must be skillfully elicited, given many teenagers may be unable to point to the root cause of mental health challenges due to various life changes and fluctuations in hormones. He suggests incorporating tools such as questionnaires, rating scales, projective tests, and narratives. One method to do this could be through an assessment that matches participants to sub-communities or tailored content. BBGV’s portfolio company Real does this by allowing each user to select a care pathway, such as body image, to unlock associated audio and video programming.
KPIs for social communities: Social communities should target strong engagement and long-term utilization. To do this, communities can include tailored and new content, personalized insights, timely behavioral nudges, and an engaging user interface. Given content related to mental wellbeing is generated by users who may not be licensed therapists or coaches, companies need a process to moderate content to ensure it delivers value to the end-user.
Tackling the teen mental health market does not come without challenges, but prompt action is necessary given stressors are at an all-time high and the importance of equipping teens with the appropriate resources to manage their wellbeing.
If you are building a self-care app, text-based support solution, or social community platform within this landscape (or know someone who is), I would love to learn more! You can reach me at firstname.lastname@example.org / @uma_veerappan on Twitter and BBGV at email@example.com / @BBGVentures.