New Beginnings: Investing in Digital Solutions for Boomers’ Second Lives

UNDERSERVED MARKET & OPPORTUNITY

Baby Boomers, born between 1946 and 1964, are the rising generation of seniors and they differ from their predecessors more profoundly than perhaps any two sequential generations. 10,000 Baby Boomers are turning 65 every day — a trend that will continue until 2030. They are an active group who spend more time on personal errands and household activities than media & entertainment. They are still focused on generating income over full-time retirement, bypassing the porch life and senior communities favored by Traditionalists. And they are the first technologically savvy generation of seniors: they discover new products and information online rather than via word of mouth; 87% have a mobile device and 68% have a smartphone that they use on average for 5 hours a day, comparable to the 5.5 hours that millennials clock in. Yet Boomers often find that smartphone apps and digital solutions — even those that purport to solve a problem they face — are not designed with them in mind.

SURVEY METHODOLOGY

To better understand the behaviors and stressors that older adults experience, we conducted a nationally representative survey with 534 participants. Our survey panel consisted of individuals across the ages of 55–85+, split evenly by gender, and across different ethnicities (61% White, 22% Black, 6% Asian or Pacific Islander, 4% Native American, 2% Hispanic or Latinx, and 5% Other). We targeted Boomers across a representative mix of US geographies (27% Southeast, 21% Midwest, 20% Northeast, 19% West, 14% Southwest.) and different size communities (e.g. metropolitan cities, metropolitan suburbs, small towns, rural). The majority of respondents live in the suburbs, rural areas or cities (in that order). Our survey panel also consisted of participants with varying levels of income to better understand the pain points across different household income thresholds.

BBGV THESIS

Based on our survey, conversations with founders in this space, and research, we believe that Boomers are in search of digital solutions that enable “New Beginnings.” Many Boomers who’ve left lifelong careers are not retirees, but rather second careerists — a topic we will cover in depth in a future post. Some are 1099 freelancers working for companies such as Taskrabbit, Uber, or HelloAlbert, and an integral part of the gig economy. Others are turning an interest or skill into part-time work as accountants, substitute teachers, pet sitters, or Etsy sellers. Many do not identify with existing, outdated communities (e.g. AARP) that were designed for their predecessors, and they are often overlooked by companies and analysts focused on the future of work. They need digitally-native platforms that will allow them to be more productive, more financially secure, and more informed and proactive about their health.

Personal Finance and Second Careers: Finding Fulfillment & Financial Stability

Rising healthcare costs coupled with the uncertainty of social security benefits are contributing to Boomers’ apprehension over their retirement plans. With increased life expectancy and costs of aging-in-place, 43% of respondents said finances were a top concern. These concerns were further exacerbated by COVID-19, which forced many Boomers to tap into their retirement savings. They are acutely aware of the financial pressures associated with maintaining their quality of life and are seeking digital solutions to help ensure financial stability.

Healthcare: Aging Empowered

As the pandemic accelerated healthtech adoption, telemedicine services among Boomers increased 300% — a permanent shift in how this generation accesses healthcare. But preference for accessing health services is still inversely correlated with age, with 71% of Boomers preferring to visit a doctor’s office compared to 42% of Gen Z and 47% of Millennials. This is largely because Boomers believe that the level of care they need is better addressed in person, or because they have a general distrust of telehealth’s capabilities. But while only 19% of Boomers prefer using video for healthcare, 58% of Boomers are willing to use it and may well get more comfortable with it over time.

How to win over this customer segment?

Startups in these spaces need to be intuitively designed and built with Boomers in mind. To date, companies such as Wealthfront (Personal Finance) and Classpass (Health & Wellness) have largely ignored the unique needs of this customer segment. Unlike Gen Z and millennial-focused companies that offer a clean UI/UX with a seamless customer experience, products catering to Boomers remain largely uninspiring, offline-only, or with dated design practices.

  • Designing Simple & Accessible UI/UX: Boomer-focused startups must develop a differentiated UI/UX design that is intuitive for over 55s. Respondents noted that the product should be simple to navigate, easy to learn, and if possible, include accessible instructions. While millennials prefer a clean and simple design with a quick onboarding process, Boomers prefer more details and how-to tutorials. Many digital solutions assume familiarity with current app protocols or demand a steep learning curve, either of which can make adoption challenging for Boomers.
  • Utilizing a Differentiated Customer Acquisition Strategy: Traditional digital marketing strategies and customer acquisition funnels may not work as effectively for Boomers. According to our survey, the best way to reach Boomers is through television ads (72%), search engine optimization (68%), and word of mouth (59%). Facebook ads (24%) are 30–50% as effective. Given that 22% of respondents are apprehensive about digital products/services and 29% of them find it difficult to learn about companies , startups need to be more thoughtful about their GTM plan. That may include partnerships with offline community groups such as church groups, community centers, and neighborhood associations. For Boomers who don’t currently use many digital products, 71% of respondents said they are more likely to adopt them if they are more convenient than physical alternatives. Understanding why Boomers choose to adopt digital solutions will be critical in attracting and retaining this customer segment.

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BBG Ventures is an early-stage fund backing female founders with big ideas that will reshape the way we live.