The SHB Interview: F. Scott Moody, CEO, K4Connect

Tech entrepreneur wants to bring seniors housing into the 21st century.

By Jeff Shaw

By all accounts, F. Scott Moody was free to retire and spend his life in casual luxury.

AuthenTec, the computer security company Moody co-founded in 1998, was acquired by Apple for $394 million in 2012. Apple mostly sought AuthenTec’s fingerprint-sensor technology. At the time it was Apple’s second-largest acquisition in the company’s illustrious history, and the technology is now known as Touch ID.

“That was the end of my career, or at least that was my intent,” says Moody, who was 55 years old at the time. “I wanted to stay active in startups, but I didn’t want to start another and I didn’t want to work again.”

Given that Moody’s degree is in industrial engineering, and his entire career was spent working with semiconductors (computer chips), seniors housing seems like the least likely next step imaginable. Yet here he is.

After some intense life experiences convinced Moody that he had more to offer the world (more on that later), he decided to partner with Jonathan Gould — who was working on a hospitality industry tech startup — and launch a technology company for seniors and those living with disabilities known as K4Connect. The name is even a reference to Moody’s wife and three daughters, all of whom have names that begin with the letter K.

Gould took on the role of chief technology officer of the Raleigh, North Carolina-based company, while Moody assumed the title of chief member advocate.

“Everybody in the company is called an advocate,” says Moody. “I don’t like the word employee, and everyone here advocates for the user.”

The company seeks to bring top-level Internet of Things (IoT) technology to an underserved and hesitant market of seniors, who Moody believes would most benefit from this type of technology. (An example of IoT is Amazon’s Alexa or Google’s Home, which combine a variety of technologies into a single, voice-based user interface.) 

Through three rounds of investment funding — led by Sierra Ventures, Intel Capital and AXA Ventures — the company has raised more than $22 million for its product development. K4Connect has a lineup of clients to date, most recently announcing an expanded partnership with Carlsbad, California-based Kisco Senior Living, which owns and operates 20 communities in six states.

Seniors Housing Business spoke with Moody regarding the present and future of technology in seniors housing, and how the industry can leverage tech to drive efficiencies.

Seniors Housing Business: Walk me through your professional history before K4Connect, particularly what happened with AuthenTec following the acquisition.

F. Scott Moody: I graduated from NC State (North Carolina State University) in industrial and systems engineering and went to work in 1980 at Harris Semiconductor in Melbourne, Florida. At the time, there was hardly anything known as a startup, and entrepreneur was just a French word. I graduated one weekend, got married the next weekend, and Katherine and I moved to Florida three days later.

I eventually rose through the ranks to run a $200 million division at Harris Semiconductor. I then joined forces with Dale Setlak, who also worked at Harris and who I refer to as “the smart guy,” and we started AuthenTec in 1998 when I was 41.

It was a fingerprint sensor based on some unique technology. When we started, there were a lot of people doing fingerprint scanning, but I didn’t think people had developed a technology that was good enough. 

We took the company public in 2007, which was a very interesting time to take a company public. It was very challenging. I will say we were blessed in a way that we had the cash to survive. Highlighting the challenges: our two lead bankers when we went public were Lehman Brothers and Bear Stearns. Within 15 months they were both out of business. It was a scary time.

We managed through it successfully, and in 2012 we were acquired by Apple. I retired and moved back to Raleigh, North Carolina. I’m from New Jersey, but I went to NC State and met my wife there. Given her family connections here and given that the Research Triangle was up and coming, I came here. That’s where I thought my career ended.

I was still investing and involved in a number of things. As part of a trip with a micro-finance organization, I went to Rwanda and that changed things.

Hearing the call

SHB: What happened in Rwanda?

Moody: I had been there several times on mission trips with my church. Following the sale of AuthenTec, I started working with a micro-finance organization called Hope International, which funds small entrepreneurial projects. We went over there for a trip to see how people’s donations were used.

I met a woman named Jennifer while I was over there. She went to open an orphanage right after the genocide (in 1994, between 500,000 and 1 million Rwandan citizens were killed during a civil war) and ended up opening about a dozen orphanages. She used to bake cakes for the birthdays, and ended up opening a bakery to help fund things. Then she bought a coffee shop and converted it into a coffee shop and bakery, and she only employed battered women to train them. Then they could go out and be entrepreneurs themselves by opening bakeries in their villages.

When you meet somebody like that, it’s honestly embarrassing. For me, that was it. I had to do more. For all the blessings I’ve had in life, I just needed to do more.

I got together with Jonathan Gould and was exceedingly impressed. We knew each other from another startup. He reminded me of my last co-founder — super smart and, more importantly, a super good person.

We worked together for four months, researching smart technologies. I always felt like these things were too difficult. It reminded me of the fingerprint industry. A lot of people talked about it and had products, but they were hard to use.

SHB: So why, with all the options laid out before you, did you go with technology for seniors housing?

Moody: I didn’t see it at all. That’s the truth. I had never really thought of older adults and those with disabilities.

We were on our way, developing the technology, filing patents. Then one day I happened to have coffee with a gentleman named Eric. He was an advocate for the homeless.

He asked what K4Connect does. I gave him examples of how all these smart technologies could be used for living, how it would work in a home. “That would be a great product for me,” he said. Then he told me he had multiple sclerosis. He had a cane, but I hadn’t seen it because he arrived at the coffee shop before me.

I went back and talked to Jonathan and we set up another meeting a week later. Eric has retired but was a lawyer, another very smart and very good person. As we started the discussion, he said, “Let me tell you guys why I’m here today.  Right now, I’m using a cane, but I’m not sure how long that will last.  So when I wake up, I figure I have the energy for 1,000 good steps in a day. How I use those steps defines the quality of my life. You guys can make my life better.”

These smart home technologies, they’re a convenience. But for the people we serve, they’re really important. They’re a real utility in their lives.

I went home and had a second conversation with Katherine. “I know nothing about this market,” I said. “Nobody will ever fund us. But I don’t think God called us to spend 20 percent of our wealth and if it doesn’t work out to go back to retirement. I want to go all in, and I’m pretty sure we’ll lose every penny, but this is why we’ve been called.” 

She was incredibly supportive, and it turned out it’s a really big market worldwide that’s completely underserved by technology. We’ve been successful raising money, and I like to think we’ve been successful serving.

Bring the tech to seniors

SHB: How is K4Connect different from other IoT offerings available to seniors housing?

Moody: There are a lot of great technologies being developed, but oftentimes they’re not designed specifically for this demographic. They’re designed for you and me — in homes and offices.

A senior living community can’t use 50 different technologies, all of which have a different app and different requirements. The resident can’t manage it all. At the community level, you don’t have an IT staff. At the corporate level, you don’t have software developers.

What we do have is a value proposition — by bringing all of these devices, apps and services together into one system with an app that’s usable by residents, staff and management. We don’t make all these products and technologies, but we make them available to the people we serve.

That looks easy when you use it, and it sounds easy, but it’s really hard. We have 55 people, and 30 of them are developers. About 45 of them have engineering or computer science degrees. 

Our real value-add proposition is taking all these great ideas and technologies and making them available to the people we serve in senior living communities.

SHB: A number of seniors housing communities still use paper records. How do you get people — both seniors themselves and staff at seniors housing communities — to adopt cutting-edge technology, especially when you’re approaching an industry that is notoriously tech-averse? 

Moody: Technology is only successful when you stop calling it technology, when it’s just a part of your life like picking up the phone and hearing a dial tone. Too often, by calling it technology, it’s almost a euphemism for user annoyance.

We have to improve lives, make them simpler, happier and healthier, and focus on adding value. If it adds value to their lives and is designed in concert with what they’re used to, they will use the technology. But you have to design for that. 

“Older people don’t like tech,” I hear. Well, they don’t like something designed for 25-year-olds but just with a bigger font. My grandmother didn’t wear the same clothes as my daughters, but that doesn’t mean she doesn’t wear clothes.

Technology needs to be exceedingly reliable and easy to use, but the fact of the matter is that seniors use it.

SHB: How do you get people to adopt the technology, to get them over that initial hesitance?

Moody: If you talk to any architect who is designing senior living projects, one of the big requests is for a smart home. A lot of people are focused on smart health apps, but why is that for 40-year-olds? Isn’t it even more important for an 80-year-old? 

With today’s technology, you never have to get off your couch again if you don’t want to do so. If all those services can be provided for a 25-year-old, why not for an 80-year-old who could really see the benefits?

One of the biggest issues in senior living communities is, beyond a doubt, staffing. Generally you hear of turnover rates of 50 to 100 percent. You’re always losing time to training. 

I also think of the residents. Let’s say you need help going to the restroom and you get used to the people. That’s a pretty private thing. All of a sudden someone new shows up. Who are you? Well, Mary quit yesterday. It has to be difficult to develop a relationship with a new person giving you a bath or helping you go to the bathroom. 

SHB: How can technology help keep that frontline staff?

Moody: Those staff members have a hard job. Our focus is not to reduce staff, it’s to make sure they work in a good environment, have the tools to do the job and can spend more time with the people they serve.

How do we make that staff more efficient? How do we make the operations more efficient? How do we save money not by reducing the staff, but by being able to keep our staff and let them do the job that they’re here to do?

Technology can make the whole operation run better than before. Things like building management, workflow automation, compliance and governance can all improve operations and lower costs.

For the staff, there are efficiencies we can find. We’ve started a consulting group to help with that — K4Advisors. It’s one thing to have the technology, and another to have processes to take advantage of that.

Once in a community, our system works as an operating system, since we  bring everything together in that community, from home or wellness devices to applications, services and even previously siloed systems. So, the opportunities are somewhat limitless because we can only talk about what’s available today. Who knows what comes out five years from now. We’re plug and play. We can integrate all these new devices and applications and features and systems.

It can be something as simple as a light switch. How many times have you seen someone in a senior living community sitting in the dark because he or she can’t get up, or is too tired? Now we can turn lights on and off through an app or a bed sensor or voice.

Look outside the industry

SHB: Since you came over from a completely unrelated industry, what are some challenges in seniors housing you see that longtime veterans might not notice?

Moody: In terms of technology, I don’t think people always fully recognize what might be available. In the semiconductor industry, where I came from, we sold into every end market in every part of the world. So part of [that challenge] is seeing efficiencies or technologies in other industries and being able to bring that to senior living. To some extent you get a wider perspective.

Of course, the hype doesn’t always match the reality. You see commercials all the time that talk about technology that, in reality, doesn’t work the way that it’s portrayed.

Oftentimes, what we have to do is find out what is actually important to the people we serve? What can we bring forward and, as it’s integrated into the platform, present it in way that provides the most benefit to the resident and staff?

SHB: What does the future hold for technology in seniors housing? 

Moody: Frankly, you will see a lot around voice. Voice has a long way to go, but it has really become advanced through Amazon, Google and Apple. But for stroke victims, the technology might not be able to understand them yet. In the future there will be some very advanced technology that is much better for certain individuals.

I don’t think people realize there’s a lot of work behind [the technology]. For example, you can ask what’s on the menu today, but what if there are 50 items on the menu today? You don’t want Alexa to list 50 items. 

The program has to think “it’s the morning, so I will tell them what might be available for breakfast.” Or it knows they are on a specific diet and only replies with that information. All of that has to be thought through for the technology to be meaningful and useful versus being a novelty and annoying.

One issue that’s not solved is all these mechanisms for fall detection, a new kind of nurse call, things like that. That will be a blended set of technologies. 

There are also all sorts of ideas around autonomous vehicles. Autonomous vehicles are great, but they have a long way to go. All these food delivery services, maintenance services, car services — the challenge now is how do we provide them in a safe and reliable way to the people we serve? We’re working to bring those services into the application itself.

We don’t have to think about “Star Wars” and science fiction. There are technologies we can make available to people now.

SHB: What’s something people in the industry might be surprised to learn about you? 

Moody: Just under four years ago I had a brain tumor. Everything’s fine. It was benign. But the operation was 11 hours. I was in and out of the hospital for three weeks, and immobile for six. I still have right-side paralysis in my face and I’m deaf on the right side.

I look back on that time and I see it as a blessing — not fun to go through at the time, but I learned a lot. It greatly expanded our mission.

It’s one thing to be empathetic to those we serve, it is another to walk in their shoes. For example, I don’t take pills besides a few vitamins, but I was taking 13 pills at that time. One was every four hours, one was after six hours, one was after meals, one was because I was throwing up from the first pill, one was when I needed it for the pain.

I asked myself, “What does a poor person do in this situation?” I had money. I had a caregiving wife. I had insurance. What if somebody didn’t have that support system?

Our mission changed to serving the underserved technologically and economically. We want to serve every resident, not just the wealthiest ones.

I know we’re a venture capital-backed company. I know that, in time, our investors expect a return. But I look at it as a reasonable return. We’re going to do what we can to lower our cost, lower our prices to reach more people. That’s our job.

In general, I think we have higher expectations of ourselves than the investors do of us. In the end, we are all on the same team focused on the mission of serving others.  We believe that if we do that, if we truly improve the lives of those we serve, good things will come.

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