Gerontologist, entrepreneur Katy Fike has found her calling making the world a more ‘age-friendly place’
By Matt Valley
As the worlds of finance, technology and senior care converge a little bit more with each passing day, Katy Fike is in her comfort zone. A founding partner of San Francisco-based venture capital firm Generator Ventures and co-founder of Aging2.0 — whose mission is to accelerate innovation to improve the lives of older adults globally — she possesses a unique skill set.
Fike is a former investment banker with Lehman Brothers who left Wall Street a little more than a decade ago to earn a doctorate degree in gerontology. She also has an undergraduate degree in systems engineering. That intellectual versatility has suited her well since the launch of Aging2.0 in 2012.
“It’s really fun to dance across these worlds and find where we have common ground, where we can find win-win-win solutions for the investor, for the senior care provider, as well as for the entrepreneur to grow their business,” she says. “Those three groups can sometimes speak a very different language. I’ve had the pleasure of getting to spend time in each of them.”
Generator Ventures, the venture capital arm of Aging2.0, invests in startups focused on aging and senior care. Launched in May 2014 in partnership with Formation Capital — a real estate private equity and investment firm with nearly $5 billion of managed investments in healthcare real estate — Generator Ventures provides both capital and “unprecedented access” to leading post-acute and senior care organizations and distribution channels.
The Aging2.0 Academy, which is tightly integrated with Generator Ventures, is a yearlong accelerator program for the top startups in aging and senior care. The Academy provides structured support and mentorship to help companies scale and reach their growth objectives.
To gain more insight into these initiatives, Seniors Housing Business interviewed Fike in April, a few weeks after her presentation, “Technology, Innovation and You,” delivered at the NIC 2015 Capital & Business Strategies Forum in San Diego. What follows is an edited transcript.
Seniors Housing Business: Tech startups can learn a lot about senior care by listening closely to operators and owners. What can owners and operators learn from tech startups?
Katy Fike: The culture and mentality that startups have is often quite different than established companies. Startups want to test, try and learn things as quickly as possible. A common phrase in Silicon Valley is “fail fast.” They want to learn lessons from their customers as quickly and cheaply as possible.
The approach at a big company traditionally has been quite different. Often there is a feeling that the organization needs to have everything perfectly worked out, or that you need a 100-page instruction manual. Startups operate a little bit more off the cuff — because they have to. They have to listen and be super-responsive to the feedback they are hearing from customers as they design, develop and deploy their new products and services.
That mindset of being nimble and really trying to hear what the customer wants and incorporate their feedback into the next version of the product, being iterative, and not letting perfect be the enemy of good is a mindset that senior care providers can learn from tech startups.
SHB: What are the biggest obstacles facing a startup company? I can imagine there are many, starting with funding.
Fike: The reason we started the Aging2.0 Academy is that we recognized the startups all seemed to have common challenges. We wanted to help the very best ones overcome those barriers and get into the market. We didn’t want to see the good ones decide that the senior care market was too hard and shift their focus to markets where it’s easier to get distribution, traction and funding.
We really believe these startups are working to solve important problems and have real potential to improve the quality of life and care. We want to support them in doing so and continue to attract top talent to this space.
There were four barriers for startups that we kept seeing over and over again. The first was having a good understanding of the needs and problems of older adults, family caregivers and/or service providers. As you can imagine, most of these technology entrepreneurs are in their 20s, 30s and 40s, and they are designing products for a life stage that they are not currently in.
We often tell startups, “You could be working on what you think is the most amazing solution, but if it is a solution to the ninth biggest problem of a senior living CEO, you’re never going to get his attention, much less budget approval.” The sooner we can align what the startups are working on with the priorities of families and senior care organizations, the better we can help deliver products people actually need and want.
The second barrier centered on design and marketing. Even after you understand the problem really well, execution is critical, especially in our space where the end user might have some vision or dexterity limitations. It’s important to make sure that the products are designed in a way that’s highly usable for the end user, whether that be the older adult, the professional caregiver or the family.
The third barrier was distribution — how to efficiently go to market and get the word out about these products. If they have nailed the need, and they have nailed the design and marketing, how can we help them really get to scale?
In order to help address the distribution issue, we have partnered with many of the largest organizations of senior care including Brookdale Senior Living, Genesis HealthCare, Life Care Services, Revera, Home Instead Senior Care, Silverado and Health Care REIT.
These companies have tremendous reach into the marketplace and they have influence as leaders. They work closely with our Academy companies to help them refine their product, and ultimately to help these products get out into the world where they can make a difference. Conferences and articles like these also help us spread the word about new products and services to improve the lives of older adults, so thank you.
The final barrier was funding, as you mentioned. Prior to Generator Ventures, there really weren’t any venture funds that focused on, and were actively investing in, the space. We see investors getting increasingly comfortable with digital health and healthcare investing, but the post-acute and senior care space is not an area they know as well. It’s an area where we feel we have the relationships and insights to make smart decisions and help create value.
SHB: Can you provide an example of an innovation that Aging2.0 and Generator Ventures have worked with, invested in, and that has benefitted the industry as a whole?
Fike: We get excited when we get to connect these early startups with our corporate partners who are truly leaders in the field. Many of the startups that are in our Aging2.0 Academy end up working with some of the largest operators in the field, such as Brookdale Senior Living and Genesis Rehab, which is an incredible opportunity for a young startup.
One example is Portugal-based Sword Health, a startup focused on reinventing the motor rehabilitation therapy industry, particularly post-stroke. Through the Academy program, the Sword team has been working very closely with the director of global innovation at Genesis Rehab (one of our Aging2.0 Leaders Circle partners) to help refine their product.
This close collaboration with an industry leader likely helped contribute to Sword recently winning a $1.3 million innovation grant from the European Commission.
We like to see “the rubber hitting the road” when the startups get to co-develop with the large industry players who have the frontline expertise and knowledge.
SHB: Technology is a vast field, even as it relates to seniors housing. For example, some products target the care provider while others focus on the consumer. Does the technology that entrepreneurs are introducing today fall into any common buckets?
Fike: You’re right, it is broad. We see both “B2B” and “B2C” solutions. Some solutions are more for the back office and operational purposes, which the end user, the resident, may never see, but which help the organization run more efficiently.
Other solutions are more resident-facing such as cloud-based resident engagement tools to enhance and personalize activities such as Linked Senior or SingFit. We’re starting to see smart devices become part of care protocols, such as sensors to collect data about how often a bedbound resident is turned and provide reminders when someone needs to be turned to help avoid pressure ulcers.
Some of the other products we see are very low-tech, but highlight the importance of thoughtful design. One of the companies in our program right now is called Narrative Apparel. The company is rethinking clothing and designing clothing that can help people dress independently longer and help them look and feel like themselves, even if they have some mobility limitations.
SHB: During your presentation at the NIC Strategies Forum, you said that Uber has elevated the customer experience of transportation. You pointed out that the mobile app has fundamental implications that extend far beyond transportation and that it has changed the way people think about services. Why do you believe that’s the case?
Fike: This “Uber-ization” trend is really about providing services on demand. If you look at how senior care is provided, it is done in batches. For example, we feed everyone at the same time or we dispatch home care workers in shifts with three-hour minimums.
I think we’re going to see much more on-demand services, where older adults are going to be able to get what they want, when and where they want it. I believe the only way to be able to cost effectively deliver that experience is with technology on the back end. Otherwise the logistics of doing so would become very cumbersome.
SHB: How does Aging2.0 make money?
Fike: We have a couple different business models that feed Aging2.0. On the Academy side, we follow a common model used by other startup accelerator programs in other industries. We provide the services of the Academy in exchange for a small equity stake in each company. That aligns our interests and enables us to support them without them having to outlay cash, which is in tight supply for most startups.
We also have the Leaders Circle, which is essentially a sponsorship model. The Leaders Circle partners help support our initiatives and, in return, we provide innovation consulting services and access to the frontline innovators. We also recently launched the Aging2.0 Alliance, which is a broader innovation community with a membership model with 80+ member organizations and counting. That’s a smaller membership fee to participate in the Alliance relative to the Leaders Circle.
We also host events and conferences, so we have standard registration and sponsorship revenues. In addition to our two larger annual events — the Aging2.0 Global Innovation Summit and the Aging2.0 Expo — we have hosted more than 100 local events in cities around the world.
SHB: Have you encountered any surprises on the seniors housing front internationally?
Fike: We think there’s a lot to learn from the international markets, and vice versa. Asia is quite interesting. We have several different chapters in Asia, including Shanghai, Beijing and Taiwan and we’re starting one in Tokyo. They’re probably farther ahead on things like robotics. They also have different cultural norms regarding taking care of elders that add an interesting element. Senior living and post-acute care are really just starting to take off in Asia, which creates tremendous opportunity as the population ages.
In Europe we see another interesting dynamic, which is a lot of single-payer healthcare systems, which lends itself to a different type of innovation. You see a lot more top-down innovation happening in the United Kingdom and across Europe, where they’ll be able to allocate large government funding for some of these programs because the government is the one holding the bag, broadly speaking, for healthcare and some of these aging-related needs.
SHB: How many total employees does Aging2.0 and its affiliated entities have?
Fike: We’re a small, but mighty team of seven people. I think of us as an example of how technology can really help you scale. We have a small group of people, but by leveraging things like webinars, online newsletters and our Facebook page, we’re able to have a global reach.
SHB: What prompted you to make the career switch from investment banking to gerontology and focus on improving the lives of seniors?
Fike: Throughout my whole life, I’ve always had an affinity for older adults. My parents are older and my grandparents were older (born in the late 1800s), but I never thought about it as a career growing up.
However, I was working in the World Financial Center on the morning of Sept. 11, 2001. That morning when the north tower of the World Trade Center fell, it hit the building we’d been working in and had thankfully evacuated. Being there that morning certainly made me start asking myself what I really wanted to do with my life.
I had been putting in the long investment banker hours for projects that we never talked about again after Sept. 11. That didn’t sit well with me. I realized I needed the work I did to matter more, not less, when real life happened. So I started thinking, “What do I care about? Where do I have potential to have an impact?” I kept coming back to seniors.
Then, coincidentally, my mom sent me a book written by a geriatrician that discussed the broader need and opportunity to rethink how we take care of our elders. I was blown away by the book. I read it feverishly and couldn’t get it out of my head.
The book took me beyond my own personal story of older grandparents and parents and opened my eyes to the huge global trend and opportunity around aging. It unlocked a passion in me, and I couldn’t get it out of my head. I started volunteering more, I started reading more, and I started having more and more ideas about potential new products, services and business models to improve the lives of older adults.
Ultimately, I decided to quit my job and enrolled in the School of Gerontology at University of Southern California. I started in the master’s program, but after one semester I was completely hooked and applied to transfer into the Ph.D. program.
In class we would learn about problems — whether it was falls or medication management or loneliness — and immediately my mind would go straight to thinking about some new solution. I’d be sketching product ideas or thinking of a new business model, or pulling in something I’d seen in some other industry and thinking about how it could work in aging or senior care.
I loved what I was learning and kept seeing opportunities — particularly opportunities to bridge the gap between technology and aging. I knew I had found what I was supposed to do.
SHB: What part of your job at Aging2.0 gives you the biggest charge?
Fike: When I see an older adult struggling with a product that’s not working for them, or difficulty reaching a shelf in the grocery store, or someone not treating them with the respect they deserve — I feel a tremendous sense of urgency about getting new products and services out into the world that can help improve the lives of older adults and make our world a more age-friendly place.
I also love working with entrepreneurs. They’re passionate, they’re optimistic, they’re energized and they are often making great sacrifices and taking big risks to build something they believe in.
They could have much more stable jobs and higher salaries if they wanted, but they’re choosing to take the entrepreneurial route, which is not always easy. I admire them and enjoy supporting them along the way as they work to create impactful, sustainable businesses to enhance the aging experience for all of us.