With a new leader helming its Enterprise Innovation division, AARP is making moves to a be a bigger player in this arena, including by creating new products through in-house “startups.” The innovations being developed by AARP could boost aging in place by helping people manage chronic conditions such as diabetes.
After conceiving of and leading the AARP market innovation segment for more than seven years, Jody Holtzman left the organization last November. Enterprise Innovation is now being led by Senior Vice President of Innovation and Product Development Andy Miller.
A self-described “serial entrepreneur,” Miller has founded and led a number of companies, including CardStar, which was acquired by digital marketing giant Constant Contact in 2012. Miller went on to serve as Constant Contact’s chief innovation architect for before joining AARP in July 2016. Previously known as the American Association for Retired Persons, Washington, D.C.-based AARP is a multi-faceted non-profit organization focused on the 50-plus population, and includes affiliated entities such as a foundation and insurance plans.
Under Holtzman’s leadership, the AARP innovation team was focused largely on community engagement, such as through sponsoring events to stimulate the development of products and services for older adults while increasing awareness of concepts such as ageless design, Miller told Senior Housing News.
Community engagement is still a key focus, he explained, but the innovation-related mission and mandate has become broader. There are three primary functional areas that he and his team are working on: product development efforts, launching AARP Innovation Labs, and driving the internal culture of innovation at AARP.
This is not a wholesale reinvention of AARP’s innovation approach; many current projects began during the latter stages of Holtzman’s tenure but now are accelerating, Miller said.
For instance, the product development push, which involves AARP forming and funding its own startup businesses, has been happening for about 18 months. So far, the organization has brought two of these startups to life, with one product already being marketed to the general public.
That product is the “Let’s Be Well” box. This is a box that contains products and information to support people who have just been diagnosed with type 2 diabetes or who are taking steps to gain better control of their condition. The box includes items such as a diabetes cookbook, a plate to help with portion control, and resistance bands for exercises. It is being offered directly to consumers for $50, marketed in concert with the American Diabetes Association. The AARP Let’s Be Well team is also exploring the potential for enterprise sales, including through a pilot with a hospital network.
This box is the starting point for a larger Let’s Be Well push, Miller said. Additional boxes could be created for other conditions, such as heart disease. And the box can be a starting point to create a whole “ecosystem” of support for seniors living with these conditions, which could ultimately include digital resources—say, tele-dietiticians or physical trainers available on demand through an app.
A second AARP startup is called Confetti. The product here is a digital tool to compile photos, text and other content to celebrate moments in people’s lives.
“Let’s say it’s mom and dad’s 50th anniversary, and I want to create a keepsake gift, I’ll email everyone I know who is important in their life, asking them to contribute pictures and stories,” Miller said. Confetti then creates a free, shareable, digital “keepsake,” which Miller likened to the posts Facebook creates for users, such as, “this is your April in 30 seconds.”
Confetti is currently going through internal testing by AARP employees and family members.
Funding for these efforts is entirely internal to AARP, Miller said. While he declined to share exact figures, he explained the funding process.
“The product development team is resourced in a way that enables us to move very quickly, and we treat it like any startup would be treated from a venture capital perspective,” he said. “We have a four-stage model that drives how much capital each project can get.”
In the first “idea/exploration” stage, he joked that the team has enough funding to afford one large pizza to feed them. In the “minimum viable concept” phase, they can afford a second large pizza. The next stages are minimum viable product, and then the goal is to get a commercial pilot running.
Extending AARP’s reach
Miller also declined to share the exact number of people on his team, but said that it is growing and realistically has the capacity to be doing about three product development projects at a time. To increase the through-put and improve the odds of creating a “hit” product, Miller’s division is working with external startups through the Innovation Labs and related initiatives.
One element of this is The Hatchery, a 10,000-square-foot facility in Washington, D.C., which functions as a startup incubator, giving work space to startups and functioning as a hub for them to connect with experts in aging and related topics. A 3,000-square-foot facility, The Tech Nest, is located at a research park near the University of Illinois in Urbana-Champaign. While these locations have been in place for two to three years, it’s only in the last 18 months or so that they’ve started to be fully leveraged as intended, Miller said.
The partnerships announced on Wednesday are part of AARP’s outreach to entrepreneurs. The organization was connected with the three startups—Folia, Orbita and Pillo—through its involvement in the PULSE@MassChallenge program. MassChallenge is a large startup accelerator, and the PULSE program connects entrepreneurs with mentors, medical health professionals, and business “Champions,” including AARP.
The three PULSE startups are involved in various aspects of caregiving for seniors. Folia offers web and mobile tools to help diabetes patients and doctors remain in constant connection with each other; Orbita is a voice assistant and AI technology meant to be leveraged for care coordination and reducing social isolation; and Pillo is a “health care assistant for the home” that dispenses medication and guides users in adhering to medication management plans.
These are all early-stage startups, and part of AARP’s effort is to help them work together to make the most of potential synergies—such as by baking aspects of the Folia app into Pillo, which runs through the Orbita voice technology.
The Enterprise Innovation team specializes in working with early-stage companies, Miller said. AARP has a $40 million venture fund in place, but that mostly invests in later stage companies, he noted. Today, AARP is not writing checks for the early-stage startups that it is working with, but offers services to these enterprises, sometimes in exchange for a warrant in the business.
“It’s usually really small, less than 1% of the company in most cases,” Miller said. “We’re [working with these companies] for strategic reasons, not a financial return.”
AARP is undertaking these efforts at a time when technologists and entrepreneurs see massive opportunity in the health care space. More than $11.5 billion in capital flowed into the digital health sector in 2017, with early stage deals accounting for 65% of that activity, according to an analysis from StartUp Health.
The senior care industry is avid to identify and leverage promising new technologies, with organizations such as Aging2.0 and Direct Supply trying to drive innovation in the space, and home care startups securing large funding rounds—including a $50 million investment announced by Honor this month. The overall market opportunity is huge, given the coming demographic wave of aging Baby Boomers.
For Miller, in this crowded playing field of health entrepreneurs and the organizations supporting them, he sees the broad scope of AARP as an advantage. About 10% of the AARP employee base has gone through advanced training in innovation principles, to be champions throughout the company and “expand the core innovation team outward,” Miller said. “Innovation Jam” events are planned for the future, to bring people throughout the organization together in hackathon-style challenges.
“At AARP, we’re not a tech company, so we want to be inclusive,” he said. “For innovation to work, you need all voices represented.”
Written by Tim Mullaney