Hey Bill –
You wrote about 4Gen as the ‘next big thing’— driven by the projected average lifespan on its way to 105 years old. None of our social, political, and economic systems were designed to accommodate that. And I agree that the massive changes required will drive it as the ‘next big thing.’ I have two questions. Anything new on your radar screen since Press Go was published? And why are you so willing to openly share these opportunities with your readers?
The Next Big Thing
Thank you for your questions. Opportunities do change quickly and new ones can suddenly emerge.
The COVID pandemic has made me even more bullish about the startup opportunities that 4Gen will spawn. I’m most excited by the opportunities driven by “aging in place.” Currently, 1.4 million Americans live in nursing homes. The average cost for a private room in a nursing home has reached $100,000 per year. Add COVID to that—with 175,000 US nursing home deaths in the last year.
But, according to a 2016 AARP survey, roughly 90 percent of American seniors wish to live at home, or “age in place,” as long as possible. Aging in place enables seniors to maintain a greater degree of personal independence, increases their quality of life, is healthier and safer, and is much less expensive.
The burden for supporting parents aging in place often falls on their children. More than 50 million people in the US serve as primary caregivers for their aging parents. And they are often at the peak of their productive careers. Caring for and managing logistics for their parents takes a toll on them personally and impacts their work performance.
Given the lack of benefits and support at work, many employees hide the growing burden of caregiving responsibilities. They struggle to balance the responsibilities of work and caregiving, often dealing with the unexpected and recurring care obligations that require mental, physical, and financial resources to address them. Individual productivity suffers accordingly, inflicting a cost on the employer. Then, when the emotional and physical stress becomes too much, their capacity for work becomes impaired. Some respond by reining in their ambitions; others reduce their working hours; still others drop out of the workforce altogether. Eventually, employers often pay another major cost: They lose talented, trained employees. (Joseph B. Fuller and Manjari Raman, The Caring Company: How Employers Can Cut Costs and Boost Productivity by Helping Employees Manage Caregiving Needs, Harvard Business School, , 2019, https://www.hbs.edu/managing-the-future-of-work/Documents/The_Caring_Company.pdf).
My research found that 73 percent of employees report having some type of current caregiving responsibilities. More than 80 percent of them admit that caregiving affects their productivity, and 32 percent voluntarily left a job during their career because of it. The higher their salary and level, the more important it is to retain them, and the more likely it is that they will leave.
The pressure caused by caring for parents aging in place is clearly having a significant impact on enterprises’ ability to retain their most senior, experienced employees. Unfortunately, employers seem to be largely unaware of that. Only 24 percent believe that caregiving impacts workers’ performance.
Are there new business opportunities that can address this need? I’ve interviewed a number of executives that are caring for their parents aging in place, and it seems to me that there are two dimensions to the problem:
- Every family member worries about “how Mom and Dad are doing.” That creates anxiety, but consumes a very small amount of the caretaker’s time. Quite a few startups have developed solutions that target health and wellness monitoring. They coordinate caregiving visits and share medical information with the family. And many healthcare networks have portals that also provide this data.
- I believe that the bigger opportunity will be solutions that target the huge amount of time that caretakers spend taking care of Mom’s and Dad’s activities and household. Felicia, a successful pharmaceutical company executive explained:
Creating and managing Mom’s schedule creates a lot of anxiety and consumes a significant amount of my time. It’s exacerbated because she lives several hundred miles away. I’ll give you an example. Mom gets her nails done every Tuesday. I call her to discuss what she would like to have done. Then I schedule the appointment with the salon and explain what Mom would like done. After that, I’ll call a transportation company to arrange her pick up and return trip times. If the logistics don’t work, I’ll need to recontact the nail salon. I then call to confirm with my Mom. On Tuesday morning, I have to reach out to reminder her. Then I confirm that the transportation company picked her up at home and dropped her at the salon. And then I confirm that they picked her up after her appointment and got her home safely. Afterward, I check to make sure that both the nail salon and transportation company have been paid. And that is only one of dozens of tasks that I need to take care of each week.
I’m not aware of any startups that target this opportunity—but it’s not difficult to envision how one could. The solution would help caretakers remotely manage the many tasks that are required to manage their parent’s household. It would combine:
- a library of standard activities that define dependencies, and how their completion is confirmed and communicated to the caregivers;
- the ability to register preferred vendors and define alert thresholds;
- 2-way voice interaction; and
- the ability to broadcast filtered alerts to family members and automatically pay verified bills.
Who would buy it? Instead of selling it as an app to the parent’s caretakers, I’d explore the potential of monetizing it by including it in the wellness benefits that large enterprises provide for their employees. That’s where the real business case is—retaining and improving the productivity of their most senior employees who are at the peak of their productive careers. As we say in Pittsburgh, “That dog hunts.”
The Next, Next Big Thing
Since finishing Press Go, I’ve stumbled upon another exciting opportunity that I believe has tremendous potential. It’s driven by the increased focus and resources that enterprises are investing in building purpose-driven brands.
I must admit that until recently, I just didn’t get it. I was a follower of Milton Friedman’s 1970 quote, “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.” Upon his death, The Economist described Milton Friedman as “the most influential economist of the second half of the 20th century … possibly of all of it.” But the world has changed quite a bit since he passed. And, so has business. As Lawrence J. Peter, creator of the Peter Principle, once quipped, “An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today.”
But I get it now. And if Milton was still alive, so would he. I’ve learned that the brands rated the strongest aren’t defined by how much they spend on marketing and advertising, but by the purpose that informs the brand’s vision, mission, story, visual identity, decision-making, and actions. And that drives significant value for the shareholders.
The data is convincing:
- consumers are four to six times more likely to purchase, protect, and champion purpose-driven companies (2020 Zeno Strength of Purpose Study, Zeno, June 17, 2020, https://www.zenogroup.com/insights/2020-zeno-strength-purpose);
- they grow two times faster (Purpose 2020: Igniting Purpose-led Growth, Kantar Consulting, 2020, consulting.kantar.com/wp-content/uploads/2019/06/Purpose-2020-PDF-Presentation.pdf);
- they outperform the stock market by 120 percent (Best Global Brands 2017, Interbrand, https://interbrand.com/wp-content/uploads/2018/02/Best-Global-Brands-2017.pdf); and
- they have 30 percent higher levels of innovation and 40 percent higher levels of workforce retention.
Purpose-driven has become one of the board’s top agenda items. Today’s directors are becoming increasingly aware of its importance to investors, consumers, and the company’s bottom line. Under the banner of Environmental, Social, and Corporate Governance (ESG), 80 percent of boards are focusing on it, and 52 percent report that they are seeking ways to improve their understanding of ESG performance. And it’s become a major theme for investors. Purpose-driven funds captured $51 billion of net new money in 2020—a record and more than double the prior year. There is no longer a trade-off between “doing good” and “good business.” They’ve become two sides of the same coin. Doing “good” is “good business.”
So, what opportunities will be fueled by the purpose-driven megatrend? Over the last few months, I’ve met several entrepreneurs dedicated to tackling the great social, health, and environmental issues of our age. A high percentage of them are on their way to being funded. And there are a number of business opportunities for new companies that can support the mission of large enterprises as they embark on this journey. Boards are wrestling with how to respond, and seek partners that can help them create an organization-specific definition of ESG, integrate it into the company’s strategy, help them measure progress, and effectively communicate their intent and progress to their external constituencies.
In his 2021 letter to CEOs (blackrock.com/corporate/investor-relations/larry-fink-ceo-letter), Larry Fink, Chairman and CEO of BlackRock, captures the call-to-action:
The more your company can show its purpose in delivering value to its customers, its employees, and its communities, the better able you will be to compete and deliver long-term, durable profits for shareholders.
I cannot recall a time where it has been more important for companies to respond to the needs of their stakeholders. We are at a moment of tremendous economic pain. We are also at a historic crossroads on the path to racial justice – one that cannot be solved without leadership from companies. A company that does not seek to benefit from the full spectrum of human talent is weaker for it – less likely to hire the best talent, less likely to reflect the needs of its customers and the communities where it operates, and less likely to outperform.
And Finally—Why Do I Share My Ideas So Freely?
I’m well past the point in my career where I aspire to run a company. But my appetite for startups has never dampened. The professional high that comes from helping startup teams launch and scale their businesses, and to anticipate and avoid the pitfalls that lie in wait for them, will always be there. If I have an idea that they can bring to market, they’re welcome to it. And I’ll get tremendous satisfaction by doing everything I can to help them along the way.