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Mary Furlong & Associates' Boomer/Senior Market Report
Exploring the 10 Trends Powering the Age Boom
December 2006 - Vol. 3, No. 8

Mary Furlong & Associates has launched new Public Relations services! Read more.

In This Issue:

LETTER FROM MARY

Dear Friends and Colleagues,

The year winds down after experiencing two wonderful conferences: the Silver Economy Conference in the Netherlands and the Consumer Directed Health Care Conference in Washington, DC.

At the Silver Economy Conference, Maxime de Jenlis, General Manager of Bayard Group Benelux, talked about developing six magazines for age 50+ readers in European countries, one of which is Plus magazine in the Netherlands, with a total circulation of nearly one million and a turnover of approximately 50 million Euros. The target customer is women over 40, much like a European version of MORE magazine. Notre Temps is the French version and is one of the most popular magazines in the country, with a very fast-growing circulation. Maxime shared the insights that the editors have about European boomer women. On the "offensive side" she is one who wants to live her passions, share time with friends, learn again and enjoy herself, while on the "defensive side" she wants to "preserve her revenue," "be aware of all that science can do for you," "preserve her health capital" and most of all "choose her life." The themes seem to resonate universally. Being in control, choosing a life that inspires, and having the knowledge and talent around to assist in decision making are themes for the U.S. boomer as well.

Medspa, spas that merge medicine and health matters with pure luxury, was a term heard at both conferences. Expect it to be one of the "phrases that matter" as the boomers get older. Other phrases are: graying gadget geeks, reverse mortgages, blood sugar and intergenerational money management. Josef Hilbert presented on the initiative for health tourism in the German regions of the North Rhine-Westphalia. It is amazing to watch the transformation of the region from a mining area to a learning, healthy living and medical tourism center. We stayed in a castle (wireless and with moat) next to a newly designed zoo. The castles are being turned into five-star restaurants. Wellness, beauty and rejuvenation are the key, so you see a number of 60+ entrepreneurs walking around with business plans for "medical health and wellness ventures." Despite the nice pensions that Europeans receive, they still want to supplement their incomes with money - and supplement their lives with spirited adventures.

Another highlight was listening to the insights of Ladan Manteghi, Director of International Affairs at AARP, who is driving their global strategy. She gave an inspiring speech that brought one in touch with the purpose and history of AARP and also shared how the issues are being discussed around the world through the partnerships in the Global Aging Program. Expect great things to come from this initiative.

Steve Brown, a talented U.S. entrepreneur and President of the Health Hero Network, gave an amazing demonstration of the health benefits of remote health-monitoring and shared a case study of how their services worked with the Veterans Administration. And Dolf Van Den Brink shared insights about the ABN AMRO Bank and new ideas about services that banks might develop for the boomer market. To date, no one has nailed how to help boomers move from workers to late-life entrepreneurs - this is a giant opportunity in the years ahead.

Finally, Jeannette de Noord of Philips discussed some of their new initiatives in the consumer health and wellness arena. She reminded us all to seek out the "sweet spot" - the driving need of the consumer - and to solve that. The day after the conference Jeannette and I visited the Philips HomeLab in Eindhoven, a cutting-edge house full of electronic prototypes. What an amazing experience to see what can be done with light and electronics. By far, this was the best merging of design, elegance, functionality and understanding in any center that I have seen to date.

We're very excited about the upcoming What's Next Boomer Business Summit, March 5-6, 2007, at the Hyatt Regency Chicago. This is the fourth annual event we've co-produced with the Business Forum on Aging of the American Society on Aging. Subtitled "How to Win in the $2 Trillion-Per-Year Boomer Market," the themes are Innovation, Distribution and Interactive Marketing. Come learn about brand strategy from Emilio Pardo, Chief Brand Officer, AARP. Discover what Yahoo! is doing in health and lifestyles from Jack Barrette, Development Officer for Lifestyle, Health & Medicine. Sandra Timmermann of the MetLife Mature Market Institute and David Baxter of Age Wave share the latest research. Andy Sernovitz, CEO, Word of Mouth Marketing Association (WOMMA), will reveal new effective ways to reach 50+ consumers. Past What's Next summits have helped brand managers, corporate strategists, VCs, entrepreneurs and nonprofit executives to better understand the boomer market. Register early as this event always fills up quickly.

We are also pleased to announce that beginning January 1 we'll be accepting registrations for the 2007 Silicon Valley $10,000 Boomer Business Plan Competition. This year we're offering two $10,000 prizes in two separate categories: the Health sector, including wellness, fitness, eldercare and medical devices, and the General category, which covers technology, travel, financial services, real estate and any other creative business entrepreneurs can come up with. You'll find more information on this great opportunity below, and let us know if you are interested in applying, judging or sponsoring. We are doing a global search for talent and partnership.

Stay tuned - I will report on the CDHCC in the next issue. Did want to mention that our client Posit Science won a first place award for fitness. CEO Jeff Zimman made a presentation at the event and accepted the award. Check out the Posit Science Cognitive Club. Also, conference organizers Skip Brickley, Wendy Borow-Johnson and the whole Transmarx team did a wonderful job of this event. Momentum is really picking up in business-to-business conferences. Watch for two other notable events they're hosting this spring in Las Vegas, the Consumer Directed Health Care Conference and the National Health Wellness & Prevention Congress.

We hope that your holidays are filled with joy, warmth and kindness. We hope that your memories are good ones. For some holiday treats, we've asked our good friend Mollie Katzen to share her favorite gingerbread recipe below. Mollie is the author of the "Moosewood Cookbook" and "Eat, Drink, and Weigh Less."

If you are looking for a good book, I can recommend the following reads from my recent flights:

And, if you want one of the first copies, my new book, Turning Silver into Gold: How to Profit in the New Boomer Marketplace, is now available to pre-order on Amazon.

May all of your holidays be filled with joy. May the year ahead bring you lots of new ideas and connections, and success to one and all.

All the best,

Mary

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FEATURE ARTICLES

The Grandparent Money Tree
By Caroline Goldman

Kids are big business, but they're also big boomer business.

Marketing to boomers as grandparents has become a major focus of a wide range of companies lately. From banks looking for Grammy and Pops to fund their grandkids' education to specialized grandparent-grandchild tours, savvy companies are taking notice of the more than $35 billion boomer grandparents are spending on their grandkids every year.

Toys are a major destination for those grandparent dollars. KB Toys started a new discount program for their 50+ shoppers this past October, and Fisher-Price publishes Loving Your Grandbaby, a magazine and accompanying website for their boomer clients that offers advice - and, of course, product suggestions.

Grandparent-grandchild travel has grown into its own niche market: nearly 70% of travel agents in a recent American Express poll have booked grandparent-grandchild trips. Companies such as Grandtravel - "dedicated to helping grandparents create lasting memories for themselves and their grandchildren" - focus solely on these generation-skipping trips. Elderhostel, a trailblazer in the boomer travel industry, offers intergenerational trips from whitewater rafting to "creative expression." Many hotels also offer special packages for grandparents traveling with their grandkids.

But it's not all fun and games. An AARP study found that more boomer grandparents buy necessities for their grandkids than older grandparents, putting them in direct contact with the most basic of necessities - diapers. And with both parents and boomer grandparents being Internet-savvy (boomers compose the largest group of Internet users), it's no surprise that online diaper company 1-800-Diapers recently received a $4 million investment from venture capitalists.

"[Boomers] are in their peak earning years, and they'll continue to work and earn money as they age," Jane Murphy, president of Grandboomers, told the New Haven Register. "Boomers will be a younger, healthier generation of grandparents than in the past. It will be active involvement."

Active involvement both emotionally - and financially.

Apple Upside-Down Gingerbread

Here's a great holiday gingerbread topped with a baked-on layer of spiced apples!
By Mollie Katzen

The Fruit:
2 tablespoons melted unsalted butter
1/2 cup (packed) brown sugar (dark or light)
2 8-ounce Granny Smith apples, peeled and sliced
2 teaspoons grated lemon zest
2 tablespoons fresh lemon juice
1/4 cup minced crystallized ginger
1/2 cup minced walnuts
1/4 cup dried cranberries

The Batter:
3 cups unbleached all-purpose flour
1 1/2 teaspoons baking soda
2 teaspoons baking powder
1/2 teaspoon salt
2 teaspoons cinnamon
2 teaspoons ground ginger
1/2 teaspoon cloves
3 tablespoons grated fresh ginger
1/2 cup unsalted butter
2/3 cup light brown sugar
3/4 cup molasses
2 eggs
2 teaspoons vanilla extract
1 1/2 cups buttermilk

1) Preheat oven to 350°F. Spread the melted butter in a 9"x13" pan.
2) Sprinkle the buttered surface with 1/2 cup brown sugar, then arrange the apple slices on top in a lovely pattern (or just scatter them). Sprinkle with the lemon zest, lemon juice, crystallized ginger, walnuts and cranberries, and set aside.
3) For the batter, sift together all the dry ingredients - except the brown sugar - into a medium-sized bowl. Stir in the grated fresh ginger.
4) Beat the butter and brown sugar at high speed in the bowl of an electric mixer for about 5 minutes, or until light and fluffy. Add the molasses and eggs, and continue to beat for another minute or two. Beat in the vanilla.
5) Add the flour mixture and the buttermilk to the batter alternately in about 3 batches, beginning and ending with the flour (dry-wet-dry-wet-dry). Stirring with a whisk and then a spoon, mix from the bottom of the bowl after each addition -just enough to thoroughly blend without overmixing.
6) Spread the batter as evenly as possible over the apples, and give the pan a little shake to make sure that everything has settled.
7) Bake for 50 minutes or until a toothpick inserted comes out clean. Remove from the oven and allow to cool in the pan for at least 15 minutes. Then rap the pan sharply once or twice, and invert onto a serving platter to reveal the apples. Allow to cool for at least another 15 minutes (you can also wait until it has cooled completely), then cut into squares and serve.

NOTE: If this inverting procedure makes you nervous, you don't have to do it. Just cut each serving like a normal piece of cake and invert onto the serving plate one chunk at a time. Your friends and family will still be impressed.

Mollie Katzen is the author of the Moosewood Cookbook and Eat, Drink, and Weigh Less.

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NEW MARKET FINDINGS

Older Worker Training: What We Know and Don't Know
The AARP Public Policy Institute

There are a number of factors influencing a person's decision to work longer, including financial incentives, benefits, health, employment opportunities, and socialization. However, whatever the reasons, America needs to prepare for an aging workforce. Although much is known about aging as a process, relatively less is known about the implications of aging for performance of everyday activities such as work. This report summarizes what is currently known about an important aspect of work and employment, namely, training, and retraining.

Overall, the results of research in this area are encouraging:

  • Older adults are able to learn new skills, even ones involving new technology. Nonetheless, they are typically slower to acquire those skills than younger adults.
  • Some of the slowing in learning new tasks may be attributable to older adults' preference for accuracy over speed, with the reverse holding true for younger adults.
  • Generally, what is best for the young adult is also best for the older adult. However, at least two studies have shown that there are greater gains for older adults when performing procedural (action or hands-on) activities compared to conceptual training.

Find out more.

Why Do Boomers Plan to Work So Long?
Center for Retirement Research, Boston College

Recent changes in retirement trends and patterns have raised questions about the likely retirement behavior of baby boomers, the large cohort born between 1946 and 1964. This study compares the retirement expectations of workers born between 1948 and 1953, the leading edge of the baby boom, and those born between 1936 and 1941.

Work expectations increased significantly over the period. Between 1992 and 2004, the mean expected probability of working full-time past age 62 among workers ages 51 to 56 increased from 47 percent to 51 percent. The increase was even more rapid for the expected mean probability of full-time work after age 65, which grew from 27 percent to about 33 percent over the period. Controlling for other factors, self employment, education, and earnings increased work expectations at older ages, while defined benefit pension coverage, employer-sponsored retiree health benefits, and household wealth reduced expectations.

Lower rates of retiree health insurance offers from employers, higher levels of educational attainment, and lower rates of defined benefit pension coverage accounted for most of the increase between 1992 and 2004 in expected work probabilities after ages 62 and 65. These trends suggest that the boomers will remain at work longer than the previous generation. The recent uptick in average retirement ages appears to be the leading edge of a new long-term trend. Lengthier careers will likely promote economic growth, increase government revenue, and improve individual financial security at older ages.

Find out more.

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SPECIAL ANNOUNCEMENTS

Are you developing innovative products and services for the 45+ market?

Do you have a business plan or startup venture that shows significant business potential for this burgeoning market? If so, we invite you to enter the fourth annual international $10,000 Boomer Business Plan Competition, sponsored by the Executive Development Center at Santa Clara University's Leavey School of Business and Mary Furlong & Associates.

From early-stage ventures in medicine to media, fashion to financial services and beyond, the 2007 Boomer Business Plan Competition aims to generate the best ideas from the best universities as well as tap into the business expertise and creativity of any entrepreneurs globally who are addressing the 45+ market.

TWO (2) $10,000 prizes will be awarded in two separate categories:

  • Health Category. Opportunities focused on health, wellness, fitness, eldercare or medical devices that relate to the boomer and/or aging market. Screening judges with expertise in different segments within the various health fields will evaluate the business plans. Technology innovations can be integrated into these business ideas.
  • General Category. Opportunities focused on travel, financial services, media, transportation, grandparenting, relationships, social networks, real estate, fashion and beauty, recreation and play, or spirituality as they relate to the boomer and/or aging market. Screening judges with expertise in these different segments will evaluate the business plans. Technology innovations can be integrated into these business ideas.

The 2007 $10,000 Boomer Business Plan Competition will provide contestants with the opportunity to meet investors and partners, secure resources and get media exposure to help turn dreams into realities.

This is an opportunity you can't pass up if you are at an early stage in the development of your business. In Phase 1 of the competition, all entrants will receive feedback on their executive summary submissions following the first round of the judging process.

In Phase 2, entrepreneurs selected as semifinalists in the competition will have their full business plans reviewed by venture capitalists and industry experts and receive additional feedback on their submissions.

In Phase 3, the final phase of the competition, the top 5 finalists in each category will present to an esteemed panel of judges at the 2007 Silicon Valley Boomer Venture Summit at Santa Clara University on June 19, 2007. This event is designed to uncover new opportunities for business and investment in the boomer marketplace and is an unparalleled opportunity to:

  • have access to networks of world-class entrepreneurs, investors, private equity community and potential partners
  • receive content-rich feedback on your business plan from the judging panel
  • gain media exposure and special invitations from sponsoring companies and the venture community
  • receive extensive materials on the size and demographics of the market, online and offline sales strategies, and access to the top organizations touching the 45+ market (AARP, ASA, BFA, NCOA and others)

Who is eligible to enter? The competition is open to (1) individuals and teams of students, alumni, faculty or staff at accredited four-year colleges and universities; (2) entrepreneurs from early-stage companies with annual revenues of $0 to $1 million; and (3) independent business professionals.

Two $10,000 Grand Prize Winners will be chosen on June 19, 2007, at the Silicon Valley Boomer Venture Summit and Boomer Business Plan Competition. The prize is to be used toward the winner's business or business concept.

Important Dates for Boomer Business Plan Competition

  • January 1 - April 20, 2007. Contestants register to enter.
  • April 20, 2007. Executive summaries (3-5 pages) due by 5:00 pm PST.
  • April 27, 2007. Top 20 semifinalists selected in both categories (Health and General). All contestants notified.
  • May 18, 2007. Semifinalists' complete business plans due by 5:00 pm PST.
  • June 1, 2007. Top 5 finalists selected in both categories; all semifinalists notified of selections.
  • June 18, 2007. Entrepreneurs' Bootcamp at Santa Clara University.
  • June 19, 2007. Silicon Valley Boomer Venture Summit and Boomer Business Plan Competition: presentations by top 5 business plan teams in the Health and General categories. Grand Prize Winners selected and announced.

More information to come! If you have questions about the $10,000 Boomer Business Plan Competition, feel free to email us.

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JUST FOR FUN

The Venture Capital Aptitude Test (VCAT)
By Guy Kawasaki
Reprinted with permission from Guy's blog, How to Change the World: A practical blog for impractical people.

If you want additional proof that we're in a bubble, here it is: young people are trying to get into the venture capital business again. I get several emails a week along these lines:

I'm about to graduate from college where I majored in economics. I've always been interested [what does "always" mean for a twenty-something year old, but I digress...] in business and entrepreneurship and ran my school's entrepreneurship club. I've been working as an analyst for Goldman, Sachs, and now I'd like to get into the venture capital business to further my understanding of entrepreneurship and to help startups achieve success by tapping into my knowledge base. I am adept with PowerPoint, Excel, and PhotoShop.

They see a wonderful job: going to cocktail parties and networking events, flying in private jets, and getting sucked up to by entrepreneurs while pulling down a base salary of $500,000/year plus a piece of the upside of selling a YouTube for $1.6 billion. Who wouldn't want such a job? (Frankly, I would too.)

First, a rare moment of Guy-Kawasaki humility: I am by no means "proven" as a venture capitalist. I've been in this game for about ten years, but I don't have the mega-hit that "makes" a fund. Thus, I may not be a source of good advice about getting into this business, but when has the lack of knowledge stopped a blogger?

Regardless, here's my advice to all the Biffs, Sebastians, Brooks, and Tiffanys who want to be kingmakers:

Venture capital is something to do at the end of your career, not the beginning. It should be your last job, not your first.

My theory is that when you're young, you should work eighty hours a week to create a product or service that changes the world. You should not sit in board meetings listening to an entrepreneur explaining why she missed her numbers while you read email on a Blackberry and intermittently spew forth gems like, "You should partner with MySpace; I can also introduce you to a few of the losers in our portfolio."

Furthermore, entrepreneurs should view any young person who opted for venture capital over "real world" experience with contempt. Why would you want advice from someone whose background consists of working in a college bookstore or cranking spreadsheets at an investment bank? Financial models are almost totally irrelevant because there's no financial wizardry involved in making a good product and selling the heck out of it.

I've concocted the Venture Capital Aptitude Test (VCAT) to help people decide whether they are right for the venture capital business. If you'd like to take this test online, click here. My buddies at an interactive agency called Electric Pulp created the test for me. Knock yourself out!

Part I: Work Background
What is your background?

  • Engineering (add 5 points)
  • Sales (add 5 points)
  • Management consulting (subtract 5 points)
  • Investment banking (subtract 5 points)
  • Accounting (subtract 5 points)
  • MBA (subtract 5 points)

The ideal venture capitalist has an engineering or a sales background. Engineering is useful because it helps you understand the technology that you're investing in -for example, is the entrepreneur trying to defy the laws of physics? Sales is useful because every entrepreneur has to introduce a product and sell it. For the third time in this blog, let me say, "Sales fixes everything."

The three worst backgrounds for a venture capitalist are management consulting, investment banking, and accounting. Management consulting is bad because it leads you to believe that implementation is easy and insights are hard when the opposite is true in startups. Investment banking is bad because it leads you to believe that everything can be reduced to cells on a spreadsheet and that companies should be built for Wall Street, not customers. Moreover, investment bankers are oriented towards doing deals, not building companies. Accounting is bad because it leads you to believe that history not only repeats itself, it predicts the future.

Finally, there is the issue of the pertinence of an MBA to venture capital. The upside is that such a degree can provide additional tools and knowledge (such as calculating that 25% of $1.6 billion is $400 million) to help you make investment decisions and to assist entrepreneurs. The downside is that earning this degree (and I have one) causes most people to develop the hollow arrogance of someone who's never been tested. All told, the downside of an MBA outweighs the upside.

Part II: First-Hand Experiences
You may have been in the right places, but you also need the right experiences in those places. Specifically, have you gone through these?

  • Been kicked in the groin by a major, long-lasting economic downturn, so that you know how powerless you are. (add 1 point)
  • Worked at a successful startup, so that you can speak first-hand about the ecstasy of entrepreneurship. (add 1 point)
  • Worked at a failed startup, so that you understand three things: first, how hard it is to achieve success; second, that the world doesn't owe you a thing; and third, what it's like to be fired or laid off. (add 3 points)
  • Worked at a public company, so that you know what the end goal looks like, warts and all. (add 1 point)
  • Held a CEO position, so that you have this fantasy experience out of your system and will not try to run the startup from a board position. (add 2 points)
  • Been an angel investor with your own money, so that you understand the fiduciary responsibility of investing other people's money. (add 2 points)

Part III: Necessary Knowledge
Finally, can you answer these questions for entrepreneurs? Because this is the kind of advice that entrepreneurs need. (Don't worry: many current venture capitalists would fail this part.)

  • How do I introduce a product with no budget? (add 2 points)
  • How do I determine whether there's really a market demand for my product? (add 1 point)
  • What do I do if customers hate our first product? (add 1 point)
  • How do I get Walt Mossberg to return my call? (add 2 points)
  • How do I get to the folks who run Demo? (add 1 point)
  • How do I get a plug in TechCrunch? (add 1 point)
  • How do I get the folks at Fox Interactive to return my call? (add 1 point)
  • How do I dominate a segment when there are five other companies doing essentially the same thing? (add 2 points)
  • How much time, energy, and money should I spend on patent protection? (add 1 point)
  • We bet on the wrong architecture for our product; what do I do now? (add 2 points)
  • What kind of people should I hire: young, old, unproven, proven, cheap, expensive, local, remote? (add 1 point)
  • How do I get them to leave their current jobs without throwing a lot of money at them? (add 2 points)
  • How do I tell my best friend that he can't be chief technical officer just because he was a cofounder? (add 2 points)
  • How do I get the buyer at BestBuy to return my call? (add 1 point)
  • How do I handle a customer who wants to send back his purchase for a full refund? (add 1 point)
  • How do I fire people? (add 2 points)
  • How do I lay people off? (add 2 points)

Results

Here's how to assess your readiness to become a venture capitalist:

  • 40 or more points: Call CalPERS and tell them you're raising a new fund.
  • 35 to 39 points: Call Sequoia and Kleiner, Perkins and tell them that you're available.
  • 25 to 34 points: Send your resume to 2,000 venture capitalists and pray.
  • 24 points or less: Work until you can score higher and keep flying on Southwest Airlines.

Here's the bottom line: You should become a venture capitalist after you've had the shiitake kicked out of you. This will yield at least two positive results: First, you'll stand out from the full-of-shiitake artists who entered the business when they were young. Second, you'll really be able to help your portfolio companies - which is what venture capital should be all about. See you in ten or twenty years.

Guy Kawasaki is a managing director of Garage Technology Ventures, an early-stage venture capital firm, and a columnist for Forbes.com. Previously, he was an Apple Fellow at Apple Computer, Inc. where he was one of the individuals responsible for the success of the Macintosh computer. Guy is the author of eight books including The Art of the Start, Rules for Revolutionaries, How to Drive Your Competition Crazy, Selling the Dream, and The Macintosh Way. He has a BA from Stanford University and an MBA from UCLA as well as an honorary doctorate from Babson College.

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CORRECTION

Last month we noted that SeniorNet had won a Webby Award in 1988. The correct year is 1999.

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NEWSWIRE

Retire Well for Less Than You Think
Most of us dream of the day that we're finally free. Yes, retirement is a wonderful goal, but unfortunately, on the surface, it seems like one that's always just out of reach.

Robot Maids for Elderly to Make Debut in 2013
Hundreds of Korean scientists are working on developing robots, which will be able to set the table and wash dishes for the elderly, with the aim of finishing the task by 2013.

Boomers Set to Shake Up Housing Market, Again
Listen to the online broadcast: As the nation's 78 million baby boomers near retirement, their housing needs have changed dramatically. What they want is different from generations past, and only a few homebuilders seem ready to meet the challenges required of the next phase of "boomer housing."

Discounts Get Better with Age
Seniors looking for adventure are eligible for some good deals on hotels, car rentals and more. The key is to ask.

Anti-Aging Conference Offers New Ideas for Not Getting Old
The Baby Boomer generation has been influencing American culture since they first began growing their hair and ripping their jeans.

Read more articles here.

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Boomer/Senior Market Report

Published by Mary Furlong & Associates 3527 Mt. Diablo Blvd.
#128, Lafayette, CA 94549 Telephone: 925-283-7698
http://www.maryfurlong.com

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