The Health Enterprises Network recently hosted Converge Louisville, a conference focused on innovative solutions to the social and
clinical determinants of health impacting seniors. During the conference, Medical News spoke with Nigel Smith, Director Hatchery Ventures, AARP Innovation Labs about orchestrating the value exchange in age tech. Listen to the podcast here and read the highlights below.
Medical News: A lot of our readers may not know that there is an innovation lab at AARP. Can you talk a little bit about what the lab does and why it was created?
Nigel Smith: Five years ago, AARP started seeing a lot of big trends happening, tied to the changing demographics, people living longer, getting older. So every day, 10,000 people turning 65, fastest growing age demographic, people over 85 second fastest, people over 100, fact that my 11 year old daughter has a one in two chance of living until 104. So with these changes, we saw a lot of big challenges and opportunities unfolding in the health, wealth and self-spaces and as an organization we realized that we needed to be more innovative in order to continue to deliver on our mission.
We went through what I can only describe as an innovation renaissance; it was a really beautiful thing. Not many organizations do what AARP did, when we invested very heavily in innovation internally to shift our culture and capabilities. We trained everyone on how to innovate. We trained a handful of employees on how to facilitate innovation. We changed the budgets and everything to infuse innovation throughout. So we did a lot and we see the results of that today. We did a lot to simulate the environment externally as well.
Then we also focused on disruptive innovation and this is where Innovation Labs come in. We thought it was important to have a very, very myopic focus on disruptive innovation. So we launched our own innovation lab space, 10,000 square feet in the heart of DC and within Innovation Labs we are doing two things. One, we are developing our own disruptive solutions internally, something we’ve never really done before. We’ve always had a model of if we thought something was going to be important, we would find a company that would create it for us and we’d endorse it.
Now we have internal entrepreneurs, we call them innovation catalysts, that are developing new businesses on our behalf, and we also have a focus on disruptive startups and that’s where I come in. So I go around the country, trying to find startups that have really cutting-edge technologies that I can bring on board and help shape for an ageless consumer, help develop new use cases and then help them scale and grow for impact.
Medical News: When you find a company that you are interested in investing in or partnering in that you find that is doing innovative work, how do you work with them? Do you all have a fund that is investing dollars, or are you lending services? Are you finding potential customers? What does that relationship look like?
Nigel Smith: So we are providing a bundle of non-cash services in exchange for warrant with companies and the services that we are providing is extraordinarily valuable for companies in that early stage, that seed series A stage. So basically within AARP, within Innovation Labs, we have a very strong design function, human-centered design function. So we unleash the power of our design team with our startups, we help our startups think about the features and benefits of their solution so that what they’re currently doing can be extended to a broader consumer base than they’ve currently thought about. So the gold standard are those suitcases in the airport, where whether you’re one year old or 99 years old, you can push it around. Or the Amazon Echo where my mom or my daughter can both use, they speak to Alexa, “Tell me the weather.”
The second thing is really what are the different use cases? So you have these amazing technologies that can address one particular use case but what are the other use cases? So a good example would be virtual reality. We have a problem with social isolation today; one in five people over the age of 65 we believe are socially isolated, which is a lack of connection to friends, family, community. The new virtual reality technologies right now, are deeply immersive, and there are some killer apps we think that are already out there that can take you different places, connect you with other people.
Medical News: Louisville is home to a number of healthcare aging companies. What advice do you have for these companies, whether they’re large or small, or whether it’s somebody that’s looking to build a startup? What advice do you have for them as they pursue innovative opportunities?
Nigel Smith: So, keep the consumers … just understand the market, understand the consumers. The world is changing; it’s changing so rapidly. So understand what this means from the needs of the consumers, that’s number one. Number two, understand that it’s not very simple. So I kind of shared with you, startups are thinking about the consumers, but they may have to go through businesses or enterprises, so it could be a complex path. So understanding the complexities potentially of the business models for execution.
Medical News: I really appreciate your passion for this. What brought you to the Innovation Lab?
Nigel Smith: I’ve been with AARP for a long time. It’s been, gosh, about 12 years. I’ve been in a variety of strategy and innovation roles. I wake up everyday just hungry to go to work because of the platform that AARP represents, the fact that we touch 38 million people, we are trying to do stuff to impact society. I have been so impressed with what we’ve done from an innovation perspective the last five years. When we set out on this journey, it took so much courage to do what we did. We looked at the big challenges and opportunities out there and said, “Look, as an organization we needed to be more innovative in order to deliver on our mission.” We decided to go all in, to shift our culture, our capabilities to stimulate the external marketplace. $7.6 trillion is the size of economic activity generated by people over 50. We sized that, we coined this longevity economy and told the entire world, ignore this market at your peril.