In 2050, in Japan, the ratio of older people over 65 years old will exceed 45% of the whole population and the average life longevity will reach 85 years old. Most Japanese admit that serious national issues regarding aging population will come into being in the near future: lack of care givers and nursing homes, increase in medical expenditure and lower economic growth. Recently, the Japanese government announced that aging population was Japan’s biggest challenge and that social revolution was urgent to overcome the problem. At the same time, it is not difficult to imagine that the same trends will appear in East Asia and South East Asia sooner or later. Aging population is definitely a huge problem in the whole Asia. However, looking at the situation in Japan, we could also say that as people’s health consciousness gets higher and their healthy life longevity longer, the number of healthy older people will increase as well. Actually, some research labs predict that the ratio of older people who can lead their lives independently or with occasional supports will reach 50% in 2050, which means that the majority of older people will be “healthier” than we think. Then, what are their lives like? What kind of joy and anxiety do they have in a daily life?
Problems
Through deep interviews to older people, we found that most of them led their lives as they did in youth until around 75 years old: cook food, work at office, go shopping, join community events, see their families and friends etc. However, around 75-80 years old (we call older people over 75 years old “the ultra-aged people”), the turning point comes. The ultra-aged people often become reluctant to go out at some point in their lives even if they are still physically healthy. They stop strolling in a local community, tidying a garden, and going to a grocery store. That’s because their families, children and grandchildren, discourage them to go out alone due to concerns about unexpected accidents or sudden unwellness. What if their loved grandparents fall down and break a bone, get involved in traffic accidents, or suddenly feel ill while going out alone? These families’ concerns are from pure consideration and the ultra-aged people can’t stop giving up going out. Actually, while the ratio of older people under 75 years old who often take a stroll is 25%, that of the ultra-aged people goes down to 15%. However, families’ dissuasion deprives the ultra-aged people of chances to moderately move their body. Unfortunately, it leads to deteriorating their physical conditions and ended in serious disfunctions at times.
Solution
The actual problem is not that the ultra-aged people go out but that they go out alone and no one pays attention to them. If they can find someone who stands by and watches out for them while they are outside, they can make it without concerns. Our solution is building a system to “keep an eye on the ultra-aged people any time”. Our service, “Promenade”, will provide a platform to match the ultra-aged people who want to go out and supporters who can go out together. The ultra-aged people (call them “self-starters” from now on) or their families access Promenade and search available supporters (call them “supporters”) in the local area whenever they want to go out. Matched supporters visit the self-starters’ houses and take them out.
Business concept
l Value proposition (USPs)
- Find a supporter in minutes no matter when: Self-starters don’t have to reserve a slot many days in advance.
- Ask for simple activity support which only takes 30 mins to 1 hour: Self-starters don’t have to feel badbecause their requests are too easy or too short-time.
l A novel way
As Promenade is specialized in simple activity (just “keep an eye on self-starters, and sometimes talk and have fun with them”), the entry barrier for supporters is relatively low, which means that we make the supporter pool quickly large enough to find an available supporter in the local area in minutes and send him/her to a self-starter whenever.
l Core design requirement
- Interface easy to use: Not all the self-starters are used to use digital platform, so we will prepare two optionsto access us. App with user-friendly interface for digital-accustomed users and telephone service withguidance operators for digital-divided users.
- Pool of supporters to be fully trusted: Spending time with strangers is sometimes stressful, so we willrestrict supporters only to reliable people. First, we will only invite prestigious college/university students and medical/nursing experienced people to join us as supporters. Second, we will rate supporters based on feedback from self-starters.
Value system
Our main activity is improving the quality of the matching system: build a matching platform and an interface (both of app and telephone service), develop a precision people-matching scheme which can process users profile and feedback data through AI. The chart below shows our business process.
Target segment and Market size
We divide older people over 65 years old (35 million people, 28% of the population in Japan) into three segments. 1) Restricted-healthy people (35% of older people): lead a life independently or with occasional supports but have concerns about dealing with daily pitfalls by themselves. 2) Healthy people (48% of older people): lead a life independently without any concern. 3) Care receivers (17% of older people): need others care all day long.
Our general targets are 1) Restricted-healthy people and their families. Among them, our early adaptors are the ultra- aged people over 75 years old who live in urban areas with their children/grandchildren (2.5 million people, 7% of older people). As for the potential early adapters, the average expenditure for health promotion service is $30/month and the market size is $900M (annual). If we can make 10% of them use our service (*refer to the research introduced in the paragraph of “Problems” that 10% of the ultra-aged people give up strolling for some reasons), our potential revenue will reach $90M.
Market position and competitors
Our service is positioned at the spot of “providing simple-activity supports with time-flexibility”, which differentiates us from competitors below.
- Staffing professional care giverTheir targets are the elderly who need others’ care and their value is sending professional care givers in specifictime slots. They provide a wide range of services from daily care to hospice. The price is relatively high.
- Providing day care in nursing homesTheir targets are whoever wants to join the day care. In fixed time slots, staff come to the elderly’s house, take him/her to a nursing home and provide fun services like talking, playing and exercising together. The price is low.
Revenue model
Our main revenue source is 1) Matching fees from users (5-10% margin). Self-starters are charged around $20/hour and supporters receive 90% of the payment. In the later phase, we will add 2) Ads fees from health-related players.
Next steps
Prototyping & pilot: Build MVP and conduct a test – UI/UX, user actions with conversion rate etc.
Operations setup: Set up a platform and a telephone service operation
Soft launch: Launch a beta version in a restricted area (Tokyo, Kyoto, Fukuoka)
Scaling up: Expand the business around Japan
Geographical expansion (China, SEA) Diversification of the business
IPO
Blog post 2 by Masahiko Yoshii and Koyomi Kobayashi
This is an important topic, especially as more and more countries grapple with aging population and there are very few models on how to provide the support that elderly people need. For your model above, do you think you might be able to get government subsidies or even have government as a client? Also, how about the options to ‘gift’ or ‘donate’ a particular number of hours of service?
One concern with the model is the number of supporters you would need to ensure your first USP: “Find a supporter in minutes no matter when.”. Have you been able to estimate how many supporters you would need on the platform, especially for non-working hours like night time etc?