I believe there is a massive opportunity to build a startup that helps retirees manage both health and wealth.
About 10,000 Americans turn 65 every day. Most enter this critical period of their lives with fear and uncertainty, and more often than not, piecemeal guidance that covers just healthcare or financial decumulation.
Moreover, many companies serving this demographic are built to make a quick buck. As a result, they are doing a disservice to their potential customers, as well as missing a bigger opportunity to help accommodate a retiree’s health and wealth needs, and to maintain a trusted relationship over many years.
Such a company would serve as a comprehensive advisor and broker, navigating a retiree through his or her optimal choice of healthcare plan, helping with income and decumulation needs, while navigating social security and potentially expanding to other services. This help may come in the form of intergenerational wealth transfers and tax strategies, reverse mortgages (if needed) and preventative guidance focused on longevity and strengthening quality of life.
Here’s why I’m bullish on this opportunity:
- Compelling wealth management economics – it’s one of the few areas within middle class wealth management that makes sense economically, as downward fee compression for advisors continues
- Solid recurring revenue on health insurance – selling Medicare plans not only provides a meaningful premium for first year sales, but a compelling annual renewal stream
- An opportunity to naturally serve multiple customer needs – this approach allows you to acquire a customer and serve multiple needs, raising LTV and retention
- Improve quality of life for customers, raise revenue – it’s an opportunity to help improve the quality of life and longevity for your customers, which also translates to more renewals and less costly service utilization
- Plenty of well-capitalized investors and acquirers – many companies have gone from zero to publicly listed in a few years. Even short of a multi-billion valuation, there is a large universe of well capitalized, innovation hungry, slow-moving, yet acquisitive competitors
- It’s pandemic advantaged – customers need more support and guidance, not less, as market fluctuations continue and the healthcare and social security landscape continues to change
- It strengthens the financial fabric of society – as with all great companies, the goal isn’t just large scale profit, but building a business model that helps customers, shareholders and employees. If built with an ethical intention, this business can significantly improve lives at scale.
The devil here is really in the details – especially finding a way to cost-effectively acquire customers at scale (including finding a creative way to avoid skewing heavily paid), differentiating your offering from others and building defensibility that is increasingly difficult to replicate as you scale.