New Senior Generation seeks to provide senior citizens a user friendly service including physical outreach and tablet computer with phone app. geared especially for their needs along with an internet based ecosystem of products and services.
In the Czech and Slovak markets there more than 2 million senior citizens. A market share of as little as 1% or about 23,000 clients can generate more than €5 million in sales and open up further e-commerce opportunities in the senior sector.
One of the key drivers behind this product is the fact that elderly people have specific needs that mainstream products don’t often incorporate. A recent article in Smashing Magazine highlights this need, combined with general demographic trends. A report from the Pew Research Center in the US focused on similar issues. Publications geared for elederly readers feature reviews about tables and PCs designed for senior citizens.
Furthermore, one of the principles is the Czech Aging 2.0 global platform ambassador, which affords interesting potential for “first peek” opportunities at other senior related startup opportunities on the market. The Slovak interface is ready to be launched.
The entry point to this business is the sale of the tablet computer, either directly to the end-user or to a younger family member / relative (Patron) who a) sees the product as a way engaging the senior through involvement of technology b) is not in a position to provide prerequisite physical training.
The unique combination of HW / SW and training delivery ensures very strong traction in terms of future customer relationship management and leverage. Following on a general all platforms mobile app. is next in the pipeline, as are agreements with other senior product / service purveyors once a critical mass of clients are reached for reselling.
The money will be used to give the business a strong base of working capital. This business requires cash to fund purchases of inventory and cash to fund marketing expenses.
The business offers a compelling value proposition targeted at a market that is growing and eager to embrace technology. Seniors want and need such products, but the products on offer a) come at higher price points without any software embedded that is specifically geared for the senior user b) are sold without prerequisite physical training.
The business is led by a team of entrepreneurs who are highly experienced and have researched the product and the market well. Once the core product achieves success the business will have mutiple opportunities to cross-sell other products and services. The team has set up their own NGO for B2C senior IT training that has received media coverage and Google NGO support for online activities – this NGO is a soft lead developer for sales.
This is a product that must be sold with a push strategy. Experience proves that the company must reach the consumer with compelling marketing message that will drive a purchase decision – part of the outreach must be personal.
If sales unfold too slowly, fixed costs that the business incurs for marketing expense, staff and product development costs will create a drain on cash flows.
The management team is small, basically a partnership, so the business depends entirely on these two people plus a growing IT volunteer base that executes senior training.
New Senior Generation seeks to provide senior citizens a user friendly tablet computer, SW (app.) and training geared especially for their needs along with an internet based ecosystem of products and services.
In the Czech and Slovak markets there more than 2 million senior citizens. A market share of as little as 1% or about 23,000 clients can generate more than €5 million in sales and open up further e-commerce opportunities. Slovakia is “language-prepared” for a 2016 launch.
The Czech Republic is a market with 2.3 mn people over the age of 60, plus an additional 1.5 mn over the age of 50. Add in Slovakia and the market of people over 60 is about 3 mn in size. Many of these people do not own personal computers or notebooks. However, people generally are healthier than in the past, have longer life expectancy and of course, free time that can be used enjoying the product. A penetration rate of just 1% of the broad market indicates some 30,000 tablets can be sold.
The most unique selling point is the way it is uniquely packaged as a HW/SW/physical training proposition.
The tablet comes with a seniorphone app. and a web-based environment designed specifically for the senior user, supported by physical and personalised training. The product is promoted through internet advertising combined with strategy of media outreach so that the product and the services are mentioned in media. The product is also available via ALZA.CZ (https://www.alza.cz/search.htm?exps=Senior%20Tablet), one of the Czech Republic’s leading internet retailers as well as via an own e-shop: http://obchod.seniorhub.cz/ with attendant data / voice packages, extra training and consumer financing.
Target customers are firstly the seniors, but also the “sponsors” or “Patrons” – younger generation family members / relatives, such as children and grandchildren.
The Patrons see the product as an entry level product at a competitive price that will a) engage and entertain their loved one b) take away the issue of their having to “train-them-up” with the attendant familial relationship “baggage” that would impede home-training on consumer IT devices.
New Senior Generations has set up its own e-shop. Users will be driven to the site with an online campaign and through PR.
Secondly, the company established a pilot sales channel for the seniorTAB via ALZA. Third, the company plans to work with specialty retailers. Additionally, the company has softly “partnered” with mobile telephone provider Vodafone (CZ) for sales of their data and voice tarifs via their NGO.
The SeniorTab is priced at Kč 5,549 or about €190 / US$230. This is about a 40% discount to most of the brand name, non-dedicated devices, such as are sold by Lenovo, Apple and Samsung. The pricing reflects the fact that many of the functionalities and features of the competiting products are not present in this device.
This said, the Senior Tablet is configured with applications that make the device user friendly for senior citizens. Second, the pricing and features built-in are designed for an entry level user. Third, none of the other devices come with the personalized customer support and training that this product comes with. The company has setup a net work of on-line and in-person tutors who help customers use the device via its own NGO – Moudra Sovička (the Wise Owl). Numerous references point to the training being the single key decision point for both target groups.
Demand is driven by the growing aging population, an increasing desire from elderly people to embrace and explore technology and the need of younger generations to engage with their parents and grandparents.
Second as technology advances the range of features and benefits that can be embedded into tablets is increasing, making the device inherently more marketable. However, information about this uniquely bundled HW/SW/training proposition now needs to be disseminated.
The key performance metric is tablet sales, which are at an early stage. The company began soft-selling units during the past few months. The goal is to sell 1950 units during the next 12 months.
Only a few companies similar to New Senior Generation have launched operations, mainly in the US market. All follow a “stand-off – fire-and-forget” sales and CRM model, which our NGO experience has clearly shown as not being optimal. The target group will sacrifice HW/SW performance over personalized physical interaction with the vendor. This enables HW pipeline planning / investment to buck the current “6 months and it is old” paradigm. In the EU, the key competitor, Oscar Care, is an app. only and is actually complementary as they deliver a service to a smaller market sub-segment, where the Senior is much less independent. New Senior Generation is developing a relationship with Oscar Care and are preparing a cross-marketing initiative. Another senior app. Koala Phone, has supplied the reworked SeniorPHONE version for the SeniorTAB.
There are three key inputs: SW development, HW sourcing and (initially) volunteer trainer.db development. SW/app. development is currently sourced externally. One of the partners has managed IT development and implementation projects in the past. External developers were hired for work required to-date with the simple web-based app. coded using industry standard developer language – there are many quality developers that can be subsequently employed. Part and parcel with this is secure server storage and hosting. Fortunately the server market has expanded dramatically over the last several years and there are many quality, reliable suppliers on the market, one of which is being used. HW sourcing can be streamlined with volume with the potential to tender out provision to minimalize purchase costs. The trainer.db is slowly being produced with preliminary discussions taking place for several larger corporations to donate employee time via their CSR obligations prior to critical mass being reached for an own paid network of skilled seniors.
A substitute product could be any tablet with someone willing to teach a senior how to use it. For example, in the US and the UK a software application called Breezie
is being marketed at a price point of about €150. The product requires a Samsung Tablet with Android operating system. However, market experience and personal references time and time again clearly demonstrate that the ability to successfully pass on IT consumer knowledge to seniors in a familial environment is extremely limited at best. Secondly, the seniorTAB comes equipped with software and a web-based app. for training purposes and a seniorPHONE app. with large buttons for free, that is installed during the introductory training session. New Senior Generation delivers REAL customer relationship management for 5499 Kč along with HW and SW, not just clicks in an enterprise SW solution.
New Senior Generation is raising capital to purchase stock from the producer, market said stock, develop a complementary app., but again for own 3rd party sourced HW bundled with training. Secondly, New Senior Generation plans to hire online marketing staff to reach more Patron customers. Sale of 2/3rds of current stock will ensure that New Senior Generation will break even in Q1 2016
The current business plan shows New Senior Generations generating cash profits as early as 2017. The current round of capital financing should cover Venzeo’s operating and capital expenditure needs through the middle of 2017.
Cost Base Flexibility
New Senior Generation’s cost base is extremely flexible. The company can accelerate or slow down development and sales according to capital availability. The company employs few staff at present.
New Senior Generation looks to diversify its funding base with a combination of pure financial investors as well as business angels who are active and add value. Investors should believe that they can make a difference in individual senior’s lives, help unlock an exciting CEE segment and a the same time make a fair and reasonable return.
Compelling product – The SeniorTAB product speaks to the desire of elderly people to embrace technology. The product addresses the needs of young and old to engage, for example, through e-mail, photo sharing and the intenet as an information sharing medium.
We’ve seen examples of this trend in other markets. In the UK, for example, an article in the Guardian, recently highlighted the surging demand among senior citizens for tablets. In the popular press we see articles often about selecting tablets and computers for senior citizens.
Unique selling point – Bundling the solution with the product creates demand. More and more potential customers (Patrons) are realizing they need help with seniors in getting them online and need the sort of bundle that only seniorHUB / TAB provides. Seniors themselves welcome the holistic approach of the well supported product.
Management experience – New Senior Generation is managed by its founders, who understand the demography and sector. They have a long career history in marketing, brand building and application development.
Small company – The company is run by its two founders and a small team of part-time workers. The business is reliant on these two key individuals. With additional capital and business development this should change, the business should be expanded and the company will have a stronger foundation.
Limited balance sheet – The company main asset is the inventory of tablets purchased for re-sale. The main source of cash for marketing and brand building will be the capital raised, plus revenues from the sale of the inventory. If the product takes hold in the market working capital to buy further inventory may be a challenge. At the same time, penetrating new markets will also be a challenge without additional capital. With a small capital base the company is vulnerable to the possibility that it can run out operating cash.
Complementary product environment – SeniorTAB provides an entry in the opportunity to market related products and services. The SeniorHub internet application not only supports the SeniorTAB, but provides a portal through which other products and services can be marketed
Scaleability – The product concept can be translated and placed into markets in neighboring countries. This can be done through organic development or by building a franchise.
Growing market – Generally the population of older people is expanding, both in absolute terms and relative to the overall population. Product marketers and brand builders who understand this market and can identify its needs will see an increasing array of opportunities and customers to serve.
Competition – Competition can come from two sources. A strong, well financed company can enter the market with similar product and at similar price. Thus far, no direct competitor has emerged. Secondly, branded product can feature and embed software that caters to the elderly user. In the Czech and Slovak Republics a software application called Oscar is available that can be loaded onto many types of tablet with Android operating system. The product is free, but the user must supply his/her own hardware and the product does not contain the tutorial and support elements that SeniorHub provides. To the extent the elederly user is tech savy and willing to pay for software and hardware features the market for tablets generally is highly competitive with many brands from well known companies with sizeable marketing budgets. On the other hand, SeniorTab speaks to the niche of customers who would otherwise likely not be in the market for tablet to start with. The appeal of SeniorTab is that it is an ideal starting ground for the senior citizen who has little or no experience with computer technology.
NSG was founded by a team of two. Pavel Kucera brings a wealth of marketing and business experience. Tomas Hublak has a strong base of skills in IT, application devleopment, training and programming.
Pavel Kucera, Founder
Paul (Pavel) Kucera has many years experience in PR and communication and specifically executing complex public outreach projects in the health sector, including initiation the still running Incoforum incontinence project in 2000, as well as local PR projects for (amongst other) international IT / consumer electronic clients, including LG, Siemens, Motorola, NetApp etc. He recently sourced the SEE PR team for Viber’s successful launch in those markets. Over the last decade he has been involved in several startups in different sectors including FMCG and Financial Services. He is currently the Aging 2.0 platform local ambassador.
He likes challenging tasks to fully use his potential and experience in different sectors and his ambition is to develop New Senior Generation as the “go-to” player in all things innovative in the senior sector for CEE, including mentoring and discovering other exciting senior startups and delivering them to the Aging 2.0 Generator Ventures financing platform and local investors. Paul is convinced that getting seniors online and active will help to unlock their “SoftGDP” potential.
Tomas Hublaek, Founder
Tomáš Hubálek has more than 7 years of project management experience and is the “god-father” of the seniorHUB / TAB concept. Tomáš is a unique IT guy, in that he understands seniors, has developed significant training skills and insight from being the heart and soul of the New Senior Generation NGO – Moudrá Sovička – and the patience and enthusiasm to make a real difference, one senior at a time. Tomáš is also an expert in complex solutions at a B2B level for energy acquisition and management via auctions, consulting and SW / HW implementations. This holistic approach is now being put to good use for seniors.
A calm and collected person, his passion is to deliver a holistic a solution to getting seniors on the internet, saving money for products and services and being as active as possible via better management of (not only) online intergenerational relations.
New Senior Generation fits many of the criteria we established for the Angel investmens we make. We highlight our key considerations.
- Unique, compelling product with proven demand.
- Potentially attractive acquisition target.
- Inherent competitive advantages.
- Strong, focused, motivated management team.
Pricing for tablets has come down in recent years, making the product more affordable. The range of applications has broadened and new applications are continually being introduced. Data traffic and bandwidth are far more accessible than in the past, so the product can be used more often and with more comfort. Receiving, sending and viewing photos, for example, is a matter of seconds, whereas only a few years ago it was a matter or minutes. Content such as movies, music and TV can be more readily accessed now than in the past. The advance of technology has been rapid and a large segment of the population is underserved, but sees the possibilities and wants to explore them. Whereas in the past the monetary and non-monetary price point was higher, both elements of price have moved down to a point where people not only desire the product, but also they are willing and able to pay for it.