In Episode #136, we explore AgeTech and investing in the future of how we age. We’re joined by Abby Miller Levy, Primetime Partners’s Managing Partner and Co-Founder. We cover becoming an accidental investor, the compelling white space in the senior market, and ending ageism.
In Episode #136, we explore AgeTech and investing in the future of how we age. We’re joined by Abby Miller Levy, Primetime Partners’s Managing Partner and Co-Founder. We cover becoming an accidental investor, the compelling white space in the senior market, and ending ageism.
“I hope we have a society that isn't plagued by obesity and diabetes because people are excited to live longer and are therefore making trade-offs when they're younger to enjoy a longer, healthier life.” – Abby Miller Levy
EPISODE GUIDE (LINKS, QUOTES, NOTES, AND BOOKS MENTIONED)
FULL TEXT TRANSCRIPT
This episode is our definitive guide to AgeTech and investing in the future of how we age. In it we cover:
ABOUT PRIMETIME PARTNERS
Abby Miller Levy is Co-founder and Managing Partner of Primetime Partners, which is a new venture capital firm that specializes in AgeTech, or investing in technology around the future of how we age.
As you'll hear in this interview, the latest data and statistics around aging are almost too hard to believe. Here are just two data points. As of 2007, it's expected that about half of all babies born will live to be over 100 or become what are called centenarians. And by 2024, it's expected that workers aged 55 or older will represent a full 25% of the nation's workforce, with the fastest annual growth rates among those aged 65 and older. And yet, before Primetime Partners was founded by Abby Levy and venture legend Alan Patricof of Greycroft and Apax Partners fame, there were no venture firms focused solely on aging and enabling the technologies, products, and businesses we'll need to support an aging population.
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ABOUT OUTLIER ACADEMY
Learn timeless lessons on work and life from iconic founders, world-renown investors, and bestselling authors. Outlier Academy is the forever school for those chasing greatness. Past guests include Gokul Rajaram of DoorDash, Scott Belsky of Benchmark and Adobe, Joey Krug of Pantera Capital, Mark Sisson of Primal Kitchen, Luke Gromen of The Forest for the Trees, and Brian Scudamore of 1-800-GOT-JUNK.
ABOUT DANIEL SCRIVNER
Outlier Academy is hosted by Daniel Scrivner. Over the last 15 years, Daniel has led design teams at Square and Apple, turned around a $3M+ ARR SaaS business, and invested in more than 100 companies. He launched Outlier Academy in 2020 to learn from the world’s best founders, investors, authors, and peak performance experts.
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Daniel Scrivner (00:06):
Hello and welcome to another episode of Outlier Academy, where we decode what the top 1% of iconic founders, renowned investors, bestselling authors, and outlier thinkers have mastered in what they've learned along the way. In each episode, we dive deep to uncover the tools, strategies, habits, routines, and hacks that we can all apply in our own work and lives. I'm Dan Scrivner, and on the show today I'm joined by Abby Levy, co-founder and managing partner of Primetime Partners, which is a new venture capital firm that specializes in AgeTech, or investing in technology around the future of how we age.
Daniel Scrivner (00:40):
As you'll hear in this interview, the latest data and statistics around aging are almost too hard to believe. Here are just two data points. As of 2007, it's expected that about half of all babies born will live to be over 100 or become what are called centenarians. And by 2024, it's expected that workers aged 55 or older will represent a full 25% of the nation's workforce with the fastest annual growth rates among those aged 65 and older. And yet, before Primetime Partners was founded by Abby Levy and venture legend, Alan Patricof of Greycroft and Apax Partners fame, there were no venture firms focused solely on aging and enabling the technologies, products, and businesses we'll need to support an aging population.
Daniel Scrivner (01:23):
In this episode, Abby and I explore the data around aging and the downstream effects of us all living and working much, much longer. From why 50% of all Americans will run out of money within their lifetime, to what it means when a full 25% of our workforce is 55 or older, why a new type of venture firm was needed to invest in age tech and why there have been so few winners in this category to date? We break down Primetime Partners investment strategy from why they're focused on investing in seed through series A rounds, and why they're leaning into incubating multiple age-tech companies. And we get hyper specific about what age tech looks like from new financial products to help the aging get liquidity on the $9.2 trillion in home equity that they own, to new retirement savings and insurance technology for long-term care, to financial products for managing cash flow as seniors have to stretch their retirement savings for more and more decades.
Daniel Scrivner (02:18):
It's a fascinating conversation that's changed the way I think about aging, ageism, and what's needed to make the best of our lives as we live to 100 and beyond. You can find a searchable transcript for this episode as well as our episode guide with the video version of this interview and a list of articles, books, and interviews to go deeper on aging and age tech at outlieracademy.com/136. That's outlieracademy.com/136.
Daniel Scrivner (02:45):
With that, please enjoy my conversation with Abby Levy of Primetime Partners. Abby Levy, thank you so much for joining me on Outlier Academy as part of our Outlier Investor series. I'm so glad to have you on the show.
Abby Levy (02:58):
I'm thrilled to be here, Daniel. Thank you for having me.
Daniel Scrivner (03:00):
So we're going to spend today talking about the firm that you've been building that I find fascinating, which is called Primetime Partners. But before we get there, I want to start with your background because you have a very fascinating kind of weaving background in terms of what you did before founding Primetime Partners. Give us a quick sketch of your background and help us connect the dots.
Abby Levy (03:20):
Well, if you can connect the dots, that would be wonderful, but because I call myself, I'm an accidental investor. My background is I've always worked in business. I started my career at McKinsey & Company after college and went to business school. And then started about 20 years of working with brands always on business building. I worked at brands like OXO and SoulCycle. I was a founder of a business called Thrive Global with Arianna Huffington in the wellness space, but in each of these cases, whether I was an advisor, an operator, or a co-founder, was always around taking an idea and kind of getting from zero to one.
Abby Levy (04:02):
Even in the case of SoulCycle, it was figure out how we build a digital business, aka Peloton, was coming on strong. So I think that's kind of been the common thread through a lot of my experiences working with different businesses, so that when I became fascinated with this question of what happens to us as we age, what is our role in society, why does it seem like we plan to age 50, 55, and then there's this just big gaping white space of what you do next? When I began to look at that, prompted by my father's experience of prematurely retiring and having 20 years of not having that professional life anymore, I started writing business plans because that's what I'd done for my clients, that's what I'd done for the brands I'd worked with. I'd always just written a business plan to create a new product line if it was OXO or a new business, if I was working with Hearst, etc.
Abby Levy (04:59):
So that's what I did. And I wrote about four business plans, let's be clear, very loose like Word documents, dot dashes. And I forget who it was, but a friend of mine said to me, "Why don't you just start an investment platform to fund dozens of these businesses focused on the aging population, not just these four you've been noodling on?" And so that's how I became an accidental investor was that the right startup for me to build wasn't one of these media companies or operating companies as I was thinking about them, was actually an investment platform. So that's how I ended up in venture.
Abby Levy (05:31):
And then I was very lucky to partner with my partner, Alan Patricof, who... Alan founded Apax Partners, he is the AP of Alan Patricof Apax. He founded Greycroft, which is now 2 to $3 billion under management. And that was also happenstance because I was talking with my good friend from business school, Jon Patricof. I told him I was starting a venture fund focused on aging and he dropped his fork and said, "Holy bleep, that's what my dad wants to do." And since Alan and I had known each other professionally, he was an investor in mine and Arianna's company, Thrive Global, it was an easy kind of fateful moment to reunite.
Daniel Scrivner (06:12):
One of the things you've mentioned, I don't know if you've said it so far in this interview, but you've said it before as we've been talking, is that you were always meant to do something in business. Where does that come from? Was it just this compulsion? Was it a fascination with businesses and what they do? Where did that interest come from?
Abby Levy (06:28):
Well, I think first of all it comes from I grew up sitting around the table with a small business owner and my dad ran and owned a company that made stuffed animals, took book Paddington Bear, and Babar, Madeline, and made stuffed animals. So I was always around business and I admire my dad greatly for so many reasons, including a lot of the skills he taught me around being a small business owner. So I think I was always drawn to business for that, but then I had a bit of a Goldilocks experience. I studied languages and government in college, I thought I wanted to go into government. Then I spent some time in the summers there, I was like, "Maybe not." And I spent time on staff for Teach for America because I'm really committed to public education and I found myself sneaking in the marketplace section of The Wall Street Journal and kind of hiding that I was reading it while working at Teach for America.
Abby Levy (07:26):
So I think it's all these little pieces drove me towards the efficiency that the private sector can have, the innovation, and also just the speed at which you can do things. Having worked in nonprofit, having been exposed to government, you just really underestimate, particularly in America, how amazing our business sector is. It's where it happens, so I think that's why in some ways it's just a foregone conclusion that I would always work in business.
Daniel Scrivner (07:58):
Yeah. I want to talk a little bit about the founding story of Primetime Partners, and you already talked about a couple of the elements there, kind of happenstance knowing somebody that knew Alan Patricof obviously, and then kind of seeing the aging experience through your father's experience. Were there other things that kind of, I don't know, made you begin to pay attention? Because I know this was an area you were obsessed about for a long time, what fascinated you and obsessed you about this problem or opportunity?
Abby Levy (08:30):
I mean, the data is really, really compelling. I mean, the data that an audience of... People demarcate the line of what a senior is, whether it's 65 because that's when Medicare starts or it's really 55 because that's the average retirement age, or 50 out of 60. So it varies. But the fact that this audience is soon going to be 25% of our population, controls two thirds the net worth of our country, three quarters of healthcare spend, and less than 5% of marketing dollars goes this way. And so the fascinating part to me was it's just ignored. And that was the whole point of me stumbling into this space. I had never thought about, "Well, what's my dad going to do after he retires? Or what is anybody going to do?" And so the fact is it's just ignored. So to me, the founding of Primetime was like, "Wait a second, this is an ignored..." Like from a capitalist perspective as an investor or any business builder, all you talk about is where's the white space? Blue Ocean ideas, where's the white space?
Abby Levy (09:33):
The number of young business school graduates who start with like, "Well, there's white space here." If you look at the amount of venture funding that's been the balloon of venture funding over the past decade, it's almost hard to find white space. There's no ideas that haven't been uncovered yet. And then you look at the space of aging and longevity and I was literally, I was surprised. It's like, "Are you serious that there's actually nobody focusing on this?" It just seemed shocking. There were more pet businesses, more pet startups and dog startups than there were startups focused on aging and longevity. And so to me there was a bit of indignation but more importantly was just saw the dollar signs on, the cartoon character with the dollar signs rolling around in their eyes. I was like, "There's so much to do, so much to build, let's get going."
Abby Levy (10:25):
And so that was really a huge impetus was just the magnitude of the opportunity, the TAM across healthcare, and FinTech, and PropTech, and consumer. And that was the thought behind Primetime, which is not to be a horizontal fund focused on an audience and their needs irrespective of the way that most venture funds have now developed where the partners and the teams are so vertically focused around industry. And that strategy I think has played out well so far in our past two years since we launched and has also been really gratifying to build that expertise horizontally.
Daniel Scrivner (11:06):
Yeah. I want to read something that's on your website just because the four stats you mentioned there, when you read off or list off those four, they clearly don't add out, especially the getting then to the 5% of marketing dollars dedicated to this massive market. But on your website, and I don't typically do this but I'm just going to read this because I think it's a great encapsulation of your focus and why it's important.
Daniel Scrivner (11:27):
"There is a seismic global shift in the composition of our population. The global population aged 60-plus numbered 962 million in 2017 and is projected to double by 2050 to nearly 2.1 billion. Older adults control 60% of the US net worth, not to mention trillions that health plans and our government spends on the segment. As an investment platform, Primetime Partners identifies and builds the businesses that provide the products, services, and experiences to satisfactorily address the needs for this 25% of our population."
Daniel Scrivner (11:57):
One of the questions I wanted to ask was if you kind of put on your cynical hat, are there any good reasons for why people haven't invested more into age technology startups? Because one comes to mind, which is I could imagine just someone saying, "Could you ever build a big, profitable, interesting business focused on this segment?" What are your thoughts there?
Abby Levy (12:18):
So with humility, I'll say I'm not the first investor to get excited by the data. When we started, I mean, most of our peers in other venture funds had a bullet point in their investment themes around the gray tsunami. I mean, the data is the data. This demographic shift is not a surprise. And so it's not that investors haven't been looking. The biggest constraint has been there haven't been founders building businesses or big enough businesses, and so the quantity and caliber of the startups has been low. I've talked to a whole bunch of people and I think there's consensus around that. What's different that I don't think we appreciated the timing of was COVID. And COVID obviously would never wish to have COVID have happened, but what it did do is it opened the eyes to hundreds of entrepreneurs of how much needs to be built for an aging population, because every person in our country started becoming a caregiver.
Abby Levy (13:24):
Whether it was helping your parents or your grandparents, find a vaccine, get delivery of their groceries, use FaceTime or some sort of social media app to stay in touch with people, we all became caregivers. And it was the first time that you couldn't look at a newspaper without the front page talking about nursing homes. There was just this overarching shift in attention to aging. And that sparked, and I can see it in our numbers of deals that we saw sparked entrepreneurs for the first time coming out of the woodwork to work on these issues. We talk about the healthcare side, but 50% of Americans run out of money because we don't have retirement savings, enough retirement savings. That also came to light.
Abby Levy (14:11):
And so we had this kind of fermentation of issues that are coming to light and for the first time ever I think we have a crop of entrepreneurs that are really tackling them in a significant way. And entrepreneurs who are serial, not just new folks with a nice idea, but serial entrepreneurs who have turned their attention to this issue. So I would say the number one constraint of why there haven't been big businesses built in this space has been just a constraint of entrepreneurs building in this space. And during this time, a company like Papa has gone from zero to evaluation of basically being a unicorn in the space. I mean, there's been a lot of activity, but I would say we're just at the beginning, Daniel, we are just getting started in this ecosystem.
Abby Levy (15:02):
And so there still are a lot of barriers, but one of the ones that I think has been dismissed is this issue of older adults don't use technology. And with 77% of older adults using telemedicine during COVID, 77% of adults. I mean, this is a staggering number to say that... Who would've ever thunk it that you would have this population using video to talk to their doctors? It's changed everything.
Daniel Scrivner (15:30):
One of the questions, and it's a bit of a tangent from we've been talking to, we're going to come back in a second to kind of a thesis in your approach and some of what you're investing in at Primetime, but one of the things I was curious about, you talk about these staggering stats that just make sense. One of the things I wanted to ask was what it was going and raising funding, because to your point, there are a bunch of generalist investors that maybe have this as a sub-bullet. And then here, you and Alan Patricof are basically saying, "We're building a venture platform that's completely focused on this. We're going to be experts in this area." Did that resonate with people? Did people have a lot of questions? What was it like going out and raising for this fund?
Abby Levy (16:06):
Well, just to set the context, we started fundraising in June of 2020.
Daniel Scrivner (16:12):
Abby Levy (16:13):
So basically two months into the pandemic. And since I'm the general partner, the lead general partner, I'm the first time fund manager. And so we intentionally did not go talk to institutional sources of capital for, again, because timing because of first time fund manager. And then lastly, because we only needed $50 million. Actually, our target was 35 for fund one. And so given that, I think... So that's just to set the tone of what kind of fundraise it is. So in that sense then, it is high net worth individuals, family offices, and turns out some strategics. And so when you're talking to those folks, many of whom are 50-plus, there was not a single person who didn't nod their head and say, "Yeah, why hasn't this been done before?"
Abby Levy (17:09):
So the data speaks for itself, the logic of a horizontally focused fund. All of that made sense. I think the only piece that we got a couple of questions on, which really was your question, Daniel, which is there are no proof points other than care.com and GrandPad, which got bought by Best Buy, there were like two or three examples of successful exits in this space. And so what we said was that we're at the beginning of this category and it will be a long road. We're two years in, we've had a lot of step-ups, everything in venture has been up into the right over the past two years, so I cannot take credit for it. So everything's going well, but it's a long road. So I think that's where I think the intellectual and emotional alignment was there with our LPs.
Abby Levy (18:04):
And then I think for a couple of our LPs that are nursing home operators in hospital systems, I think it's been a very symbiotic relationship. And that has been super easy because they understood the opportunity and they wanted to see the deal flow. And that's what we've been delivering upon is really being able to show our strategic investors, "Here's what's going on in this landscape." We've looked at 900 businesses in the past two years where we're seeing 10 companies a week. We're just sucking it in, sucking it up and then being able to share it.
Abby Levy (18:38):
I was just going to say, the other thing is if you're going to go fundraise, having a partner like Alan Patricof is amazing because he's been doing this for 50 years. And his ability to say, "Okay, that didn't go so well." Or, "You don't win them all." And just recognizing that, especially for someone like me who's kind of used to pretty high marks and success rate, that you have to just bear with it when you fundraise, that there's just going to be some conversations where it's just not in their investment theme. They don't do venture or now's not the right time, and so you have to be okay with some nos. I'm typically not okay with no, and Alan had the experience set to kind of temper me a little bit to say, "That's normal. There's going to be a lot of nos."
Daniel Scrivner (19:22):
That's great advice. I want to ask about two questions of the strategy of how you're deploying capital and what you're doing at Primetime. And one of those is you're relatively early focused or you're are early focused, you're doing seed through series A. I'd love to, if you could talk a little bit about why that's interesting. And then the second piece would be incubations. Incubations are not necessarily a new thing for venture funds, but it's interesting to me that that made sense. And you talked about some of these business plans. I'd love if we could flush out both of those.
Abby Levy (19:51):
Yeah. I mean, I think they kind of go hand in hand, which is because this industry is just being born in a sense, I believe it is, that going early stage makes sense because that's where you've got the most volume of opportunities. There isn't as many great quality later stage deals to do, and so one of it was based on supply. The second reason for staying early is just based on me, where my experience set comes to bear is in zero to one. And I think we're able to be really helpful to our companies, we now have 26 portfolio companies. We're very much in the weeds on introductions, and strategy, and PR, and visibility, and all of the things that I like to work on.
Abby Levy (20:39):
So I think part of it is just what we're good at. We have Ray Jang who works with me. He's a former founder himself. It's kind of a good place to be. And then the third is just pricing, like to compete in the later stage rounds with this pricing, particularly when we started the fund when digital health through COVID just ballooned and FinTech was ballooning, I had sticker shock. And so being a $50 million fund, that's where you play.
Abby Levy (21:10):
In terms of the incubations, I mean, they're the best, not kept secret, but they're the best investment ever, right? Because effectively Primetime, we have two incubations right now. You basically get founders shares, so you trade your sweat equity for a sizable equity piece in these new businesses. And particularly for us because we came to the table understanding the white space, knowing where the white space was and if we didn't see a company that was satisfying that white space, well let's go find a venture studio partner. In each case we're working with two venture studios, we don't have a team internally, we're a four-person team, we can't incubate something ourselves. We went out and we found two venture studios to work with who have the lion's share of the economics, but we're still effectively co-founders with decent founding economics.
Abby Levy (22:00):
So it's great for LPs, it's great for, I think us intellectually, and time will tell if it ultimately returns the way we think that it will.
Daniel Scrivner (22:15):
I want to ask one more question, which is, so you've talked about Primetime Partners as being a platform. And this idea that you're horizontal, so you can invest across disciplines, across industries, which makes sense given the thesis. But one of the things you said in a previous conversation is that the major, meaning the thing that you're... Basically the mote or the main skill that you're bringing to what you're doing is that you are becoming experts in consumer behavior of an older population, which I find fascinating. Talk to us a little bit about what that means, what you've observed and some of the things you've learned when it comes to that consumer behavior.
Abby Levy (22:51):
Absolutely. I mean, I think the thing that we've... And maybe it's because my background is in marketing that I tend to focus on this, but our portfolio of 26 company is a mixture of D2C, B2B2C, B2B, but at the end of the day there's an older adult user in the mix. And so a couple of things that we've learned that we've been able to share across the portfolio, content really matters. This audience makes considered purchases. It is not influenced by what someone on TikTok or Instagram, they're going to research and learn themselves. So content marketing really makes a difference. Affiliate marketing, trusted brands make a difference. Elements of micro-segmenting. So I've said a gazillion times, when there's a founder that comes with a pitch that talks about seniors as this monolithic group, it's like saying the audience 18 to 45 is one group. And what founder would ever start, "We're targeting 18 to 45. Period." No sub-segments, no target personas, nothing.
Abby Levy (23:51):
So as we age, we only get more idiosyncratic. And so figuring out who the micro segments are within an aging population is really, really important. I think other things we've learned, really tactical. A lot of founders want to target the adult child. They say, "Well, we'll get to the adult child and they will influence the senior." And I always ask that person, "Does your grandmother buy what you tell them to buy? Does your parent do what you tell them to do? No. So why do you think that by targeting an adult child, you're going to build a big business?" Maybe if the senior has dementia and needs, it really is under the care and supervision of adult child.
Abby Levy (24:34):
So I think the reason I'm bringing up these examples is we're seeing in practice through our portfolio things that are working and not working. And we really do share those insights because stuff that's happening on D2C. What one of our business is doing in FinTech on Facebook has applicable learnings to something that a payer-focused business is doing around enrollment and engagement for a healthcare product.
Daniel Scrivner (25:02):
Yeah. Even just your note on how you market and acquire customers is very... Even just in the couple of glimpses you've given there, it is very different than if you are running a business that's targeting millennials or, Gen Z, or Gen Y. So it makes sense that one, there's unique expertise there. And then two, that it's basically going from zero to one in a whole new form of marketing, in a whole new form of advertising, user onboarding, all of it. One of the questions I wanted to ask about was if we bubble up for a second and just kind of, I think it's helpful for people. We've talked about some of the stats around aging, but as I was preparing for this, I kept trying to get to what is the big idea? And the best I could get, and I'd love you to help push back on this and shape this, is that really we are going through a period where, as you said before, we're going to live a hundred-plus years.
Daniel Scrivner (25:52):
So we're getting to a point in civilization where many, many, many of us are going to live more than a hundred years. That has an enormous amount of ripple effects. That means that we're going to be retired for longer so we need more savings. That means that we need meaning in our lives, so we might want to work when we're older. What do those employment opportunities look like? There's health, there's insurance, there's entertainment, there's a bunch of things there. Talk a little bit about that, what living to a hundred changes and what you think are some of the most staggering knock-on effects of just people living longer, then we can go into some of the areas.
Abby Levy (26:26):
I mean, it's hard because sometimes I feel like I'm the grim reaper at cocktail parties because I'm talking about all these issues of what's missing, but I think you hit upon a bunch of them. I mean, you've got within financial products and services, our whole financial services industry is focused on asset accumulation, work hard, spend more, use credit cards and mortgages to spend more. And then the back half of your life is asset de-accumulation. And there's not a lot of product services or conversation around asset de-accumulation. Another really good example is that this is very focused, but our OB-GYN, our obstetrician gynecologists are trained on fertility and birth. Less than 5% are trained on menopause.
Daniel Scrivner (27:19):
Abby Levy (27:20):
You can go literally category by category, take housing. Housing is literally bigger, bigger, bigger, bigger. And then once you can't live alone, you have to go to senior housing. There's nothing in between. There's nothing in between living by yourself and living in basically a hospital-like environment. There's a very little in between. There's only 2 million senior living beds in our entire country. We don't have that white space of housing, we don't have that white space of financial planning, we don't have that white space of FemTech, we don't have that white space in employment opportunities. We have internships and job training for young people, but what happens with off-ramping? And that whole question.
Abby Levy (28:06):
So I guess what I'm saying is the opportunity is in this gap between 55, 60, and death. What are the businesses that support what that experience is? And it's across every aspect of life. The only place I've seen some really good work is some of the dating apps for seniors are fantastic, so we have definitely figured out dating.
Daniel Scrivner (28:33):
The most important. That's the tip of the pyramid and then we'll work our way down from there.
Abby Levy (28:38):
Exactly, exactly. You have to go on Medicaid, but you can date.
Daniel Scrivner (28:42):
Great, great. It's good to know we've got that solved.
Abby Levy (28:44):
Daniel Scrivner (28:44):
I'm sure there's a lot of happy dating seniors. I want to zoom into some of the problems because I think one, it's interesting to explore really specific examples and also, I think, they're all visceral. One of the ones, you have this amazing paper, I believe it's available on your website, called the Prime Take on 2022, The Collision of Age, Tech, and FinTech, which is wonderful. Which basically talks about here's all the issues that are popping up that are unsolved around living longer and what that means. And then here's the kind of intersection of where these things show up in financial technology and innovation.
Daniel Scrivner (29:16):
And one of the ones, the stat you brought up earlier, that is grim reaper-ish, is the fact that 50% of people will run out of money while they're retired. And it's an interesting example because it seems like a lot of... Sure, some part of solving that can definitely happen once you are retired, let's say 60-plus, but a lot of that maybe has knock-on effects for what you do when you're 30, 40, 50. And you brought up this idea of Alto IRA and more diversification, investing in alternatives. Talk about that example and some of the interesting things you're seeing around how people are trying that problem.
Abby Levy (29:50):
Absolutely. I mean, listen, we have an issue just breaking it down. I mean, as humans we want to maximize today, we don't want to plan for tomorrow. I mean, that's just kind of an instinctual reflex that we all have. And the single best thing that we can do as younger people is to maximize our 401(k)s or any retirement plan because it is the only free money we get. It is free money in the sense that if your company matches you, it's tax deferred, it is literally the best thing you can do to plan for your retirement. And 401(k)s are woefully, first of all, a lot of employers don't offer them because they're small and a lot of people don't take them up on it or only put what they think they can afford today not thinking about the value of that money there versus being spent on Starbucks or whatever else.
Abby Levy (30:54):
And so I do think in terms of the companies, we're invested in two businesses in the retirement space, we're looking for more. One is called Penelope, it is a 401(k) focused on micro-businesses and they're launching a solopreneur kind of for people who are independent consultants, and freelancers, and this and that. But there is absolutely everyone should have a retirement plan. So that's kind of point one. It's like, you can't talk to any economist or academic who doesn't say, "Have a retirement plan, max it out." Then within that, we're invested in a business called Rocket Dollar, traditional 401(k) fund administrators like Fidelity, T. Rowe Price, Vanguard. They offer you mutual funds. They are not allowed to offer alternative investments.
Abby Levy (31:44):
Now, obviously the bottom crashing out on crypto has made many people skeptical or nervous of alternative investments, but there's a lot within that. Alternative investments include second homes and user's real estate property, think of Airbnb. As I said, real estate includes art, it includes being able to invest in venture funds or other things. And so Rocket Dollar is a safe way, and a legal way, for you to be able to put retirement assets in that tax-advantaged state into alternative assets. And so those are just two examples of investments we've made that are really trying to encourage people to save more and to do that through tax-advantaged vehicles like 401(k)s.
Daniel Scrivner (32:31):
Yeah. I think it's also fascinating just to think that obviously with your thesis, it's not like the primary users of these are people that are 60-plus, but you're going downstream and you're using the lens of what you're seeing and what you know to be true, to then go and invest in things that should exist and they need to get many more dollars that will likely get money from you that they won't get from other venture capital funds, which is really interesting.
Abby Levy (32:54):
Yeah, absolutely. And listen, we had that, one of the nice things about being a small fund with an LP base that's very supportive is we didn't say to them we're only focused on business for 65-plus. We said, "This is what we're focused on." And then we have two investments in menopause-related companies. Menopause affects women 35 to 55, so is that a senior issue? Yes and no, but women's health is ignored post childbearing years, feminine care is. And so that's our gateway into it. So I think we're in places that we think ultimately impact this audience, but we definitely have said no to things when they're too off theme.
Daniel Scrivner (33:43):
One of the other areas, the specific example cited in that paper that I really like that I want to talk about for a moment is employment. And the stat that you have inside here, it's basically this idea of what do you do when you're retired? And I think for anyone that has older parents, one of the things that you observe is potentially them one, not knowing what to do with themselves when for the first time in their lives they're not working and they don't have somewhere to go and exert themselves. And I think another thing you learn is how much of all of our identities, for better or worse, are entwined in what we do for the world? Yes, employment pays us. It's also a way, it's part of our identity, it's part of how we're giving back to other people.
Daniel Scrivner (34:24):
One of the stats you have inside here is by 2024, workers aged 55 and older will represent 25% of the nation's workforce, which is staggering. With the fastest annual growth rates among those aged 65 and older, and one third of adults claim they plan to work longer as a result of the pandemic. So just to repeat that, 25% of the workforce after 2020 is 55-plus. What are you seeing there and what companies are being built that excite you?
Abby Levy (34:48):
I have to be honest, this is an underrepresented area. So if there are any founders listening to this, please reach out to me. We have some ideas of what needs to be built, but I think a couple things are happening. One, I think it is actually really great that on the policy side and the advocacy side, there is a lot of academic and foundation work being done in intergenerational workforces. And really thinking about how to rebrand. Historically for a lot of larger companies, there were age limits, you got pushed out when you were a certain age because they wanted to make room for the younger generation. And so there was this juxtaposition of, "It's them or me." And that culture of, "I need Mr. Smith to retire so I can move up," has created this tension that doesn't need to be there because Mr. Smith, by the way, can, should be maybe off ramped in a way that suits his desire for retirement and can be a great addition to continue the expertise and the knowhow.
Abby Levy (35:59):
And by the way, the workforce that's now 55 to 65 is all, I wouldn't say digitally native, but they've all been in the workplace for the past 15 years, 20 years with technology. So it's no longer that they're dinosaurs putting in air quotes, so that's no longer an issue. So I think that the startups, we're not seeing startups yet, be honest, because a lot of this is around policy and HR approaches for how to retain and maximize and aging workforce. The things we have seen, and frankly we are working on, one is one of our incubations, is how you introduce older adults to the creator economy, the gig economy?
Abby Levy (36:47):
And so it's not surprising that a disproportionate share of Airbnb hosts are 45-plus because it's a really great gig job for someone of that age and there are other gig jobs. And so being a creator is actually a really good gig job. It can be for the right creators. So we're working on something that helps older adults become creators, but there's not a lot in this space yet. So I wish I had a rosier picture for you.
Daniel Scrivner (37:18):
I want to talk about housing and that'll be the last kind of maybe specific example that we'll get into. But the reason is just because it is obviously a massive problem. You go through your life, as you talked about accumulating assets. One of the biggest assets that you have is your home. I think a lot of people struggle with this idea that, "Well, that's where all my net worth is. And obviously now I'm comfortable, I don't necessarily want to enter a new phase of life." And so I think housing is naturally difficult. One of the examples I was going to share is what I've started to see in the last couple years that I found really exciting is 55-plus active communities. My parents recently, maybe five years ago, went through that transition where they sold their house, they pocketed all the equity, they can now invest that and now they are back, kind of weirdly, to paying rent, but they're doing it in a 55-plus active community. What are you seeing there that's exciting? What do you hope that you see there soon in that space?
Abby Levy (38:11):
I am obsessed with this space. I think it is so smart, not just from a financial management perspective to your parents' example, but from socialization, and community, and fun, and vibrancy. And to me it's going back to college to not view it as a way point on the way to assisted living, which is the way it had always kind of been presented in some ways that it was... To really make it aspirational. And thank goodness for the people that licensed Margaritaville, the brand, to senior housing to kind of change the narrative on it. And people joke, but the largest CCRC or what that's called, kind of an independent adult retirement community is called the Villages in Florida. And that place is a waiting list to get in because it's just a huge community of people who all want to enjoy these years.
Abby Levy (39:05):
So the types of companies we've seen, there's a company called UpsideHoM that is helping turn apartment buildings with effectively individual units to have some of that infrastructure that makes it feel more like a retirement community so that people can downsize into apartments. There's a company called Sunbound that helps you manage the downsizing of your home and kind of, there's so many transactions, and so many fees, and so many things. And I think we're going to continue to see senior living operators develop hybrid models. There's some that basically offer their services into the community, so for people who want to age in place to be able to do that.
Abby Levy (39:52):
And then lastly, we're invested in a business called Fraction. It is a way to tap into your home equity. I think increasingly, there will be this shift in narrative that your home is just your piggy bank. And as opposed to the shame of I have to sell my house and that is always historically with reverse mortgages and things like that, it's always seem like a predatory, I have somehow failed and so I have to sell my home in order to make ends meet. It's just part of your balance sheet and you're liquidating it as you need the cash. And so the more that we get comfortable talking about asset accumulation, not as a sign of failure but as a sign of longevity, and just a part of longevity, the better off we are in businesses like Fraction, that's how they're approaching the conversation with an aging population to say, "You should just sell some of your home equity now so that you can live the life you want."
Daniel Scrivner (40:48):
Makes sense. I want to ask a big question to wrap all of this up, which is, if you're wildly successful at Primetime Partners, which I think you will be, and you talked about having, I think you have three kids, what do you hope is different in your kids' lives when they get to be 50 and 60 that it's not true today? By funding and by building Primetime Partners, what changes and what do you hope changes for future generations as they think about aging?
Abby Levy (41:19):
Well, I do hope ageism changes so they don't treat me-
Daniel Scrivner (41:25):
That's number one.
Abby Levy (41:26):
... like I'm an invalid just because I turned 70. No, but I do think... I've never been asked that question. That's probably one of the best questions I've ever been asked, Daniel, and I've done a lot of podcasts. A couple things, one is I hope it takes a little pressure off of people in their 20s, 30s and 40s. I think that it's not about getting it all done in such a short amount of time. I think it's about these chapters that we have in our life. And so I hope that that creates a little more breathing room and less stress for my kids. I hope that they have multiple careers. I think that people talk about the third act that there's some great books being written about right now. There's a book called Elderhood out on the market, which I love, I love Susan who wrote it. And you should really take a look at it. But I think that hopefully they'll have multiple careers.
Abby Levy (42:25):
And then lastly, I really hope that preventative healthcare. I mean, we haven't talked much about healthcare in this conversation, but most of the diseases are behavioral. Diabetes is the most prevalent behavioral disease in our country. There are things you can do to delay Alzheimer's. If you're going to get it, you're going to get it, but you can delay it. What we eat, how we exercise, how we sleep, you have to change that in order to have a longer health span. So I just gave you a bunch of different things, but I hope we have a society that isn't plagued by obesity and diabetes because people want, they're excited to live longer and are therefore making trade-offs when they're younger to enjoy a longer, healthier life.
Daniel Scrivner (43:15):
Yeah. The two things I love that you brought up there is one, easing the burden, just taking stress and pressure off people in their 20s and 30s because if we are going to live a hundred years, then God forbid people try to treat the first couple of decades as if they need to achieve everything and reach the milestones and goals that they've set in the first part of their life. And I think just that last piece around being able to have meaning, being able to find meaning, being able to carry through that through your life and have multiple chapters, I want to end by talking a little bit about lessons that you've learned. I know Primetime Partners is your first time being an investor. I guess the things I'd be curious to know are what has surprised you the most about being an investor versus being an operator? And then the second is just any big lessons learned. And that could be things you might share with someone else who's thinking about starting a fund or things that just strike you as you think back on the last couple of years.
Abby Levy (44:09):
I'll start with the second question first. I think in terms of lessons learned, having strategic LPs and people who are interested in the problems that your companies are solving as investors, as advisors, it changes how quickly and easily you can help the portfolio. And I think that it's funny, when I started this, one of the founders when I was talking to said to me, "All venture funds say they are," and she went in air quotes, "Value-add." That it's just kind of like what everybody says, we're value-add. And I think what I've learned is that our greatest value, other than insights, industry insights, and things we're gleaning by consumer insights, all that, is because we are staying very close to the strategic partners, customers, etc., that our companies need. And I hadn't experienced it. It's makes sense, it's common sense, but if you have the opportunity to take five small checks from people who can be strategic or one large institutional check, take the five small checks. You will get much more from it.
Abby Levy (45:22):
I think another thing that I've learned along the way is on team, I've got a great team. And that is not just because they're smart, but we are all very entrepreneurial. And I think that's the piece, is finding a team that... We had a lot of choices on who to hire in terms of a fit, and I think the fit really aligns with our vision and our mission, but the bright, shiny object of pedigree and this and that isn't always the right choice. The right choice is having the right cultural fit that issues your values, especially because our whole category is based on the value of aging, older people matter. It's a value-based industry in terms of... So I think that was another lesson learned.
Abby Levy (46:14):
And then I think the third piece on lesson learned is, that I had to learn the hard way, is we have to get better at saying no faster. We were just talking at lunch today, our team, we fall in love with ideas, but at the end of the day, it's the founders that are going to make all the difference. So you can have the best idea and people, I've always said, "Would you rather have a B idea and an A founder, or an A idea and a B founder?" And I used to pump the question saying both. And I think what I've learned is it's better to have a B idea and an A founder. And I think most people in venture will say that, but because I'm such an ideas person, it's hard for me to let go of the ideas. And I think I've learned the hard way that we have to get better and faster at letting go of the ideas we love if it's a B team.
Daniel Scrivner (47:03):
Yeah, that's very well said. That's the perfect note to end on. Thank you so much for coming on, Abby. This has been so much fun and I've learned a tremendous amount. I mean, my hope for this interview is that people listening, one, it's a window into something that's deeply under discussed, which is the fact that we're all aging, we're all living longer, and we need to be thinking about that more and spending more time and energy and effort improving that part of our life. But I think it's also a great example of someone taking a leap and going from zero to one in a brand new space. So thank you so much for joining me, Abby. I appreciate it.
Abby Levy (47:32):
This has been such a pleasure. Thank you, Daniel.
Daniel Scrivner (47:36):
Thank you so much for listening. You can find a searchable transcript for this episode as well as our episode guide with the video version of this interview and list of articles, books, and resources to go deeper on aging and AgeTech at outlieracademy.com/136. That's outlieracademy.com/136. And you can learn more about Primetime Partners at primetimepartners.com.
Daniel Scrivner (47:59):
For more from Outlier Academy, follow us on Twitter or LinkedIn, subscribe to our YouTube channel at youtube.com/outlieracademy. And visit outlieracademy.com for more incredible investor interviews, profiling in Effects, Greycroft, Pantera Capital, the Compound Kings ETF, Driehaus Capital, and many, many more incredible investment firms. We'll see you right here with a brand new episode next Wednesday.