How business can respond to an ageing population (and perhaps save the world!)

Judith Davey
1/06/2018

As I observe NZ society in its adaptation to population ageing, I take a special interest in business enterprises which have sprung up in response to this world-changing  trend. The private sector has done a lot better than many areas of government in recognising the implications.

• Driving Miss Daisy started up in Havelock North in 2008, building on an idea from Canada. It now needs no introduction and has franchises operating in most main centres.
• Since 2000 Elder Family Matters has provided a range of services for older people in their own homes, ranging from companionship to palliative care – “Our purpose is to enable healthy and happy elders and their families living as they wish to live.” They operate in the Greater Wellington region and Palmerston North.

These are two examples and I am sure that others are emerging. However, while trawling through the literature for my research on older entrepreneurs (see blog of March this year), I found a wonderful example from Indiana, USA , which combines entrepreneurship and product development to suit older people[1].

Pedego is a company, founded in 2008, which makes bicycles and is USA’s leading brand of electric bike. Most of its distribution is through independently owned branded stores usually launched by people in their 50s and older. They encountered the bikes as consumers and came to corporate Pedego’s rescue in the early days, when it was struggling for lack of distribution.

The 50-plus age group also makes up Pedego’s primary market, many returning to two wheels for the first time in decades. The entrepreneurs built their bikes to accommodate older bodies.  The spirit was willing, the flesh, perhaps, not so much. Electric bikes acted as “psychic training wheels”. “A lot of customers had bad hips, ankles, hearts, whatever,” says Pedego’s CFO. “If their hip starts to hurt, they can just use the throttle. So they are willing to venture out and do things because they know they have the ability to get home.”

They realised that the then-existing electric bikes didn’t cater to that audience. Most came in black and positioned riders to lean forward. Older customers wanted colours and to sit upright. They also wanted models they could mount easily. So they hired a computer-aided-design professional.

At first, bike stores shunned the product. “”They think electric bikes are cheating.” For a while, the founders sold bikes to their friends, who in turn sold them to their friends through parties—not the usual business model. But then a customer asked if he could open his own branded Pedego store and now they receive about 400 inquiries a year. The average customers are a 58-year-old man and 57-year-old woman; some customers are as old as 95. Often they were introduced to electric bikes while hiring them on holiday. One enterprising store owner, with previous marketing experience, rigged up a simulator to train people on the bikes and an indoor track for test rides in poor weather. Others organise regular group bike rides.

The secret appears to be that older customers trust someone who looks like them more than they’ll trust the Lycra-clad enthusiasts who haunt traditional bike shops. When they see the store owners still going strong – out there riding and enjoying life – they get “a sense of hope”. Says a 61-year-old owner, “I can say to a customer, ‘Look, I had my knee replaced.’ And the guy says, ‘Oh, I had my hip replaced. We talk about aches and pains, hills and headwinds.”

At a recent dealers meeting, two new products were introduced – an adult tricycle (I would certainly be in for one of those) and a vehicle for people with disabilities. So the innovation continues along with the health, social and environmental benefits, which I am sure my blog-readers will have noticed from this example.

 

[1] Leigh Buchanan, Editor-at-large, Inc. magazine – Boomers Are Ditching Retirement for Entrepreneurship: And They’re Killing It. March 9, 2017.