15 Sep CEO Corner – September 2020
The Evolution of Link-age Labs – Part I
During the last 10 years, I’ve been blessed with the opportunity to travel throughout the country seeing all types of innovative solutions developed for healthcare, and older adults specifically. While I have been greatly encouraged by the tremendous efforts to develop new products, services, and technologies, along with strong growth in investment capital in our space, a few years ago something started really bothering me. Over the course of several articles, I’ll share with you what I’ve seen that I believe needs to change in our sector and why, along with what Link-age is doing as a company to serve as a catalyst for re-imagining how we approach innovation.
A bit of background might help provide some context for how we got to where we are today. In 2010, Link-age was a Group Purchasing Organization (GPO) that had experienced solid growth in core business and found success in (and successfully left) a rehab therapy company. The big challenge was trying to figure out what came next. It seemed like a no-brainer that I should attend the What’s Next Conference in Chicago, a micro-conference within the much larger National Council on Aging/American Society on Aging National Conference. Little did I know that it would end up proving to be one of the most pivotal events in the history of Link-age.
During the next two days I listened to a variety of speakers, entrepreneurs, and an investor talk about the tremendous market potential represented by older consumers, otherwise known as The Longevity Economy. $7.1 trillion of annual economic activity generated by Americans over the age of 50 makes the Longevity Economy the third largest on the planet behind only the US and China – or put another way – $2 Trillion larger than entire economy of Japan. You get the point…it’s huge.
Aside from the incredible market potential, what struck me was that many of the people trying to innovate into this massive opportunity had no real in-depth understanding or accessing older adults at scale. I began to sense that Link-age could play a vital role in what most experts at the conference described as a market still in its “wild west” phase with very little form, structure, or metrics. I was stunned by what I witnessed and ended up taking an entire legal pad full of notes that would become our play book for transforming this company. I still have those notes and I am struck by how much of what was written in wishful ignorance has come to pass over the years thanks to the hard work and dedication of our incredible team as well as our terrific network of partners throughout the country.
Over the years that followed, we traveled the country building a network in the Longevity space so we could immerse ourselves in trying to understand the ecosystem and figuring out what role Link-age could play that would leverage our strengths as a company but, perhaps more importantly, what we would need to build in order to become a real player in that arena. We knew that Link-age had Members of the GPO that could potentially serve as a distribution network for products, services, and technologies being created for older adults, and we also discovered that much of what was being invented did not resonate with our Members or their Residents due in no small part to the fact that these offerings had not been researched or vetted with anyone in the target market. Ultimately this need led to the creation of Link-age Connect, a unique market research consultancy that could gather insights for its clients from the all-important but difficult to reach end-user.
So, we had the distribution network to access the market, subject matter expertise, and a research company – all vital elements of a business model that could make its mark in the Longevity Economy. But something was still missing.
We needed an efficient way to deploy capital in order to monetize the opportunities we were uncovering for our members. After working in consultation with John Hopper, now the Chief Investment Officer of the Ziegler Link-age Family of Funds, to rebuild Link-age Ventures into something that could do more than one-off investments, we went in search of a partner. In 2012 we met with Ziegler, the leading investment bank in senior living to see if they were interested in working with us to launch one of the first private equity funds of its kind to invest in the Longevity space. Eight years later, with two private equity funds totaling $63,000,000 in capital raised, more than 120 Limited Partners, 25 investments made, 4 successful exits, and a third Fund on the way, I am happy to report they said yes and have been a strong partner.
Despite all the wonderful accomplishments, something was still bothering me. Looking forward to sharing that in part II of this series.