To begin, who Is AARP?
AARP is the United States’ largest nonprofit, nonpartisan organization dedicated to empowering Americans 50 and older to choose how they live as they age. With nearly 38 million members and offices in every state, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, AARP works to strengthen communities and advocate for what matters most to families with a focus on health security, financial stability and personal fulfillment.
AARP Innovation Labs
AARP’s innovation renaissance began four years ago. Our CEO and Leadership Team challenged the organization to become world class innovators. We began a journey to shift the culture and capabilities of the organization internally, to stimulate innovation in the marketplace externally, and to create the infrastructure for disruptive innovation to the end of products and services effectively serving every age group, including the 50+. It is from this innovation renaissance that AARP Innovation Labs was born.
How Does Innovation Labs work?
We discover, shape and scale strategically aligned early stage (seed/Series A) startups with solutions we think have the potential to disrupt aging. We discover fitting startups through pitch contests we sponsor around the country, as well as through accelerator relationships such as MassChallenge HealthTech (MCHT) and MassChallenge FinTech (MCFT). Once identified, we use our in-house expertise to help shape the startup solutions for expanded use cases, while exploring pathways for the startups to work with AARP.
We invest in select startups through our Hatchery Ventures Program. Examples include Pillo, an interactive, engaging companion robot that stores, dispenses, and reorders vitamins and medication, shares patient education, guides users to follow provider-directed care plans, and connects patients to care teams and caregivers; XRHealth, which uses virtual reality games, movies, and 360-degree workouts to bring VR therapeutic applications into the home; and Rendever, which has created virtual reality networking technology and content creation tools for family members that allow world exploration to become both a social and personalized experience.
We conceptualize and develop new, disruptive products and services for AARP. Our product development team consists of internal entrepreneurs called innovation catalysts, and they leverage lean and agile human-centered design approaches to create new products and services in our “health,” “wealth,” and “self” verticals. The most recent product we launched is Alcove, a virtual reality platform that enable users to look at intergenerational family pictures, watch videos, travel the world and engage in other immersive experiences together.
Our Design Team provides internal consultative support to all business units, leading design sprints and innovation jams, and serving as an innovation center of excellence.
Learning Through the MCHT and MCFT Experience
The goal of our partnership with MassChallenge is to effectively prepare startups to best engage with a big, mature organization like AARP - and how we get AARP ready to engage with and optimize value from these disruptive startups. Our role in AARP Innovation Labs is to orchestrate the value exchange.
We joined MCHT three years ago as a Founding Member and joined MCFT this year. We are one of two companies that collaborate with both platforms.
Getting startups enterprise-ready and getting AARP startup-ready has neither been easy nor seamless, but the journey is getting better each year and many lessons have been learned.
Lesson #1 – Managing the Tension
In mature organizations that collaborate with startups, sometimes a tension exists. While there is the enthusiasm factor with the promise of value that startups can bring, there is also an acknowledgement that startups represent risk as well as a distraction to short-term value creation. The default DNA of many mature organizations is to defend and protect existing value streams at all costs. In for-profit entities, those streams typically represent shareholder returns and investor targets. In the case of AARP, the streams we protect are our reputation, alignment with our public policy positions, our trusted brand, our multi-faceted relationships and other intangibles.
For each startup selected from the MCHT and MCFT cohorts, internal AARP teams conduct due diligence to ensure their reputation, financial stability, legal and business practices align with AARP policy values.
Over the past couple of years, the Innovation Labs team has been able to deliver value by helping to streamline this necessary yet complex due diligence process, as well as getting different parts of the organization comfortable with some of the risks inherent with startups. For example, not having a lot of financial history may require looking at other startup data points in determining whether we want to take the risk of engaging with them. In our first year with MassChallenge, this due diligence process took months because it was new and different; working with our 2019 MCHT and MCFT startups, we streamlined the process to less than a month.
Lesson #2 – Efficient Onboarding
Once startups have been cleared to engage with AARP Innovation Labs, we onboard them via multiple pathways.
- Staff assignments. Each startup is teamed up with a variety of staff members, ranging from design experts to subject matter experts, for the duration of their engagement.
- We provide general protocols around processes such as media and content approvals that could otherwise derail a positive relationship with AARP Innovation Labs.
- We begin in earnest to scope what we will try to accomplish during the MCHT/ MCFT engagement period. For some startups, the scope is clear; they come in with broad parameters already outlined and we help to refine. For others where the scope isn’t clear or where there may be multiple options, we may host an “Innovention” – a half day design sprint where experts from different parts of AARP help map out possibilities prioritize options.
Lesson #3 – MOU
We establish a Memorandum of Understanding (MOU) with each of our startups. The MOU outlines the give-get for the duration of the MCHT/MCFT engagement, and outlines terms for confidentiality, insurance, treatment of data, and other critical requirements. Entering a MOU signals to each startup AARP’s intention to deliver real value.
While our desire is to streamline the MOU as much as possible, we have come to realize that each startup’s level of engagement is inherently different, making a universal pathway difficult. For some, we may wish to do an in-home user test with a physical product. For others, we may wish to integrate with one of our existing Innovation Lab platforms for testing or entertain an online play. Last year, we even attempted to get three startups to integrate their individual solutions for into a combined platform for a live user test, as we believed there could be synergistic benefits to the end user from a singular platform experience. Every case is unique.
Our learnings to date have been to consult often with our General Counsel (OGC). The earlier the better – even if the scope of work is not fully baked – as OGC can help shape the scope of engagement with AARP in light of our organization’s legal considerations, rather than revamping deal structure after the fact, which has added delay in the past.
Lesson #4 – Here’s My Number, So Call Me… Maybe?
We host a meet-and-greet event in our innovation lab – The Hatchery – early on in the process where all staff members, AARP volunteers in Washington DC, and a handful of local influencers and investors are invited to meet our cohort of MCHT and MCFT startups.
This event serves many purposes. For staff, it’s that “curious” factor –a chance to peek at what we are up to in Innovation Labs. For startups, it’s an opportunity to get exposed to many potentially valuable sides of the business – from publications to digital content to communities. They get feedback on their solutions from staff and volunteers. And in some instances, they get an opportunity to do live recruits for pilot efforts. The exposure to influencers and investors is always of value as well, and many leave with powerful additions to their rolodexes.
This event gives staff an opportunity to hear the passion from some of the founders about why they are doing what they are doing, and puts a tangible face on the products.
Lesson #5 – Continuous Coaching
There are so many coaching opportunities along the way, and these come from multiple sources. We stress to our internal teams our responsibility to help the startups shape and evolve and get better while under our care, and we take that responsibility very seriously.
For me, I push the startups to be strategic about the scope of how they engage with AARP. To not just ask “what does AARP want?” but instead think about their strategic priorities, and explore how AARP can best be helpful to them.
The startups we work with also learn to stretch their thinking with our Design team. We encourage them to brainstorm things that most wouldn’t consider: E.g., selecting the appropriate geography for a focus group to get the most valuable demographic mix versus just picking a convenient location; asking open-ended vs closed-ended questions; knowing when to walk away and suspend judgment – even from what you have built.
We consistently get feedback from our startups that they learn a tremendous amount, and this is something that we strive for and are proud to achieve.
After several months, something magical happens at AARP. My colleagues may have met the startups at the meet-and-greet. They hear the stories. They read the articles in the journals and the news publications. They play around with the solutions. They see and hear the sizzle, and start to get comfortable with the risks. Suddenly I start getting calls, sometimes from my colleagues internally saying, “Hey, I have an idea for how startup X can fit into my program.” Sometimes the startups reach out, excited, saying, “You would never guess who just reached out from AARP!” This cycle typically takes a few months, but it is beginning to happen and with some regularity with our portfolio startups… and it’s a beautiful thing.
It is doable to get startups enterprise-ready. More importantly, getting an enterprise startup-ready is also possible, and this has the promise for significant value creation.
My team is thrilled to be at the center of it all at AARP.
This is a guest post from Nigel Smith, Director, AARP Innovation Labs.
About the Author
Nigel Smith is the Director of AARP Innovation Labs. In this role, he manages Hatchery Ventures, a first-of-its-kind platform for AARP where he works with early stage startups to shape their disruptive solutions for an ageless consumer, then helps them scale for impact and value creation. Leading-up to this role, Nigel developed innovation platforms, processes, and models that supported systemic innovation throughout AARP, provided strategy development counsel to business leaders, and consulted with a variety of internal clients on the execution of innovation. Nigel is a member of CALIBR Global Leadership Network, is a 2015 graduate of Leadership Maryland, holds a Masters in Business Administration degree from Stanford University, holds a Certification in Leading Innovation Change from UC Berkeley, and holds a Bachelors in Business Administration degree from Howard University.