Investors are betting that humans turn to tech startups for wellness solutions.
Wellness is not just a buzzword, it’s a $4.2 Trillion market and growing. It’s a movement and it’s happening now. Our society has taken a turn and people are more focused on their physical, mental and spiritual health than ever before. Being happy and healthy has evolved into a top priority.
In walks technology…Apps and startups have enabled this movement by creating technology to address our mind, fitness, sleep, diet, reproductive health, environment and beyond. WellTech has been surging with innumerable apps and companies over the last decade. Investment activity has followed in suit with over $2.2B in investment in the 97 modern wellness startups we’ve identified as of March 2019.
Rising healthcare costs have created a growing need for alternate options to address our wellness – physical, mental and spiritual. With increased healthcare costs, increased stress and ailments, and a growing trend toward happiness and health, the market is primed for wellness apps and technology. These technologies give users assistance in achieving overall wellness and help them take proactive measures for a healthy lifestyle. Modern wellness startups have stepped up to fill the gap. People are turning to consumer technology from Apple, Google, Amazon and others to solve these needs –they have less barriers to entry, despite some initial costs for hardware.
Startups Come in Four Flavors
We have classified these wellness startups into four categories: Mind, Body, Community and Space (check out our detailed infographic on this space here). Mind includes startups addressing emotion recognition, intelligent assistance therapy, mental health, mindfulness, mood shaping and stress. Body includes connected apparel, fitness, health, nutrition, sexual wellness and sleep. Community includes the busy market of on-demand fitness and wellness, cryptofitness and on-demand elder care. Lastly, Space involves air, light, scent, sleep, sound, touch and manipulation of whole space.
Community 37%, $811M.
Body has 29%, $647M.
Mind has 18%, $403M.
Space has 15%, $333M.
There are some outliers, like the newly-crowned $1B+ valued unicorn, Calm, a startup that helps users relax, sleep, or focus. Calm recently raised $88M to total their funding to $116M, a leader in the Mindfulness subcategory of the Mind category.
Community’s large amount of funding is lead by ClassPass, a subscription-based fitness app, at $239M and Practo, a medical advice and booking app, with $234M. These are both large startups that have matured and have accrued funding over the years.
Future Changes in WellTech
The Community category, which incorporates the on-demand fitness and wellness providers, is pretty saturated with lots of emerging startups and investments in the last couple of years. We expect this to flatten out.
Mindfulness has been heating up, expect more here, especially with Headspace, a meditation and mindfulness app that will match funding and valuation to rival Calm. Also, be on the lookout for funding in the Intelligent Assistance Therapy sector, with startups like talkspace, an online therapy app.
Sleep startups don’t currently have the funding that other subcategories have, but we expect that to change soon. Between wearables and environment management, this is a wildly growing sector. Apple recently acquired Beddit, showing market value/
In the Body category, we’ll see growth in Nutrition startups like uBiome which provides microbiome testing, and habit that offers personalized nutrition, like highly-anticipated Lumen.
We’re often asked about the underfunded categories, as these have the most potential to grow. We see three regions that may quickly grow if new innovations are brought forth to market:
New sensors and software. That can measure brain wave activity, galvanic skin response, facial recognition or accurately measure breathing are underfunded categories that may blossom into new business models
Corporate Wellness Technology (CWT) Platforms. Employee wellness solutions that combine multiple features into one suite. Corporations are adopting these technologies for employee wellness, yet they are loosely strung together and lack a cohesive experience.
Data and analytics that measure actual human improvements. There’s a need for analytics that combine biometrics to actually gauge if wellness practices are making a long-lasting effect beyond just simple usage this is for consumer level, crowd aggregation, and at societal level.
We’ll also see acquisitions that create super apps that offer comprehensive wellness platforms that address mind, body, community and space. Google and Apple are likely contenders in this arena, but there’s certainly room for an independent startup to take this on. Large sports brands like Nike, Under Armour and Reebok have an opportunity to step forward to lead on this, as well.
We have a spreadsheet tracking these top 100 startups and will report on a periodic basis how this market is shaping up.
There are nearly a dozen tech Initial Public Offerings (IPOs) planned for 2019, the tech companies are scurrying to generate immense wealth before the expected 2020 recession. While many industries are seeing financial problems. pre-IPO tech companies are being heavily valued by Wall Street traders and financial analysts. Most of these companies are Collaborative Economy companies, an industry I covered with great detail over the last half decade. These online marketplaces enable the buying and selling of assets (they don’t own) between individuals. Since they don’t own most of the assets, they have great upside –and little downside. These tech companies are the darlings in business, as they prepare for a massive set of IPOs that could result in over $250 Billion in material wealth as their shares are released to the open market. Here’s a quick breakdown of their anticipated valuation of this year’s launches:
Roadmaps directionally guide us when situations are unclear. To guide me, I often used this framework in client work, speeches, and reports. It serves us to see how technology is rolling out in our lives, as Scott Monty said, it could a “chart of your life”. It’s not just for me, it’s for all of us to use in our personal and professional planning.
As we approach the anticipated recession, now is a good time to publish this roadmap, as we’ve seen economic conditions shape each era. For example, in the Internet Era, the dot coms experienced a shakeout in the 2001 recession. Next the Social Media era became a low-cost channel in the next economic downturn and the collaborative economy birthed in the 2008 recession as people struggled to stay in homes, and get what they needed, cheaply.
The same will happen in the next recession, technologies will reduce costs, increase efficiency, and humans and businesses will turn to them to increasing their adoption at an exponential growth rate.
It’s worth noting that these eras often happen in overlapping waves. One era doesn’t start and stop, they overlay each other, and obviously interact with each other. For example the Collaborative Economy era (like Uber) will soon become the Autonomous World era, as the cars become self-driving.
Social Media era
Collaborative Economy era
Autonomous World era
Modern Wellbeing era
Mid 90s, “popped” in 2001. Currently a matured market; nearly all internet users access these services.
Gained traction in 2005, gained market adoption during 2008 recession, most internet users use these platforms multiple times a day.
Many companies birthed in 2008 recession, when people were resource strapped.
Undergoing growth for decades, there have been many surges and ‘winters’
Early Fitbit emerged in 2007, Nike’s Fuelband emerged in 2012, spurring a craze. Since then hundreds of wearables attracted mainstream attention.
Every media, business, and entity created a website to share information and enable commerce; “dot com” boom.
Free, low-cost people-created media, and used by marketers to reach customers.
Peer-to-peer commerce platforms emerged during recession, enabling people to get what they needed from each other.
AI technologies simulate human intelligence by replacing and augmenting simple repetitive tasks to more complex problems.
Consumer accessible technologies improves humans minds, bodies, physical spaces around them, and communities.
Easily accessible browsers, web software, hosting, network technologies
RSS, ratings, commenting, publication tools.
Mobile apps, geo-data, online payments, ratings and reviews, marketplace software
Machine learning, big data analysis, advanced computing.
IoT, devices, apps, machine learning, and prior digital eras
Birth of business to consumer ecommerce.
Peer to peer communication changed the flow of information power.
Near real time services, sharing of resources can improve sustainability, human connection.
Reduce humans painful toil of hard labor, repetitive tasks –solve complex problems
Humans can improve mental capability, increase longevity, enjoy happier, more content lives with their loved ones.
Many failed startups from lack of monetization, “dot bomb”. Traditional retailers and middleman struggle to compete.
Privacy woes. Monetization of user data in questionable ways. Digital addiction, psychological damage, social dynamics changed.
The sharing companies and their investors became 1%ers, some models increased congestion, and workers rights often trampled
Top fears include: robot overlords enslave humans, job loss, lack of human/work purpose, unforeseen ethical dilemmas
The concerns over data privacy and over reliance on technology in our lives continues to grow.
The race is far from over, but current leaders: IBM, Palantir, Google, Amazon, Apple, Nvidia
This battle is still being fought, but Apple, Google, Calm, Headspace, 23andMe, Ubiome lead the market.
Thousands of “dot bombs” and their investors.
Users privacy, journalism, governments and marketers who failed to adapt.
Some on demand workers. Traditional companies who failed to adapt.
Workers who conduct repetitive tasks.
Traditional medical, health, pharma and insurance companies who don’t adapt to these consumer technologies will lose out
These large companies are laying foundation to support –but not always lead– in the other eras
Leading platforms must adjust business model for autonomous world era. Balance user and gov needs.
Workers who perform repetitive tasks will be replaced by autonomous systems.
These autonomous technologies will continue to creep into our lives, businesses and society, indistinguishable from most human services.
These technologies continue to integrate with our bodies, where we become reliant on them, a form of cybernetics
The first version included only the first three eras, and the second edition layered on the Autonomous World era. While I’ve been eyeing the fifth era, Modern Wellbeing era for about a year (prior we called this a quantified self), I waited until the right time to publish this in public. It’s ripe now, as with the growth mindfulness apps and features emerging, new devices that measure heart rate variability and others coming. During the next period, people are so tired from the politics, bad news, too much tech, they want to focus on themselves.
With that said, what’s the six era? I’ve some early ideas, but it would appear as unrealistic science fiction at this stage. Love to hear your reactions to this view of how technology is going to roll out. Which era are you currently focused on? How will you plan for the next phase?
Click above video or access directly: Tim Cook describes how he wants users to curb their phone addictions and have “a great life” without being tethered to the phone, features include data on app usage, and ability for users to limit notifications, apps, and overall time on device.
By Jeremiah Owyang, Jessica Groopman, Rebecca Lieb, and Jaimy Szymanski.
Apple is leading self-regulation of the tech industry by enabling users to impose limits on the time they spend on social networks. The company, which has 44% of smartphone market share in the USA, is using its hardware and software platforms to become the arbiter of balance in our lives, by providing multiple features that will: gauge how much technology we’re using, and provide us with tools to limit and manage our social media usage.
We don’t expect wild-scale consumer adoption of this feature, but we do believe this is the first in a series of self-regulation features that will be introduced by the industry. In the long term, this trend will serious implications for marketers in the coming years and pose an existential crises to Facebook.
Too much time spent online is making us sick. Studies show that not it impacts our ability to focus, alters mood, underlies sleep disorders, and sparks social dysfunction. Meanwhile, Facebook has continued to erode trust, from both data mis-used, as well as being accused of deploying highly addictive features, that keep users glued to the app, similar to how casinos lure gamblers. At Kaleido Insights, we seek to analyze how technology impacts a various stakeholders in a single view. We see at least four major groups impacted by this announcement:
Impact to us Humans
We see some specific impacts to the users of the Apple ecosystem:
Apple has announced a variety of tools to limit “anxiety-tech,” including dashboards of time spent on seemingly pointless apps, limiting interruptive notifications, and reports on usage.
Parents will have stronger controls to manage how children (and adults) use technology.
The big question is, will the normal user opt-in to use these tech-limiting features? While we think most users will be skeptical, those who are more mindful are more likely to adopt. There’s already a slew of apps that measure and limit screen time that are gaining adoption.
Impact to Government and Regulators
Government continues to behind in putting guardrails around the tech industry:
Senator Mark Warner, was recently quoted saying, “the era of the wild west in social media is coming to an end,” suggesting that federal lawmakers seek to regulate social networks.
Also, former Facebook security chief Alex Stamos wrote shortly after leaving the social networking giant, ”In some ways, the United States has broadcast to the world that it doesn’t take these issues seriously,” showing the concern from even within the social network.
Overall tech giants don’t want to be regulated by government bodies –it’s in their best favor to self-regulate, and in this interesting case, Apple is regulating Facebook.
Historically, technology goes through patterns of early adopters, widespread adoption, various issues arise, and the industry often is regulated. This has occurred with spam, search, native ads, and now with social network over-adoption –the difference here is that Apple is providing features for users to “self-regulate” their Facebook additions.
Impact to Technology Companies Silicon Valley must reevaluate purpose and even business models as users and society questions their role in our lives.
The biggest question remains, can tech companies self-regulate faster than law makers around the globe? It depends on the makeup of each company.
Recently, both Mark Zuckerberg and Jack Dorsey went to congress to both educate lawmakers as well as provide their own narrative to shape the discussion
We’re already seeing Google try to appease users, launching a campaign called Google Digital Well Being which suggests that in order to reduce constant interruptions from apps and social networks, that users ought to rely on Google AI, and “Make Google do it”. Not only would this put Google’s AI as the center of users’ life, it would cost you a few thousand dollars to purchase all the hardware they recommend.
Impact to Marketers and Advertisers Caution, be on right side of history as consumers shy away from tech addiction:
As some mindful users limit their social networking time, it will make it harder for media creators and marketers to reach them. engagement features such as likes and comments means engaging content will have fewer signals,–reducing the spread of content.
If these features gain traction, fewer ads will be viewed, which we believe will result in marketers needing to focus on higher quality content, or deeper engagement apps.
As a result, we expect CMOs to refine their social media marketing efforts:
Create more compelling content. Marketers can’t be lazy, rehashing photos from one social channel to the next. As time and attention become more limited, they’ll need to up their game.
Marketers will try to shift users off social networks by engaging them on SMS, email marketing, or inviting users to download their own branded apps to engage, perhaps with conversational bots.
Over time, limiting social network usage means marketers may limit the user of Facebook Connect as a rapid registration method on microsites or campaigns.
We will see a decrease in the social marketing advertising budget.
We may see marketers focus more on real-world-events in the face of a digital detox trend.
Where does this leave us? Apple (and Google) will push its own feature sets to enable users to suppress annoying and harmful apps. This is a display of might but also puts user needs into the center of their value proposition. Users are already more likely to trust Apple, who they pay high amounts of money for their premium product –rather than the advertising based models that have gotten Facebook into so much trouble as they strive to keep our attention.
While we anticipate only early adopters will initially enable these features, this will be the first in many moves to curb excess notifications, pop-ups, and addictive behaviors. As this continues, the tech industry will be able to self-regulate ahead of government institutions. For marketers, this spells an even more difficult way to reach customers in social networks, so they’ll shift to in-person events, native apps, or other direct communication tools.
Finally, attention economy-based companies like Facebook will need to evaluate business models that are better both for users and the ecosystem.
By Jeremiah Owyang and Jessica Groopman, Kaleido Insights Analysts.
A new category of software companies must emerge, these companies enable a business to manage multiple virtual assistant experiences from one single platform.
Business needs: marketing, customer care, and other departments are struggling to manage various virtual assistant and AI platforms ranging from Alexa, Cortana, Facebook messenger, and beyond. The APIs will frequently change, often without notice, multiple scripts will have to be integrated and managed per each platform.
These vendors have the following features:
Enable a business buyer to manage a single set of chat scripts from a single platform,
Manage changing APIs from various Virtual Assistant companies, reducing customization by the business buyer
Enterprise-class data security and compliance
Provide aggregated analytics and dashboard reports cross-platforms
Foster data integration and common data standards
We’ll obtain more business requirements from the large companies we speak with on a regular basis.
If this patterns sounds familiar, we saw this same exact market movement in the social business industry, and a rise of Social Media Management Systems emerged (I covered this market at great length) to manage dozens of social networks with ever varied and changing platforms.
Management tool will need to manage AI agents across multiple functions, channels, platform providers:
Voice services (Alexa, Cortana, Siri, Google Assistant)
Branded service agents (IPsoft’s Amelia; Autodesk’s AVA)
In 2016, China Unionpay (CU), the third-largest payment network by value of transactions processed, behind Visa and Mastercard, recently announced a blockchain PoC project in collaboration with IBM to develop a loyalty bonus points exchange for its 200+ members across 150 countries,
Snipps (digital marketing promotions provider) recently partnered with LoyalCoi,n
Elements’ ELM token cryptocurrency miners can earn ELM for “proof of work” processing. These universal tokens can be used for shopping, airlines, movies, etc.
Russian Burger King’s WhopperCoin announced their program
Business Opportunities: While private blockchains and branded cryptos are nascent, bleeding edge technologies with limitations, we have to ask: Why is this a budding trend? We see many potential business opportunities including:
Fraud reduction: Blockchain reduces loyalty fraud, as members in the network have key information shared in the distributed ledger––a core feature of blockchain. It’s a “single source of truth;”
Loyalty exchange: Interchangeable points for other currencies, including other cryptos or even fiat based currencies, this provides more value than holding points to one single company’s loyalty program.
Transferability: Tokens could theoretically be exchanged across other businesses or services, allowing customers to freely choose how to redeem for rewards, discounts, and more, all which encourages repeat engagement. Rewards or tokens become equity, monetizable to consumers.
More flexibility: Blockchain enables rewards to be more easily tracked, transferred, and allocated into micro-redemptions. In addition, new modes of engagement (e.g. tied to specific content consumption; IoT product use; biometric authentication; beacons; local or regional campaigns) could be more easily scaled up or down across loyalty networks.
More cost effective: Creating or expanding loyalty programs across affiliates is historically very time- and cost-intensive, especially considering systems integration. A distributed ledger can significantly reduce development, integration, reconciliation, and security costs.
Low(er)-risk: As blockchain-based applications go, loyalty programs are relatively lower risk initiatives than those involving capital markets, healthcare, or other highly sensitive data.
Risks and Challenges: This nascent space is fraught with froth, due to media hype, low barriers to entry and more.
So. Much. Hype. Many of the announcements are not fully deployed systems, but rather a promise. In general, the blockchain space is brimming with more press releases than at-scale deployments (most enterprise blockchain projects are in PoC today). Some of these large companies are likely following the popular trend of tech startups launching ICOs (initial coin offerings) to raise funds.
Token fatigue, sigh: Consumers may soon feel overwhelmed by all the token offerings, and eventually become apathetic (as many have of current, disconnected loyalty programs)
“What’s Blockchain?” steep learning curve: Customers like loyalty programs––it’s unsure if they’ll see more value in a blockchain or token-based loyalty program.here are multiple steps to educate customers, as well as encourage them to download, setup, and manage token wallets and accounts.
But will it scale?: Thisremains an issue, particularly involving public blockchain networks or programs with high volume transactions, including other charges against the scaling issues with blockchain as an overall industry.
Hands off my data. Brands will have to collect less personally identifiable information (PII) data for these programs. Not only because of GDPR, and inability to scale, but will have to limit how much PII can be put on a shared network. This also means data aggregators and brokers become less relevant to loyalty programs.
Kaleido Insights’ Recommendations: Deploy blockchain for your loyalty program if:
You’re poised to experiment with an emerging technology that reshuffles economic benefits of loyalty programs, in favor of brand, affiliates, and customers,
You’re ready to deploy significant upfront marketing spend to educate customers on what and how to use blockchain,
Your company is a holding company with multiple disparate brands, products, locations, and systems,
You’re part of a partnership with multiple companies that all share a common loyalty program, but the systems are not well interconnected,
Current partnerships aren’t delivering meaningful business ROI; are too cumbersome or costly to scale; customer loyalty is not growing,
You’re frustrated with the loyalty vendors in your market, and want to give them notice, there’s a new distributed way to maintain customer loyalty,
Your customers deserve a more flexible loyalty rewards program, and you want to empower them (key segments: early adopters, millennials, crypto-enthusiasts).