HomeHero launches its senior care marketplace in Los Angeles just as baby boomers hit retirement age

By Michael Carney , written on January 28, 2014

From The News Desk

There’s a demographic shift about to hit the United States like none it’s ever seen before. The baby boomer generation, those 76 million rugrats born to American families between 1946 and 1964, are sprinting (or more like shuffling) toward retirement at an astounding rate. As a result, the number of retirees in this country is expected to increase every year until 2030 when the over-65 crowd will reach an estimated 72 million people, up from just 40 million in 2010. This sea change will have a profound impact on our economy, but nowhere is the impact likely to be felt more than in the healthcare industry.

HomeHero is a new marketplace and technology platform launching publicly today out of Santa Monica technology studio Science with the the aim of helping families find, hire, and manage in-home care for seniors. The company has been in private beta in the greater Los Angeles area for several months, over which time it’s screened, on-boarded, and deployed several hundred of certified caregivers.

Types of care range from around-the-clock care to daily assistance to weekly drop-ins, and can include everything from companionship to chores and housekeeping. Clients have the option to search HomeHero for caregivers according to experience, location, language, gender, reviews, and other factors and then read caregiver bios, view in-person video interviews, and review ratings and reviews before booking. The company emphasizes that it conducts thorough background checks (at the national, regional, and local levels), verifies certifications, and reviews past client references for all caregivers.

It’s a much more modern and personal experience than calling an agency, or God forbid turning to Craigslist, and trusting that whoever shows up will be a good “fit” for your loved one. The company also promises rates (starting at $15 per hour) below those charged by these legacy agencies, and yet will pay its caregivers more than they can make elsewhere – a feat that it’s able to achieve through technology and the ever-popular “cutting out the middleman.”  The company provides a $1 million in insurance covering bodily injury and property damage.

Going forward, HomeHero aims to launch a new city monthly with an early emphasis on the West Coast. The strategy for expanding in these new markets is to work closely with geriatric care managers at local hospitals who act as patient advocates and are typically well plugged-in to the local senior care community.

Like many startups, HomeHero was created out of a personal need by its founders, Kyle Hill and Mike Townsend, both of which recently required in-home care for their loved ones. Hill's family, for example, struggled to find a suitable caregiver for his recently widowed grandmother. “Once we found one we liked, we learned that managing them from far away was even harder,” he says. “We wanted to consolidate a suite of in-home care services into a simple and affordable offering that families could use right away.”

HomeHero is more than simply a marketplace. The company also offers families access to a caregiver management platform that it calls HomeHero Connect. The platform combines timesheet tracking, automated payments, daily activity summaries by recorded audio, and emergency alerts. Families who already have an independent caregiver hired outside the HomeHero network, including those elsewhere in the country, can even invite them onto to the platform and then use Connect to manage their remote elderly care.

It’s ironic that HomeHero is using technology to solve a problem for a generation that on average, likely still struggles to program the clocks on their VCR and microwave. HomeHero’s true customers are not the seniors that will be receiving care, but rather their children and extended families who today are between 30 to 50 years old – exactly the people now using Uber, AirBnB, OpenTable, StyleSeat, and other technology marketplaces to find products and services elsewhere in their lives.

Today the average distance between the elderly and their closest adult child is 56 miles, up from 32 miles 30 years ago according to a 2013 Private Duty Benchmark Study. Seniors are also staying in their home longer today, reaching an average age of 90 before leaving, up from 74 years old three decades ago. According to HomeHero, the growth in the retiree population is expected to reduce the elderly to caregiver ratio in the marketplace by a factor of more than 50 percent, creating even more demand for effective booking solutions.

With this shift in population, America is also in the midst of a major shift in healthcare regulation, thanks to the Affordable Care Act (aka, Obamacare). Although HomeHero will surely be affected, its founders argue that the company's startup flexibility gives it an uncommon advantage in this regard. HomeHero offers non-medical companionship rather than in-home nursing, meaning the company will be less affected by upcoming regulatory changes than some of its indirect competitors.

Nonetheless, there are new requirements coming online in 2015 including that all agencies in the category will be required to publish the names of their caregivers online as well as an increase in the caregiver minimum wage. Of course Obamacare will likely have unforeseen consequences, the details of which could make or break a young company like HomeHero.

“The senior care market is not heavily impacted by technology, and with HomeHero, families can now have peace of mind and transparency with their family's caregiver,” Science CEO Mike Jones says. “Finding the right person to provide at-home care for seniors is a growing financial and emotional burden for millions of Americans, and HomeHero ensures they are paying the right rate for the right level of service.”

In today’s startup environment of on-demand housekeeping, maintenance, and salon care, disrupting senior care may seem like a natural next step in software and technology eating the in-home service world. But the company will face a number of very real challenges that make this anything but a sure bet. Anytime you’re inviting a stranger into your home, there are risks. The company will need to conduct thorough background checks – something Uber and other recent disrupters have learned the hard way – and assume a stance of accountability, rather than indifference, when things inevitably go wrong.

But more so than housekeeping or even transportation, caring for another human being, particularly one that can’t fully care for themselves, is an intimate and risk-laden service. In that way, HomeHero is not unlike childcare marketplaces like UrbanSitter that have by-and-large struggled to grow at the rate of other hot startup services marketplaces. Whether it be poor execution or simply an unwillingness of parents to trust their kids to a stranger hired over the internet, HomeHero would be wise to look at this market as a cautionary tale and extract as many learnings as possible to avoid a similar fate. now commands a post-IPO market cap of more than $700 million based on a similar model of delivering in-home care. Only about 10 percent of Care's business comes from senior care, while the rest is the result of its more than 9 million members booking everything nannies and babysitters. Despite its scale, seven-year-old Care is relatively basic offering compared to that HomeHero's combination of video interviews and its Connect platform.

For all the things that HomeHero does to make booking caregivers through its marketplace a better experience than any offline agency has ever offered, it will still need to overcome that stigma that as a startup it must inherently be cutting corners in ways that will put your loved one at risk. That’s a problem that only time and relentlessly delivering high quality service can address.

[Image via HomeHero]