The Graying Of America

Who wants to think about getting old? Ken Dychtwald, for one. The 38-year-old psychotherapist has been studying aging for most of his adult life and thinks businesses should start doing the same. Thanks to medical breakthroughs and declining birthrates, people over 65 now outnumber teenagers for the first time ever -- a gap that will only grow larger as the baby-boom generation grows older. These demographic trends, Dychtwald argues, are going to have enormous consequences for business in the coming years, affecting everything from the design of car seats and movie theaters to the way that companies portray older people in their advertising. "There's no industry, no service, no product that will be untouched by the aging of America," he declares.

And therein lies opportunity, as Dychtwald has been quick to realize. In 1986, he started an education, information, and marketing research company called Age Wave Inc., based in Emeryville, Calif., to advise businesses on adapting to an aging world. Last year, the company grew 900%, posting revenues of $3 million, up from $300,000 the year before. Meanwhile, Dychtwald himself is getting as many as 150 requests a week to speak before a variety of audiences.

"This thing has grown exponentially," says Dychtwald, who's doing all he can to make sure that Age Wave keeps up the pace. For openers, he has assembled a board of heavyweight directors, including Institutional Investor Inc. executive vice-president Fred Rubenstein and INC. 500 member James Bernstein, founder of General Health Inc. Together, they have come up with an unusual growth strategy, built around joint ventures with companies seeking to tap the over-65 market. Rather than merely providing expertise for a fee, as most consulting firms do, Age Wave looks for projects in which it can take an equity position via a joint venture. In such an arrangement, the firm typically receives a fee covering its costs, plus a modest profit, as well as a long-term income stream (assuming that the project turns out to be profitable).

It's a nice deal if you can swing it -- and, to date, Age Wave has swung it three times, with nine more joint ventures in neotiation. It has also sold 20 libraries containing resource materials on aging, at $150,000 a crack. Yet it still has only 30 employees. "Our goal is not to create a General Motors or an IBM," says Dychtwald. "Our goal is to have a lean, trim, smart company that only gets involved in projects that do good for the public, and that have extremely high profit opportunities." Indeed, he says, Age Wave has been consistently profitable, and he doesn't expect that to change. "We have demographics on our side."

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