Special: The Vitalize Podcast - Taking AgeTech from Niche to Mainstream, with Max Zamkow of Third Act Ventures

Welcome to Just Go Grind. Today we have a special episode from the Vitalize Podcast, our show at Vitalize Venture Capital. You can find all episodes of the Vitalize Podcast on Apple Podcasts and Spotify, or go to thevitalizepodcast.com. Let's get to it. On today's episode, we have Max Zamkow, the managing partner at Third Act Ventures, an early-stage venture capital firm investing exclusively in age tech. Let's dive in. Max, welcome to the show.

Thank you so much. Really glad to be here, Justin.

Yes. And for people who don't know Theriac Ventures, where are you investing? What are you guys doing there?

I'm curious. Sure. So we invest specifically in age tech, not a term most people know. But age tech is any technology or service that is primarily for older adults and/or their caregivers, whether that's family caregivers, professional caregivers, And really, it's actually much broader than one would think. I, like most people, you think retirement is 65, but actually, it kind of starts around 45, 50 when you're even thinking about retirement, all the way through. I literally just talked to a company that's doing like water-based cremation. So all sorts of crazy stuff, which is great. And we are seed stage investors again. All throughout age tech.

And with that too, so when you started 5 or 6 years ago with this, like, take me through what you were thinking at that time, what were you seeing at that time to focus on age tech? And was it always— was it still age tech from the beginning around this is how we think about it? I'm curious about the beginnings of Third Act as well.

Sure. So the things we were seeing and that are still present now, but fortunately smaller, the first is a huge gap in funding for this ecosystem. And the term barely existed. It used— there are a couple other synonyms: silver tech, gerentech, elder tech. Hate those ones. No one likes them. I think age tech is finally starting to win, which is good. But there really was— were very few, if any, people focusing or looking at this ecosystem, which meant that us entrepreneurs who were trying to build here, really couldn't get early-stage funding. Anyone who was building here would have to build to, you know, $1 million, $2 million, $3 million in revenue till they could find someone who, even though they may know nothing about the industry, at least can understand the cash flow coming in and out and see the opportunity from there. But to go from $0 to $1, $0 to $2, there was very little. Fortunately, that is changing. We've had some new entrants, Primetime Partners being one of my favorites. And more generalist firms entering as well. In terms of kind of what we're seeing or how it's kind of expanded, again, like when I first started, I thought 65 plus, that's where we're targeting. Most things are being targeted really at like the 80, 85 plus, really things just around nursing homes and senior living. Since then, we've seen a real broad expansion, not just into those facilities, but outside of those facilities. Care models are changing where people are trying to stay at home and be cared for in their home as much as possible. Large institutions are getting on board and then going even earlier, realizing that retirement doesn't start at 65. It starts earlier. It starts when you're planning about it. And now we're living so much longer. The fears are, how do we make sure not to outlive our money? How do we keep active and engaged in whatever it is that we need to do? So it's really broadened out a lot. As the whole industry has changed, which is really exciting.

When you raised your fund, you raised a fund, raised a fund, just to be clear, back in 2015, was it?

Yeah. Yeah. So I raised a small fund. It was mostly personal money and then some outside money as well.

Okay. So with that, then that context is helpful. Did you have pushback around the thesis or what you're investing in and everything? I'm curious about, about that because we've always talked to a lot of different people around staying generalist, going vertical specific, like especially you mentioned something that's not, wasn't as prevalent with not even knowing the name for how you want to go. about it? Like, sure, how was that process? I'm curious.

So interestingly, we didn't get a lot of pushback, but more just like glazed eyeballs, I would say. It is probably the most boring space you can invest in, particularly when there's crypto and space and all sorts of much more exciting things. Talking about the population getting older, People getting older, um, how aging currently sucks. A, you get, again, people just like tuning out. And B, you also get a lot of people who like just kind of don't want to talk about it. Aging is not something, particularly in American or Western cultures, we enjoy thinking about. We really worship youth for everything from beauty creams to how well, uh, JLo is aging at 50 and looked at the Super Bowl halftime. We really do. And so a lot of people, again, don't want to think about it, like, we're not interested. But fortunately, the demographic shift is obvious. We've been hearing about gray tsunamis and all sorts of crazy terms for a while. So there's less pushback as there is in, like, again, boredom and some skepticism that maybe older adults won't use technology. But I think that's been proven, at least in the last 5, 6 years, that it's not necessarily the case.

So for you then, in this industry, what are the types of companies, things you look for, what you're excited by within the space? You mentioned kind of, you know, it's not the same as like crypto or other things like that, but obviously this is a very important market, a lot of needs within this. We see the trends are going, populations are going. For you as an investor, like, what are some of the things that you are excited by within that and companies you see? I'd love to hear more about that.

Sure. In particular, I look for things that are being applied to new models that are emerging and new potential, not just models of care, but also business models. One of the most exciting things that's happened over the past few years is the ability for Medicare Advantage payers to start reimbursing for not just home care and other care-related things, but All these other things that go into people's health that they call the social determinants of health, which is everything from making sure you have food in the fridge to making sure you have heat in your building and that you're living somewhere safe and that you can get to and from the doctor's offices. All things that obviously matter a lot in terms of your actual health. And so all of a sudden now there was a very interested and financially motivated payer for a lot of these businesses that were definitely had the ability to help a lot of people. But consumer businesses, particularly in this market, can be really challenging. Getting people to actually shell out money individually can be really hard, particularly for care-related things when health insurance, Medicare kind of covers the very, very basic low level. So all of a sudden now there was a large payer with a huge financial incentive to come in and kind of pick up that slack, which is great. You know, the thing I tell entrepreneurs also is that, you know, my background before Third Act Ventures was at the operating side. I was a software engineer, a mobile software engineer. So I don't pretend like I have decades of experience and can see around corners. So a lot of what I'm interested in comes from things that come to me or that I find, entrepreneurs that are able to find a vein of new opportunity and they're able to open my eyes to it, to things that I had no idea was a problem or existed.

With that too, I mean, with what you're focusing on inherently, there is this industry of, okay, building and selling to, I guess, people who it's directly affecting versus people who are paying for what the service is. How do you convey that to founders? You know, screen for that, maybe like, even look for to see like they're thinking about it in that way. I'm curious from what you see in talking to companies.

You actually hit on probably the most challenging thing about the industry. And one of the main reasons besides just the industry barrier being a little bit technophobic, which again, is changing.

Yeah.

Again, but the biggest reason why there hasn't been more innovation, and it's because there are so many different perspectives and stakeholders in any product that satisfying them all is really hard. And many entrepreneurs focus like really on one and totally neglect another. So whether that's focusing on the buyer and forgetting the end user, or focusing on the family, but not even thinking about the independence and dignity of the person they're caring for. All sorts of things. In terms of how I screen for it, it's relatively simple. A, when we do a product walkthrough, I ask questions from every perspective, and I try to, but really, before I invest, the company has to have at least a few customers or pilots And I just call them. I get their perspective and I make sure to talk not just to the buyer, but if it's a product that's being used by frontline nurses, I have to talk to a nurse because I need to make sure that if they're the ones that are using it, that it provides value to their work, makes their life easier, not harder, so that they keep using it. And it's not just another very well-intentioned product that ends up going unused after a few months. when it stops getting shoved down their throat by the administration. So I just talk to people.

With this too, so that's obviously, okay, that makes total sense. Like every— everyone who knows about VC and diligence process and like, you're obviously, you're talking to customers and you're asking for referrals and everything like that with this too. So that complexity, you're going through that side of things. What else are you screening for, for these founders? And is it, I guess what I'm really curious about is with what you're doing, you kind of seen different parts of the industry and you've seen the evolution of age tech. in the last 5 or 6 years, because you've been investing, you've had tons of companies, how much of it is like your thesis around these are the areas, there's probably things here that are going to be built and looking for founders there, versus you kind of mentioned a little bit earlier, but them coming to you and just that you're just taking in whatever inputs in terms of the founders coming in, how much is like between those 2 things? I'm curious.

It's a good question. I haven't actually calculated what the ratio is. But I would say it's probably 25 to 35%, you know, my grand theses of what I see happening and what I hear happening. And that means like 65 to 75% of things that are coming to me. Um, part of the reason for that, again, is that without decades of experience, I can see things that I think are exciting, interesting, but but I can't necessarily tell whether like now is the right time for it. And timing is so crucial in venture capital. The same company started today versus a decade from today could have vastly different outcomes just based on what the market is ready for. So as much as I liked, as I would love to be able to know what's coming and invest there early, a lot of it is, you know, I'm going out finding companies in these spaces, but really just again, those companies coming to me or you know me finding them through someone else and opening my eyes to why this is the right company, why it's the right product for right now.

I know this is kind of an impossible question, Max, but I'm curious if there's one or two companies you want to call out that are doing something very intriguing, interesting, useful, impactful in the space especially. I'm sure all of your companies you thought of course is why you invested, but I'm curious if there's one or two. that stand out more recently that you want to call out?

I'll talk about one that I love talking about, not just because I really love what they're doing, but because they're a great example of why investing in this space, you really need to take your own subjective opinions about any product out of it. Because unlike any other space you're investing in, I mean, maybe space, I don't know, but you really just like, I recognize that I am not the user or buyer for any of these products. Unfortunately, my grandparents have passed. Fortunately, my parents aren't there yet. They're in their early 60s, so they're only a part of age tech, which means that what I think about a product, about how it looks, how it functions, really doesn't matter. All that matters is whether the people that it's for, that use it, really care about it. And so that was very clear when I talked to a company called Care.coach. What they do is they have developed a human plus AI system. They call it human in the loop that powers a basically like 3D avatar of a cat or a dog, or I think they're developing some more as well, that exists on a tablet and that is given to older adults. Often who live by themselves and don't have anyone else, just to like be with them, talk to them, make sure they're taking their meds, check in on them. And older adults just talk to it. And when I saw this, I was like, this is kitschy. Who is going to just talk to this 3D avatar all day? Who would use this? But as I dug in, I realized that The people who use this love it. They talk to it like it's their best friend. They are living much healthier lives. When something happens, the avatar is there to alert whether that's a neighbor, caregiver, 911, whoever it is. And there even— there was this great article, I think it was in the LA Times, about how this one individual who powered the avatar to some degree was in such a strong relationship with the person that they cared for that they actually attended their funeral, which is just wild.

Wow.

Yes, really unique, really exciting. And yeah, they're just basically being able to provide very inexpensive, light-touch home care and monitoring So that these people can live a lot safer, a lot longer, independently.

With this industry, and it's, like you said, it wasn't the sexiest industry. It's grown since you started this, this firm. I'm curious, have you always co-invested or led deals? Has that changed as the industry has evolved and you've seen the space grow a bit more? Like, I'm just curious about that side of being in venture, obviously, is like people have different strategies that for you and Third Act Ventures, like, Has that changed since the beginning? And where is that kind of currently at?

Sure. So that hasn't changed since the beginning. We're a follow fund. That is, or will probably be changing in the not too distant future. A, as my check size increases also, which is helpful. And as I and the firm has just gotten to know the industry a lot better, and is more comfortable doing that. You know, we're still going to be very collaborative and have other funds in any fundraise we do. And because we know that we definitely cannot support all by ourselves, but it is definitely something that as the industry has matured and the firm has matured, that we will be doing a lot more of.

And on that note, Max, so as the industry has matured and you guys have progressed in this as well, how do you think about then being the leaders in this space, branding, content marketing to really one, like that only helps your industry grow if you talk more about it, but also it helps your firm. And we think a lot of about that at Vitalyze. I think gave a lot of credit to Gail at Vitalyze who helped us in terms of, she committed to the marketing side, brought me in, we have some resources around that. We're thinking a lot about that for future of work specifically. And we see then that people now refer us deals constantly cuz like, oh yeah, Vitalyze, future of work. We think we see it all the time. For you, how do you think about that and see that?

That's a great question. So I feel like even from the beginning, you know, I recognized that this firm, no matter how big we get, will not be able to fully satisfy this industry. There's so much potential out there. So that I've always made it a mission of mine to get more investors to look at this space, come into this space. In the early days, it was a lot of fielding calls about firms dipping their toe in, showing them some opportunities, not really getting there. Obviously, that has changed a lot in the last few years, which is great. But I started doing whatever I could, again, not just to do outreach to entrepreneurs, but also outreach to investors. I started writing a monthly and then became quarterly newsletter, basically just highlighting all the deals that are going on in this industry that, again, many people hadn't heard of to try to generate excitement, help people understand the potential and value. It's called AgeTech News. I've now started to take that one step further and create that, create its entirely own kind of media platform brand, again, aggregating all news about age tech startups, funding, financings. We also just put together recently a directory of all age tech startups that we know about. It's like 660 and counting around the world, which is exciting. So now there's Yes. One place you can go to get more info on them. And we'll be doing a lot more, creating more content about it. Again, trying to help the industry push forward, really helping these companies get the word out there about what they're doing more to help them find whether it's another client, potential hire, investor, whatever it is. And again, just try to bring age tech from the niche to the more mainstream, at least.

I love that so much. Obviously my background in marketing and content, I'm very biased in that way. I think it's really beneficial, but I also think if you look at the industry and take a step back, look at something like Hacker News for YC and how Hacker News with all of the everything going on there, the bottom of it was to say like, hey, check out YC. And like, if you look at Andreessen Horowitz launching Future, their media platform, it's the same thing. They control distribution, they control the narrative around things. I think even in every niche you could see that within venture. Where if you are targeting a certain area, you could in theory win it by just being known for that, having the newsletter, the YouTube, the podcast, whatever in that space. I think it's a super smart strategy for people. I think we're going to start to see it more. I think you even see it as like individual operators doing that. If you look at Packy McCormick and his newsletter and how that has grown into that, he's an advisor in crypto for Andreessen Horowitz. We see like Li Jin talk about the creator economy and she had launched a fund, then joined with another Sure.

I was just thinking of Fred Wilson at Union Square Ventures. His AVC was one of the earliest ones and really just created a brand for that firm, which is so incredible.

Yeah, people always reference, and even like First Round committed very, very strongly to their media side of it eventually as well. Paul Graham with his essays, like, I think it's a smart strategy. And people are gonna continue to do this. And I think with what you're doing too, and with Age tech, and how you said it's growing, there is an opportunity, it seems like, to have more of that media side of it. So people just know that, oh yeah, Third Act Ventures is going to be the one to talk to.

Can I ask you a question? I know I'm reversing the roles a little bit. So in this world where everyone is starting to commit more to media and branding, how do you stand out from the pack?

I think the first thing is figuring out obviously what the industry message narrative you want to kind of get out into the world is. For us, we look at, you know, like I said, future of work. And other than that, it's like spreading access to this asset class with Vitalized Angels, our angel community. I think any investor and how they could go about it, once you figure out what that thing is for you, obviously it's age tech, then it's pick the media, the platform that you think you can do consistently. So whether it's a newsletter, whether it's Twitter, whether it's LinkedIn, whether it's YouTube, choose the one single platform that is going to be the first kind of beachhead. And go hard on that one, and then kind of expand out from there. For us, like we didn't start the newsletter right away. I have a lot of podcasting experience, so we started the Firelight Podcast. And even within that, we before that were doing a lot more on Twitter. So like Gale grew her following to like 27,000. As of now, mine's like 5,000 something. So like we leveraged Twitter side of it. We leveraged then the podcast. The podcast builds co-investor relationships and founder relationships. which then you can promote on Twitter. And then we only recently within 6, the last 6 weeks launched a newsletter. So I think if brands wanna go about that, you can start with one. And then there's a whole rented audience versus owned audience. Exactly.

Mm-hmm.

Because it's also like, as an investor, you know, there's not time, like you have no time. So you're like, what should I focus on? And like when you see the ROI of something like a newsletter, something like Twitter, for instance, where you can get eyeballs there, you see it's worthwhile. If you just start a newsletter first, the one problem with it is like if you don't already have an audience somewhere, then no one's gonna read it. So you have to have something that's a rented audience, which would be like LinkedIn or Twitter, and then your own audience would be like your newsletter or your podcast feed. So I think any brand can think about it that way if you're in, whether it be venture.

Yeah. Yeah. I think thinking about it that way is great. And I've, as I, I've told you this privately, but I am so impressed with just like how much and consistent content you guys are able to put out. It's really impressive, particularly with all the other things we have to do, uh, in our day jobs. I just am in awe. So thank you and, and keep doing it. And thank you for the advice. I appreciate it.

I appreciate you asking, Max. And I will say one last thing on that too, like for any, you know, VC or angel or whatever who's thinking about that same exact thing around branding, you could even start with a part-time hire, have an idea where you wanna focus on and get the ball rolling that way. I think especially at a venture firm where your, your main focus, the biggest ROI thing you do is investing in great companies. And having them do well, like that's the main focus, obviously. But when you look at how much deal flow comes now for us through Twitter, and because even for Vitalize Angels, our angel community, when we see the box of like how you heard from us, way more than half come through Twitter, a chunk come through our podcast, some come through LinkedIn, and we see that we track that so we can kind of see where people are coming from. I think any brand, any VC could do the same thing around that to figure out like. where we gain the kind of most ROI from that. But definitely hiring someone is helpful to be able to pull it off, even if it's like part-time and you just do that. I think it's worth the investment.

Makes sense to me.

Max, what is the best place for people to find you, connect with you online, learn more about Third Act Ventures and founders they want to pitch you? How should they do that? Sure.

Website's the first place, thirdact.vc. Feel free to reach out to me directly, max@thirdact.vc. And we have LinkedIn is probably where we are the most active. Again, Third Act Ventures, find me Max Samko, as well as AgeTech News as well. You're welcome to look us up there, LinkedIn mainly, and agetech.news on the web. Anyway, all roads lead here.

I love it. I love it. I love it. I think it's a really important industry, obviously, you're investing in. where things are going. Like, people don't think about it until they're older and then they're gonna start thinking about like, oh yeah, of course.

I guess it's too late. It's too late. Gotta make it better for all of us before we get there.

Exactly, which is why I love it. I was happy to chat. Thank you so much for your time today, Max.

No, thank you, Justin. So glad to be here.

Hey, thanks for listening. If you wanna learn more about us, head on over to vitalize.vc. You can also follow us on Twitter @vitalizevc, or you can follow me on Twitter @justingordon212. Have a great day and I'll talk to you in the next episode.