1099s and Tenderness: Papa Health
What happens when you combine eldercare with tech's two hottest trends, 1099 labor and selling data to 3rd parties?
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āMy loneliness is killing me.ā
- Britney Spears, ā...Baby One More Timeā
Old and Definitely Not in the Way, Promise! (hi Mom)
Globally, there are few cultural traits as commonly prioritized as the reverence of and respect for the aged. No matter what region of what country, itās a near guarantee one of the reasons the local culture reveres grandpa is because heās reached age 80. As those around them pass on or move closer to their immediate families, many elders are left vulnerable to loneliness and the psychological effects therein.
There are also more seniors relative to other age groups than ever before. This means taking care of grandpa isnāt just culturally important, itās a juicy revenue opportunity. Bullshit Economy contributing factors such as Americans working longer hours, and the Millennial and Gen X cohorts having less wealth means granniesā and grampiesā children have less time and money to spend looking after them. Add in the absurd cost of healthcare and you have three hearty blows in the artificially ballooning eldercare market.
Resting arthritically at the intersection of all this is Papa Health, a homecare startup thatās received $92 million in funding which:
ā...pairs older adults and families with Papa Pals for companionship and assistance with everyday tasks.ā
Papaās ācompanionship as a serviceā offering is only unique if you neglect to consider the worldās oldest profession. Instead, the confluence of dismal economic circumstances, the proliferation of two-sided marketplaces supplied by 1099 labor such as Uber and TaskRabbit, and the insatiable need for data has Papa asking the question, āWhat if we paid college students $15/hour to take grandmas to coffee, track how it goes, then sell the data to insurance companies?ā
Papaās true differentiator is that itās striving to meld techās hottest paths to profit:Ā
A marketplace model with contract labor that skirts industry regulations (Uber, Airbnb, TaskRabbit, etc.)
The collection and selling of user data to third parties (Facebook, LinkedIn, Google, etc.)
Feed The Insurance Coās
As evidenced by the market caps of companies like Facebook and LinkedIn, the potential for products whose business is ingesting our data for free and then repackaging and reselling to 3rd parties is enormous. One such 3rd party hellbent on its need for data is the insurance analytics industry. Currently at a market size of just under $8 billion, itās expected to grow to over $22 billion by 2027. It was only a matter of time until our sense of duty to the aged crossed paths with dataās tantalizing margins.
āYouāre so kind to me, I really wanna tell you truthfully, you did a marvelous job taking me to the store and on my chores that I had to do. I appreciate it.ā - Sam Cirrincione, Papa Health user
Papaās āPapa Platformā, allows the company to collect data on behalf of families and of course, health plans, with the goal of increasing quality of life. About the product, Papaās CEO has this to say:
āI think whatās exciting about Papa is that weāve become the eyes and ears of the plan.āĀ
Papa, according to its CEO, is aspiring to be the hall monitor for insurance companies. Deranged.
Papaās quest to report on both the 1099s who provide the service and the old people that hire them opens the door for a feedback loop in which insurance companies could begin providing instruction to Papa caregivers on the optimal way to interact with the elderly.
Hoping this Loop Goes Nowhere
This has some disturbing implications, especially in the context of existing facial recognition technology and devicesā ability to listen and track us Ć la every phone and smart-home device on the market. Will Papaās caregivers, upon request from Aetna, be instructed on the optimal curvature of their smiles and the most pleasant pitch and tone of voice? Which earlybird specials are in-network on Anthem plans?Ā
By virtue of being 1099 employees, Papaās labor force is especially vulnerable to the whims of its employers. Since the āPapa Palsā messaging is aimed at recruiting young people (18 and up) whose main requirements for participation are only a clean criminal record, a command of English, and a driverās license, itās reasonable to think that Papa is working with untrained clean slates when it comes to what does or does not constitute effective and kind interaction with those in their care.
As of January this year, Papaās available in all 50 statesāthe market for cheap labor with high value continues its growth unabated. Itās no secret that every app tracks our data, but few so brazenly pair techās two highest margin strategiesālow paid 1099 labor and selling dataāin such a genial manner.Ā Ā
šØšØHOT NEW SEGMENT ALERT - WHATāS THIS DING DONG SELLING?šØšØ
Welcome to my hot new segment where readers guess whatās being sold in the ad. The first correct answer I receive gets a shout out in the next newsletter and a link to any of their work or social media that they choose. To answer, respond to this email, or message me on Twitter (@jarholst) For each correct answer I receive, Iāll be donating $1 to The Doe Fund.
A) Television
B) Paint
C) Diapers
D) Toilet Paper