Mind Games @ Venture Capital Journal

The August issue of Ven­ture Cap­i­tal Jour­nal brings a very good piece on the emerg­ing brain fit­ness soft­ware  (also called “neu­rosoft­ware”) category:

– Mind Games (sub­scrip­tion required)

– Dakim, Lumos Labs, Posit Sci­ence and oth­er brain fit­ness star­tups are start­ing to gain mind share and cap­i­tal from ven­ture firms.

The reporter and I spoke as Lumos Labs received its $3m round, and we dis­cussed oth­er fund­able start-ups, fea­tur­ing Cog­niFit. Which, as men­tioned over the week­end, just raised $5m.

If case you are a new Sharp­Brains read­er, per­haps vis­it­ing us after read­ing this VCJ arti­cle, let me pro­vide a quick overview of the cat­e­go­ry and our Mar­ket Report (which is annu­al, not quar­ter­ly as the arti­cle states):

A) Report High­lights

We esti­mate the size of the US brain fit­ness soft­ware mar­ket at $225M in 2007, up from $100m in 2005 (50% CAGR), ana­lyz­ing the size and trends of four cus­tomer seg­ments: con­sumers, health­care & insur­ance providers, K12 school sys­tems, and for­tune 1000 com­pa­nies, mil­i­tary, and sports teams. Two seg­ments fueled the mar­ket growth from 2005 to 2007: con­sumers (grew from $5m to $80m, 300% CAGR) and health­care & insur­ance providers (grew from $36m to $65m, 35% CAGR).

Ten Spe­cif­ic High­lights from The State of the Brain Fit­ness Soft­ware Mar­ket 2008 report include:

1) 2007 was a sem­i­nal year for the US Brain Fit­ness soft­ware mar­ket, which reached $225 mil­lion in rev­enues up from an esti­mat­ed $100 mil­lion in 2005.

2) Over 20 com­pa­nies are offer­ing tools to assess and train cog­ni­tive skills to four cus­tomer seg­ments: con­sumers; health­care and insur­ance providers; K12 school sys­tems; and For­tune 1000 com­pa­nies, the mil­i­tary, and sports teams.

3) The Nin­ten­do Brain Age phe­nom­e­non has dri­ven much of the growth. The con­sumer seg­ment grew from a few mil­lion in 2005 to an esti­mat­ed $80 mil­lion in 2007.

4) There is major con­fu­sion in the mar­ket, so edu­ca­tion will be key. Users and buy­ers need help to nav­i­gate the maze of prod­ucts and claims.

5) Over 400 res­i­den­tial facil­i­ties for old­er adults have launched com­put­er­ized brain fit­ness cen­ters. Sales to the health­care and insur­ance provider seg­ment grew from $35 mil­lion in 2005 to an esti­mat­ed $65 mil­lion in 2007.

6) More than five pro­grams have shown results in ran­dom­ized con­trolled tri­als. Cog­ni­tive func­tions that can be trained include: visu­al and audi­to­ry pro­cess­ing, work­ing mem­o­ry, atten­tion, and decision-making.

7) A prod­uct has obtained 510(k) FDA clear­ance for reha­bil­i­ta­tion of stroke and Trau­mat­ic Brain Injury patients. Anoth­er prod­uct is being used by a grow­ing net­work of ADHD specialists.

8) Large-scale, ful­ly-auto­mat­ed cog­ni­tive assess­ments are being used in a grow­ing num­ber of clin­i­cal tri­als. This opens the way for the devel­op­ment of inex­pen­sive con­sumer-fac­ing, base­line cog­ni­tive assessments.

9) The poten­tial for K12 Edu­ca­tion remains large­ly untapped due to lim­it­ed research link­ing cog­ni­tive train­ing to aca­d­e­m­ic performance.

10) Com­pa­nies, sports teams and the mil­i­tary are find­ing oppor­tu­ni­ties to improve pro­duc­tiv­i­ty. The aging work­force will make this a must.

B) Table of Contents

Edi­to­r­i­al

Exec­u­tive Summary

Chap­ter 1: Why now? Mar­ket Overview

• Brain fit­ness soft­ware mar­ket: the focus of this report
• Four cus­tomer seg­ments of the brain fit­ness industry
• Part of the larg­er neu­rotech­nol­o­gy market
• Brain fit­ness became a media dar­ling in 2007
• Con­flu­ence of mar­ket forces dri­ves growth
• Demand: range of con­sumers and insti­tu­tion­al buy­ers of brain fit­ness products
• Sci­ence: new find­ings spark focus on brain fit­ness market
• Sup­ply: sep­a­rat­ing hype from real­i­ty in the claims of brain fit­ness soft­ware products
• Pol­i­cy: brain fit­ness start­ing to shape pub­lic pol­i­cy agenda
• Nav­i­gat­ing the brain fit­ness soft­ware pro­gram landscape
• Inter­view with Dr. Yaakov Stern — The con­nec­tion between build­ing a cog­ni­tive reserve and delay­ing alzheimer’s symptoms

Chap­ter 2: The Sci­ence of Brain Fitness

• New brain par­a­digm: life­long capac­i­ty to change and cre­ate new neurons
• Neu­roimag­ing: enabling sci­en­tif­ic explo­ration of the brain
• Cog­ni­tion: core brain function
• Some cog­ni­tive func­tions improve as we age oth­ers typ­i­cal­ly decline
• The four pil­lars of brain health
• Soft­ware-based brain fit­ness pro­grams: effec­tive to train spe­cif­ic skills
• Cog­ni­tive assess­ments: crit­i­cal to iden­ti­fy bot­tle­necks and mea­sure progress
• Cross-train­ing the brain builds up the cog­ni­tive reserve
• An emerg­ing field: much more research needs to be done
• Inter­view with Dr. Jer­ri Edwards — Improv­ing Brain Func­tion­ing for bet­ter Dri­ving and Aging

Chap­ter 3: Con­sumers Tak­ing Charge of Their Brain Health

• Nin­ten­do cre­ates glob­al aware­ness for brain training
• Grow­ing appetite for casu­al games among play­ers over forty
• Baby boomers move the mar­ket by sheer size
• Con­sumer inter­est in health and wellness
• Grow­ing con­cerns about herbal supplements
• Com­mer­cial soft­ware prod­ucts flood mar­ket with incon­sis­tent claims
• A num­ber of crit­i­cal ques­tions remain unanswered
• Com­pa­ny pro­files: select con­sumer brain fit­ness products

Chap­ter 4: Health­care and Insur­ance Providers  Focus on Pre­ven­tive Health & Clin­i­cal Conditions

• Brain fit­ness cen­ters becom­ing main­stream in res­i­den­tial facilities
• A major incen­tive for insur­ers: delay­ing the onset of Alzheimers symptoms
• Emerg­ing clin­i­cal applications
• Stroke/ Trau­mat­ic Brain Injury Rehabilitation
• Atten­tion Deficit Disorders
• Poten­tial future clin­i­cal applications
• Use of com­put­er-based cog­ni­tive assess­ments in large-scale clin­i­cal trials
• Open questions
• Com­pa­ny pro­files: select brain fit­ness prod­ucts sold through health­care or insur­ance providers
• Inter­view with Torkel Kling­berg  Expand­ing Work­ing Mem­o­ry for kids with ADD/ ADHD
• Inter­view with Eliz­a­beth Zelinksi Healthy Aging Enhanced with Com­put­er-based Programs

Chap­ter 5: K12 School Sys­tems Respond­ing to Learn­ing Dis­abil­i­ties in New Ways

• Ear­ly K12 brain fit­ness applications
• Mis­match between aca­d­e­m­ic needs and the claims of exist­ing offerings
• A great resource: the US Depart­ment of Edu­ca­tions What Works Clearinghouse
• Sci­en­tif­ic Learn­ings his­to­ry and plans
• What Works Clear­ing­hous­es take on Fast Forword
• Houghton Mif­flins Earobics
• Oth­er pro­gram developers
• Open questions
• Inter­view with Dr. Bradley Gib­son Link­ing Com­put­er-based Cog­ni­tive Train­ing to Aca­d­e­m­ic Performance

Chap­ter 6: For­tune 1000 Com­pa­nies, Mil­i­tary & Sports Teams Improv­ing Productivity

• For­tune 1000 com­pa­nies increase health & well­ness budgets
• In light of the aging work­force, a focus on brain fit­ness is a log­i­cal extension
• In com­pa­nies start­ing to embrace seri­ous games, brain fit­ness may be a new application
• Mil­i­tary and sports teams lever­age new brain fit­ness technologies
• Pro­grams to improve dri­ving skills proliferate
• Few pure-breed play­ers, but some mar­ket lead­ers are start­ing to take notice
• Inter­view with Dr. Daniel Gopher Appli­ca­tions for Com­put­er-based Cog­ni­tive Simulations

Chap­ter 7: Future direc­tions: mar­ket trends 2007–2015

End Notes

C) Com­pa­nies Includ­ed in the report:

Advanced Brain Technologies

Applied Cog­ni­tive Engineering

Brain Resource Company

Brain­Train

CNS Vital Signs

Cogmed

Cog­niFit

Cog­ni­tive Drug Research

Cogstate

Dakim

Gem­stone

Houghton Mif­flin

Lex­ia Learning

Lumos Labs

MyBrain­Train­er

Nin­ten­do

NovaV­i­sion

Posit Sci­ence

Sci­en­tif­ic Brain Training

Sci­en­tif­ic Learning

Teach­Town