"The foundation of all of this stuff is that it's new," he said. "Any new industry is divisive and creates debate. And I think that's the good news about innovation."
Lumosity: Rapid Growth ... and Controversial
A little history:
Lumos Labs was founded in 2005 by Michael Scanlon, a Stanford Ph.D. student in neuroscience, David Drescher and Kunal Sarkar.
The idea was to create an online training program for your brain, leveraging research in neuroplasticity -- the mutable quality of the brain -- that showed the possibility of enhanced cognition through changing environment. In 2007, the company launched Lumosity, a website where you could exercise your brain by playing games and -- so its advertising went -- improve your memory, attention and other mental abilities.
By 2013, the company had made it onto Forbes’ list of America’s Most Promising Companies, capitalizing on a brain-training craze and earning rave reviews in the business press. In 2014, CNN Health published a report that rated Lumosity the best app to train your brain. More than 70 million people in 182 countries have played its games, Lumosity says.
As it grew, the company marketed itself on TV, radio and online. (In fact, the public radio audience has been one of its target audiences, as listeners can attest.) The general thrust of the ads was that Lumosity could “improve key skills and affect quality of life" and that “healthy people have (used) brain training to sharpen their daily lives and ward off cognitive decline.” It published “success stories” on its website, including wide-eyed testimonials like this:
“In 2007, we learned that my mother had early onset Alzheimer’s. I joined Lumosity at first for my mother. I now use this site not only for her, but for my brain as well.”
Not everyone was on board. Researchers studying the topic found little to no evidence of sustained cognitive benefits from such exercises. Some studies determined they did little more than improve an ability to perform the narrow task a player was accessing in each game. In 2014, the Stanford Center on Longevity issued “A Consensus on the Brain Training Industry From the Scientific Community,” signed by dozens of scientists in the field.
“To date, there is little evidence that playing brain games improves underlying broad cognitive abilities,” the analysis said, “or that it enables one to better navigate a complex realm of everyday life."
Currently, many researchers believe that although brain-training companies have greatly exaggerated the benefits of their products, further study in the field is warranted.
But the government did not feel the need to wait for the final verdict. It wanted Lumos to pay $50 million in redress, but settled for $2 million after reviewing the company's finances. It also required Lumosity to notify customers it had settled “a deceptive advertising lawsuit” and provide a link to turn off auto-renewal of subscriptions.
'Passionate About the Product'
In the interview Wednesday, Berkowitz, who has only been on the job since November, seemed eager to distance the company from the controversial claims it has made in the past, and also renounce any notion that a product like Lumosity could be a panacea for the brain's inevitable decline.
"It's never been a driver of this company, to be some health-related solution,” Berkowitz said. “As we go back and look at the kind of reasons why we're building the product, it really is to bring the idea of science back out to people.”
He said the type of hyperbolic language the FTC cited had been removed in 2014, before the FTC was involved, and was in any event "a very small piece" of the company's marketing. He likened the customer testimonials to which the FTC objected (you can still see some of those here, on the Internet Archive's WayBack Machine) to the user-generated reviews on Apple's App Store or Google Play.
"These are things run by those companies and are independent," he said.
But didn't Lumosity choose to publish those particular testimonials?
"It was on the website. So if you call it choosing to run it, yeah. Today, they're not up there."
The FTC also slammed Lumosity for soliciting users' success stories by offering prizes, without disclosing this fact on its site. Berkowitz attributed such problematic marketing decisions to growing pains.
"As a young company, what you're doing, people are very passionate about the product," he said. Now "we're focusing on making sure that the things that we're doing have a basis in fact."
As to the question of how many of his customers had availed themselves of the FTC-mandated option to cancel their auto-renewal, he said, "We've had some, but I think nothing's been outside of our expectation."
Last August, market research firm MarketsandMarkets predicted that the cognitive assessment and training market will grow from $2.4 billion in 2015 to $7.5 billion by 2020.