This paper discusses important considerations when developing assistive technology with and for older adults. Two case studies demonstrate the use of Experience Labs to engage older adults in a participatory design process in the early stages of development of novel sensor systems. Firstly, we present the ‘Interaction Space’ as a holistic way to model and understand interaction between people, products, technology and environments when developing complex systems. It is argued that looking at the interaction between older adults and technology benefits from a holistic view of the Interaction Space in which primary and secondary users are continuously acting together with the technology. We then highlight considerations when developing technology systems with participants who are not confident technology users, in order to design meaningful spaces for critical reflection and creative collaboration. We conclude that the Experience Lab approach enables the complex Interaction Space of sensor systems to be dissected into comprehensible elements leading to a better understanding of the impact of the proposed technologies.