Rock Mackie is a legend in the Wisconsin business community. He’s Professor Emeritus in medical physics at the University of Wisconsin and was the co-Founder of a number of companies including Geometrics Corporation (now owned by Philips Medical) and Tomotherapy (IPO, value went up to $1+ billion). Rock is also a very approachable researcher and businessman who is curious as anyone and always gives you ideas.
This interview provides insight into how Rock thinks and also his fascinating story. Then we talk about what he’s up to now. He’s involved with several startups both as an investor and advisor/board member. He’s also involved with fostering entrepreneurship at the University of Wisconsin, which we talk about at the end of the interview.
-How did they come up with the idea for Geometrics?
-Why they could have sold Geometrics for a lot more money?
-How did the idea for Tomotherapy come about and evolve? For Rock, it was nearly a 20 year engagement from the idea to when it was finally sold to Accuray.
-What is Rock working on now? It includes some very interesting technologies.
Dave Kruse: Hey, everyone! Welcome to another podcast with Flyover Labs. This is Dave Kruse with Madison, Wisconsin. Today, we are very lucky enough to be interviewing Rock Mackie and Rock is a legend in the Wisconsin business community as you will learn why. Rock has been the founder of two successful medical device companies, Geometrics Corporation, which was acquired by Philips and TomoTherapy, which they took public. He came to Madison in 1987 as a professor in engineering physics and is a Professor Emeritus since 2011, which he can get into more of the details. His main focus has been an entrepreneur which he does well and an investor, so Rock thanks for joining us today.
Rock Mackie: Thank you. Thanks Dave.
Dave Kruse: So, we have a lot to talk about. We could go on so many different directions with Rock about research, entrepreneurship, kind of his vision for the university and academia, but lets start with Rock’s background and how he got into science and, yeah, so that would be great, Rocky, tell us a little bit about your background.
Rock Mackie: Sure. I’m a physicist by training. I got my bachelors degree at the University of Saskatchewan in Saskatoon and got my PhD in physics at the University of Alberta in Edmonton and then spent three years in a radiation therapy clinic in Regina, Saskatchewan before getting recruited to the University of Wisconsin in 1987, so I have been in Madison ever since, first as a professor of medical physics and human oncology at the med school. I also have appointments in engineering physics and I have done a lot of work with biomedical engineering, so worked in two colleges, the school of medicine and the college of engineering.
Dave Kruse: And what is medical physics?
Rock Mackie: Medical physics is the largest program in the world. Our department is one of the first and the largest in the world. It trains about 150 physicists who are engaged in practices in medicine, especially radiation oncology and radiology, but now spreading out into surgery, cardiology, neurology, other fields.
Dave Kruse: Okay, and how did you realize you were interested in science growing up or how did you get into…
Rock Mackie: Yeah, I was interested in science, although after high school I spent 2 years trying to be a novelist.
Dave Kruse: Really?
Rock Mackie: Yeah, I was also interested in science fiction especially and after two years I reasoned that I was a lot better if I were to go into science than if I would stay as a novelist, so an unpublished science fiction novelist.
Dave Kruse: I was going to say, are there any essays or books which you had published in those days?
Rock Mackie: No, no.
Dave Kruse: Okay. Alright, well, I had to ask. So, what was kind of your initial research on and focus or interests when starting your career?
Rock Mackie: So, my career was in radiation oncology right at the beginning, so I developed some algorithms to make radiation therapy treatment planning calculations a lot more accurate, almost an order of magnitude more accurate and that turned out to be my PhD in Edmonton and that gained me some notoriety in the field and hence that’s why I got recruited to Wisconsin. I ended up implementing that algorithm in Pinnacle and the product that Geometrics, our first company, developed. It was also a company that Mark Gehring was a founder of and Mark put all his incredibly simple, beautiful treatment planning code. We had the first treatment planning code in that product that was event driven, up until that it was a menu-driven software in the field. It was the first 3D visualization in the field and it had this most accurate dose calculation algorithms, so that company was founded in a partnership with a company called ADAC.
Dave Kruse: And what year was that?
Rock Mackie: So, it was founded in 1992.
Dave Kruse: Okay.
Rock Mackie: And that software was already being used in the university for radiation therapy in stereotactic radio-surgery, which was a type of radiation therapy that required 3D treatment planning, so when Mark and I started doing that in 1988, there was no basically treatment planning system you could get for this field, so we had to write our own, I would say Mark wrote most of the visualization and the architecture for it and then after the founding of the company we put in the accurate dose calculation and generalized it to the whole field of radiation therapy. We got FDA approval in 1996. In fact, we had to start the company not because we were entrepreneurs, but because we had layoffs in the hospital where Mark and another programmer would lose their jobs.
Dave Kruse: Really?
Rock Mackie: So, we started the company so that they would have, so we could keep going and working on the software. We were also told by the FDA that they were going to soon ban, in fact they already had banned for interstate use any kind of software for treatment planning. We could operate out it at UW, but if that software was going to go outside the state then we needed FDA approval for anyone else to use it and so we formed the company really to employ Mark and another programmer and to get FDA and the company ADAC funded it.
Dave Kruse: Oh, okay.
Rock Mackie: In a very classic academic way. It was an advance against royalties, just like a book deal.
Dave Kruse: Wow. Did you have a relationship before?
Rock Mackie: No, we were just looking at a bunch of companies and ADAC needed us the most because their treatment planning system was not very good.
Dave Kruse: How was your system compared to ADAC’s, like what was some kind of the key differences?
Rock Mackie: Well, it was fully 3D.
Dave Kruse: Okay.
Rock Mackie: It was fully event driven.
Dave Kruse: What does that mean versus the menu?
Rock Mackie: Well, menu, a bunch of questions would come up and you would have to answer the questions and it was very tedious because you couldn’t go back and forth very easily.
Dave Kruse: Okay.
Rock Mackie: And so even driven is more like Windows or Word, right? where you click and everytime there is something you can do in context you get to see what the button does and if it is not in the right context the button turns grey, so this was very early, in fact, in many ways earlier than even the commercial software like Word existed.
Dave Kruse: Wow, interesting.
Rock Mackie: So, it was very sophisticated, very far ahead of it’s time, so ADAC got sold at around, lets see, when did they get sold, something like 2000 to Philips, so Philips owns it today, still operates it in Fitchburg.
Dave Kruse: Okay.
Rock Mackie: They still develop and support the code in Fitchburg just outside Madison, I think they have about 150 employees there, probably about half of them working on the software side.
Dave Kruse: And how much money do you raise?
Rock Mackie: Well, for that we didn’t raise anything. It was purely a partnership that was functioning. Yeah, so I think it was about $3 million bucks, that was the advance, so very very cheap. So that software we estimate is, probably sold nearly $1 billion worth of that software.
Dave Kruse: Wow!
Rock Mackie: It reached 40% market share in the industry and is still the #1 in terms of number of patients planned with that software worldwide as far as we can tell.
Dave Kruse: So, that was a pretty good ROI for them.
Rock Mackie: Yeah, and we sold it for a song to them.
Dave Kruse: Oh really, okay.
Rock Mackie: Yeah.
Dave Kruse: Have you every disclosed how much you sold it for?
Rock Mackie: We have.
Dave Kruse: Yeah?
Rock Mackie: A little over $4 million.
Dave Kruse: Okay, alright.
Rock Mackie: But also included paying off what we owed them, so it was probably I would say about $7 million.
Dave Kruse: $7 million, okay.
Rock Mackie: But what I estimate it was probably worth 10 times that, probably at least worth $40 million at that stage.
Dave Kruse: Wow! Well, you’ll earned them from the next company.
Rock Mackie: Well, and we needed the money for the next company, because Mark went on and started UltraVisual with Praveen and Roger Chylla and Paul Reckwerdt, who was one of the founders and I went out and with our money we started TomoTherapy, couple of years later; actually a year later.
Dave Kruse: So, before getting the Tomo, how do you come up with the ideas? You came up with the idea for Geometrics back in your PhD and then you had the idea for Tomo.
Rock Mackie: Yeah, so when I came here in 1988 we got the first ideas for Tomo, so 1988 was a very interesting year, very fertile year because I had just come to Madison, we already had the roots of the stereotactic software with Mark. I had got a grant, hired Paul as a scientist and we got the ideas for TomoTherapy along with two graduate students Stuart Swerdloff and Timothy Holmes, we really started working on the TomoTherapy concept in 1988.
Dave Kruse: How did you come up with the idea?
Rock Mackie: It was just a series of, the root of it, the genesis of it was a conversation with a Swede named Anders Brahme who told me in 1987 that he had developed a way with optimization mathematics to optimize delivery of radiation therapy that required highly non-uniform beams of radiation, kind of counter intuitive because as a medical physicist we spend some much time making sure that beams are nice and uniform and so his thesis was that well, that’s okay, but those distributions can be improved a great deal if you could tune it and optimize the delivery. Unfortunately, there was no technology that could actually deliver that and so we started thinking about, how could we actually build a machine that would deliver these non-uniform beams of radiation.
Dave Kruse: Interesting, so did you take his algorithms then? …
Rock Mackie: While we were guided by it, we thought we had better ways to do it and this spawned actually a whole lot of research. At this university and the optimization, mathematic optimization group, Mike Ferris, he developed a whole bunch of ways too so, developed a huge number of papers written about how to optimize radiation therapy from the late 1980s through even the 2000s.
Dave Kruse: Interesting.
Rock Mackie: And so the field became intensity modulated radiation therapy, so it was not named when we started our work on it, people called it, you know, non-uniform beam optimization.
Dave Kruse: Is that still state of the art?
Rock Mackie: It’s still state of the art, so pretty much all curative patients today have IMRT radiation therapy with the exception of breast radiation therapy.
Dave Kruse: Okay, so what year do you start thinking about Tomo’s ideas?
Rock Mackie: So we started in 1988, but we thought they were a little crazy at first right, because we were proposing some fairly outlandish things. It wasn’t until 1991, so one of the things that we had realized early is that there is a great analogy between the way that we wanted to deliver radiation and CT scanning, in fact, in terms of mathematics it was called the adjoint problem, so it turned out that optimization of radiation therapy is the adjoint to CT scanning and so that analogy was very useful for us, so we delivered, you know, what the fan beam of radiation just like a CT scanner and then one of my graduate students, Timothy Holmes came to the realization and said, jeez, what if just looks like a CT scanner, why don’t we just make it in a ring gantry and then he also leapt, why don’t we also do CT scanning in the machine to verify setup of the patient, so that became known as image-guided radiation therapy, so IMRT and image guidance were the two leading thrusts of radiation therapy over the 1990s and the 2000s, so we were the first to enter market with something that could do a CT scan as well as deliver IMRT.
Dave Kruse: So, before starting Tomo, what did you learn from Geometrics that helped you start Tomo, I mean besides prior connections but…
Rock Mackie: Well, the business side we learned a lot too.
Dave Kruse: Do you remember some of the major lessons learned from Geometrics?
Rock Mackie: Well, with Geometrics, the founders were also the managers of the company, so Mark was the CEO, and I was the chairman of the board and so I think we learned that, you know, we’re really smart guys, but we probably should have got a business person to actually run the company and at least when you hit the commercial face right, so as a technology company it was probably fine, but at some point you need to have someone who is more interested in the business side than the technical side and so that clearly is something I learned, so we hired someone who came from the CT world, John Barney, he used to be in a company called Picker and then Marconi and so he had retired from Marconi, joined us in 2001; and by the way, it took us several years to raise the investment.
Dave Kruse: For Tomo?
Rock Mackie: Yeah, it did. We were in the dot-com bubble, so we were trying to raise money in 1998 – 1999,
Dave Kruse: So when did you start the company?
Rock Mackie: December of 1997.
Dave Kruse: Okay, so you sold Geometrics.
Rock Mackie: We sold Geometrics.
Dave Kruse: Okay.
Rock Mackie: The interesting thing, I guess I got ahead of myself, the interesting thing is between 1994 and 1997, we had a partnership with General Electric, so General Electric wanted to, they liked the idea of TomoTherapy, they were #4 in the field of radiation therapy then and so they wanted to leapfrog their competitors, so for 3 years we had a very good relationship with General Electric and then in 1997 GE had a radiotherapy accident that killed somebody, was the fault of a service engineer, and so Jack Welch, who is still the CEO decided we are going to get out of radiation therapy and basically abandoned our contract.
Dave Kruse: Wow.
Rock Mackie: So that in a way, was very much the situation we had in Geometrics is that suddenly, at that point I had 20 people in the payroll to develop TomoTherapy. We had spent millions on it. I had gotten resolve grant and GE funded at that point, so the group was up to 20 people and, you know, we were rocking and rolling with GE equipment as the basis for the TomoTherapy machine in 1997, suddenly they just walked away.
Dave Kruse: Wow!
Rock Mackie: And so we had to scramble and figure out what the hell we’re going to do.
Dave Kruse: So, did you ever consider quitting or giving it up or trying to….
Rock Mackie: Like yeah, we had this problem, all these people were out of jobs right.
Dave Kruse: That’s a wild day.
Rock Mackie: And because it had worked before in Geometrics said, well lets give it another go and so Paul and I both put up, well it ended up, we both had to put in about $75,000 dollars each and then WARF was very helpful.
Dave Kruse: And whose is WARF?
Rock Mackie: Well, Wisconsin Alumni Research Foundation. At this time, it was depressing to have GE walk away and about the same time I had an offer to go to Harvard.
Dave Kruse: Really? To do what?
Rock Mackie: To be the chief actually.
Dave Kruse: To be the chief, wow!
Rock Mackie: So, I decided that was certainly an option and then Paul DeLuca, who became the Provost, he was the chair of medical physics, went in lobbying, tried to find money to keep me here, what turned out to be the way to keep me here was give the funding for the TomoTherapy program of $1.1 million to tide us over until we could get the company growing, so WARF was very helpful. Without that, I don’t think it would have happened.
Dave Kruse: Wow!
Rock Mackie: So, they basically rescued the technology.
Dave Kruse: Okay.
Rock Mackie: If you would like, an early accelerator, WARF has an accelerator program to, you know, make sure their patents are worth something and keep on the cutting edge and so that was really critical for our success.
Dave Kruse: So, by 1997 you must have had quite a bit of technology really. How much longer until you….
Rock Mackie: If GE had stayed in the program we would have had something finished by 2000.
Dave Kruse: Wow! You started in 1994, so it was about a 6-year program it would have been if ideally, but how long did it take you until you actually finished?
Rock Mackie: So, we actually treated the first patient 2 years after that in 2002 with essentially the GE design.
Dave Kruse: Okay.
Rock Mackie: And that was, I remember the date, August 21, 2002, the first patient was treated at UW.
Dave Kruse: And from 1997 to 2002, what all happened in raising money, what additional research did you have to finish up?
Rock Mackie: So, the company was founded, but we didn’t really move people from my research group over the company until the early winter, I think it was January-February of 1999 and then by July 1st we had 8 people at the company and venture investors were our elite round, we got $3 million from them, we got $300,000 from the state as a loan and we were starting to look for a CEO.
Dave Kruse: Okay, when you raised money from venture investors, did you have a prototype in place or did you still have a lot to build?
Rock Mackie: Still we were working on the prototype, so the prototype was being built, in fact, all of the software and algorithms and the product design was going on. We had the gantry, we knew what gantry we were using at that point.
Dave Kruse: Gantry?
Rock Mackie: Oh sorry, gantry is the thing that spins around the patient that holds everything together.
Dave Kruse: So, was there much technology risk when venture investors came in? Depends on who you are talking to.
Rock Mackie: It depends who you talk to. Yes, I think at that point it was mostly operational risk and I think we understand enough. There was no real science we were doing. We got the science all done over that previous decade and it was mainly the engineering, operational engineering. We knew that functionally everything could be done, so it was really operational risk and of course getting a more experienced CEO was I think a help. John Barney was a great example of that. He was able to get a pretty nice team together in the early days of the company and we had to change away from the General Electric platform into our own platform and so we got an existing OEM supplier called Analogic to help us build the gantry and that allowed us in a year to really do what we had taken as 4 years in GE, but of course we knew what we were doing at that point, but working with an OEM is definitely another good thing to do. If you have the opportunity and technology to borrow from another technology that’s very close to yours, so Analogic in Boston was building one of the first baggage CT scanners, so we used their gantry system and so it was essentially built upon a frame of a baggage scanner for security.
Dave Kruse: That’s smart. Okay, interesting.
Rock Mackie: So, it was very interesting. Well, we had started before, so they were scanning bags before 2001, but you know, the market really wasn’t there. It really picked up after that obviously.
Dave Kruse: So, lets see, what year did you raise money?
Rock Mackie: So, in 1999 we had the money and we got it from VI and from a venture firm in Michigan called Avalon who happens to be, the head of that was Rich Snyder, the Governor of Michigan, so in fact Avalon’s biggest win was TomoTherapy, so Rick Snyder owes his venture capital fame to TomoTherapy.
Dave Kruse: So, in 1999, and so when did you start your first clinical study and then when did you get your clearance …?
Rock Mackie: Well, actually we also used the vet school very effectively, because the vets have a radiotherapy program and so the first patients we treated were dogs, even though we didn’t have to. We didn’t need a clinical trial. We went in under 510(K), so we didn’t need a clinical trial at all for the FDA approval, but we were really using the animals to help train the technicians who operate the machine.
Dave Kruse: You didn’t need a clinical study because there are predicates out there.
Rock Mackie: Yes, there predicates out there, exactly.
Dave Kruse: So, what differentiates, because as predicates, but you still had new technology, it was just, was it…
Rock Mackie: You have to prove that it’s essentially the same.
Dave Kruse: Okay.
Rock Mackie: I mean, what we knew it was better, but also we could market it as the same. Other people really would have to make the claim that it’s better.
Dave Kruse: Would that still work with it today with the FDA, do you think?
Rock Mackie: The FDA might have wanted a small set of patients treated today possibly, it’s hard to say because again, you know, you need a clinical trial when there is a biology question and in this really there was no biology question right, it’s purely engineering, we know that radiation works and if we put the beam here, it’s going to kill cells, preferentially the tumor and not to the normal cells and we know so much about the radiation dose effect there is no real biology to question there, so I think it’s silly for the FDA to make a company do a clinical trial just to prove their engineering works. There are better ways to prove engineering works right?.
Dave Kruse: Makes sense and we’ll get off of Tomo, obviously it’s interesting for people outside of Madison TomoTherapy is a big story in Madison so I have never heard the detailed story so hopefully everyone is enjoying it, I know I am, but I have one more question and then we will get into what Rock is working on now and where his interests lie. So with Tomo, you eventually took it public. What year did you take it public?
Rock Mackie: So, we took it public in May of 2007 and so we had profitable years 2004, 2005, and 2006, so we were quickly profitable and our market was growing year and year by, you know, multiple dozens of percent.
Dave Kruse: And with initial sales were you confident that hospitals were going to buy? Like did you get lots of interest?
Rock Mackie: Yeah, we got a lot of interest. Yeah, there was a ton of interest and we also hired a new CEO, so John Barney retired in 2005, we got Fred Robertson who was a very experienced CEO, had run Marquette Electronics in Milwaukee and then when GE bought it he had run that division in GE and he brought a very experienced team with him to grow the company from 2005 and do the IPO, so that was also strategic, you know, getting the right people at the right time. John was great, wonderful for, you know, for kicking off the company, but you know, Fred really accelerated the growth in 2005-2006.
Dave Kruse: How did he accelerate growth?
Rock Mackie: Well, the product was really catching hold, but he had the right people and they, I think, maximized the marketing and sales.
Dave Kruse: So, looking back, are you glad that you did the IPO or would you’ve kind of taken a different route ?
Rock Mackie: You know, in hindsight, it was a great IPO, it was the sixth largest healthcare IT IPO of the decade.
Dave Kruse: Wow!
Rock Mackie: It was the largest one in Madison. We have had a peak value of $1.2 billion and so it was as market cap.
Dave Kruse: Good size.
Rock Mackie: Good size, and it was a great IPO. Of course, then we hit the meat grinder of the crash in 2008, 2009 and 2010, so we reached the peak of about $240 million in revenue in 2007 with a pretty hefty backlog. Unfortunately, our backlog was probably overstated by our VP of sales. Well, it wasn’t overstated, it wasn’t I think properly justified because we were starting to sell to big, what’s called IDNs, so they were big hospital chains and so they just bought in at a discount and we didn’t know where exactly they would be installed and when they would be installed and so reported backlog became kind of more strict, you needed to know when and where things would be installed and so we decided we would be conservative and pull out some of those IDN deals and so that hurt our stock price, so that was the first little dip in the stock price. Then, the biggest competitor in the field came out with their “we’re nearly as good as TomoTherapy” product.
Dave Kruse: Okay, we’re nearly as good, I guess.
Rock Mackie: I mean, they said it was just as good, but few knew it was nearly as good and so that hurt the market and then the whole healthcare restructuring was the third kind of blow after Obama took over and so there was big uncertainty and hospitals weren’t buying in the US, although at the same time we had gone out into the European and Asian market and had tremendous traction, especially Asia, yeah. So, Korea has the highest proportion of TomoTherapy units in the world.
Dave Kruse: I did not know that.
Rock Mackie: In fact, for many years I think they were the #1 type of radiotherapy product.
Dave Kruse: And what was the revenue models, mainly large upfront purchase plus maintenance contract?
Rock Mackie: Yes.
Dave Kruse: Okay, and how much did one of those machines cost?
Rock Mackie: I mean, they are listing for $3 million and real world prices would be like $2.5 to $2.7 million depending on the country.
Dave Kruse: Interesting. So, yeah, good lessons from your background is that, you know, to take really good science and to create, you know, really interesting to use your experiences around in some ways, especially with Geometrics, but I imagine you did the same with Tomo too.
Rock Mackie: Yeah. I mean, Tomo is a great product and Accuray bought it in 2011, but what often when companies buy a Madison company, the Madison company leaves. What happened here was a Silicon Valley company Accuray had moved it’s manufacturing here, so it actually now had much more manufacturing because two product lines are coming out of the factory here.
Dave Kruse: It’s a great story for Madison.
Rock Mackie: Yeah.
Dave Kruse: Alright, well I can talk all day about that but lets move on to what you are doing now and yeah, so what are you up to now? When did you officially leave Tomo?
Rock Mackie: So, I left when the merger happened in the end of June in 2011.
Dave Kruse: And you started in 1997?
Rock Mackie: Well, the middle of June in 1997 to 2011.
Dave Kruse: So 14 years.
Rock Mackie: So I was at TomoTherapy a long time.
Dave Kruse: Long time.
Rock Mackie: Long time. More than 20 years actually from ideas to end, so that was a long run.
Dave Kruse: A long good run.
Rock Mackie: A long great ride, yeah, it worked out.
Dave Kruse: I mean, that’s why it was long because it was good. Yeah, so what are you up to now?
Rock Mackie: So, I spent 5 years at the Morgridge Institute in medical engineering.
Dave Kruse: And what’s the Morgridge Institute?
Rock Mackie: So the Morgridge Institute is a private not for profit setup, a research institution setup to help the University of Wisconsin and to partner with the University of Wisconsin, but it’s a little bit more nimble because it’s not a public university and so there were several big research groups in here, regenerative medicine, virology, basically high speed, high throughput computing medical engineering and now there’s a new group on metabolism, so kind of broad groups working with University of Wisconsin scientists and a lot of the technology that actually I’m working on now as a retired academic at its genesis in that group.
Dave Kruse: Because you retired in 2011 from UW Professor Emeritus.
Rock Mackie: No, actually I stayed a bit longer. I didn’t actually retire and become Emeritus until 2012 and I had actually joined Morgridge before I actually retired from the university and so at the end of 2014, I retired from Morgridge after 5 years, so I was at Morgridge for 5 years and that’s when I went in saying I’m willing to do this for 5 years, start the program.
Dave Kruse: So, that was a fast 5 years and I remember you doing it.
Rock Mackie: So I, you know, got the first 3D printing systems in the university at Morgridge with a great high precision machine shop. We had, by the end of 2014, we had worked with 40 groups.
Dave Kruse: Wow!
Rock Mackie: Well, actually 40 departments on campus and we have had, we have spun out 155 projects.
Dave Kruse: What’s an example of one interesting project that you did?
Rock Mackie: Oh, there’s just so many, so the one that was cute is kind of the fruit fly of the botany world is a plant called Arabidopsis. Arabidopsis grows just a few inches high and you can grow that in a test tube until it gets seeds, then you can figure out it’s genetic properties from it’s seeds right, ___33:25___ and then you manipulate and plant those seeds, but the seeds are only half a millimeter in size, even smaller than that, maybe 200 microns in size and so you have to plant them up to then with little tweezers and so we developed a vacuum system so that you could plant 1000 at a time the same time you could plant a couple at a time, and this was a project to try to grow, you know, in each generation a million of these plants, so it made that growing a million at a time practical, so that was a cool project.
Dave Kruse: How did you work these?
Rock Mackie: Well, with the 3D printers we could make these tiny little vacuum holes, so we apply a vacuum and suck the seeds to the hole.
Dave Kruse: Smart.
Rock Mackie: So each hole held a seed and then we put it into the Petri dish and then blow the seed into the growth media and then we run a nice paper, a couple of papers actually with that botany group.
Dave Kruse: Okay.
Rock Mackie: We work with groups, for example, another botany group that was looking at the effects of gravity and growth. We worked with Jim Berbee to develop a better otoscope for his emergency medicine program for kids. It was a scaled down otoscope and yeah…
Dave Kruse: My daughter needs that, we have had a lot of otoscopes in the last ten months, … last year.
Rock Mackie: So, that was a great time and three technologies that came out of that we patented through WARF. One was a veterinary CT scanner that could scan horse legs and horse heads, built on a robotic platform and that patent is now issued. A technology for fluorescent-guided surgery that would enable people not to turn the lights off if they want to use fluorescence in surgery and you know, kind of having the lights off in surgery kind of is a problem, so it’s kind of an oxymoron and so we developed a technology that would have a high speed flashing of white light, so the room would appear brightly lit, but most of the time you actually have the room dark and requiring the fluorescent signal.
Dave Kruse: Clever.
Rock Mackie: And so that is I think extremely valuable technology and then we also developed a linear CT scanner system, so that we, rather than having a point of production of x-rays, the x-rays could be along a line of production and this could be used then for the next generation of CT scanners to have a stationary source, so these line sources would be forming a polygon around the patient and you would then keep the source fixed. The detectors would all be fixed as well, so that you could then have a stationary CT scanner, which also could be important for baggage and security purposes.
Dave Kruse: Absolutely, yeah.
Rock Mackie: So that technology then utilized then putting multiple cathodes to irradiate this line source, then it occurred to us that, gee, you know, the principal problem in an x-ray target is that the electron beam that’s striking the x-ray target will melt the target unless you cool it like crazy, but that’s an opportunity for 3D printing, so we also then filed a patent with WARF on a 3D printing technology that’s perfectly scalable to make a line source of electron beams, so when a beam is striking a powder, it will melt powder together and where it’s not it won’t and so that technology was patented by WARF as well.
Dave Kruse: Wow!
Rock Mackie: So those 3 technologies, the CT scanner for animals, especially horses, the fluorescent-guided lighting system and the linear print head, if you’d like, electron beam metal 3D printer are things that we’re forming companies around.
Dave Kruse: Okay, alright, okay. Yeah, and so, what are you up to now from, more or less an entrepreneurial investor side of things?
Rock Mackie: So, the company that is developing the large animal CT scanner is called Asto CT, Asto means to stand and the problem with horses is you would like them to stand while they are getting the CT scanned. If you have to put them under general anesthetic, horses don’t do well when they come out, so people then essentially aren’t doing screening or diagnostic exams for horses and so this will enable the horse to have light sedation and get the CT scan. I mean, horses stand while they are sleeping, so we put them to sleep, scan their legs and then look for fractures, which is a huge on vet need.
Dave Kruse: Yeah.
Rock Mackie: So to give you an example, you know, for every 1000 races there are 3 fractures on the race track and those horses are euthanized, so there is a huge problem with horses breaking their legs and falling.
Dave Kruse: Interesting.
Rock Mackie: And so we think that the racing industry will want this, but also show and recreation horses, you know, we don’t want a Christopher Reeves type accident as well.
Dave Kruse: How far away are you from a prototype? I mean, you already have a prototype?.
Rock Mackie: So we’re working, last time we were working with a Boston OEM provider, different one actually than Analogic, because they have their own version of a baggage scanner that is basically a CT scanner, so we will be partnering with them on this project and robots are kind of commodities now, so we are partnering with a couple of different robotics companies too.
Dave Kruse: I mentioned that, but with these partnerships is there money exchanged or it’s more promises if things go well, you know, we’ll sell them all your equipment or how does that kind of the development phase where….
Rock Mackie: So, typically then there is, it’s called nonrecurring engineering, so you would then enter an agreement to give them some money for the engineering that they have to do and return for favorable pricing if you end up using the product and so a business agreement and then maybe even a manufacturing agreement beyond that, so it’s typically three phases, nonrecurring engineering, some sort of pricing on units that they can modify and then a long term project where they might make something more specific for you.
Dave Kruse: Okay. Have you raised money for… ?
Rock Mackie: So, I’ve put in some money and we are raising money.
Dave Kruse: Okay, alright.
Rock Mackie: So, we’re looking for another $350,000 and then we would roll up my…, I have a bridge note for $150,000, we roll that up into $500,000 to build the first prototype for Asto CT.
Dave Kruse: And then get additional funding.
Rock Mackie: And then in the Q1 of 2017 look for additional funding.
Dave Kruse: Okay. Do you have a CEO for that?
Rock Mackie: Yeah, so we have an experienced CEO. He was the CTO for Lunar and then when Lunar sold to GE, he ran the CT operation for GE for Lunar. He was in those two companies for 20 years. He also worked at Philips and after that he went to work for a startup, so he has got startup experience as well. So, David Ergun is his name.
Dave Kruse: Okay. So, what other companies are you involved with? Any ideas you are working on? I know you’re very busy, sounds like you’re very busy.
Rock Mackie: And by the way, I’m the chairman of this company, so day to day, I mean, I work very part-time for these companies, give them mainly startup advice and give some of my experience to them rather than having to, I mean, I’m not the guy soldering anything anymore, although at TomoTherapy we’d sweep the floors, you know, or shovel the rocks when we had to.
Rock Mackie: So, the oldest startup company I’m working with now is HealthMyne and by old I mean it is a couple of years old and HealthMyne is the old, basically band getting back together, so Mark Gehring, Praveen Sinha, and Roger Chylla who also worked with Mark in his startup after Geometrics have gotten together and so it’s a healthcare IT that merges the imaging record with the electronic medical record and produces quantitative data from the imaging record, adds it to the quantitative information from the medical record and allows radiologists and oncologists to both understand the trajectory of a patient over time, but also curate the data, in other words to be able to see if the data seems reasonable for using that for research to determine for example, if certain information in the record is prognostic for various disease or descriptive for various disease or predictive of outcome.
Dave Kruse: Do you have any good case studies or an example of where this….
Rock Mackie: So, the software is being first released clinically. We have FDA approval for it at the university in April of 2016 and so, we’ll be starting to gather clinical information at UW. We have another partner at Tampa in Florida at the Moffitt Cancer Center and we are looking for a few other customers to implement this year and then these customers are providing feedback because this is a very market-driven company, we want to see really what’s the most useful now, but as well looking forward to seeing where this field is, healthcare IT is going, at the moment there is almost no other comparable companies that is merging with the imaging record and the electronic medical record, so there is some competition but not in North America and so this is a very interesting company. We are about to, in fact, we are raising some money as we speak.
Dave Kruse: How much are you raising?
Rock Mackie: Well, I think it really depends on the market, but it’s going to be several million dollars and this would keep the company through to the deep introduction into the market place in 2017.
Dave Kruse: Okay. Did you have to do a clinical study for FDA approval?
Rock Mackie: No, again this was 510(k), in fact we have two 510(k)’s for various pieces of the software, yeah.
Dave Kruse: Interesting. Okay.
Rock Mackie: Then the fluorescent-guided surgery companies called OnLume and in fact it was in the Governor’s business plan last year and got second place in life sciences division. The winner of life sciences won the whole division last year, so we are finishing up our prototype. I have actually rented some space on the east side associated with a big machine shop, Swift Engineering.
Dave Kruse: Yeah, I know those guys.
Rock Mackie: You know those guys? Yeah, so they are quite entrepreneurial as well and so it’s a great partnership, so both Asto CT and OnLume are located in the same building as Swift, so it makes it handy.
Dave Kruse: Yeah, they’ve got some good equipment out there too.
Rock Mackie: Yeah, it’s first rate, so OnLume is finishing up it’s prototype, we have partnered with a surgical lighting vendor, a very informal partnership at this point and we have modified their lights to give this flashing, the ability to flash their lights at high frequency. We have a high speed camera that we are finalizing and we’ll have kind of a nifty software that will then be able to add the fluorescent signal to the white light signal so that the surgeon can then cut what glows basically and be able to do that in visible light.
Dave Kruse: So, with what these companies are, are you talking to people in the industry, like a potential client, the technology sounds, you know, very interesting, so how do you know people will actually buy it and for this price?
Rock Mackie: For sure, all these companies you have got to go and talk to the market right, and so it helps to be a founder who knows the market, so I know the market pretty well. By the way, Asto CT also has 2 vets, that are their co-founders, so it helps to really understand the market, so they made lots of introductions. We have talked to lots of both vet owners and vets and then the surgical guided surgery, we have talked to surgeons, we have 2 advisors, one at the vet school and one in neurosurgery. Our first prototype will go again into the vet school and so again you start to see things repeating itself.
Dave Kruse: Yeah.
Rock Mackie: You know, and there you don’t need FDA approval to sell it in the veterinary market, so that’s another thing about both these companies.
Dave Kruse: Is OnLume, they won’t need it?
Rock Mackie: We don’t need it. It’s touching humans right and so you basically just need electrical safety, so UL approval for these products.
Dave Kruse: Well, that’s nice.
Rock Mackie: Yeah, it’s very nice.
Dave Kruse: Yeah, how much do you think it will take in order to get, let’s say OnLume to the market, how much time?
Rock Mackie: Well, you know OnLume will take a little more I think because we have to develop, there’s less of the base technology, although, you know, you can get very nice camera systems, you know, and of course you can get nice monitors and of course the lights are available, so again we are trying to do as much as possible, but it does take a little bit more engineering, it’s not an integration task like Asto is going to be relatively quick to the market because of it’s integration, you know, OnLume they started at the same time, both of these companies by the way. OnLume has more in-house engineering to do.
Dave Kruse: Gotcha, okay. Alright.
Rock Mackie: And then the third company is the least developed. We have entered the business plan competition for this year, by the way, as has Asto. Asto didn’t put in last year, so they put in this year, so they both made it through the first cuts, and so the 3D metal printing company is called Linectra and it will be founded this year, it still hasn’t incorporated fully. It’s in gBETA, it made it into the gBETA Program, so I don’t know its association of WARF and Gener8tor.
Dave Kruse: Yeah, and Gener8tor is an accelerator in Madison and Milwaukee.
Rock Mackie: Right exactly and gBETA is kind of the short course version and the founder is interesting on this company because this is his fourth company he started. When he was a graduate student here he founded 3 other companies.
Dave Kruse: Wow! He’s busy.
Rock Mackie: And doing a PhD, in fact, he will finish his PhD this summer.
Dave Kruse: Okay, who is that?
Rock Mackie: Brandon Walker.
Dave Kruse: Okay.
Rock Mackie: And, you know, Brandon is very entrepreneurial. He is one of these guys who is both good in business and good with….
Dave Kruse: Wow! Which is rare, technology.
Rock Mackie: Which is rare, right. In fact, the CEO of OnLume is also of that ilk, Adam Uselmann, again good business head, very good technical head, both very driven guys, young, aggressive, smart, focused so it’s a pleasure to mentor guys like that.
Dave Kruse: Exactly. You can be on the board and help use all your mistakes and everything you have learned and don’t do this, don’t do that.
Rock Mackie: Exactly, right.
Dave Kruse: So yeah, we’re almost out of time, but what’s Linectra doing … 3D printing?
Rock Mackie: So, Linectra will be able to put an electron beam anywhere along a line and then melt metal powder and then get fully melted powder that will make finished strong metal products and then you have to talk about ACE a little bit.
Dave Kruse: Oh yeah, so lets talk about the University of Wisconsin, what’s going on there?
Rock Mackie: Right, so at Morgridge, you know, they want me to be both entrepreneurial and to help technologies that were developed at Morgridge get out to light of day and I’m doing that, but also some development activities, try to raise money for Morgridge and then I also have kind of a third university role and that is, as the President of ACE. ACE is the Advocacy Consortium for Entrepreneurs or the easier thing to say would be the Association of Campus Entrepreneurs, both ways just say it, it’s ACE and so basically it’s academic entrepreneurs to help academic entrepreneurs. It is a 501(c)(4), so we officially can do lobbying if we want, hire lobbyists. We have some partnerships with American Family and several other service organizations, Morgan Stanley, ___49:48___ and so on that help us and what we do is, every two months we have a program to get these entrepreneurs together and focus on some aspect of academic entrepreneurship and we are an association that, is probably one of the few associations that goes all the way across campus, so it turns out that the most entrepreneurial academics are artists.
Dave Kruse: Interesting.
Rock Mackie: 100%…. there’s no such thing as an ivory tower artist right. They are judged by their impact on society and innovation in art and they are judged by how much society appreciates their art and so they are the most entrepreneurial and, you know, it’s interesting, probably the business faculty in some ways are the least in terms of actually starting companies, but clearly we have a lot of entrepreneurs in the engineering school, in the medical school and, you know, college of agriculture and life sciences as well, so we probably have our universe here of a couple of hundred academics entrepreneurs and by the way it also includes post docs and graduate students in the entrepreneurial set, so I think we’re kind of a nice organization. We are trying to develop some ideas for a seed fund to support D2P, which is discovery to product incubator that the university has and so hopefully we will be able to find some mechanism to be one of the first supports for some of the graduates of these incubator programs.
Dave Kruse: Yeah, it’s a great resource for the University of Wisconsin and Madison and the state of Wisconsin, so hopefully you can keep that going and before we go, we talked about this before the interview as kind of what’s your vision for it and I thought it was interesting for post docs, like where do you think they should be …
Rock Mackie: Well, it turns out that post docs probably are the biggest potential entrepreneurs in terms of success. In other words, if you look at the pool of entrepreneurs, we had 800 of them on campus. We have 2000 faculty, we have 800 post docs. The faculty aren’t going to go full time to a company, but the post docs could and they end up when they go to a company, like TomoTherapy had a couple of post docs and they did very well. They ended up doing very well financially, but also very well in terms of having a choice if they wanted to even become academics after a run at TomoTherapy.
Dave Kruse: After that….
Rock Mackie: Yeah after that, so there’s a life because more and more universities want real world experience right and so it turns out that a survey was done by a post doc association here when they entered last year that only 8% ever thought they would get into industry, well the truth is more than half end up in industry right and unfortunately they are not being trained for a life of industry, they are being trained to be professors and so I think the university should have an entrepreneurial post doc training program that then takes a cohort of them and finds University of Wisconsin technology to spin off and these guys are the perfect chief technology officers for the spin-off company, so I think we should start a program where we nationally advertise for entrepreneurial-minded post docs to get some basic training which we already offer here like D2Ps for example as well as the entrepreneurial boot camp that’s offered and there is actually lots of opportunity for classes in the business school as well, so we should put that together, find post docs, advertise nationally for those that want to see what industry is like as well as learning how to be a professor and be smart because we would end up getting the people I think and so Mark Cook and I have been trying to work on for this for a while. We think we are starting to get some traction and we have a post doc association now that has joined in with Milwaukee’s PICO program, which is an internship and consulting program to give post docs a taste of what it’s like to be in a company, so hopefully that too will transfer from Milwaukee to Madison and by Milwaukee, I mean Marquette and the University of Wisconsin Milwaukee.
Dave Kruse: Interesting, yeah. Yeah, that would be great for the state of Wisconsin and Madison and the entrepreneurial community, especially if you’re attracting, the post docs are already kind of at an entrepreneurial event, which just makes a lot of sense.
Rock Mackie: Exactly.
Dave Kruse: Is anybody else doing that?
Rock Mackie: Well, other than PICO and there’s a similar program in St. Louis at Washington University.
Dave Kruse: Okay.
Rock Mackie: I don’t think universities have seen what a resource post docs potentially are. I mean a well trained entrepreneurial minded post doc who has got some business experience or some incubation has a tremendous career potential ahead of them.
Dave Kruse: Oh yeah.
Rock Mackie: I mean, those really could become future CEOs.
Dave Kruse: Yeah, definitely. It would be great, at least from Madison, keep some of them in Madison, but even if they go outside of Madison to start companies and create that network and yeah, it would be powerful.
Rock Mackie: Right.
Dave Kruse: Alright, well, we can keep talking but we probably should stop. Rock, thanks for coming on the show.
Rock Mackie: Thanks Dave.
Dave Kruse: Thanks everyone for listening. I’ve learned a lot and to me this is fascinating, so definitely appreciate Rock’s time and I appreciate all of you listening, so we’ll see you’ll next time, bye.