Cutting Edge Business Innovation—A Conversation with Dr. John Adler

Michael Mendenhall: We're almost there. This is a little something that you're going to experience as we close the show. So it's a little tease that the choir put on my face just before I came on. It's really exciting. We have Dr. John Adler, who is a neurosurgeon. He created the next generation of surgical devices for brain surgery, called the CyberKnife. Many of you probably, if you're in the New York area, have seen this advertised by NYU Langdon here in New York City. It is helping save many, many lives from brain cancer. This new CyberKnife is now being used for all types of cancers. And he believes the technology can also help to cure other diseases, which we're going to hear about. And this is a really pioneering division in the medical field and perhaps some of his surfing skills because he is a major surfer as well. Let's welcome Dr. John Adler.

Dr. John Adler: In the barrel, baby.

Michael: In the barrel. So, you're saving lives. That's gotta be exciting.

Dr. Adler: It is. I mean, I'm blessed. I've got as good a life as I can imagine, but I have to admit, you get kicked in the head a lot in the world I've chosen to be part of.

Michael: Yeah, it's an interesting journey. We'll touch on this because we do have a limited time and I want to get through some of the new things that you're doing. But it was sort of all by happenstance. You had said earlier to me, "It's like 13 to 14 years to where I could actually do neurosurgery. I had to make a living. I had to support a family," and by sort of happenstance, you said, "Well, I'll go into teaching." You wind up at Stanford in neurology teaching and you ran into some engineers who started to think about your idea of what you could do to improve brain surgery.

Dr. Adler: It was a little bit more deliberate than that, but it's not a bad way to launch into this. You know, as a neurosurgeon, I've lived in the trenches of medicine for my entire professional career since I was 26 years old. And you can't help if you have any kind of heart to understand just how inadequate our treatments are for patients, you know, which is—how many thousands of patients have died under my care? It is not necessarily a reflection of me. It's a reflection of what I couldn't do for them, what medicine couldn't do for them. And believing that I had a duty to try to fix that, I've dedicated my life to try to make a next generation of product that I hope meets that need.

Michael: And that, you know, a lot of these companies experienced the difficulty of trying to sell their idea to raise capital. Talk about that, because there was hesitancy. You're building a $3 million plus machine. Who's going to buy this? Should we invest in this? Tell us that piece of your story.

Dr. Adler: Well, I am in the least loved industry, I think, in all of investment world. Nothing is more hated than major medical capital equipment, because it has a bleak track record. And I think that many ways, that people haven't gotten the business models right, but it's been dominated now by General Electric and Siemens and Phillips. You can't compete with those people.

But I believe in almost every industry, even in the least loved one, if you're creative enough and nimble enough, you can eke out a niche and build a great business. Now, my first company, you didn't get quite right, it's the CyberKnife. It's a technology for treating the whole brain, the whole body. This next product, which you'll see, I hope, in buses soon in NYU, we'll brag about it, it's called ZAP, ZAP Surgical. And we just treat problems in the brain.

Michael: Now, this is separate from the beta you're doing now, that the FDA approved, that takes this technology and starts to look at other diseases.

Dr. Adler: Well, you're getting even ahead of ourselves yet, but so, I mean, I've been a brain cancer doctor who then pivoted to trying to treat cancer everywhere in the body and that's been a good run. And then realizing that I could do better in the brain, I went back to the brain cancer business, but sneakingly, I realized that what we're doing could have application far outside of treating brain tumors. And, it's been kind of, again, this is why it pays to have some domain knowledge and be a neurosurgeon, is through serendipity and just antidote, I've observed that the type of treatments we give didn't just kill tumors, that they could also change the activity of the brain near where we treated the tumor.

We can change a brain circuit. And so, increasingly, we kind of understand that mental illness, psychiatric diseases, they're not diseases of the brain; they're diseases of brain circuits. And so with this last act in my career, I'm terribly excited because we are now able to take this concept of targeted radiation, very precisely in the brain, to change the most common diseases in the world, like addiction and depression. And that's where I'm headed next, this last act of my career.

Michael: Well it's an amazing last act. And the FDA approved it. Yeah, is this not amazing?

Dr. Adler: Stay tuned, stay tuned.

Michael: That we're not seeing on a bus any time.

Dr. Adler: And if anyone has a $100 million burning a hole in your pocket, talk to the FDA.

Michael: But it's exciting that that's been approved. You're in beta though, right?

Dr. Adler: Well, the technology is fully approved by the FDA. So when the FDA, they don't approve you; they give you clearance. They give you clearance to do certain things. And so my latest technology, called ZAP Surgical, coolest medical technology ever created in human history, for the record, but it can treat all kinds of tumors in the brain and head and neck region. But what we're trying to do next, and this is in research mode, starting to treat patients in Europe here, very soon is to start treating behavioral diseases starting with addiction in Germany, and that does involve an entirely new class of FDA certification.

Michael: That's fantastic. And what is sort of the length of time that you would see what the effects would be based on these tests?

Dr. Adler: Well, I've been treating pigs for the last three years and they've given up alcohol. So we're hoping that…

Michael: Is that true?

Dr. Adler: We have alcoholic pigs in Taiwan and we've fixed their alcoholism, and so now we're gonna start, the model of addiction we're starting with the humans is gonna be alcoholism, and that's what we're gonna try to fix, starting in Germany, in the next couple months.

Michael: Oh, that's fantastic.

Dr. Adler: And maybe I'll bring it to New York soon enough.

Michael: Yeah, well I was gonna say, so is that something that's approved that will be accessible to the general public?

Dr. Adler: Well, the approval process is going to take a lot of complex clinical trials and then a regulatory clearance, which will take probably hundreds of patients. So, we're getting a little ahead of ourselves. First, you need to prove in your pilot studies that you are, in fact, making patients better, not just pigs. But as we do this, yes, it'll revolve hundreds of millions of dollars and hopefully success.

Michael: But you've had success with, we'll go back, with the hardware, the medical hardware that you've produced, you've had success with that.

Dr. Adler: Right.

Michael: In how many hospitals have you placed your...

Dr. Adler: Treated millions of patients. So, my world is a complex interplay between making a fancy piece of equipment and did I tell you I make the coolest medical device ever created in human history?

Michael: Well, you know, Annie Leibovitz would have shot that beautifully.

Dr. Adler: Annie shot it? If Annie thought it was cool, it must be cool. Okay, let's say I make the Stradivarius, which is cool since we're in an artistic community. Someone needs to play the Stradivarius. And so, you've got to live in both the world of performance and in the world of instruments and technology. In my last former life, I was both. Now I'm just a technologist working with others that have to actually do the heavy lifting and treating patients.

Michael: You talked a lot about when we were speaking about your company and when you founded it, the type of people you needed and the level of experience was somewhat different in the attitude to the business in that we got to move fast, we got to be quick, we have to be nimble, be very agile. And you said there was a certain point within the organization where you're like, "I now have to have different people." Talk to them about that. That I think is important because they'll go through these transitions.

Dr. Adler: It's especially true in medical devices, but Mark Zuckerberg's famous for move fast and break things or something. You can't follow that dogma in medicine and not get yourself and your patients in a world of hurt. But you can move much faster when you're trying to treat a few dozen patients a month than when you're trying to treat 10,000 patients a month. And so, the company has gone through that very important transition in the last couple of years.

Some people are more willing to be patient, slow down, be more systematic and work with a bigger team to validate their ideas. Others are not. So you end up do shifting changing your team members. And I think it's all good. Even I realized at some point. I hope we're going to be a multi-billion-dollar company, and we'd be just talking to Wall Street, and I'm not going to be that interested in it, but there's a time and stage for all of us and finding those people at the right stage of your company is key.

Michael: Yeah, that's awesome. We talk about small businesses really being where a lot of the innovation happens, and you see a lot of these bigger enterprises not being able to innovate as fast. And certainly in the medical field, it's really these small medical companies that are really producing all of this innovation. And you've got the big guys who are sitting back, what, trying to buy you probably?

Dr. Adler: If you're successful, they buy you. And if you fail, the world never knows about you.

Michael: So talk a little bit about that and where sort of the innovation happens, where the accolades go to these innovations that happen in the medical space that really do save lives. And what does that look like relative to these big behemoths?

Dr. Adler: Well medical innovation, everybody talks about it. I mean, I'm sure you turn on the TV and Pfizer, god bless Pfizer, will talk about innovation and Merck and Johnson & Johnson and all the big universities and Memorial, Sloan, Kettering and Stanford. Everyone talks about innovation, innovation and you know, hundreds of millions, billions of dollars are given to universities for innovation. The NIH has a huge budget to do innovation.

But when the rubber meets the road, and finally, innovation, not just the idea, you've got to do the heavy lifting of crossing that chasm of death and making it work in patients. It tends to be small companies that both have the moxie and the courage to sort of do it. So in the end, medical device innovations happen because of small companies. And I just can't give a big enough shout out to the small medical device companies to do it, and to TriNet, whenever they support those small medical device companies.

If any of you are medical device companies, you've got my… because it's hard. It's hard and again, probably one of the least loved categories of startup among venture capitalists for the last 15 years. But we're going to change that with the success of ZAP Surgical. Because did I tell you I make the coolest medical device ever created?

Michael: It is pretty cool. It's very futuristic. I mean, we certainly saw that. We talked about AI and clearly, he shows up and he goes, "You should see what just happened." And it was a whole fake. Someone took his surgical device, put Elon Musk in the environment, talking about his device. Why don't you talk about what we just saw with fake?

Dr. Adler: Elon's trying to take credit for my invention. Even claiming that Tesla's making it. No, I don't really think it goes that high up the chain. I think that there is a group of fanatics somewhere, I think they're based in the UK, who decided that there's a device called MedBeds, which can…

Michael: Which is what he called your device.

Dr. Adler: Well, no one defined what the MedBed device was, but it was a device that basically prevented aging and cured all possible disease. And they decided that my machine, did I tell you is the coolest medical device ever, is suitable to be characterized as the MedBed device. So if you look at MedBed and today, Elon Musk in a fake video, we had a shout out for MedBeds and the ZAP backs indirectly.

Michael: Yeah, that was pretty interesting. But, well, hey, at least you're in the news, right?

Dr. Adler: That's what I say. All news is good news.

Michael: So this is very exciting. What would you really say to these small businesses that, you know, are facing these hurdles? I mean, your road didn't happen in five years. You had to stick with this, you had to be dedicated to it, have discipline around it. You traveled abroad, you came back, you're working with some of the best people to do this and at times, do you have the funding to do it, you know, how did you make that work? And what advice would you give these small businesses that may face some of these capital issues and have an idea that's really profound?

Dr. Adler: Well, this is my third rodeo, and somebody like me would think you'd finally figured it out and it should be easy. It's not. It's never easy and that's why very few people succeed at it. For many people, being an entrepreneur is aspirational. It seems joyful. It seems like, you know, Mark Zuckerberg trying to pick up girls at Harvard. Next moment, you're the richest man in the world.

It just doesn't work that way. It's continuing living in the face of failure. And I can tell you, no one has faced more failure than me in life and what you have to do is outlast the failure. It can't define who you are and you will fail and fail and fail and fail. But I'm convinced that almost every startup, if you can put up with enough pain, if you are a masochist enough, you can outlive the pain and you will find success. So, my console, I am now year 10 at ZAP. My first company was at Accurate, took about 15 years, I think about before we went public and were kind of a short success.

And my, another company before me was Curious; it took me 13 years before I got a big buyout. So I just think you gotta be at least a decade into this, expect that that's gonna be your fate. And if you can just put one foot in front of the next, day after day, in the face of all kinds of failure, I'm betting you're gonna be successful.

Michael: That's terrific. Well, listen, yeah, this is awesome. I mean, we're humbled by what you do. I mean, it is amazing what you've contributed to society and really saving people's lives and very humbling. And we thank you for being a TriNet customer. And we thank you for flying all the way out here from California to be with us to talk about it.

Dr. Adler: My pleasure. Thank you, Michael.