Mary Lou Jepsen: The Full Xconomy Voices Interview

And that’s, I think, the only way we’re going to release something, is if we can prove to ourselves we have ways to define what it means to be responsible about that and do that.

And I think that there’s been a lot thinking about this for the last 20, 30 years. I mean, I remember Jerry Yang gave those e-mails to the Chinese government.

Xconomy: Jerry Yang of Yahoo?

MLJ: Yeah, and was really surprised that those people were jailed. That was the first time that it sort of hit my consciousness of what could happen. I probably should have thought about it earlier, but it was a very, you know, jarring event. How do you create systems of privacy to protect people. It’s incumbent on us to do so and to see the development and evolution of that over time with the new technologies. Facebook, Google, they all struggle with that and have created some pretty cool systems but yet our notions of privacy keep changing. And so those companies are on the forefront of trying to create systems. They’re also in the crosshairs of evaluation of where that falls.

And so what I’m struggling with as as I start Openwater is, we like to think what’s in our hands is our private space. As we open that up, what are the responsible ways to do so. If you can’t speak, if you’ve just had a stroke, would you be willing to wear it and forego some of your privacy? If you’re brain dead, but not really—forty percent of people thought to be brain dead are not brain dead. They just can’t communicate. Well, what are they? What are the patient’s choices in this? One of the family’s choices, one of the privacy implications is, what are your decision making abilities in that state?

All of these questions need to be answered. I didn’t get my Ph.D. in ethics, so we’re reaching out and working with lots of different really big thinkers in this area and developing that conversation with them is going to take the same kind of time, probably a much longer time, than to just develop the technology. But we’ll wait until we can introduce this in what we believe is the most responsible way we can, and define that as we’re going along.

Xconomy: The longer you stay small, I think I heard you saying earlier, the better chance you have of keeping that conversation going. If you got snapped up by Google, let’s say, or Intel, it might be harder to keep this conversation going.

MLJ: Right. I’ve already turned down an acquisition offer. It’s an interesting thing to have a startup that everybody wants to fund. That’s never happened to me before. It’s a nice thing, but you still have to choose. And we’ll announce in a few months probably, what funding we’ve taken. Right now we can’t really speak about it. But we certainly did decide not to go the acquisition route.

Xconomy: I mean I love talking about the ethics, and I hope a whole fleet of science fiction writers get unleashed on this particular question, and ethicists and others.

But going back to the business—what existing businesses do you think this could disrupt, the Openwater technology, if it works, if it’s scalable, if it’s affordable? Who would be saving so much money from this that they would be willing to pay you whatever it takes? Who are your first customers?

MLJ: The thing is, when you’re reducing the cost of something from a few million dollars—an MRI system costs a few million dollars and a million dollars a year of upkeep, plus a dedicated person or two on the system—to something that at scale hits consumer electronic prices, and is a million times smaller, there’s your answer. I mean it it’s very clear that that enables doctors offices, ambulances, people with conditions that could benefit from more often looking at the inside of their bodies, a variety of conditions from clogged arteries, internal bleeding, to neurological conditions, a torn ACL, to see how things are. Those are some of the early very straightforward missions.

Xconomy: So, radiology departments, other medical offices? Sounds like you’re going to be going up against General Electric in the very near future.

MLJ: No, I don’t think so. I mean, why so? I mean why would somebody want to if you can buy something that is smaller and cheaper. This is sort of the $100 laptop problem, I suppose. Just another order of magnitude or two. The average cost of a laptop is $1,000 or $2,000 and we made a $100 laptop and that was disruptive to a couple of companies.

There was a “60 Minutes” expose once of Intel vs OLPC. It was really rough because some companies wanted to sell things for more money, and some people want to sell the same performance for less money and less size. And so, you know, sorry. Get better at your technology! But on some level the whole industry, I think, needs a shakeup. Right now about 2,000 MRI machines ship ever year and the average price is a couple of million dollars. And the access is very low. People are dying. We have 40 MRI machines per million people in the U.S. You get to Mexico, there’s two MRI machines per million people. You get to a typical African country, there’s one in the capital. People are dying.

And the reason health care in the U.S. and other places has gotten so much more expensive in the last 20 years is because of the technology. There’s a fundamental reason the technology’s gotten better and more expensive. And so let’s look at figuring, let’s make the technology better and at the same time massively lower the cost. You can do both if you take it on. And right now is a really great moment to do that because the consumer electronics industry is hungry. Most big consumer electronics companies, their valuation has halved in the last 18 months because the floor has fallen out of smartphones, which is the number one driver of consumer electronics right now.

And the markets have saturated. And so what you see right now in Asia, which is honestly where most consumer electronics are designed and made, is this incredible hunger that I haven’t really witnessed in the last 20 years or so to find what’s next. So they are willing, the companies that control these massive, very sophisticated factories, to make some process changes. These companies do not do R&D by large. And so it’s very interesting.

If that threatens the makers of the 2,000 MRI machines a year, well, they should get on the train. People are dying. We should be trying, I think, to save more people, diagnose more conditions early and treat more people.

So that’s where I come down on that. And GE, of all people, invented the light bulb. They were a leader in consumer electronics. It’s in their DNA somewhere to be able to move back to this.

Although you know some companies have gotten really good at selling things that cost more than a million dollars. And so it might actually just be more structural. And so there’s, you know, management solutions to that. If you’ve got a sales team that’s really good at selling big expensive stuff, you can get a different sales team and management operation that’s better. There’s a lot of talent around that’s going to other things. GE’s a very well-run company, I’m sure they can figure that out. And the other companies as well. I have a lot of friends at GE, by the way. I think they’re amazing.

Xconomy: And now they’re in Boston, so we love them. A couple of more questions and then we can wrap up. Do you feel like you’re under pressure to meet some milestones this year in order to make the company investable? You said you’re in the enviable position of turning away acquisition offers, and having lots of people come to you with potential funding. But you still have to demonstrate that the technology is real. So what do you feel like are your big milestones for this year?

MLJ: We’re invested. That’s not a problem. Really, it’s not. I just can’t announce what we’ve done.

Xconomy: Okay. So to put it differently, what do you feel like you have to prove in the next year to get to convince people that you really are on to something big?

MLJ: When we release products is when we have to convince people. Right now what we need to do—this is a Sergey Brin-ism—he says the best products are the ones that go through the most iterations. In software you can do that serially because you change some code and you can ship it out to a million people and see how it goes and then scale it out to a billion people at a Google or a Facebook. In hardware you need to do that in parallel, because hardware takes longer to change around the physical components.

And so what we’re doing, our main focus right now, is getting our hardware to go through a lot of iterations, but in parallel, so we build up a dozen different designs and look at the architectures and look at sort of the parasitics and how different different things work together. We’re trying to get the best signal to noise ratio in our system. We’re trying to optimize right now on depth and resolution and scanning speed and figure out exactly what the right combinations of those are.

We’re building up lots of different physics prototypes. See, the thing in hardware is, once you start engaging with a $10 billion factory—think about the amortization cost of a $10 billion factory over four or five years. Think about the per-hour cost of that. Once you’re in that factory you’re on a treadmill and you have to ship or you’re going to get thrown out of the factory.

And so what we’re doing right now is working with some small, little factories that are more patient, building up different designs. In developing the software and systems and so forth, what you try to do is bring all of that together at the right time. But it’s very much a hockey stick and we’re in the part of the hockey stick that hits the puck and not just the part that goes that goes up, going through all of the iterations so that we’re ready for the steep climb.

And this is my fourth startup working with all of these factories in Asia. I’ve learned a lot about how to do it over 20 years experience. And so basically I hire up a group of really extraordinary CTO, architect-type people with really good diplomatic skills, ideally that speak an Asian language. Because when you do hardware, within a month you can have 10,000 people on your team.

Xconomy: What is it like to be Mary Lou Jepsen right now? In a way, it seems like what you’re doing now represents a convergence of everything you’ve been dreaming about for 20 years or more, and all of the skills and experiences you’ve built up at your four companies and at these other large places. It must be pretty exciting.

MLJ: It’s really great. I think one of the reasons that I was able to do this is—I think everybody knows Google and Facebook pay really well, at the level I was at. And so I don’t need the money anymore. So I was actually able to make decisions that I haven’t been able to make for the last 20 years since 1995, because I had a brain tumor. I needed health insurance, which meant I needed a job that had health insurance. I had to give up arts and open source. I had to give a bunch of things because I really needed those things to live. And now I don’t.

I love the work that I do. I am very proud of much of it. If I could have chosen anything, this is what I wanted to do. And so now I get to do that.

I think of Seymour Papert, when we started One Laptop Per Child—we’re in Brazil once before our first head of state, President Lula, decided that Brazil was going to buy two million laptops, and everybody thought we were nuts, it’s never going to work, and I was having dinner with Seymour Papert in Brazil and Seymour called OLPC the dessert course in life. Like, what you do after you’ve done everything else. And I felt like that at that time too, that it was the dessert course in life. But this is, sort, of I don’t know, the cheese course after that.

And it continues to change as you have access to different resources and your life stuff becomes more flexible. When you have enough money to just pay for your own health care—for me that really changed the equation.

Xconomy: That’s such an unexpected answer, but so down to earth and so real. I mean, so many people are in that position of not being able to do the creative thing that they wish they could do because of instability in their income or their health care coverage. And for you to say that, having had having had the chance to work at Facebook and Google really kind of freed you to do something amazing and take a giant leap, that’s great.

I hope that many, many people get to enjoy your dessert course. This has been a wonderful interview. I want to thank you for joining us.

MLJ: Thank you so much for having me.