About this episode
In this episode, I have the great privilege of chatting with Alan Finkel. We revisit key formative moments at Monash University and ANU, and the opportunities that emerged from the challenge of accessing and developing the best fit for purpose equipment. We discuss the difference between framing questions and solving problems through a discussion of the Engineering Method, an approach that underpins Alan’s career at Axon Instruments and beyond. Through instrument development, Alan recognises that development needs to be orientated towards needs, those spoken and those yet to be identified, and move past ‘what a customer wants’.
We spoke of time, timing and timeliness in Podcast 13 and we discuss a terrific example of how networks and preparedness catalyse the first key inflection point in the journey of Axon Instruments. That preparedness is founded on the bedrock of ‘The Relentless Pursuit of Quality’. We then discuss the growth of Axon, covering subsequent product launches and explore the one year that didn’t quite meet expectations, reflecting on market surveys and the internal rigour needed for market intelligence and its interpretation.
Our discussion then moves towards post Axon life, a moment of (failed) retirement and the next journeys undertaken with The Florey Institute, Chancellor of Monash University and Chief Scientist of Australia. We close on reflecting on the role the Chief Scientist plays in Australia and in technology transfer closing with Alan’s current writings on the current renewable energy transition.
CB: Hello, everyone, and welcome to Tech Transfer Talk. My name is Cameron Begley, Managing Director of Spiegare. And joining us today, we have the great thrill of having Alan Finkel AC coming on to the program. For those of you who don’t know Alan, he was most recently, Australia’s chief scientist from 2016 to 2020, and prior to that, Chancellor of Monash University, President of the Academy of Technology and Engineering, and CEO and fFunder of Axon Instruments, where we’re going to start our conversation with Alan today. Alan, welcome.
AF: Hi, Cameron.
CB: It’s great to have you join us. Thank you. Alan, the journey from being an electrical engineer, what was it that got you going into electrical engineering?
AF: Cameron, it’s one of those things. Some kids have a vision of their life’s journey right from the very beginning. I thought I did, but I think that my vision was something I inherited from my parents. So, growing up in primary school and secondary school was convinced that I wanted to be a doctor. Until the day-
CB: A Doctor of Medicine, I assume. Alan?
AF: A Doctor of Medicine, a medical doctor, medical practitioner, until the day in year twelve when I had to fill in the application form for university. And I realised that if I got into my first preference and I put down medical doctor, I would have to deal with sick people, with old people. And somehow it finally dawned on me that I didn’t have that kind of empathy. And my real interest growing up in medicine was more the engineering of the body. I really loved to understand, and I read the How and Why Wonder books. I had a project where I built a thing, a little model called The Invisible Man. And I just enjoyed learning about how the human body operated. And if I had gone and done medicine, I probably would have been a neurosurgeon or an orthopedic surgeon. In other words, applying my engineering and carpentry skills to the human body. But fortunately for mankind, I didn’t. And so, then I just went through a process of elimination. I said, well, I enjoy physics. I enjoy mathematics. Maybe I should do engineering.
CB: Indeed. And the journey started very early with your fascination on how things work, how the body works, how the brain works, which is a theme that runs through a lot of what we talk about. So you find yourself in engineering.
AF: Absolutely. And it’s an interesting comment you made about effectively being curious and wanting to know how things work. I was always building things, breaking things, trying to repair them after I’d broken them, et cetera. And a lot of people have asked me, because I went on to do engineering and science, who was my role model? And I didn’t have a role model in engineering or science. I was the child of immigrants from Europe who had to make good. My father had to make good in the so called schmutter business, the clothing trade, and did very, very well. And he himself was creative, and part of his business growth was to refurbish factories as they grew into newer ones. So, if I had a role model, it was him, but it was not a formal engineer or scientist. He was not a formal engineer or scientist. I just was born with the proverbial geek gene, and I was interested in science. I grew up in the 1960s, lying in bed, listening to the radio reports about the Mercury, Gemini and Apollo missions, waiting with bated breath to get the next Scientific American that would have the color photo spreads from those spacecraft missions. I just had a passion for it.
CB: So, it’s interesting – that the lack of a role model is an interesting thing. There was not a strong role model from your father, but not that notion of a science role model or an engineering role model, but the curiosity seemed to be the driver that carried you through engineering, because electrical engineering is not a trivial thing to take on. I remember – I’m a chem eng, and we used to look at the electrical guys going, we don’t know how you do all that math. And they used to look, how do you do all that chemistry? So, I have an appreciation for the trade you tried to apply there at university.
AF: My apologies for being part of the group that frustrated you, but I just enjoyed physics – was my favorite subject. Fantastic. And mathematics, pure and applied maths were right up there amongst my favorite subjects.
CB: Yeah. So having gone through the undergraduate course, the lure of working for the State Electricity Commission or the Telecom Australia, as it may have been back then, didn’t quite drag you across the line Alan?
AF: No. Cameron, I didn’t. have a vision for where I wanted to go. I knew kind of what I liked, but I didn’t have a vision for a career. And so, when I finished my bachelor’s degree, my undergraduate degree, I thought, well, gosh, am I going to go out and look for a job or should I put that off? And I decided that I would put it off. I knew by then of what it means to do a PhD, a Doctor of Philosophy in a discipline in engineering. And I knew that if I didn’t do it straight away, I would never come back. I can’t tell you why I knew that, but I knew that if I left, got a job, I would not come back to any academic pursuit. And so, I spent a bit of time speaking to various researchers at Monash University and decided to apply to do a PhD. And I was accepted, and I was accepted into a PhD, which was perfect for that mixed interest of medicine and how things worked in the human body with the engineering. I came across a wonderful person named Stephen Redmond, who was a reader in the Department of Electrical Engineering at Monash University. And he and a few others had established a biomedical research group within the Department of Electrical Engineering.
CB: Early days there.
AF: And he was looking at the spinal cord motor reflex, which is electrical and complex, and he was interested in having somebody do some more so-called single cell research, where you get down to the exquisite details of how individual nerve cells communicate with each other. So, he agreed to take me on. And I worked with an interesting animal model called Helix Aspersa, which is Latin for common garden snail.
CB: Right, excellent.
AF: The really good thing about a common garden snail is that they have a very simple brain. So, Cameron, I hope no one has ever referred to you as a snail brain, but if you take it literally, it does mean somebody with limited capacity. A snail only has about 10,000 neurons. You ,we human beings, we have 86 billion. Electrically active and chemically active. It’s very complex electrically and chemically active neurons. So, the snail brain is many orders of magnitude simpler to study. And so, I did my PhD studying electrical communication between a pair of neurons in the snail brain.
CB: Right, okay. So, did the snail move quickly enough for you?
AF: I’m afraid the snail didn’t get away. And the interesting thing about that research was my interest was mixed between designing the instrumentation, the equipment that I had to use to make the recordings and doing the actual scientific research. Because I was in an electrical engineering department, there was an expectation that we would do things ourselves. And so probably one of the things that served me better than anything else was the attitude of the Chair of the Department, which effectively came through as, Alan, you can have the best equipment in the world as long as you design and make it.
CB: Yes, and was that, do you think, driven by the natural PhD, discovery and learning and things, or was it simply that the equipment that you needed or expected that you needed, Alan, was just not there to be had?
AF: It was actually a bit of both. If I had been in a department of medicine or department of physiology, they would have given me a budget to go out and get the best that was there. There was equipment out there mostly from American and some European manufacturers. But the department attitude in the department of electrical engineering is, you’re a PhD in electrical engineering, you damn well do it yourself. And if you’re doing it, do it really well. And that sounds like throwing you into the fire, but it wasn’t, because the Department back then, and I’m not sure the departments do this now, back then had an excellent electronics lab or workshop, I should say an excellent electronics workshop. And it had an excellent mechanical workshop. And when you’re making things, it’s not just the electronics. It’s the housing. If you’re doing biological experiments, you’ve got fluid flow and temperature control. It’s all complex. So, there was support for me, but I had to do the design myself. I had to fabricate everything myself, and I learned a lot by doing that.
CB: What it also does is then creates different doors that you get to walk through, around the way you design that and the way you solve your problems and the way that things come to the surface in terms of results and insights.
AF: Indeed, in that situation where I was the designer and manufacturer of the equipment that I used, and I was the one and only customer of that process, it was a very good market research process. So very quick feedback from the customers. And so, if I was doing a day’s worth of research and it didn’t work out well, the experiments, you know, what could I do? I’d put up my hands, I’d look towards the heavens and say, what can I do to change? I don’t know. But if the equipment didn’t behave to the level that I needed it, I could literally whack myself on the side of the head and say, you idiot Finkel, and stay up till 3:00 a.m. the next morning, improving the design and benefiting from that the next day. You can’t do things in total isolation. I had the benefit of my PhD supervisor. He gave me introductions to people in the Department of Medicine and the Faculty of Physiology sorry, Faculty of Medicine and the Physiology Department. And so, I had fairly good awareness of the kinds of. Things that could be achieved if you just had the right equipment. And I just kept making my equipment better and better and better without thinking of the global context. But at the end of the day, it became really world class.
CB: Yeah, absolutely. And I’m looking forward to teasing apart how these foundational moments might have driven some of the early efforts. But what I’m interested to explore here Alan, is you said you’re up at three in the morning, tinkering trying to figure out how to make things better. But in a classical research environment, if that’s the right turn of phrase, it’s about the framing of the questions that drives the academic pursuit and the research pursuit, whereas I got the sense there that it was how to solve the problem. That was sort of the thing keeping you up, not trying to figure out what the next question was.
AF: Cameron that’s absolutely correct. So really good scientists, and I’m not a really good research scientist, they’re consumed by the question, and their creativity comes in how to frame the question and then adjust the experimental conditions to bring out the biggest or the strongest signal. And I just wasn’t great at that. If the signal was small, I just saw it as noise and didn’t know what to do. My passion was truly to make the instrumentation to enable me to do the experiments better. But actually, doing the experiments was not where my total or best skills lay.
CB: Yeah, but in its way, by being interested in how to solve the problem, it really sets the scene for going out and doing a new venture or startup or industry-oriented research, which is about how do I solve the problem? Whatever the problem happens to be.
AF: It does. Cameron so one of the things that’s odd about engineering undergraduate training is you learn about the technology and how to do things, but they don’t sit down and explicitly teach you the engineering method. Some people in science, in their undergraduate degree, have the benefit of being explicitly taught the theory of science. But there is an engineering method, and I inculcated that through the experience that I had. To me, the engineering method is pretty much five steps. First one sounds trite, but it is the single most important, and that is to identify the problem. A lot of people assume the problem or don’t even think about the problem but jump into a solution. So, you need to articulate, identify and articulate the problem. Then you have to analyse it. Then you have to come up with a first solution that you’re going to test. So the third step is develop a solution. The fourth step is to test it. Then you have to iterate the third and the fourth – just go round and round and round as you evaluate. And finally, you say, okay, I have a solution, which, when I evaluate it, meets all the sensible criteria. And so, the fifth is to package it up and deliver an operable solution that yourself and others can use. And so that became part of my modus operandi through the trave ills of doing my experiments and suffering and having to fix them, et cetera, et cetera, et cetera. So, it was the classic school of hard knocks, if you like. But that engineering method actually has guided everything I’ve done since my PhD, whether it’s policy, advice to government, business development or actual engineering. Engineering method is much more applicable than just engineering.
CB: Yeah. And what strikes me about the engineering method, and it’s great to recap that approach, it’s strange how everything old is new again. The engineering method that you just described gets held out in innovation books and workshops and accelerators and these sorts of things as, oh, it’s this iterative method where you define a problem and go through these steps. And there you were in your doctorate, and I suspect, and as you say, in all the years since, a method that was, for all intents and purposes, being used in the 70s, but in truth has been there long before that and is now in vogue again, being held out as this revolutionary way of thinking about things. In fact, it’s just the things you have to do to solve problems.
AF: So, you’re right that it has a long history and is enduring now and into the future. But what’s unfortunate is that it’s not that often followed. Think about things that go wrong in politics. Think about things that go wrong in business. Think about some things that go wrong in product development. The engineering method is easy to articulate but it doesn’t all that often get followed. I’ve inculcated it through doing my PhD. And I always follow it without even thinking about it. But it’s staggering how many times I’ll come across something that went awry and when I look at it and I say, yeah, they jumped to the conclusion without going through the analysis, or they didn’t really articulate the problem and so the solution they delivered, didn’t solve it. Like when I did have a business and we can talk about that later. I had a number of rules of thumb, and one of the rules of the thumb was to never give customers what they ask for, but to always give customers what they need, because most customers not in a position to really articulate what they need because their focus is on some different outcome, and they need a tool. If they were that clear about how the tool should operate, they’d probably be in your business and making the product.
CB: And indeed, a classical tenet of B2B selling is to meet the needs of the customer and rather than their wants or their whims or the things that buy it’s, meeting their needs both spoken and perhaps unknown to themselves.
AF: And that’s why it’s dangerous to make business decisions based on customer surveys that are ‘fill in the box’ surveys, because when you do a customer survey, you’re putting your own disposition and thinking into the questions that you ask, and you’re giving people the limited choices and you’re not really communicating. Maybe do that for some baseline, but most important is to have fewer people but sit down and talk to them, and really work it out what it is that they need.
CB: I suspect that that is the subject of a supplementary discussion around the forces at play as to why the engineering method is not religiously followed in politics, in business, even when we talk about market surveys. I suspect that’s a whole other area of exploration, Alan, which I’d be happy to take up with you. I am interested in the immediate term to look at how the journey started to shape up with Axon and some of those formative moments that happened after you finished your doctorate, because it sounds, at least at this point, Alan, you’ve become an exceptional builder of equipment for the purpose of detecting snail brain signals. How do we go from here?
AF: Okay, so the challenge in the equipment is that the signal in a snail brain is really small. So, most of the people listening today will have heard of the electricity system. They understand the concept of amps and volts, or even kilovolts, big currents, big volts. In a single brain cell, you’re dealing with currents that are small, not milliamps, not microamps, but nanoamps and picoamps, just getting smaller and smaller by factors of three. And you’re not dealing with hundreds of volts or volts. You’re dealing with millivolts and microvolts. So, you’re dealing with extremely small signals, and you need exquisitely sensitive electronic amplifiers to bring them up to the voltage level that can go into a computer for further analysis. So that was part of what I was doing in my PhD, got to the end of my PhD, had the same problems when I got to the end of my undergraduate bachelor’s degree. Crikey, what am I going to do now? I’m not ready for the real world.
And fortunately, I was offered the opportunity to go to the Australian National University and join a newly created division of Neuroscience. And there I was, not working solo as I was during my PhD, but with my former PhD supervisor Stephen Edmond and another guy, David Hurst, and some colleagues. And that was actually more pleasurable than my PhD, because I was designing a new series of instrumentation that made it possible for them to do more detailed research, in one case on the spinal motor cord reflex, and another case on ganglion cells. They’re the neurons that controlled smooth muscles in the abdomen. My job was to make sure they had the most exquisite instrumentation for doing those experiments. So, a couple of years went on doing that, and then by serendipity, let’s just call it fortune, good fortune, a famous researcher named Paul Adams from the State University of New York was visiting the ANU Neuroscience Division. And as is often the case with famous people, he was a really lovely person. Not only did he give his talks and speak to the senior of people, he came down to the basement where myself and other postdocs were, and he got talking to me, and I remember standing in front of my rack of equipment talking to him. And at one point, he looked over my shoulder and said: ‘What’s that, Alan?’ and I explained to him what my equipment was and what it was doing, and he asked the question that defined the next 23 years of my life. He said, ‘wow, could I get one of those?’
CB: And the journey begins.
AF: Because that clarified for me what I already suspected, that there would be a market for the equipment that I had been designing. So, I took that as a motivating factor. Grabbed my wife, who had just finished, or was in the process of finishing her PhD in biochemistry, and we went off to San Francisco. She did a postdoctoral fellowship for five years at the University of California – San Francisco, and I started a company further south in Silicon Valley on making the sensitive amplifiers that I had been using during my research and making them commercially for sale.
CB: So, at this moment, Alan, if I’m hearing all this correctly, as we sit and chat, the market research is N equals one plus a hunch that there might be a need for a few more. So, we’re hoping it’s more than the initial forecast for IBM, which might be a couple of handfuls and maybe not quite out at Henry Ford car demand, but we’re hoping for somewhere in between. You’ve made this decision mid postdoctoral fellowship at ANU, what is the timelines we’re talking about here? Not so much in terms of calendar, Alan, although that might help as well, but from the time you had that conversation with Paul Adams in the basement at ANU, how many months was it until you were in this rather odd place called Silicon Valley?
AF: I think it was about six months. I had a lot to do. I had to wrap up what I was doing in my postdoc. I had to marry my bride and make the arrangements to go. My startup was not a classic that people are used to today, which is funded either by angel investors or venture capital. I had about $100,000 of family money. This is back in 1983, so you can work out how much that would be today. Not a lot of money, but a clear vision of what I wanted to produce and the encouragement of my colleagues from the Australian National University. And so hopped on the plane, went to San Francisco, spent a few weeks scouting around, finding premises, and started the process of just everything. Finding out where to buy capacitors resistors, integrated circuits, who could do circuit board fabrication, et cetera, et cetera, et cetera. But I had the product well-conceived in my mind. It was a question of taking something that was at an advanced TRL level out of my PhD and postdoctoral research design and turning it into a commercialisable product. So that went remarkably quickly. I arrived in Silicon Valley in March, and by August of that year, I shipped my first product. My first customer was somebody who had been contacted by David Hearst, my research colleague at the ANU. And David, basically just on his own volition, didn’t even tell me. He wrote to that guy and said, Finkel is coming, he’s going to make these gadgets, you should buy one. And without any further prompting, the guy reached out to me and said, I want to buy one. And so, he was my first customer.
CB: So, this is a really interesting point there, Alan, about the power of network and the power of reference.
AF: It is, but it’s a deeper point than that, if I may, Cameron, because, yes, the reference is important, but it’s really the power of quality. So one of the things that’s been a driving thing for me is to always do whatever I do to the absolute best that I can. And so, the quality of what I was making was very, very good. And my colleagues who I had been working with at ANU, they recognised it in a way that I didn’t as being the best thing that was out there. So that reference was not just because I’m Finkel the son of my uncle or friend or somebody like that, and I should give him a reference. It was, this guy Finkel has made some really good stuff, and my colleague in America would benefit from having early access to that. And so, yes, the reference was powerful, but there are references and references. And so, when you get a reference, this kid’s had a tough life, you should give him a job, that’s one thing. But this kid, he or she is just the best software engineer I’ve ever seen, that’s a different kind of reference.
CB: And the first sale is made. I’d like to have you just talk through what happened a few months later. I think it was in Boston, where sort of things were coming to a head, as I have it, Alan.
AF: Well, it was extraordinary. I had shipped the first product to a researcher in August. Fairly complex equipment. Ordinarily you’d expect that to sit there for five or six months at the back of the lab before the researcher got the chance to integrate it into the research program. Around about that time, I had the opportunity to go to the very first conference where I was going to exhibit in America in November in Boston. And I got to tell you, the initial $100,000 was running low. I was getting a bit nervous. Went to the conference. I had the only booth that didn’t have carpet out of hundreds of booths. My wife came with me as my assistant because I couldn’t afford to get other staff. But what had happened unbeknownst to me, this researcher had opened the box, used it, got such good results, that he tossed aside the data that he was going to present in November at the Neuroscience Society and did a new set of experiments based on using my equipment. And so on the afternoon of the first day, a whole lot of people saw him present and asked him, where did you get that equipment from? And he said, this guy Finkel Axon Instruments somewhere in the exhibition hall, somewhere over there. And so, from later in the afternoon of the first day and then on the second or third day, I just had a constant stream of people coming to the booth. And I was effectively giving tutorials on how to do these sophisticated measurements of two cells talking to each other or one cell under deliberately stressed conditions. And that’s when I realised that at that moment in time, and you don’t have these opportunities many times in your life, at that moment in time, I was the world’s expert on the experimental technique, and I was the world’s designer of the best equipment. I was the designer of the world’s best equipment. And you just can’t have that sort of opportunity more than once or twice in your life. And so orders started to roll in, and I just survived the nadir in the U shape of my bank account.
CB: Yes, that is an incredible moment. And you think back the conversations that we’ve had so far, and that quality moment now resonates through, because without the quality of your work, the recommendation, the connection doesn’t come without the quality of the researcher’s work that can stand up at, what I’m assuming here, Alan, was a pretty high-level sort of Gordon conference standard.
AF: Oh, no, it was much bigger.
CB: This was the much bigger, right? Okay.
AF: This was the American Society for Neuroscience. It was probably 20,000 researchers.
CB: Right. So, this is a moment of great influence and impact. And because of the quality of your work and in turn, the quality of the researcher and their work, all of a sudden, your order book is overflowing.
AF: You know, it’s not as if you understand and plan all these things as you’re going. But later on, when people would ask me why was your company, Axon Instruments, so successful, Alan? I would say, if you only want one answer, it is the relentless commitment to quality. And my stepfather, my father died when I was younger, my mother remarried, he once expressed to me, he said, ‘Alan, quality is remembered long after price is forgotten’. ‘Make the best product, charge what you need, get through the pain of that pricing and people will come back again and again and again because they remember the quality’.
CB: They’re very sage words, Alan. Because the quality does endure long after the stick has been taken off. So, very sage words indeed. So now you’re off and running. And I think what interests me now is from that bottom, nearing the bottom of the U curve and the bank account inflecting, and things really gathering ahead of steam from Boston, how does Axon scale from a single product, single market through to over the generation? Because you’ve now got a 22-odd-year journey ahead of you. Little did you know in the moment what are some of the learnings or steps that have unfolded, because to build scale these days, which is a question in the Australian innovation system at the moment, how do you build that scale from that single product market starting point?
AF: It’s hard. And we probably weren’t the best example for some of the young companies starting today because they are going to go the venture capital route, in many cases scale faster. We scaled steadily and it was by saying, okay, for example, we’re starting with this instrument that can do the recordings from single neurons. But we were doing this in the 1980s, mid-1980s. The IBM PC had just come out, the first Apple computers and there was a clear interest in digitising the data rather than recording it on paper charts and things like that. And so, I recognised that was important. I won’t go through all the details, but I ended up licensing some lab software from a researcher at Caltech, the California Institute of Technology in Pasadena, formally through the university, and then taking on the responsibility hiring software engineers and taking on the responsibility to turn it from a lab grade product to a commercial product. But we couldn’t get a really good digitiser. And that’s a device that goes into the computer that converts the analog signal into digital signal. So eventually, we decided to spend a couple of years and design and make our own higher resolution, faster, less noisy digitiser. So, it was like an expanding bubble. You use what’s available but backfill better designs into that. And so, the spectrum of what we offered grew, but always with very high-quality products. That was sort of like growth of the first product line. What was really hard was to go to the second product line.
CB: Right. It’s the second product and the second market, that’s a new journey.
AF: Yeah. And that was difficult. I won’t go into the details, but we looked, and we looked and looked and couldn’t work out what it would ideally be. But then through a lot of discussions at conferences, through researchers who became friends of the company, we realised that the tools for understanding how nerve cells work were expanding from recording the electrical activity, to indirectly looking at their activity through putting fluorescent indicators onto the cells and then using cameras to look at multiple cells simultaneously. And so, we recognised the opportunity for doing optical imaging and recording. So, we worked on that for a few years and had some products that we sold, but they didn’t really distinguish – there really wasn’t a big distinction between what we had and what other people had got in earlier than us had. So, the next realisation was that there was interest in automating those processes for drug discovery at pharmaceutical companies. So, getting away from the university-type researchers to researchers in drug discovery companies. And we made a device that could look at 96 beakers of cells with fluorescent indicators in a fully automated fashion.
But the really big leap was when some researcher friends from Stanford University brought to my attention the revolutionary work in genomics. And what was happening in the 1990s was that researchers were working out ways to look at gene expression. That’s the activity of genes in an automated fashion that would allow you to look at thousands of gene activities at the same time. And they did that by painting genetic detectors onto a glass slide, thousands at a time. And each of them was different. And that was called a DNA microarray. And that was an area of research that I and my colleagues had no expertise in. But through our relationships with researchers, in particular at Stanford University, we learned. And what we found is, we could reapply our skills in high-speed digitisation and low noise electronic amplification to make a DNA microarray scanner, which is effectively like a laser scanner that would scan at very fine detail, 30,000…40,000 spots on a single glass microscope slide and through the fluorescent indicators bound to each of these spots. And remember, each spot is a unique DNA detector. You could, would look at the level of expression of the genes coming from a cellular sample that had been applied to it. So, we developed a high speed, modest cost DNA microarray scanner and the software to go with it. So that was a huge leap from neurosciences to genomics. And then what happened, Cameron, is the combination of having that solid grounding, we were number one in the world in the niche market of cellular neuroscience and expanding into pharmaceutical drug discovery, and DNA microarrays. All of a sudden, we became of great interest to some of the companies in Silicon Valley that were much bigger than us and much more established in those areas. So, we started exploring things, but not jumping into it.
CB: Now that you’ve drawn attention to yourself, what was their response, and then what was the internal response?
AF: So, we were at that point where there was interest in us, but also interesting marketing opportunities. The company had grown. We were about 130 or 140 people, and I was personally struggling to take us to the next level. And I eventually went to the board, we were a public company by then. We were an ASX listed California company. And just as a side note, might I mention to you that we were the first ever American company to do its IPO on the Australian Stock Exchange? So, we were a publicly listed company. I had a real board, and eventually, I think it was in about 2003, I went to the board, and I said, ‘Board, I have a confession to make. I’ve been cheating as a CEO.’ And they said, ‘what are you talking about?’ I said, ‘well, I’m there all the time, but I only spend about half my time doing what a CEO should do, which is engaging with the investors and thinking about the forward strategy and dealing with finances, administration, and all the things that keep the company running. And the other half of the time, I walk the corridors and sit down with the engineers, hardware engineers, software engineers, mechanical engineers, test technicians, and I talk technology and. And I love it. And I’m not prepared to give that up and become 100% devoted to those classic CEO roles. So, Board, either we have to replace me as the CEO, which is fine, or sell the company’. And we actively pursued both routes. But eventually we sold the company to a company called Molecular Devices who was really interested in US, cause of the high throughput screening or the really medium throughput screening for pharmaceutical companies and the DNA microarray work building on top of our fundamental cellular neuroscience.
CB: So, their interest in you was a result of the product diversification that took place. So, in its way, that diversification created the optionality around the sale, in that you were drawn to the attention of the market, and then you had people that had a familiarity with your own interest in you because you were now competing with them.
AF: Correct. See, the cellular neuroscience market is a worldwide market, but pretty limited in scope. And so, if we’d just done that, there’s no reason why a big company would come and want to acquire us, or at least not want to come acquire us for a lot of money. But the genomics, the DNA microarray scanning, and the pharmaceutical screening were potentially much, much larger markets.
CB: Yeah. So, in that journey, before we explore what happens next now that you’ve cheated on your ‘CEOdom’, self-confessed, as I have it, over the 23-year journey. So, from 1983 to the exit with molecular devices in 2005… 2006, we reached the bottom of that curve earlier, and it was all systems go after Boston. So, I take it 23 years of steady, profitable growth all the way through to the end.
AF: Well, almost. It was remarkable. We had 22 years…
CB: 22. I’m interested in the one.
AF: We had one year in the late 1990s where we actually lost money. And that was tough because we’d gotten confused about our next product development, and we’re spending a lot of money and time on engineering development for products that really weren’t destined to be successful, because we followed some market research surveys that weren’t done with that personal questioning and interaction that I discussed before. That was really tough. We actually had to do a redundancy that maybe ten or 15% of our people go. It was the only time we had to do that. But we did it very well. We took a lot of advice from personnel consultants. I had a wonderful man, Jeff Powell, as the president of the company, so, he worked very closely with me on all these management things. And as is often the case, we emerged from that as a stronger company, and then we were back into all systems go.
CB: Yeah, it’s interesting. The new market entry and relying on the report. Lots of market reports go around, lots of dependency on consultants and the like, in the world we operate in. What was it about that report? Without perhaps giving away things, saying things you shouldn’t, what was it in that report that didn’t allow you to meet your expectations or the expectations that…
AF: Look, the fault was ours. We were just taking the report literally and thinking that we should do our product development according to what had been expressed in there is what people wanted. And we didn’t engage directly with the customers. And so, while we made prototypes that might have been successful, they really weren’t finely tuned in the way they needed to be.
CB: So, it was more the internal rigour applied…
CB: Advice that was taken. So, it wasn’t so much the advice was inherently flawed. It was we weren’t rigorous in assessing that and its suitability for us and the veracity of what was said to us.
AF: It’s because we took that market research report as sufficient. It should have only been part of the inputs to the design process, to the product decision making process. You have to talk to your customers. You can’t replace engagement and narrative, tick the box surveys.
CB: Yeah. Okay.
AF: And I’ve learned that lesson so well that I just don’t do surveys. Every time you go to a hotel, or you do this or that, they said, you a survey. I have a rule. I don’t do surveys.
CB: Don’t do surveys. But I like the way that you use the word sufficient. Right. That you guys made the assumption, or you took it as sufficient without doing that rigorous direct market testing and direct market engagement, building the relationships, checking the veracity and the context and led you to the situation that you had in that one particular year. Thank you for sharing that, Alan, because it’s interesting what the exception is sometimes as much as it is to have 22 great years, it’s interesting as to what happened in the one year. And sometimes they’re externalities, and sometimes they’re internalities. As a CEO who had inadequate commitment to the full-time role that comes with that title, you’ve now reached the point, so, what do you do next? You’ve gone from 100,000 in your pocket turning up in Silicon Valley. You’ve now notionally retired, or at least exited Axon as the acquisition took place. You just set your sights on being the Chief Scientist of Australia and roll from there, or what happens next, Alan?
AF: Well, I certainly did not set my sights on being the Chief Scientist. I’m sure that the role actually even existed that I was aware of it. So, I did 18 months with the company that acquired us. Then on the 1 January 2006, I retired. I had been well reimbursed, if I can call it that, through the sale. And so I thought I would retire at the tender age of 53. And so, I spent some conscientious months sailing, playing golf, reading, and I failed miserably. It was intolerable. And I just started building up a series of activities. During that time, I co-founded a magazine called Cosmos Magazine, which is a popular science magazine. I founded a postgraduate research training course called the Australia Course in Advanced Neurosciences, which is a three-week residential course. And I just started doing more and more things. But I had no vision of where I was going, I truly didn’t, Cameron, and then know the luck of somehow come to the attention of somebody who can. Change your career in a heartbeat. I got a phone call from a guy named Fred Mendelssohn, who was the Chief Executive or Scientific Director at the Howard Florey Institute, which is a medical research institute in Melbourne, Australia. And he asked me if I would consider joining their board. I said, ‘why not?’ Yeah. And I did. And I went to one board meeting. And then shortly after that, I got a call from the Scientific Director of a different research institute called the Brain Research Institute. Guy named Graham Jackson, he said, ‘Alan, did they talk about the amalgamation?’ I said ‘no. What are you talking about? ‘Apparently, for about a year and a half already, there’d been discussion of the Howard Florey, the Brain Research Institute and the National Stroke Research Institute merging. And that was driven by the Victorian state government and the Australian government saying effectively, they were sick of these multiple institutes coming to them, cap in hand. And if these three institutes were to amalgamate, then there’d be $60 million to help them in the next growth phase. And a whole bunch of philanthropists said that they would jump in on that, too. And despite all of that pot of gold, they had not been able to negotiate the terms of their amalgamation. Because you had three boards with chairs and boards and three scientific directors all wanting to position themselves in the amalgamated institute. Classic. Graham said to me, ‘could you help on this?’ And I went back to Fred and the board, and everybody agreed that I should lead an amalgamation process, coming in with some business experience, understanding the science, but also, most importantly, being the fresh kid on the block without any deep commitments to one institute over the other. So, I retired after one board meeting from the Howard Florey because I decided that would be a conflict of interest. And I spent the next six months being like a Henry Kissinger, negotiating a peace settlement between these three institutes and ultimately pulled it off after a lot Friday afternoon meetings facilitated by scotch whiskey in my office, we came up with an uplifted federated model. I won’t even begin to try to explain what that was, but we brought the three institutes together as a single institute ,that is now running very well as the Florey Neuroscience Institute.
Anyway, that was done well, and possibly as a consequence of that, I don’t know, I never really found out. Sometime the next year, I got a phone call saying from somebody I knew, who I didn’t realise until the conversation started was on the Council of Monash University and she was leading the subcommittee, or the committee of council charged with finding the next Chancellor. And she said, ‘Alan, would you consider putting your name in for consideration?’ I said, ‘sure, Louise, but what’s a Chancellor?’ Because I had not been involved with the universities. And when you’re at university, I was a student at Monash University, you only know the people two levels above. So as a student, I knew my tutors and my lecturer. As a postdoc, I knew the head of the department and some others in the university. So, I went through that process and ultimately got appointed as the Chancellor of Monash University, which I did for eight years. Absolutely loved it. It’s an interesting role because it’s got the business requirements of a chairman of a board. And a university is big, it’s billions of dollars of turnover, a huge number of staff, and the council, like a board of a company, is ultimately charged with the success of the university. So, it’s responsible for budget, it’s responsible for strategy, but of course, it does that through the vehicle of management. But council in particular, the Chancellor, works to appoint the Vice Chancellor and delegate responsibility for the success of the university, but constantly work with management to make sure that they’re implementing that responsibility effectively. So, it’s got all that format, that deep business requirement, but on top of that, it has pomp and ceremony.
CB: Ceremony. Yes, it does.
AF: As Chancellor, I got to dress up in sort of bright orange damask and two and a half kilograms of gold tassels and wear a velvet bonnet ,and stand up on the stage and greet and shake the hands of the graduates in graduation ceremonies. And it’s a really important moment for those students.
CB: Absolutely, it is.
AF: And it’s something that I enjoyed giving to them to make sure that for the 10 seconds that they were walking across the stage, they had my attention, the audience’s attention. They were the focus of everybody.
CB: As they should be.
AF: Absolutely. So that pompous ceremony is actually an important part of their graduation and what the Americans would call commencement of the next phase of their life.
CB: Yeah, indeed. One of the last things I’d want to explore with you is the role you had as Chief Scientist and perhaps some of the, some of the reflections you might have on it. Not necessarily in broad terms, Alan, but maybe just back to the audience around commercialisation and innovation and tech transfer. I’m of the view that the Chief Scientist is an important piece of the equation, encouraging science to take on, and scientists and research to take on, both publication challenge as well as the impact commercializtion get things to market challenge. I’d be interested to just explore your reflections on that.
AF: To some extent that is correct, Cameron. Basically, each Chief Scientist tends to carve their own path. The job description is simple it is to advise the Prime Minister, the Science Minister and other ministers where relevant on science research and innovation, to engage with the public on science research and innovation, and represent Australia in international discussions on science research and innovation. But exactly how it unfolds is always different. We’ve talked a lot about the luck of the moment and the opportunities arising and walking through those doors of opportunity. If I didn’t say ‘yes’ when I was called about the Chancellor, I would have never been in the process and become Chancellor. If I didn’t become Chancellor, I wouldn’t have come to the attention of the powers to lead them to inviting me to be considered to be the Chief Scientist.
So, you just got to keep doing things and do them well. I came into the role at an exciting time for innovation. It was the first year of Malcolm Turnbull’s prime ministership, and he was driving a process called Nisa. N-I-S-A. The National Innovation and Science Agenda. And so, there was strong enthusiasm from the Prime Minister down through the department on the role of innovation in driving economic growth and opportunity and, of course, the importance of scientific research feeding into that. As is always the case, it didn’t last because of political exigencies, but it got going. And so, I was fortunate to be involved in reviewing the efficiency and integrity of the tax reimbursement for R & D and to make sure that that was more effective than it had previously been. I was the deputy chair of an organisation called Innovation and Science Australia that was asked to develop an innovation strategy for the government, which we did and did very well. Innovation and Science Australia was the entity to which the Cooperative Research Centres report. These Cooperative Research Centres, for those who haven’t heard of them, more commonly known as the CRCs, are a fabulous methodology for bringing together university researchers and companies with government funding and corporate funding to broadly tackle areas such as quantum computing, agricultural automation, et cetera. They pick an area and bring a wide range of capabilities to resolve them. So, as Chief Scientist, I could encourage those kinds of innovation processes. As it happened, I also got, not distracted, but I got subsumed into the clean energy transition, which is a big innovation agenda, but just by circumstances, it was about halfway through my first year, or two thirds of the way through my first year, that there was a doozy of a very, very violent storm. And ultimately, one of our states, the state of South Australia, had a blackout. And whilst blackouts are common in the electricity system, for a whole state to go dark, is very unusual as a result of that. But it so happened that South Australia was the state that was furthest along the pathway to shifting from coal to wind and solar.
And so there was a lot of finger pointing by the conservatives, the reactionaries, et cetera. And I was asked by the government to do a review of the whole of the national electricity market in Australia. And that was a huge task. I was very, very well supported by the relevant government departments and a task force that was set up. I was hearing a committee of just four others who were experts in various aspects of the electricity market. Everybody in the country who knew anything about the electricity system wanted to help, and I mean sincerely wanted to help, except for those who were stuck in this reactionary mindset, that coal has to prevail at all costs. And there are some. But mostly it was a very enthusiastic process to help redefine the evolution of the market in the face of rampant technological change. So, the market rules could encourage the adoption of solar and wind whilst maintaining reliability and maintaining affordability. And it’s not easy, but we can do it and we’re making great strides, but you’ve got to have everything working for you. The rules of the market, the guidance from government, the financial investment, et cetera.
CB: I mean, that is terrific part of your contribution, I think, in that role, Alan, around the moving to clean energy and the resilience of the system and the reliability of the system. And not only the technical complexities, and the technology transfer complexities, as you said, this rapidly evolving marketplace. But the role of regulation and the role of policy and government in establishing the conditions for successful transition to, in this case, low carbon technologies. But generally speaking, the transition to any new technology typically has a role for government and regulation. And I take it that you have explored this in more detail in Powering Up.
AF: Yes. So, I wrote, I call it half a book, about two years ago, called Getting to Zero, part of a series called The Quarterly Essays. And that was about me trying to make the case that we have in hand and with expected developments, the technology that can help us to get to zero or enable us to get to zero. And in that book, I said, I acknowledge technology does not live in a vacuum, but this book is about the technology. I’ve just finished another book which will go on the market in a month or two in June of 2023 called Powering Up. And it’s about the everything else. It’s about the global supply chain that enables the clean energy transition so that’s the financing, the ESG investment, carbon taxes, government incentives, expansion of mining, responsible purchasing, all the things that are necessary to create a framework called the global supply chain that enables that technology just scale up because it’s got to scale up very fast.
CB: Yeah, fantastic. Alan., as we draw things to a close. It’s been a fantastic conversation and I’ve really enjoyed the journey of your journey through Axon and through your third trimester as you’ve given back to the society around you. I’m interested just for those listening, those one or two fundamental things you’d like to leave the audience with today, given we’ve touched on a range of things that have happened around you and things that you have in fact taken on yourself through the journey. And I’d just be interested those one or two closing thoughts from you.
AF: Well, let me give you three, just based on what we talked about. So, this is really reiteration just to finish. Call it a summary if you like. Always do things to the best of your ability. I call that commitment to quality. There’s no better advertisement for what you’ve got to offer. Be willing to step through the doors of opportunity when they open. And third, one we didn’t really talk about, but you sort of touched on, which is the trimesters of life. And this is something I learned from somebody else. Life can be, if you’re lucky, divided into three trimesters. The first one, let’s call it roughly zero to 30 years old. It’s all about me growing up, falling in love, starting off doing your education. Second trimester, call it roughly from 30 to 60. That’s about establishing your career and building a family, if you’re fortunate enough to be able to do all of that. And then the third, is the tramistic from, say, 60 to 90 or whatever. And that’s the give back to community opportunity. And I sort of regard myself as being in that stage since effectively since I sold Axon and started my retirement, my failed retirement. So, I guess that last one is something to aspire to.
CB: Yeah, indeed. Indeed. Alan, again, thank you so much for joining us today. It’s been an absolute pleasure talking with you about the journey, and certainly I look forward to talking to you again soon. And I hope everyone has enjoyed today’s podcast. Thanks a lot, Alan.
AF: My pleasure, Cameron.