Vodafone xone Innovators Series: Orion Health's Ian McCrae on spotting opportunities, managing growth and data as the next big thing in medicine

Vodafone xone Innovators Series: Orion Health's Ian McCrae on spotting opportunities, managing growth and data as the next big thing in medicine

To mark the arrival of the Vodafone xone business acceleratorIdealog is interviewing a whole heap of established New Zealand innovators, as well as the founders of the 10 startups selected by Vodafone to receive mentorship, funding and the potential benefits of working with a global network. Next up, we book in for a check-up with Ian McCrae, founder and CEO of one of the country's fastest growing companies Orion Health. 

Ben Fahy, Idealog's publisher and editorial director: Ian, typically you hear about businesses that try to solve a specific problem and maybe have a eureka moment; sometimes there might be a gap in the market but no market in the gap. I hear there's a bit of a different story for you, your strategy was different when you're developing Orion Health. Can you tell us how it all started back in '93?

Ian McCrae, founder and chief executive of Orion Health: Yeah, a few of us left Ernst & Young and we actually just did general software development. We did some health stuff. We did some airport baggage sorting software. Bodies and bags, so it's similar. Actually, we did some accounting software and travel software. We did a lot of things but we got more and more into health. It was where we were making the most progress. Around '95, I think, we got rid of everything else and just focused on health and eventually we changed our name from Orion Systems to Orion Health and there we go.

So that's just spotting the biggest opportunity; throwing some things up against the wall and seeing what sticks?

It was an even more interesting area, it was the area we were making a lot of progress. We were making sales overseas so it was just the logical thing to focus on, really.

Now that's obviously ramped up significantly. You have over 1,200 staff, over a hundred million patients ...

Yeah, 1200 staff and about 24 or 25 offices around the world, 15 countries I think.

Were your aspirations always global from the start? And do you think enough New Zealand companies have those kind of aspirations?

Actually, we just wanted to get to half a million dollars of turnover. Then we got half a million then a million and we got to a million and we thought, 'We'll do 5.' Then it became 10, then one day we thought we might get to 50. Boy, we are north of 200 now. A billion is not that far off, eh?

When you talk to successful business people they often seem to have had a well-formulated plan, that's all gone perfectly to schedule. Is that how it worked for you?

I think these days we're pretty focused, we hold a lot of medical records in our systems. We look after the medical records for 100 million patients, so we are increasingly becoming a custodian of the medical records for huge numbers of people and there is a possibility we can become the custodian for the medical records for the world.

Amazing goal. Do you think there are any character traits that are beneficial to being an innovator or a successful business person? I guess being slightly mad might help.

I discovered the other day when I did my genome that I have the positivity gene, so that might be quite useful ...

Unerring optimism ...

You can handle stress, if you can handle stress well. You also are always positive.

A laser focus also seems to help.

These companies, there's a fair bit of work to set them up and there is lots of travel, they are quite complicated, and as they get bigger they get more and more complicated. They're not easy.

I remember hearing an interview with Andrew Mason, who founded Groupon, who admitted that he lied throughout his career in business saying, 'It was all about work-life balance and making sure you spent time with the family.' He said afterwards that you actually have to give one of them up. What kind of sacrifices have you had to make and has it been worth it, for the greater good? For the purpose that you are striving for?

I think you've got to see that it's worth it. I mean the problem is the travel, and we are in a remote part of the world. You have these extended trips, two or three weeks, typically living, travelling around the US or wherever. That's the major problem. You're away from home, you're away from the kids, so that's pretty challenging.

When you look at sectors like health and education, they are often industrialised and in a sense this is meant to create efficiencies. But in many cases it also creates waste, because it's not personalised or targeted to specific users. You have set about mapping your own data, your health data. You have become a bit of a guinea pig, I guess. What do you think the future of health looks like?

There's a couple of things there. In health there is actually a huge amount of waste. The total spend on health globally is near enough to $7 trillion and there is about 30 to 40 percent waste. My maths is not quite right here, but that's roughly $3 trillion of waste. In a New Zealand context we spend $16 billion, so there's probably about $6 billion of waste in New Zealand. That's huge. Inefficiency, gaps in care or duplicates, or patients on the wrong pathway. Typically, what you've got to do is pull together a full medical record, make it available to the physicians and reason against it. There's huge potential to make health much better, so we are pretty excited about that.

Then on the actual data side, we have a lot of difficulty getting some data that our developers can use. You have to have patient consents and all that sort of stuff, so ultimately I started giving the developers my data. I gave them my DNA and they tell me all the defects in my DNA. What else? I give them my MRIs and all my images. I have a microbiome coming through, which I'm quite excited about. That's all the bugs in your body, that should be arriving really soon now. Metabolome , which is all the chemicals in your body. I just give it to my developers and use it for my presentations, so there we go.

The world is kind of catching up in a way. Even when you look at the way that people use things like Fitbit or the data that Google collects to make your life better and to create efficiencies.

Health's going to become a data science. There is so much data being produced now, or will be produced, from all the '-omics': genome, micro-biome, metabalome, transciptome, all these different areas. That's going to produce a lot of data and devices will produce a lot of data. So the challenge now is what do we do with all this data. This is where we need to add machine learning, logic and reasoning, so we can make suggestions to the physicians, to the doctors. But also to make suggestions to the patients themselves.

It gets pretty tricky because some patients are motivated, some aren't. Some are technically literate and some aren't. The trick is what suggestions do you make to which patients? Also, health's going to become very personalised because all patients are different. They are either serious or less serious, they have other conditions, other co-morbidities. Or from their genomes they might have various propensities for certain conditions. These all have to be factored in as to how to best treat a patient.

Data and analytics are obviously very important to figure out the best approaches from a health perspective. But how important is that for innovation? You look at some companies at the moment, they're the fastest-growing companies we've ever seen. The way that you release products has changed, the way that businesses operate. How is that impacting on your company and your role?

The whole software, ICT sector is hot at the moment. The hottest area of the sector is machine learning, big data, cloud computing. Machine learning is taking off and it's particularly soon about to really take off in health. What will we do with all this information we're about to get?

The tech sector in general in New Zealand seems to be having a good run at the moment. I've seen some stats around exports of tech surpassing dairy in a few years.

Parents should tell their kids to take up computer science.

That's pretty cool ... 

Yeah, it pays a lot of money.

Do you think there is a chance that New Zealand could be, or already is, an innovative tech hub that talented people want to come and live here to do work? 

It's probably going to become the second biggest exporter, it's heading that way. You've got companies like ourselves, like Vista, Xero, Wynyard, Gentrack, Serko ... Listed companies employing lots of people, hiring lots of new graduates and really driving the economy. It definitely is a really hot area.

In your experience, is innovation coming up with new ideas or is it connecting the things that already exist in different ways?

Innovation, it comes from the people who are curious. Not only do you want people that are really smart, but you want people who are curious. Typically, the innovative folk come in on Monday morning with an idea that they thought of over the weekend or came across. Then they want to get that into the product. So I don't think it's a process, I think it's just a different way of thinking. Some people are awesome at it, and that's just what they love doing.

Can you teach it?

You typically are wired that way. I'm not quite sure ...

It seems to require water on the back of the neck sometimes, for inspiration to strike. Or a run. Or something. 

That's right, that's right. I think you have to be very curious, the people who are the truly innovative folk are always on the internet, always looking different things up, coming up with new ideas.

Data is going to change health in much the same way that antibiotics, vaccinations and hygiene have changed health historically. We're going to go into a five or 10 year period where data is going to have exactly the same impact, it's going to make patients healthier, happier, and live longer. Some of those will be our friends and families, some of them will be some of the people that work here. That's a pretty cool thing to have the possibility of pulling off. That's what gets me out of bed in the morning.

Is that a team sport? Again, there is maybe a mythology around the apple falling on the head. Is it more about working with a lot of different people within the organisation and increasingly in this environment, with other organisations?

I mean sometimes you're coming up with the ideas as you're standing in the shower. But often then you need a team around you that makes the original idea much bigger. I think it's a bit of both, really. Your own research but then your idea is made a whole lot better from when you first present them on Monday morning, some of them you don't get that great a response. By Wednesday the idea becomes much better.

Obviously there is a process for maybe refining those ideas ...

Actually, it's really annoying when somebody doesn't like your ideas, it's really annoying.

What kind of things have you learned from those knock backs? Have there been any roadblocks that you've had to overcome, or failures that you've taken on board and seen now as an important learning experience?

If people aren't completely positive about your idea then probably it's not such a good idea after all, and you might need to refine it. You need to listen to the feedback. But in health there is so much innovation going on now, it's just amazing. Also, in the whole software area, there's cloud computing, everything going into the cloud. There's big data, machine learning, it kind of makes you feel old, there is so much change just trying to keep up.

Has anyone or anything in particular helped you along the way? What kind of support structures have you needed to have in place to get to this point?

We've been pretty lucky on the way through. We've had some really awesome developers, real innovators in the company. We've had pretty good board support as well, so it's just a matter of getting the right people into the organisation. Organise them the best you possibly can and then good things happen.

Do you get out of their way and let them do what they're good at? Are you still heavily involved?

You try not to interfere but it's a mix. 

If you were thinking back, or you see some other businesses or entrepreneurs who have an idea, whether good or bad, what advice would you give them to try and turn that into a business?

These companies, you start off, then you have various stages. There is different advice for different stages. When you're going overseas, when you get past 100 people, the structures all change. How should you staff your offices overseas? I'm a big fan of putting energetic New Zealanders into new markets. Because people actually like New Zealanders, they like our accent, our work ethic and they trust us. But when you first go into a market it's kind of hard to hire the superstars because you're unknown, you don't have a brand, so usually the New Zealanders are best. But ultimately you want to take the New Zealanders out and get good local people running those operations. I found it really hard as we grew, there were various points where the company got to a certain size, like 20 people, 50, 100, 200, 500. Each time you have to change the way the company is structured, so you're learning all the way through ... You need some good people around you. We've learned a lot off Fisher & Paykel, they've been really helpful. We've got some Fisher & Paykel people on our board, they give us lots of advice, new markets etc. It's great.

There does seem to be quite a collegial approach to New Zealand businesses willing to help each other out having seen those experiences. 

The startup should go and ask the companies that are a little bit bigger than them, because most New Zealand firms will be very helpful, share lots of advice, maybe even help them into various markets. We have a lot of companies come and visit us, it usually involves a cup of coffee, chat about things.

You never know where those coffees are gonna take you. Always say yes to a coffee.

Exactly. 

Maybe to finish Ian, what keeps you going? You could be spending more time driving your Tesla around if you wanted to.

I didn't expect to become the Tesla spokesperson. But never mind. It's not very often in life you have the opportunity to make a major difference. That's where we sit in Orion, there's the chance to make a major difference to health. Data is going to change health in much the same way that antibiotics, vaccinations and hygiene have changed health historically. We're going to go into a five or 10 year period where data is going to have exactly the same impact, it's going to make patients healthier, happier, and live longer. Some of those will be our friends and families, some of them will be some of the people that work here. That's a pretty cool thing to have the possibility of pulling off. That's what gets me out of bed in the morning.

Thank you, Ian.

Thank you.