3D4Medical turns bare bones of idea into global success story

For a company whose work has been featured on Oprah, on the cover of Time magazine and in National Geographic to name but a few, 3D4Medical, which made its name with 3D software, has flown a little under the radar.

Until 2015, that is, when the Dublin company took to the stage at Apple’s iPad Pro launch to show what it would do with the new device. More than 40 million people saw the presentation, and it propelled 3D4Medical into the limelight.

However, for founder and chief executive John Moore, who set up his business in an attic room in Donnybrook in Dublin 4, it hasn't been an easy road.

The roots of 3D4Medical are in FDS, a company that made software for training pharmaceutical representatives. But just as it was looking to build a substantial business, the elearning space was becoming crowded. And although the business was doing well, the directors put it into voluntary liquidation.

It wasn’t an easy decision.

“We had a lot of very big deals, millions of dollars’ worth in fact, but they didn’t come in on time,” Moore says. “We had 35 people and it went into liquidation, because we could see what was coming.”

But it wasn’t a total bust. The business did generate the beginning of an idea for another business, involving the detailed 3D images and animations the team had created.

“The one thing we noticed when we went around to give presentations in the US was that any time we showed any of our 3D stuff, our 3D animation, there was always a ‘wow’. So I knew there was a market there for the 3D,” he says. “Then when [FDS] went into liquidation, I thought that maybe we could do a stock library.”

The idea was a compelling one: license the images, effectively making money while you sleep, and get a royalty cheque every month. The feedback from the pharmaceutical firms had made it clear there was a market there for 3D animations and images.

“If you look at traditional photography, a heart, it’s always covered in gore because you can’t get a real heart on its own with traditional photography,” he says. “But we can do it in 3D, we can get realistic results, we can stylise it without the gore.”

That kicked off an intense period of work on building a library and, over a period of about two years, the company made about 18,000 high-resolution images. The images themselves are now scattered around the 3D4Medical offices in Blackrock.

Moore describes it as a “beautiful business model”.

“We did really well on that for about four or five years,” he says. “We distributed through 51 distributors worldwide, including Corbis and Getty Images. We got a royalty cheque every month.”

However, after several years of growth, things started to falter. While there was a market for images of hearts and brains, more specialised images failed to find a market, especially once things such as severe acute respiratory syndrome (Sars) and other topics had been covered.

“We knew we were coming to the top of where we could go in that market,” says Moore. Then came the recession and, with it, the first decline in sales for 3D4Medical, particularly in the advertising market.

There was an added complicating factor: in 2009, three of 3D4 Medical’s top managers left and started their own company, a business very similar to what their previous employers had been doing.

Moore says it was a blow at the time but that ultimately it proved to be a “life-changing experience”.

“It really made me think what I was good at, what my skills were,” he says. “It’s going to sound corny but I’ll say it anyway: I really value myself as an innovator and really structured the whole company around innovation.”

It turned out to be somewhat of a blessing in disguise. There were other pressing matters to deal with, given the decline in revenues, namely the direction of the company.

"We had invested a lot of money into producing the 3D models. At that stage, we had a long relationship with the Royal College of Surgeons. We knew that these assets were worth something and, at the time, Apple had just come out with the iPhone and opened the App store," says Moore.

The firm found itself on its current path as a medical training company. The company embraced the idea of the app store, hired developers and set about creating its first software for Apple’s mobile platform.

“We took a skeleton model, took different pictures, and we were able to fake 3D by taking the series of images together and turning into a full rotation,” he says. “It was a surprise hit for us.”

Business model

The business model was similar to that of its previous image business – making money while you sleep – so the team created a suite of apps covering the body’s different systems, and in doing so put the company on its current path.

Then came the launch of the iPad in 2011.

“We really started to take it seriously,” says Moore. “We hired the best people we could get, pushed the boundaries of we could do.”

Moore relocated his family – his wife and two children – to California to work on the business for a year. While he was there, he met Apple’s iPad executives. That gave the company credibility, he says. From there, they began building up the new business.

It was a move that certainly paid off for 3D4Medical. The company is now bringing in millions in revenues every year. It has topped the App Store and is in use in universities and hospitals around the world. It employs more than 100 people and, earlier this year, announced plans to expand its workforce further.

On Moore’s desk, with pride of place, is the Apple Design Award the company won earlier this year for Complete Anatomy, 3D4Medical’s flagship software product aimed at medical training.

The company produced its own engine, developed from the ground up so that it could do things no one else could currently do: interact with models, cut into them and simulate diseased states.

Moore says they were also keen to take the software to a new level, making the models photorealistic using the processing power of the Apple devices. It was a calculated leap, but one that paid off.

Investment money

Risk-taking is part of any entrepreneur’s journey but, these days, 3D4Medical is a solid prospect. Earlier this year, the company predicted its revenues would double to $8 million (€7.3 million) as it added content to Complete Anatomy and was valued at $55 million.

In 2015, the company got $16.4 million in investment money from Malin for a 38 per cent stake. This year, it was a shortlisted finalist in the EY Entrepreneur of the Year awards.

It wasn’t always so clear-cut though. A few years ago the company was facing court action that nearly put it out of business. That, Moore says, was down to him being “stupid, stubborn” and convinced that, because he was right, the company would win out.

“Years and years ago, we had licensed something from another company, a model that we used to make images,” he says. “They sued us, saying that their original model was a foundation for everything we had done, and it was almost impossible to say we didn’t.

“We fought it because we thought it was unjust. We ended up in court. It took about a year and a half, $500,000 in legal fees, and had a judgment against us for $1 million.

“It almost put us out of business. I had to restructure and get rid of a lot of people. It paid off in a year and we came out the other end.”

It could have been settled for a fraction of that amount earlier on though, he says, providing a valuable lesson about the cost of sticking to principles.

The company has moved on, though. The relationship with Apple has been a mutually beneficial one. When 3D4Medical took to the stage in 2015 to address the iPad Pro launch event, it was the second time it had been in the Apple spotlight, having previously addressed the tech giant’s developer conference in 2012.

“Being on that stage again [at the iPad Pro launch], it gave us a huge boost. I think in the first six seconds of 3D4Medical coming up on the screen behind [3D4Medical director of design] Irene [Walsh], we got something like half a million hits and our website went down. It took us days to get it back up – what a wasted opportunity,” he says.

The company has also been involved in a number of ads for Apple and was featured as part of a documentary. Moore is realistic about the relationship though.

“Let’s be honest here: Apple promote us, but they’re not doing it because they like us; we sell iPads. It works both ways. We have thousands of emails from people saying they bought an iPad specifically to get our software,” he says.

Mac is the native platform for Complete Anatomy, with the iOS app coming later. The company is also planning to bring the software to Windows and the Surface in a bid to make it more appealing to universities.

Although the technology has been embraced by students, 3D4Medical met resistance from universities which were somewhat attached to their textbooks. The company pitched Essential Anatomy, the forerunner for Complete Anatomy, as an add-on to the books and got students on board.

The updated software also has a lecture builder on it that allows lecturers to create their own content and share it with students, who are signed up on a subscription basis. There are 100 pilot projects in US universities already, and Moore is confident they will sign up even more.

“We’re going to do a million a month by the end of the year,” says Moore. “This is disruptive technology. For the very first time, they’re embracing this. They’re getting rid of the text books. It doesn’t make sense to have text books when you can do it all on this. That’s really running by itself.”

Next up is the clinical version of the software, which will allow medical professionals to send full copies of consultations, including treatment options, to their patients for later review. The plan is to take a similar approach as the Complete Anatomy roll-out, making it available for patients who may then request it from their doctors.

“We’re going from the bottom up rather than the top down,” he says.

Augmented reality

With one eye on the future, Moore and his team are already looking at augmented and mixed reality, such as that offered by the now defunct Google Glass and Microsoft's upcoming HoloLens system. He sees applications for the technology in training and potentially assisted surgery, where a surgeon could carry out a dry run of a procedure on a cadaver that could be replicated by a robot later on.

It could also allow less experienced people to successfully carry out operations with the aid of “virtual” guide, which could benefit developing countries.

“We’re a good bit away from this yet,” he says.

With 3D4Medical’s future looking bright, it’s clear the company has come a long way from its earlier growing pains. Ironically, some of that credit may indirectly go to those former managers and subsequent rivals who may have done the company a favour by forcing it to change its focus.

“I thought it was the end of the world,” Moore says. “If I ever see them, I’ll thank them.”