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SmartCEO June 2004
20 Minutes of Your Time

Last month,SmartCEO wrote briefly about a company called Direct Dimensions in Owings Mills that does three-dimensional scanning. This relatively nascent field is interesting because of the literally hundreds of practical commercial uses for it. Most recently, Direct Dimensions gained notoriety for its measurement of the Liberty Bell, which is being re-created by a foundry in France and will be rung on June 6, to commemorate the 60th anniversary of D-Day. We sat down with the founding CEO, Michael Raphael, to talk about his fascinating business and the rapid growth he is experiencing.

SmartCEO: How did you get started?

Michael Raphael: I went through school as an engineer and went to work locally in Middle River at Martin Marietta (now Middle River AircraftSystems). It’s a manufacturing company of aerospace structure components. I was there for 10 years in a problem-solving position – manufacturing and engineering problems. Five years into it, we were having difficulty understanding the shapes of some large components. They were very complex shapes and we were designing in the computer in 3D – this was in the late‘80s – but we didn’t have tools to go out into our manufacturing shop and actually measure in 3D. We spotted a product in Florida – it was a medical tool. It was a mechanical arm that you move manually and had a probe at the end. It was jointed and looked just like your arm. That probe was used by doctors to evaluate things like curvature of the spine. We knew we needed a device like that in our industry. The point was to try to develop that and I went to work with those guys to collaborate on building a similar device for industry that was more stable, rugged and especially more precise. We converted that company literally almost overnight from 100% medical to 100% industrial. They are now an $80 million a year company named Faro. I never went to work for them,but I saw the success of the idea. Boeing and General Motors began buying these things and I said, ‘Hey, I’m thefirst user on the planet. I might as well take my skills and form my own company.’ So I left in 1995 and started Direct Dimensions.

SmartCEO: How much seed money did you use?

Michael Raphael: None. We’ve been self-financed since day one. We’ve never had any debt per se, other than some very temporary equipment loans.We, unfortunately, were under the belief for many years that we have to save our money to buy something, employees included. That’s been a struggle that we’ve had as a company and we’re starting to realize that’s not necessarily the way business is. There are leverages and that’s what we’re just now figuring out – that we need to leverage who we are and our capital and our assets.

SmartCEO: How many employees do you have now?

Michael Raphael: Today we have 11. We are adding people today as we speak. We will have another five people by the end of the summer. We will be at least 15, maybe 17 by then and by the end of the year we could be maybe in the 20s. We are growing quite rapidly right now. In fact, I’ve very recently,finally taken on some management help. It’s funny – for a long time we hired the technical people, because that’s where we thought we needed more people and we have created a great staff of technical people, but it was only recently that I came to the conclusion that I can’t do it all myself from a management standpoint. I finally realized that I not only needed to hire help for my technical guys, I needed to hire help for myself. For nine years we were a business run by one guy and I finally realized that had to change. My two new managers started in the last couple of months. They are slowly realizing the scope of this business and one of them said to me, “You are a 100 person firm in six people. How did you keep all of this in yourhead? How did you juggle all these things? How did you keep it so constrained with the 100 directions you could go into?”

SmartCEO: Well, let’s talk about the 100 directions. How did the Liberty Bell come about?

Michael Raphael: That’s a strange project for us. It’s not our main thing. The main thing is manufacturing and engineering and product development–assisting the Black and Deckers of the world. A lot of military, government and industrial work – that’s where the money is. But for many years, we’ve realized that there is a crossover from our technology to other industries like historic preservation, which is the Liberty Bell example. Also art and sculpture – we’ve been doing some work with museums. And also medical– we’ve been making great strides applying technology from the military world to the medical world.A good example of this crossover is the Liberty Bell project. The goal was to remanufacture the Liberty Bell in France and make it as precise as possible, which is what we do, we’re all about precision measurement of physical objects to convert them into three dimensions in the computer, down to microns. The goal was to be as precise to the original design as the bell was 250 years ago. How precisely can we measure what we’ve got and back into what we think the designers of this bell intended this thing to look like and sound like?

SmartCEO: Is it always that accurate?

Michael Raphael: No. after 9/11,the government contacted us to measure the Lincoln Memorial. They were worried about reconstructing it in the event of a terrorist attack and we didn’t necessarily [get down to microns] – you would shut down all the Cray computers in the country with that kind of data. Next week we are supposed to go down to Virginia and scan the Monitor – one of the subs from the civil war.That scan will also be a little less precise, but the idea is to preserve something that is decaying. You can take all the pictures you want, but it doesn’t do you any good.

SmartCEO: That’s interesting, so people are asking you to scan things not because they want to recreate them, but because they want to have the ability to recreate them. They want to have it documented.

Michael Raphael: Precisely. It’s essentially an insurance policy. We’ve contemplated talking to insurance companies about this.

SmartCEO: So, when will the new bell be cast?

Michael Raphael: It’ll be cast by a foundry in France on the 19th of May. Their goal is to make a bell as acoustically accurate as possible. They want to make and ring a bell that sounds as precise to the original bell 252 years ago as it possibly could. They were as interested in it from an acoustic standpoint as we were from a measurement standpoint. This is a 300-year-old bell foundry in France. Serious understanding of bell science and amazing institutional knowledge - it was a great match for us. They came from France and spent a couple days with us before we went up to Philadelphia and we talked about the technology and their desires.We went up to Philly and worked from 6:00 p.m. until midnight. That was all we were allowed. They moved the barriers away and we were all over that bell for the next six hours. We used multiple technologies – several types of scanners and lasers. The three of us worked feverishly capturing gigabytes of data.

SmartCEO: How much computer power do you need to do this stuff?

Michael Raphael: To be honest, that’s probably been the strongest reason for the recent proliferation of this technology. Improvements in computer speed have made this science a lot more doable. We can do things today that we couldn’t do a year ago and that we didn’t even dream of three years ago.

SmartCEO: Well, you’re a Virginia Tech grad. Have you seen the $5 million supercomputer they built that’s nearly as fast as the former $300 million machines?

Michael Raphael: Yeah – it’s funny you say that, I was having this discussion yesterday with some business partners who were here. We’re experiencing the exact same economies of scale. We’re working on solutions today where we’re employing in our little lab technologies for real problems – major problems – that have costs in the thousands of dollars, where as federal labs, until now, have been spending millions and millions on these same solutions. We can do the same things on shoe-string budgets that the federal government has been spending millions on - that has grabbed the attention of gaming companies and virtual reality companies that we are beginning to partner with. We’re pulling together some partnerships now and entering into some real interesting ventures. It’s desktop virtual reality. This stuff can be done at the workstation level now for thousands, not millions.

SmartCEO: Another thing you do is medical prosthetics. If someone loses their left ear, you scan the right one and flip it around for a perfect match?

Michael Raphael: That’s an excellent application for our technology and it gives us good kharma to be working in areas like that. We’ve been doing that for four years now, internally self-funded because we believe in it. We work with Hopkins where they teach medical cosmetic prosthetics as a kind of art. With our technology we can take a lot of cost out of the process, because we can also measure the [wound area] and make something that will interface perfectly with that area of the body. We can go direct to the mold and greatly reduce the cycle time of hand sculpting. We take the grunt work out of the project by taking away the hard stuff.

SmartCEO: And you dabble in art?

Michael Raphael: Yes – we did a project very recently with the BMA pro-bono to see what we could do in that area. We scanned a bronze tiger from an 18th century artist named Barye. This particular tiger is located at the Corcoran Gallery in Washington, D.C. and the BMA has a similar tiger, in fact they have four. There are 12 in all - all from the same artist, all cast from the same mold. The question is - how similar are they? How exact are they? Which one came first? Can that be determined? Which one might be more valuable because it came out of the mold before the mold began to deteriorate or breakdown a little bit and the casting became less precise? What if a 13th was found, but all the records showed he only made 12? Could we figure out which one was fake? And the answer is yes – we can tell, because there is enough power in the computer to see things very clearly at previously un-measurable levels.

SmartCEO: Is there a dark side to this technology? Couldn’t a forger use that data too?

Michael Raphael: It’s not so much forgery, but to some extent, the fact that we are copying things makes people feel funny. But everything is copied – it’s a form of flattery. We don’t do this for malicious purposes. I would never take that data and turn it into a knick-knack to be sold, although we could in any size or material we wanted.

SmartCEO: Why wouldn’t you do that? There would be good reason to do that. I read an article the other day that the huge statue of Jesus at Johns Hopkins hospital, that brings so much comfort to people there, has been re-created, scaled down and is sold in the giftshop. They can’t keep the thing in stock for much more than a day because there is such high demand for the item, which costs a few hundred dollars, by the way.

Michael Raphael: Yes, you’re right and we know that. My point is we wouldn’t do that unless the licensing was worked out and we were authorized. But that is exactly one of the worlds we want to get into. We want to speak to the BMA and the Corcoran about that. I went to the National Gallery and walked through the fantastic gift shop they have there. They do not have one piece of 3D art. They didn’t have one replicated piece of art there. On the other hand, the Met in New York is very big on this. They make a lot of money selling reproductions. What we’re suggesting is that it’s one thing to make a reproduction, it’s another to say that you are using state-of-the-art technology to make a perfect reproduction that can be certified and sanctioned as an exact replica. That raises the marketing level a lot. It’s one thing to have an artist give his best shot at a replica, but it’s just not precise and often looks quite different to the eye. There’s a great deal of deviation between those artistic representations and what we would provide.

SmartCEO: It’s amazing how many different types of applications this tech-nology has. Does that make it tough to focus?

Michael Raphael: Yeah – one of the interesting conundrums with our business is that we know what we’re doing for the next couple of weeks, but rarely do we know what projects we’ll be involved in six months from now. Our time horizons are still short. It’s actually rare, although we do have a neat one pretty far on the horizon in August where we’re going to go to Houston to scan astronaut space suits. We’ve done some here already, but they’ve got a bunch more that they want us to do.

SmartCEO: Are they trying to make them function better?

Michael Raphael: Yes. They have essentially three sizes. Small, medium and large. What we are working on is the ability to think about, thanks to the new affordability of this technology, making custom space suits. We have scanned the astronauts themselves also. We have scanned their hands for the glove manufacturer.

SmartCEO: There are all sorts of reasons why you could scan people, aren’t there. You did a bust of Ray Lewis. Will busts become more common?

Michael Raphael: I think it will. We’ve already done many busts. It’s rapid. We can scan a bust of a person in less than 10 minutes and we get everything. It is phenomenally accurate and the likeness is unbelievable.

SmartCEO: Do people freak out?

Michael Raphael: Yeah – it’s interesting. What’s interesting are the requests to manipulate the data. People want to look younger – move the jaw, take out the wrinkles. And it goes further. People want to get scanned to see what they’ll look like with plastic surgery. What if I get my nose done? What if I get my breasts done? It’s one thing to take a photograph and doctor up a photograph. It’s another thing to take a three-dimensional scan of a person and doctor that. What’s interesting is the latest scanners can now capture color, so we not only have the shape of the person, but a good color match as well.There will be a time in the future when the drill you buy or the seat in your car will be personally customized to fit you. Levi’s is already testing this concept where you go into a booth and get scanned and they send you a pair of custom-made Levi’s. It’s happening in wedding dresses, too. That is a trend and we’re not really going in those directions, but I think it’s clear that customization and personalization is an area that’s moving forward.

SmartCEO: What’s the best application of that?

Michael Raphael: The first place it’s going to go is the military. They have a big problem with gas masks that don’t fit. It’s a huge problem – soldiers put their gas mask on and they can put their fingers between the mask and their face. The fit of your gloves and your helmet can also be greatly improved – that’s especially important if you are flying jets. Biometrics is another area that interests the government – scanning people’s faces has good security applications also.

SmartCEO: So do you think police departments may one day might take three-dimensional mug shots?

Michael Raphael: Clearly. Without question, what is in 2D today will be in 3D in the future. We have had our technology compared to the camera 100 years ago. A fellow we are working with at MICA goes nuts when he sees this stuff, because we are the Brownie camera. What we are doing today is still very unique. We don’t know of another company in the country that does what we do at the level that we do it and as broadly as we do it. We have competitors, but the people that compete with us are doing generally quite specific areas. What we do is quite broad – we apply this technology extremely broadly with the intention to create a wide variety of crossover and cross-pollination of fields. There’s often not a lot of money in many of them yet, but we know down the road, these things are going to grow and become more prevalent.

SmartCEO: Well, it must have been exciting for you when news of your technology reached France.

Michael Raphael: That trip was an eye opener. We got a taste for the appreciation that the French people truly feel for what our soldiers did in World WarII. We all hear about Paris and France and how they’re nixing the war and all this stuff, but I’ve got to tell you, on a personal level, meeting these guys from the bell foundry in France convinced me, and I think they were very sincere, that the folks in France do not forget what America did for them 60 yearsago. Every single year there are 9,000 flowers placed on 9,000 graves – it’s heartfelt and we got a strong sense of that. I’m not a political person, but it really made me feel good to be contributing to something that really will be meaningful to people in France.

SmartCEO: Well, our 20 minutes is up. We’ll be listening for the bell ringing on June 6. Thanks very much for your time and good luck.