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Interview with Dan Michel, Dakim




Santa Monica-based Dakim (www.dakim.com) recently landed a $10.6M round of venture financing for the firm's brain fitness products, geared at helping seniors stave off Alzheimer's and improve their brain function. Dakim's product is a self-contained combination of touch screen enabled hardware and software, which is installed into senior care facilities; the software includes a number of entertaining "brain games" geared at seniors, and adjusts to different levels of challenge depending on how well users answer questions. The product automatically downloads new content, which includes movie clips and other rich media, quizzes, memory games, and other puzzles. We sat down earlier this week with the firm's CEO and founder, Dan Michel, to hear more about how the company got into the field and what seems to be a sudden interest in their market.

How did the company come about, and what's the story behind it?

Dan Michel: My background was in the marketing and advertising industry. I was the COO of BBDO Advertising in LA, and later went to Columbia Pictures where I was VP of Marketing. After that, I started my own ad agency producing movie trailers and TV advertising for about 10 years. About that time, my dad developed Alzheimer's, and I became responsible for his health care. He had to eventually live in a senior living community, and it was there that I observed both my dad and the residence community, and got to know the folks operating them, the care providers. I was fortunate enough to be able to spend time with my dad, and I observed that keeping him cognitively active had real benefits. At that time, I knew nothing about brain health--it was just intuitive that keeping him active would help. I thought if he did that, he would be happier, and I noticed that the more often I did that the longer the benefits seemed to accrue. I developed some very simple analog devices to stimulate him. He was in a senior living home in the Chicago area, and when I came back to California, I ran into an old client friend of mine from the advertising world, Mike Minchin. He's now president of The John Douglas French Alzheimer's Foundation. One of the people on his advisory board was Dr. Gary Small, who is at UCLA, and is the head of UCLA's Center on Aging, and head of UCLA's Memory Research Center. He's one of the most respected brain health researchers in the world. Mike introduced him to me, and I talked to him about the idea which would become Dakim's mPower.

He was very excited by the description. He had been spending years and years helping people develop brain health programs. What we realized is we could have a real chance of being powerfully successful. He became our chief scientific advisor. We spent five years developing prototypes of what would become mPower, and I worked with my partner, Jerry Robinson, to test it. We did that, and in 2005 we funded our company and got off and running. We launched mPower in November of 2006, and today there are 300 units out in 150 senior living communities in the country, and we're about to launch a home version late this summer or early this fall.

How's this compare to the "brain games" which seem to be becoming popular on game consoles, computers, and web sites right now?

Dan Michel: This is a dynamic market, driven by some real urgent needs, to help improve quality of life. What differentiates our product and approach is, unlike many, we're aimed strictly at seniors. We're not looking at casual adult or young adults interested in playing a brain game, we're looking for people who need cognitive stimulation, where's it's very important, or maybe even all important for them to use to prevent or slow down development of dementia. That's really what our product is all about. There's been a lot of research done over the last decade, that finds that remaining cognitively stimulated through life can have a significant impact on life. In order to reduce the risk of dementia, it also has to be a lifelong endeavor, you've got to do it consistently for the rest of your life. We're the only product in our category aimed at this, and so we're the only one able to be used consistently for long term use. There's a long list of things that are part of our product that make that possible. The first, and most obvious, is our exercises are highly produced and a lot of fun--and they're created just for seniors. They are relevant for seniors, they're compelling for them, and challenging for them. We download new exercises virtually every night, so they always have something new to come back for. Other high powered technology self-adjusts the level of challenge in real time, during every session. In each of six cognitive domains, we exercise across five levels of challenge, so that users are challenged at the optimal level. By optimal, I mean they are adequately challenged enough to be stimulating, but not so hard to be frustrating, and not so easy you want to quit. The powerful technology driving a therapeutic session is designed not only to be beneficial therapeutically, but also designed to enhance quality of life--so that the experience is fun every day.

So it looks like you sell this directly to care facilities?

Dan Michel: Right now we sell to independent living communities, retirement communities, assisted living communities, as well as some skilled nursing communities.

You mentioned you automatically update the software, can you tell us more on how that works?

Dan Michel: Because this is aimed at seniors, who don't use a PC or a computer, no technology savvy is needed by either the user or caregiver. When new activities are downloaded, the download and installation is done automatically. If we upgrade our application, it's all done automatically. There's not even a CD ROM slot on the product. No technology savvy is required by anybody, and virtually every seniors can use mPower, whether or not they have used a computer in their life. There's no passwords, it's all done with first and last name and initials. They see their name, a picture of themselves, and then they go right ahead.

Tell us a little bit about your choice behind the non-PC platform -- was this driven from the focus on the senior market?

Dan Michel: That's just it. If you're aiming at the adult market, from 25 to 54, PCs are fine. Adults 25 to 54 are perfectly able to use a mouse and computer. But when we set out to create this for seniors, it required that there was no technology burden for either users or caregivers. It must be rock solid, something that wouldn't crash at all, and wouldn't require that you were technology savvy for maintenance, or for logging in, or for administration. We needed to have a proprietary platform, which was stable, which is why Linux is our operating system. You can truly just take it out of the box, plug it in, and have some fun and take care of your brain. For the senior market, you don't want a mouse or keyboard. For an adult, it might be fine to log on and go play games on an online site, but for seniors, forget about it. Our decision to go after the senior market was because it was the most developed, and had the most urgent market pain. We're doing this because of the genuine need of seniors to slow and prevent dementia. Studies show that by engaging long term, consistently in cognitive exercise, you reduce your risk of dementia by 35 to 60 percent. That's why we built the product from the ground up for seniors, with content which is era specific to those who are seventy to ninety years old--all the rich media and music is from the 30's and 40's.

It seems like a number of companies in the "brain game" area have been raising capital lately, any idea why it's suddenly popular to focus on this area?

Dan Michel: It's a worthwhile endeavor for the rest of your life, so you don't have to go through the same experiences I and my dad went through. There are lots of alternatives now that people can pursue to change the outcome, which is important to do for all of us. There's plenty of room in our market to become a giant -- wither that's a Lumosity, or Fitbrains, or a casual game, or Dakim. However, we're really helping seniors deal with issues they are confronting today,, urgent issues. There are two important things worth mentioning -- one is the nun study, based on research among an order of nuns in Minnesota. They were granted dispensation to have their brains autopsied after death. They discovered that many nuns who show the pathology of Alzheimer's showed no cognitive impairment in real life. Scientists today have an interesting theory--there was an interesting story in the Harvard Business Review in November about cognitive fitness--that's the concept of cognitive reserve.

The Harvard Business Review told the story of a chess master, who for all of his life could think eight moves ahead. Near the end of his life, he could only think five moves ahead. After he died, the autopsy showed such severe Alzheimer's that he should have been completely nonfunctional. But, because he and the nuns were so cognitively active all of their life, they built up what is called a cognitive reserve. What we know now, is unlike what people believed a couple of decades ago--that people stopped developing their brains between age 14 and 20--the brain changes and is plastic until the very end. For example, when people experience a brain injury like a stroke or something, another part of the brain takes over and can perform functions for the injured part. They believe this is cognitive reserve, where we can built new neurons and create new synapses until the very end. That's the reason for lifelong involvement in learning, and in our case lifelong cognitive stimulation. If you remain consistently with it, you can reduce the risks and change the odds in your favor. It's worth it for everyone spending 25 to 30 minutes a day to do this. As our Chief Scientific Officer Gary Small says, it's never too early or too late to begin a brain fitness program.

Finally, how big is the market potential here?

Dan Michel: SharpBrains did a study that showed that 400 communities currently have computer-based, brain fitness labs. We're currently in about 150 communities. That's not even the tip of the iceberg.


 

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