Published in Crain’s Chicago Business, September 29, 2016 –
On a shelf behind Eric Lefkofsky’s desk are bound copies of the closing documents of the three companies he’s taken public, Groupon, InnerWorkings and Echo Global Logistics. Perched above them is a plastic structure made by a 3-D printer and given to him as a gift, a tiny double helix.
There you have his past and his present.
After making a fortune from his e-commerce startups—Forbes pegs his current wealth at $1.79 billion—Lefkofsky has moved on to his biggest challenge yet. Through his latest venture, Tempus, which he has just taken out of stealth mode, the serial entrepreneur is taking on cancer. His plan: to compile a massive genomic database about the disease that can be compared with an individual patient’s own DNA to help doctors personalize therapies. If it succeeds, people could live with cancer longer. Some might even be cured.
By now, of course, Lefkofsky is comfortable with risk. But why, with no background in genetics or medicine, is he self-funding a genomics company?
His wife, Liz, was treated for breast cancer a couple of years ago. She is doing well, taking it one day at a time, he says. He couldn’t say the same for the state of cancer treatment. To help her find the best course of action, Lefkofsky learned everything he could about breast cancer and how doctors were treating the disease. He found hospitals as far behind in the use of data as Groupon discovered small merchants were.
“You realize if you’ve been a patient or know someone who’s been a patient that technology has not permeated health care and certainly oncology the way it has permeated other industries,” he says.
“At some of the top cancer centers in the country, you find really interesting research initiatives where they’re sequencing patients, looking for patterns,” he says. “It’s not happening at scale.” At the same time, he says, doctors can be overwhelmed. “They’re caught in this paradox: You can collect lots of data, but you can’t necessarily analyze all the data.”
He’s not the only one to have this realization, however. Hundreds of startups, as well as IBM through its Watson Group and nonprofits like the Venter Institute, are using Big Data to determine which drugs will be most efficacious in treating complex diseases. And their numbers are multiplying as genetic screening and data storage become cheaper and the amount of information grows.
“I’m encouraged he’s doing this. The world needs more of this work,” says Immanuel Thangaraj, former chief financial officer of Chicago’s Arch Venture Partners and now a managing director at Park Lane Ventures, a Silicon Valley fund that specializes in health care. “But this is a crowded space. He’s joining a race like the Boston Marathon.”
Lefkofsky says Tempus is unique because it is an end-to-end solution. Through partnerships with leading hospitals, he hopes to collect a massive set of data. In addition to providing gene-sequencing tests to patients from a 20,000-square-foot lab at its River North headquarters, Tempus gives doctors software that allows them to quickly compare a patient’s genetic profile to its database of other cancer patients to determine which treatments have been the most effective, as well as to find clinical trials. Hospitals, in return, contribute data.
Tempus announced its first partnership with Northwestern’s Lurie Comprehensive Cancer Center on Sept. 29. It’s expected to announce others later this fall.
Lefkofsky, 47, began constructing Tempus late last year after stepping down as CEO of Groupon. (He’s still chairman and its biggest shareholder.) He soon hired Kevin White, a geneticist and top researcher at University of Chicago who had spent a decade building its Institute for Genomics and Systems Biology.
Tempus is now up to almost 100 employees, heavy on Ph.D.s. It’s a big departure from legions of millennials working the phones at Groupon and other companies.
But Lefkofsky says they have much in common. “If you look at all the businesses we’ve built . . . everything we work on has a Big Data component.” Says Michael Sacks, CEO of GCM Grosvenor, a $45 billion asset management fund, and an investor: “Tempus is similar. It is just much bigger and much more important.”
Like all their ventures, Tempus is owned 50-50 by Lefkofsky and Brad Keywell, his longtime business partner. Keywell, too, is doubling down on Big Data through his fast-growing startup Uptake, which is pulling in data from sensors on machines to better forecast service needs for Caterpillar and potentially other industrial clients.
“We don’t start companies thinking about the industry or big problems, or hey, let’s take a big swing because we can,” Lefkofsky says. “When you have five successful companies, it’s not like, ‘I just really want to start a sixth.’
“Our motivation for starting companies is very personal: We come across some problem, and you have this lightbulb that goes off that says, ‘I have this solution.’ “
Lefkofsky and Keywell won’t say how much they’ve invested in their latest startups. But the three IPOs and the $750 million sale of another of their startups, ad-billing company Mediaocean, allow them to endow their venture fund, Lightbank, with $200 million. Lefkofsky says he’s willing to invest up to $100 million in Tempus.
In its partnership with Northwestern, patients will pay Tempus for gene-sequencing tests and Northwestern doctors will get free use of its software. Northwestern, in return, will provide anonymized patient information to help Tempus build up its database.
“I’m excited to see where this goes,” says Michael Liang, a Chicago-based partner at Baird Capital venture fund. “The biggest question is reimbursement. How do you get paid for these tests and differentiate your tests?”
Lefkofsky says he’s up for the challenge. “I’m confident that in five or 10 years, the average oncologist will be connected to a system like Tempus. Whether or not it’s Tempus, it’s too soon to say.”