SUZANNE COX: Hi everyone.
Thanks for coming.
I'm Suzanne Cox.
I'm the program director of the Master
of Science and Biomedical Informatics
here at the University of Chicago.
Thanks so much for joining us.
And I want to say hi to everybody
who's on Facebook joining us in the live stream.
Thank you so much for joining us.
This is our monthly seminar series
that we have every month.
This time it's for special topics
in biomedical informatics, and we're
so glad that you all could join us tonight
for this special presentation.
We have a great panel put together tonight.
We're going to be discussing health care, innovation,
and entrepreneurship around informatics.
So I'm going to introduce the panelists really quickly,
and then they're going to introduce themselves and talk
a little bit more about their organizations
as we get started.
And then moderating tonight is our faculty director
Sam Volchenboum, who's a pediatric oncologist
at the University of Chicago Medicine.
He's also the director of the Center for Research informatics
at the University.
And he is the creator of our master's program,
and we're really grateful that he could come tonight.
He's also an entrepreneur.
He'll tell you more about his background as well.
So on the panel tonight, we have Steve Lehmann,
who's assistant director at the University of Chicago Polsky
Center, which is our Center for Innovation
and Entrepreneurship.
We have Arun Bhatia, who's the program director from MATTER.
And we have Dr. Cheng-Kai Kao, who
is a hospitalist at the University of Chicago Medicine.
He's the associate CMIO at the hospital,
and he's also an instructor in our program.
And he teaches our health innovation entrepreneurship
class.
So thank you so much for joining us.
I'm going to go ahead and turn it over
to you guys to do a little introduction of yourself,
and to Sam who'll be moderating.
Thanks.
SAMUEL VOLCHENBOUM: Great.
Thanks, Suzanne.
So I'm really happy everybody came out tonight,
and I'm glad that we have this great panel together.
What I'd like to do is I want to start by having everyone,
myself included, give a little bit of our origin story
so that you can hear how each of us
got to this point in our careers because I think
it's useful for other people to hear
the serendipitous and creative routes
that people have taken to get where they are.
And then we'll spend most of the time,
I think, talking about some of the issues
around entrepreneurship and innovation in health care.
And I think you'll get a lot of insight
from the folks that are here, and I'm looking forward
to hearing your questions.
A couple of things about the rules of engagement--
I would hope that people will feel free to raise their hands
and ask questions.
We'll have a mic to pass around.
I can repeat the questions.
You can use the online joinqa.com
to ask questions as well.
And I think we have a lot of people
that are watching this virtually that will
want to ask questions that way.
So with that being said, I think we'll get started.
So for myself, I'm a pediatric oncologist.
So I went to school to be a physician
and to take care of kids with cancer.
And during that process, I was always
driven to try to do more things in automated fashion.
And this is now 20, 25 years ago.
So there wasn't a lot of automated ways
or electronic ways of doing things.
But I always found myself drawn to trying
to come up with better ways to make things happen.
And I'm sure Kai has similar stories
where for the first time you take a note
and write it and put a piece of paper through the printer
and in the hospital everybody thinks
you're a wizard because you've written this electronic note.
I think we all have had those experiences,
and we got to see the revolution of electronic health records--
both the good and the bad.
And we have a lot of experiences from that.
So when I finished my oncology training,
I went ahead and formalized my education
by doing a master's in biomedical informatics.
And that really gave me the tools
that I needed then to actually speak
with some authority on some of these important issues
around security and privacy and HIPAA compliance and all
the things that are the tools of our trade
that are so important, things that you would also
learn going through our curriculum that
are going to be so important to help you develop this career.
And then for the last 10 years, I've
been at the University of Chicago.
And for the last six, I've been running the Center
for Research informatics.
And CRI is a 40 person group in the biological sciences
division that really crosscuts along
many different areas important to informatics research.
We do high performance computing.
We do HIPAA compliant storage.
We have applications development.
We run a data warehouse.
We do bioinformatics.
And by having all these things under one roof,
we're able to really matrix our capabilities
and able to do things in a much more nimble fashion
than many groups because we can all work together.
It's also given me a front seat to a lot
of interesting entrepreneurship and commercialization
opportunities, seeing many things come through our center
that people use our group to get data
to develop a research project which
then can turn into a business.
A great example is Donna [? Adelson's ?] company
where they took data from our data warehouse
and developed an algorithm that could actually
predict patients that were going to have a cardiac arrest.
And they were only able to develop this prediction
algorithm by using some really well curated data from our data
warehouse.
And then by using that data and developing an algorithm,
Donna was able to start a very successful company that's
based on using this algorithm to detect cardiac arrest.
So that's given me a lot of incentive
to try to be more involved in these activities
because I can see this is a really good jumping off
point for people that want to start businesses.
For my own personal interests, I'm
very much interested in clinical trials
and how clinical trials are run and how we execute them.
There's a lot of inefficiencies in the clinical trial process.
And one of the things that I noticed early on
was that we continue to collect data
for clinical trials in a very inefficient way
through paper based forms and through paper surveys.
And so about 2 and 1/2 years ago,
I started a company called Litmus Health that
is dedicated to using Fitbits and other wearables
to collect data for clinical trials
and to do so in a way that's standardized
and allows the data to be then used for clinical trials
and then to be shared amongst the various regulatory agencies
that need those data.
And as a startup, we have the same problems
that all startups have with funding
and CTOs that come and go and all sorts of issues.
But those are all the things that we'll hear about tonight
and all the issues that come whenever you start a business.
So that's my story.
And I think I'd like to go on the line.
I know that everybody here has a rich history
that they could share.
So if everybody could spend sort of three
to five minutes going through how you got to-- you know
got to talk as fast as I do if you don't want to.
Kai, why don't you why don't you kick it off?
CHENG-KAI KAO: Thank you, Sam.
Hello, everyone.
Good evening.
Thank you so much for coming.
So my name is Cheng-Kai Kao.
I usually just go by Kai.
Makes it easier for everyone.
I am an internist by training as also serves
as associates in my own minds institution, University Chicago
Medicine.
So in this role, I got contacted by multiple different setups.
When I say setups, I'm talking about brand new companies
about also sometimes bigger companies spin off.
And sometimes I think that some of these products
are amazing ideas.
But sometimes some of these ideas are just not so great.
And you can see there's a clear gap
between the solution they provide
and the problem they want to solve.
So the reason why I started this course about health care
innovation entrepreneurship being the massive program
is hoping that we can teach students
how to define and discover a problem for us
before you come up with a solution
and try to find a problem to solve.
Because more commonly, for example, 3-D is hot,
and people starting to think about it--
can we 3-D print everything.
And then so you really apply a solution
and try to find a problem to solve.
But what happens in that regard is the newest technology
is not always the best solution for everything.
So you often backfire later on because there's
a better solution, maybe much easier, much cheaper.
And eventually, the startup wouldn't
be successful in the market.
So this is something we want to teach our students for.
And on top of that, Informatics has been my passion.
It really helped me a lot in clinical trials,
helped me to launch the Telemedicine Program
for international patients.
There's a lot of applications, a lot of room for innovation.
One thing I open saying the class is not everyone
need to be entrepreneurs, but every one of us
should try to be an innovator in whatever we do,
try to improve things.
It doesn't need to be a company.
But whatever we do, whatever innovate
can make our life or our colleagues' lives better.
Thank you.
SAMUEL VOLCHENBOUM: Thanks, Kai.
ARUN BHATIA: OK, good evening, everyone.
Arun Bhatia from MATTER.
Glad To have you.
Such a full room tonight.
This is great.
So a little bit about my background-- actually
entrepreneurship was probably the last thing on my mind
when I first started off my career.
So I actually started off in the life sciences.
I was a biochemistry biology undergrad, did my master's
degree in biotechnology and worked in academic research
for a number of years down in St. Louis, up here
at Northwestern, really interested in the science.
Wasn't terribly good actually at the bench,
but was really interested in the science.
Got to learn a little bit more about what
folks do on the business side.
I was really interested-- actually,
it was my last class in my master's program.
I actually took a marketing class
as part of my biotechnology program
as strange as that sounds.
And that was sort of my first foray
into anything commercial, anything business.
Very interesting-- started to learn
and network with folks who are on the business side of biotech
and pharma and actually, through the Graham School,
came here and actually took a couple of classes at Booth
as a non-degree student, just to learn what
is business school all about.
And I actually fell in love with the culture of business school
and so decided to kind of leverage my science background
and pursue my business degree here at Booth.
I started off in working in a very small consulting group.
It's not even around anymore.
It was called Illinois Technology Development
Alliance, and it was a group-- kind of a consulting group--
that worked with entrepreneurs in our community trying
to prop up entrepreneurship in our community.
And that's really where I started
learning about what a business plan was,
how to evaluate it, what do startup companies need
to do as they grow up, and really just try to leverage
my science understanding with my business background
to help some of these companies.
Spent about six years after that at Baxter Health Care
in our innovation strategy group and our venture group.
And these were many companies within Baxter
that we were trying to organically grow.
So I had an opportunity to work on a couple
of therapeutic programs there.
And then spent some time at a group
called Illinois Ventures, which is a venture arm
of the University of Illinois--
again, working with faculty entrepreneurs,
trying to spin off technologies out of the university.
And then came to a MATTER, where basically I'm working with--
again, having come from the industry
side and the entrepreneurial side,
trying to link entrepreneurs with industry in our community.
One thing that we have in Chicago that's amazing
is all of these resources when you look at payers,
when you look at pharma, you look at health systems,
you look at physician associations, institutions
research institutions, best business schools
in the country.
It's amazing when you think about Chicago all the resources
that we have here.
They aren't terribly connected well, though,
and that's where I think MATTER comes in.
And some of the success that MATTER
has had over the last couple of years
has been really linking those communities together.
And the premise really there is, if you're
an entrepreneur, a health entrepreneur, IT entrepreneur,
but you're interested in Health Care.
You don't create those solutions in a bubble.
You don't do it in a vacuum.
You don't do it in a garage.
You've got to be at the table with pharma,
with health systems, with payers,
with patients providers.
There are so many constituents in health care.
That's what makes it both challenging and very exciting
as well.
And so we help our entrepreneurs essentially make
those make those connections.
STEVE LEHMANN: Good evening, everyone.
I'm Steve Lehmann, the assistant director
of the Chicago Innovation Fund.
I work helping put the first equity round of financing
into startups based on university research
both at the University of Chicago
but also our national labs--
Argone, Fermi, and the Marine biological laboratory.
I've been in this role for about two years
and my pathway into it is probably the most serendipitous
and the least biotechy.
So I started my undergrad undecided
whether I wanted to be an aerospace engineer
or a theologian.
So I studied both mechanical engineering and theology.
And the recession pushed me into theology
because I was going to work for Caterpillar,
and they said, sorry, we're laying off 10,000 people.
So I studied theology abroad at Oxford University
and then came back and decided that I needed to make money
and bounced around between a couple of different industries
and focused mostly on social enterprise
and social entrepreneurship in the emerging economies
and in international development.
My story led me eventually back to getting an MBA at Notre Dame
and that, since then--
the last seven, eight years--
I've been working on putting together
startups around deep technologies, mostly not
health care until the last two years,
but always founded on really deep intellectual property.
Before coming to U Chicago, I worked for a consulting firm
here in the city called Ocean Tomo
and helped a bunch of different companies
figure out how to take their intellectual property
and make companies out of them or to make
other decisions to buy and sell intellectual property as
needed.
And I'm really interested in the early stages of turning
a great idea into a company--
what are the different factors that
make an idea grow, how do you put the right team around it,
how do you support it in all the right ways.
I love doing that.
And the last two years, I've just
been super focused on getting up to speed in biotech.
So I'm the person on the panel with absolutely
no educational background, but who
is deeply interested in the space
and coming up to speed as quickly as I can.
SAMUEL VOLCHENBOUM: Great.
Thank you for those intros.
I have a few of my own questions,
and I'll turn it over to the audience in a second.
And you can also put your questions during QA.
One question that I always get--
in my own startup, I've often felt
like I've been behind the eight ball
in not understanding term sheets and equity, investing,
and seed rounds.
And a lot of it's been--
I feel like I'm learning it after the fact,
I'm learning it too late.
And at one point in my career, I thought, well, maybe I
should get another degree.
Maybe I should get an MBA or something.
And I think I got good advice where people said
don't get an MBA, read a book, and everybody
has their favorite book about starting a business.
But I do think it's important to try
to figure out what extra training should people get.
So should people get MBAs?
Should they get public health master,
or should they get statistics training?
What do you recommend to people when they come to you
and say, hey, I need to fill in some gaps
and an MBA seems like an easy way out,
but what kinds of things do you tell them?
I'm sure you all have a perspective on this, but Steve?
STEVE LEHMANN: Sure, yeah.
So one of my friends in the audience
is a perfect example here--
Tim, who's a Northwestern student who
decided that he wanted to get some startup experience
and didn't even let institutional allegiances
get in his way from jumping into a startup.
And he got involved with the program we
ran last summer at the Polsky Center
and jumped right into one of our startups
called O2M and just kind of open arms and said,
I'm willing to do whatever needs to be
done in order to grab the experience that I need to get.
And I love getting that hands on experience much better
than reading a book, definitely better than getting an MBA.
He's just an awesome example.
SAMUEL VOLCHENBOUM: Arun.
ARUN BHATIA: Yeah, so I think, especially in health care--
as I sort of mentioned--
there are so many different skill sets
that are going to be needed.
And so ultimately, you can't necessarily
be an expert in all fields.
And I think that, for everybody, it's a different formula.
There's not a one size fits all.
But I think what I've seen where I've
seen entrepreneurs excel is where they have
functional experience or expertise in one area,
whether it's finance, whether it's bioinformatics,
whether it's accounting.
Whatever it might be, that piece of the puzzle and sort
of the entrepreneurship puzzle, they own that.
They are an expert in that.
But then it's sort of the old cliche
if you surround yourself with really smart people.
And I think understanding things like term sheets,
understanding the business side, understanding
the bioinformatics side, I think exposing yourself
to those areas, if those are not your functional areas
of expertise, understanding enough about what's
happening in the landscape to be able to have
an intelligent conversation is important-- not necessarily
a degree, but understanding when you're talking to somebody,
OK, this is really where I need to build more expertise.
I need an expert in bioinformatics
based on whatever it is you're building.
So I think it's functional expertise in one area,
having enough exposure of what's going on in the other areas,
but then surrounding yourself with smart people, people
that you trust who have that functional expertise
to fill in the gaps.
CHENG-KAI KAO: Yeah, I think this
is where all these courses come into play
because the opportunity go out fast.
And two years later, once you finish your degree,
the opportunities probably really gone.
So timing is important.
So I think you really want to get to know what you really
need to know real quick.
This why these courses--
MATTER also offers a lot of workshops,
and there's lot of courses online as well.
And at some point, when your company goal be bigger,
you really want to work with some dedicated resources.
For example, if you are in the incubator,
they offer accountant services and all that.
So it is where you want to allow all the resources around you.
And this are where we want to help
you to plug into the ecosystem that the university
or MATTER can provide.
SAMUEL VOLCHENBOUM: Yet despite all these resources,
one of the most common problems I see
is people come with ideas where there is a critical sector
that they haven't engaged.
And they'll say, we want to build the latest and greatest
tool to do x, but they haven't talked to the physicians
or they haven't talked to the patients
or they haven't talked to the nurses.
And they have the tech all worked out
and they have built this beautiful app,
but yet they haven't talked to one of the most critical
stakeholders.
And I think you touched on this in your opening comments--
you how do you sort of push groups
in the right direction to make sure that they--
in the right way to say, hey, maybe
you should get a doctor or a nurse
or whatever happens to be on board on your company.
I mean, you guys see this much more than I do.
ARUN BHATIA: Yeah, I would say, from a resource standpoint,
I think there are exercises that you go through
to say, OK, if you're a technologist
and you have an idea, typically you
tend to be really focused on the technology, which is good.
That's where you should be if that's where your expertise is.
I found that, when you go out and start
talking with potential customers, that's
one way to really figure out very quickly,
is this the only person I need to be talking to
or are there other folks, other stakeholders in that puzzle
that I need to be reaching out to.
I think it's getting out of that shell
to say, OK, I'm just in a technology lens.
I've got a technology, and they will come.
But I think it's actually sort of pausing sometimes
on the technology and saying, let me just go out
and start talking to people, start talking to customers,
start talking to users.
If I'm building something that I think ultimately
will be sold into a hospital, let
me go talk to a health system, let me go talk to--
and then even within a health system,
it's not just the physician or the nurse.
They might look at technology very differently
than a CFO or a CIO within the hospital might look at.
So really understanding, without even
knowing who the stakeholders are-- if you are saying,
I think this is something I want to go sell into a health system
or something a hospital would buy, go talk to people
in a hospital and go figure out--
and not to pitch your idea, but to say
this is a problem that I've identified,
have you seen the same problem?
Are you solving that same problem today?
How are you addressing it?
And you might be surprised with the answer.
Some people might say, yeah, that's a problem,
but we found a really quick work around,
and we don't need anything new to solve that.
So you'll very quickly start to learn
how people are approaching that problem,
how they're solving it, and who the stakeholders are
that really have a decision in whether that technology gets
adopted.
STEVE LEHMANN: Yeah, you'll be surprised at the people
that you can actually get on the phone if you're gritty about it
and you're willing to put yourself
in uncomfortable positions.
I totally agree it's all about getting out there and engaging
with the marketplace.
There are so many cliches about this,
but ideas don't survive their first contact
with the real marketplace.
So get out there and start cycling through and refining
your idea as you talk to folks.
One of the courses that we run at the Polsky Center, which
Sam has been involved in I think multiple times
is called I-Corps.
And one of the things that they say at the national I-Corps
level is you get bonus points if, as you're reaching out
to the market, you get kicked out of a building
or you get pushed out of some sort of meeting or you get
roughed up a little bit because that's
what successful entrepreneurship looks like.
It looks like forcing your way into the executive suite
of a building.
Now you probably don't want to be doing
that in a hospital setting.
But getting out there, pushing into the meetings
that you actually need to have--
people generally are receptive if you're
willing to take that gritty path and then ask
the right questions.
SAMUEL VOLCHENBOUM: Yeah, I've gotten pushed out
of some pretty nice offices in my time
from venture capitalists.
One of the questions that came in was,
what's unique to starting in informatics based company
versus say one that's based on biotechnology or a drug
or something else?
What are some of the unique challenges that people face?
Maybe you could all weigh in on this.
CHENG-KAI KAO: I would say for informatics,
I wouldn't say it's necessary easier, but at least--
for example, the funds that you need to jump start up,
and sometimes, it's easier to do the testing
because there's other things you can do online, like AP
testing and all that.
It's easy to do some experiment to test it
out and see whether this works.
But I think the biggest challenge
is it's often hard to find who is the person you really
want to talk to.
For example, if you are developing a drug--
you're developing a cardiology drug,
you know you want to talk to cardiologists.
But when you developing informatics tool,
a lot of people don't know who they
should talk to in an organization, who
would look at this product and say this is that we need.
So I think it's important to find
your first group of customers.
And I think later on, we can touch base
how you engage an academic medical center, which
is where you really want to talk to the person who really is
going to be the first user of your products and who also,
in a position, that can voice for you in an organization.
And that's really how you get your product across
and, finally, hopefully make a deal always in an organization.
ARUN BHATIA: Yeah, I would say certainly the application
is different-- bioinformatics tool versus a drug or a device.
You have to think about regulatory reimbursement.
There are different issues there.
Customer base is different.
But I would actually argue that the process is really quite
similar, a fundamental process of identifying a need,
understanding how that's being addressed today,
understanding what the work around is for that problem
today, how are folks addressing that,
and understanding what the value proposition of your technology
is-- are you really solving a problem?
And that is a big cliche.
A lot of people say, understand your market.
And we sort of toss that out there as,
yeah, just go understand your market.
But it's surprising to me how few people really
understand that or really do that well and really challenge
themselves.
Oftentimes if I'm building a technology, I have bias.
I'm going to go talk to the people who
I think are going to agree with me
and say that my technology is good
and who are going to pat me on the back.
And to Steve's point, you want to go talk
to those people who say you're full of BS.
You want to hear that challenge.
So I think underlying process of building
a company of validating your solution, validating the need,
talking to your customer-- that process
is almost the same regardless of application.
But as you start to think about the technical pieces
of the regulatory process, the reimbursement process,
the sales process--
those obviously will differ a little bit from industry
to industry.
STEVE LEHMANN: Yet what I love about bioinformatics
is that it can scale quickly.
I look at a lot of pharma related deals,
a lot of biotech deals.
And there are really neat things about all
those different elements of health care innovation.
But bioinformatics, you don't have
to go through a lengthy FDA process,
although the FDA is going to be involved
in a lot of these products.
The marginal cost to grow that type of business
and to offer a new product is the marginal cost
of code in a lot of aspects.
And so, oftentimes, what you'll see
is investors like bioinformatics deals for those reasons
and there's more access to capital as a result.
So it's a really great space to be in.
And particularly today, it's so exciting
with personalized medicine, all these different trends
that are coming together and how we have all this massive data
that we can actually use and bring
medicine to a whole bunch of different people
with smart code in a lot of cases.
SAMUEL VOLCHENBOUM: So to follow on to that,
can you say a few words about intellectual property
because it seems like, when it comes to IP,
it's less clear with an informatics startup
often what the IP is?
When you have a drug, it's obvious
that you're going to IP the drug and you're
going to have a patent.
And in early talks with investors,
it was very frustrating because they would always
ask you know, what's your IP, what's your IP.
And sometimes you don't have IP, and I
think that can be OK for an informatics startup.
But I'm still wrestling with that.
Can you give us your thoughts about that?
STEVE LEHMANN: Sure, not having IP is absolutely OK.
And really, I guess every company that's
doing a real innovation has IP.
It just may not be patent IP.
It may be a different type.
It may be a trademark or a trade secret copyright.
And there are a bunch of different ways
that you can handle your IP, but the way
you're going to succeed in a biopharmaceutical setting
is by grabbing a patent and getting it through the FDA.
If you've got a patent and you're through the FDA
and you've got a reasonable thing that you're treating,
you've succeeded.
That's what it looks like.
In a bioinformatics setting, when you're dealing with code,
it's really about how quickly you can move,
how compelling your product is, and how quickly
you can address a market.
And so speed is really going to be your ally more than locking
down a space with patents.
You can get software patents, but it's hard.
It's really hard.
SAMUEL VOLCHENBOUM: And getting harder.
STEVE LEHMANN: And, yeah, it's getting harder.
There are some recent Supreme Court decisions
that have really just made patenting
in this space a lot harder.
One thing that a lot of people don't know is 95,
maybe 99% of patents that currently
exist in the US patent trademark system
are completely valueless.
Going after a patent doesn't mean you
have anything valuable whatsoever.
And it may not be the right strategy.
Often times, particularly in this space,
it really is not the right strategy.
SAMUEL VOLCHENBOUM: Your thoughts?
ARUN BHATIA: Yeah, I would end that--
making that a little bit of a broader point, what is IP?
IP is sort of a conversation that's
had in the context of competitive differentiation,
how are you differentiating yourself from the competition.
And so, as you start to think about that,
there's a lot of other ways--
IP is one mechanism to gain that differentiation--
there's a lot of other ways that folks
are thinking about doing that-- service delivery
innovation or business model innovation or customer
experience.
There are different ways that you can capture a customer
and keep that as a sticky customer, as a loyal customer.
So the challenge now for bioinformatics companies
and other companies that are outside the traditional life
sciences who have IP is to think about
how do we be more creative about creating
that differentiation for our product and our service.
So thinking a little bit broadly about that
will help you figure out, if you're
in a space where there is limited
IP, how best you can gain a competitive advantage.
SAMUEL VOLCHENBOUM: So do people have
to worry about sharing their ideas around?
I've never been one to require NDA.
We always have this sort of "frieNDA" kind of mentality
where it's just not been my culture in the group
that I'm with to actually ask people ever to do that.
But I noticed that, especially with larger corporations,
they're are always requiring these very onerous NDAs to put
in place.
Should people be afraid about giving talks and presenting
their pitch everywhere they go?
STEVE LEHMANN: I would say it depends.
It really depends, but mostly entrepreneurs are more--
especially first time entrepreneurs--
are more cagey about sharing their ideas
than they really need to be.
[INAUDIBLE] particularly, ideas [INAUDIBLE] but no one's
going to come in, take your idea,
and out execute you from the start if you're driven.
And if the idea came from your brain,
just the chances of that happening are very low.
And so I'm the kind of frieNDA mentality myself.
I love to talk about the ideas that I have
and that other people have, too.
SAMUEL VOLCHENBOUM: And if somebody else does it,
it's market validation.
I mean, there's plenty of stories where the first person
to do it is not the one that gets rich.
Totally, in the valley today, first-mover advantage--
it's all about the second mover advantage, frankly.
And, yeah, I think that's the way to go about it.
SAMUEL VOLCHENBOUM: Are there questions out there?
I've read one or two off of the online thing.
But we can go ask questions.
And if you don't have a mic, don't worry.
I'll repeat the question if I hear it.
Yup.
AUDIENCE: So the health care industry [INAUDIBLE]
moving towards value-based reimbursement system,
and I think that system is putting a lot of stress
on health care providers, what type of informatics
would potentially be a lot for these providers?
What is out there in the current landscape of this
area that is helping providers address or make the life easier
with the right [INAUDIBLE] changes
that are occurring in the health care industry?
SAMUEL VOLCHENBOUM: So the question
is, with value based care becoming so important
is putting a great strain on providers
to maintain all the regulation.
And what sort of informatics solutions
are emerging, whether they're coming from [INAUDIBLE]
or whether they're coming from startups that you see
making an impact in this area?
CHENG-KAI KAO: I really want to say a lot.
And this is actually great for entrepreneurship
per se because, whenever there is a problem,
there is opportunity.
So because we all sort of try to figure out
how we can survive this new payment model change.
There's a lot of emphasize on quality, a lot of emphasize
on improving the outcome, which creates a lot of room
for different purposes.
For example, from population health management type of tool,
you can be telemedicine to increase the access,
improve our quality, keeping patients away
from the hospital.
It can also be a number of different quality improvement
initiative in different department
to help them do their care or deliver their care better.
So there's really a number of ways
informatics can help in the new change over the payment model
change.
ARUN BHATIA: Yeah, I would totally agree with that.
I think value based care is really about--
if you're a physician today, there
was a time in which a patient was in your hospital room
and, for that 15, 20, 30 minutes of time,
you were responsible for giving them
a diagnosis and a treatment.
They would walk outside the door,
and they weren't necessarily your problem anymore.
Value based care is basically saying, look, that patient--
this is not episodic care.
This is sort of care outside the hospital.
And the health systems and the providers
are now being held accountable and responsible
for the quality of care of that patient,
even as they leave the hospital.
So what that means for physicians,
what that means for health systems is
we need to do a better job of tracking that patient,
following not patient, measuring their diagnoses,
understanding how they're responding to treatment.
So things around data, things around connectivity,
care coordination-- these are the areas where a lot of people
are trying to pay attention to say how can we make the data
inputs easier for physicians to continue to track
these patients so that we can see how they're doing,
so that we can limit readmissions within 30 days.
So it's those types of digital tools,
data tools that are making all of the health system smarter
about patients, about what's working, what's not--
to Kai's point about the population health side--
but if I take a group of patients,
how can I best treat them so that they're
doing well outside the walls of the hospital?
So it's really those types of tools and technologies
that we're seeing a lot of people
pay attention to and start to create.
SAMUEL VOLCHENBOUM: And we struggle with the most
rudimentary parts of this.
So you would think, if a patient has a knee
replacement at the University of Chicago
and they go back home to Rockford
and get admitted to a rehab facility in Rockford
a week later, you would think that it
would be easy for us to keep track of these patients.
We're not even good at trying to disambiguate
if it's the same patient that showed up at the rehab facility
that we saw.
So the very simple nature of having--
we don't have a universal health care
identifier in this country.
And so the simplest things, we're having difficulties with
and we need to solve these through technology and we will.
But before we can tackle the harder things,
we just have to get to the root of some of these very simple
things that we have to track.
So that's a great question.
Another question out there?
AUDIENCE: I think there's a lot more
hysteria around some buzzwords sometimes, and one of them
is tech.
Everybody is looking for [INAUDIBLE]
to solve their problems.
Now it's becoming big data.
I'm not saying they're bad things.
And another one is valuation.
[INAUDIBLE] doesn't really explain some things, as back
to your point Kai about what business problems are
you trying to solve, how are you going
to leverage tech and real big data to solve that problem.
How are we going to monetize it?
What's the size of the market for that thing?
And then eventually to justify the valuation.
A lot of that is just lost, and they even [INAUDIBLE]
when they talk about [INAUDIBLE] health, for example.
Nobody really went through the dollars
and said how they're going to make money.
They just said, oh, the valuation
is billions of dollars.
I'm not saying it just crashed and burned.
And that's one of my biggest worries
about this whole health care stuff,
which I think it's great.
But let's just be careful about it.
SAMUEL VOLCHENBOUM: So for the folks listening online,
if I can try to reflect back what you said.
I think you're expressing a concern that people are getting
so caught up in the hysteria around data science
and big data and informatics that they're losing sight
of the fundamentals of starting a business, which have
to do with customers and stakeholders
and the true valuation of a company,
and how do we keep those in our sights
and not get lost in sort of the hype of some of the work
that we're doing.
Is that fair?
Yeah.
CHENG-KAI KAO: And just wanted to add that one thing I always
say in the class is that--
because all of my students are informatics students.
And it's very easy for them to come up with something IT.
So I said, when you face a problem,
hold your internal desire to jump on some technology
solution.
Just really ask yourself what's the best
solution to a problem solved because a lot of things
you will find essentially a non-IT solution,
which is superior.
And this is just to go back to my earlier point--
like you can apply technology in a lot of things.
But they are not necessarily the best solution.
And eventually, the market will decide
what's the best solution is.
So you don't always need to come out with the best solution
per se at the time being, but at least start with something
that you think workable so you can share with the others,
get feedback.
Validate a problem first and then gradually
improve your solution with time and go from there.
And it's very easy to get lost in the process
about how much money I should get invested
and how to run a company and all of that.
So it's a lot of things people need to take in.
But I'm glad there a lot of resources
while in the university to help with that.
ARUN BHATIA: Yeah, I would just add one point.
It's a great point, and I think a lot of entrepreneurs
fall in love with the idea that technology is the answer
and is the solution.
We had a program recently where we actually
had a number of health systems and actually
had a VP of quality of a health system at a roundtable.
And he said this is the one thing he struggles
with entrepreneurs is that everyone comes in and says,
here's a technology solution that's going to basically take
your job away and obviate the need for you as a physician.
And he says, well, think about that.
If somebody came to you and said,
I have a technology that will replace you,
I'm not going to be really all that excited about seeing
what you're going to do.
And his point was, A, OK, that's not the right approach.
But, B, there's no technology that will fundamentally
replace the relationship between a patient and a physician.
And so when you think about technology solutions
or new solutions, it's about things
that enable that relationship, enable that conversation
to be richer, to be more robust, to be more productive, to get
the patient healthier.
It's not a technology to replace that relationship.
SAMUEL VOLCHENBOUM: So if somebody in Chicago
has a health care startup, it's clear to me
that, if they want to reach at U Chicago,
I think it's clear that some of these paths are worked out.
But if they really want to have an impact over health
care in Chicago land, can speak to how MATTER and Polsky are
sort of thinking about Chicago as a region
and how we can have an impact over lots
of different areas and different health systems?
STEVE LEHMANN: Sure, yeah.
So the Polsky Center--
I can just speak for our little neck of the woods
down in Hyde Park.
We love working with folks from different universities.
One of the investments we made in our last cycle
at the innovation fund was from IP coming out
of Michigan State.
We've got folks coming into our startups,
like Tim from Northwestern.
And personally, I think that our ecosystem rises or falls
based on Chicago winning in health care, in data science,
and all of these different fields.
I have an inclination of a couple
of areas where I think we're going
to be particularly well-suited.
And, yeah, working together and preventing folks,
or at least giving an alternative
to folks who would otherwise go to Boston
or to Silicon Valley, who can stay here and say,
no, there are actually great opportunities
because there's tons of startups coming out of Northwestern,
there's tons coming out of the University of Chicago--
UIC, IIT, they're all here.
And one of the projects that we're working on
at Polsky particularly is a research tower
that's going to be going in 12 stories--
I think 12 stories is where it is now,
but bringing in wet lab space for entrepreneurs
from across the city.
And it's going to be anchored by the University of Chicago.
But our thesis is that we do better by working together.
And so for me, success looks like startups
that have folks on the business team and the science team
from all of the different institutions that
make this city so great.
ARUN BHATIA: Yeah, I would add to that.
So echoing what I had mentioned before, I think when MATTER was
first born, the idea was that there
are all of these rich resources in our community.
And when you go to Boston, you stand in a certain spot
and you're looking at the Broad Institute,
you're looking at MIT, you're looking at Pfizer.
See all the industry players in each other's labs basically.
And that's been one of the challenges
that we've had in Chicago-- is, although we
have all these resources, that connection really
has not been there.
And I think that a little bit of the secret sauce of what we're
trying to do is sort of at a small scale
through roundtable conversations, small group
conversations--
is have an opportunity for industry and industry
to be at the table together for industry and entrepreneurs
to be at the table together.
I mean, just think about this for a second.
If you're developing a solution, you're an entrepreneur
and you're sitting at a table with someone
from HCSC who's a payer, someone from the University of Chicago
on the health system side, someone from Takeda
or [INAUDIBLE] on the pharma side,
and these are the kinds of conversations
that are bringing about the ideas of what are the needs
and what are the solutions.
And one of the most intriguing things that I found--
and this is not lip service.
I really do mean this--
I think, honestly, our industry partners
learn a lot more from our entrepreneurs
than the other way around.
I think entrepreneurs will certainly
leverage the resources that industry has
and the processes that they put together.
But I promise you, having worked at Baxter, I can tell you--
we would walk out of the room after having an hour meeting
with an entrepreneur, and we would look at each other
and, say, did you know that that was going on,
did you know that that's the technology that's out there.
They're learning just as much, if not more,
from the entrepreneurs.
And so I think the more we have these interactions--
and if MATTER and Polsky can--
we all serve as a hub together to engage and have
more of those interactions-- we're
hoping that more and more of those partnerships
and collaborations will happen.
And we're starting to see that more and more at MATTER
where we've got companies interacting
and partnering and doing pilots with industry partners.
So it's going to take a while, but that's
the kind of partnership and collaboration
that we're going to see going forward.
SAMUEL VOLCHENBOUM: As you develop these industry
partnerships, how do you protect the entrepreneur
and protect their interests because I
can see how the industry is always
going to want to have exclusive rights,
they're always going to want to retain IP.
What resources are available to budding entrepreneurs
so that they can go to Takeda and try to do a study together
but still make sure they're protecting themselves.
ARUN BHATIA: Yeah, It's a great question.
So I think there are, from a resource perspective,
there is work in programs that we
do with entrepreneurs-- things like what we call product trial
program.
So this is, if you're an entrepreneur
and you're selling-- and I'm just use the example
of a health system, you want to sell into a health system--
part of it is through a program at MATTER,
which is-- think of us as Switzerland.
We're sort of the neutral place.
We're helping to understand what are the points that
are important to that health system
as they're doing pilots, how do they do pilots,
how do they make decisions on that--
and so facilitating interactions between startups and health
systems or, if it's pharma companies, on how should we
be setting up these pilots, how should we be doing these types
of collaboration.
So having a safety net, if you will,
that we work with entrepreneurs to go through that process
is really important, and having our industry partners
understand that, when they become partners at MATTER,
they're also going through that process.
They're also going to engage with entrepreneurs,
and we're going to sort of, collectively learn
how to do these pilots going forward.
So there will always be issues that
come up in terms of rights, in terms of IP.
But sometimes, it's just laying the groundwork
for a process of how we're going to work together
in order to make it successful.
SAMUEL VOLCHENBOUM: Great.
Are there questions out there?
AUDIENCE: A question for Steve at the Polsky Center.
You guys are building a 12-story research facility.
It's geared toward university affiliated entrepreneur's
startups coming here.
How about non-university and some of the folks
hanging out at MATTER?
STEVE LEHMANN: Yeah, I'm not actually sure.
So I don't want to answer that question with any specificity.
But the goal for the whole building
is to be as open as possible and to be a resource for Chicago.
Exactly the vectors to get in, I can't answer right here,
but I can find out and let you know right afterward.
AUDIENCE: OK, it would a reciprocal question Arun.
With MATTER, with the folks in there,
it's lot of IT in MATTER for those
who need to validate their idea and use
some sort of experimental lab space,
you partner with industry or connection at universities
and trying to get something up and go
for non-university MATTER startup.
ARUN BHATIA: Yeah, there are through partnerships
that we have with universities.
So a lot of even the--
I'll it call-- the non-university based startups
out of MATTER have some connection back
to a university, whether it's the founding CTO
or whatever it might be.
There's typically sometimes a connection back
to a university.
And so we've often said, MATTER's
not a place where we're replacing your university
affiliation.
That's actually very, very important.
And so, for instance, when you come to MATTER,
we don't have wet lab space, and that's not
a goal going forward.
The goal is to say, look, you're doing work, technical work
within your university system, and you're
coming to matter to interact more with the industry partners
to take advantage of more entrepreneurial resources
that could be of value to you.
But typically, for the non-university companies,
they have an affiliation back to a university.
For those that completely don't and have developed
their company on their own, there are opportunities
to then engage with either CROs or other industry partners to,
say, how can we do a small scale pilot to do some of this work.
But more so in life sciences' side,
there's a lot more of a push to do contracting work
outside for a lot of that work.
So there's a virtual type of process.
SAMUEL VOLCHENBOUM: Other questions?
AUDIENCE: One of the challenges when
you've got a startup is reaching the right people.
A, you've got to identify what level of the organization
really needs to vet this out.
You don't want to go too high because [INAUDIBLE] somebody
in the longrun, right?
So my challenge has been because I'm coming from manufacturing,
and I'm just 25 years of [INAUDIBLE] this.
I'm bringing this new stuff to health care.
But I [INAUDIBLE] CEO level [INAUDIBLE]
from the hospital and the health insurer.
I've got the hospital stuff pretty well covered.
Now I'm trying to crack into the health insurance stuff.
Don't you think there's a need for some kind of a clearing
house because there's a lot of noise at there--
1,000 of coming in.
And so there has to be a clearing house
that somebody goes through all of these things.
And if you're not there yet or if you're
going for the wrong person, doesn't that--
[INAUDIBLE] where you'd be willing to pay
to connect, to say, OK, yeah, you've got a valid thing here
and I think we should hook you up with so and so
and so and so.
Can you see MATTER doing something like that
because that's something that would really add value.
I'll tell you a little experience I had recently.
I was at this hospital CEO's breakfast for 500,
600 people to go [INAUDIBLE] network.
So I got over there to talk to one of the CEOs
at the hospitals.
And I thought, the guy didn't didn't have too much time.
So I gave a very quick look, and I told him,
I'm willing to post a stupidity bond to meet with you.
And he said, what's that?
And I said, I'll bring a blank check.
If after a one hour meeting, you tell me this is a dumb idea,
that check is yours.
And he laughed, and said that's not necessary.
So he gave me his card.
And trying to get in through the door.
But other than that, this guy--
SAMUEL VOLCHENBOUM: So I think that the general question
is what sort of resources are available for people
that are trying to--
whether it's the insurance industry or the pharma tech
industry.
And I've seen this book at MATTER and Polsky
that you guys do serve as matchmakers,
and that's actually one of the primary functions
of your groups for helping people
navigate these different areas.
ARUN BHATIA: Yeah, and it's one of the biggest--
it's one of the biggest needs for entrepreneurs.
I completely understand that.
I answer it this way.
I think, as an incubator, there's a certain resource
there that we need to deliver.
And what I mean by that is there are--
let's say on the payer side just to use your example--
there are folks that we continue to meet who, let's say,
come from the medical coverage side.
So I recently met somebody who literally that is her job--
is to understand, when new technologies come in,
how do they evaluate, how do they review,
and how do they give some sort of medical coverage decision
on those.
That's really valuable for an entrepreneur
to understand how that evaluation is done
and to get that feedback.
Those aren't sort of a--
I mean, those people aren't walking around all the time.
Part of it is also meeting those people.
We are almost a startup of ourselves.
And so we're kind of doing the same thing that you're doing,
which is we're hustling.
We're trying to find those people to say, look,
we've got 200 entrepreneurs who need this type of support.
Here are the kind of people that we're looking for.
And we're going to our industry partners and saying,
this is what we need.
So I would answer that as that is
what we continue to do and strive to do and improve to do.
Do we know absolutely everybody in every aspect?
No, of course not.
But where we can help, given who our partners are,
we do our best to try and do that.
And so, we can certainly talk offline
about some specific people--
become a MATTER, and there you go.
SAMUEL VOLCHENBOUM: So we're going
to need to pause at 6:00 PM so that students going to class.
I want to ask a final question that each of you
can answer, hopefully, efficiently.
For somebody who just is starting out
and has never done this and just wants to sort of get
their feet wet a little bit, can you
each come up with sort of a simple thing
that they can do to sort of take a step into this world
and start to get more comfortable?
So I don't care what order you go in, but each of you
should weigh in.
CHENG-KAI KAO: So, Sam, you're saying basically,
anyone with an idea or if you have
a product or like a company or what levels?
SAMUEL VOLCHENBOUM: So for you, if one of the other residents
or fellows came to you and said, listen, I have an idea,
I'm not quite sure if it's any good, I don't know anything
about a startup, what would you tell them
in terms of starting to get familiar
with the world of startups?
SAMUEL VOLCHENBOUM: So, yeah, I would
suggest them to reach out to different courses
available over there.
Like I said, there should be different courses as a primer--
from biotech, informatics, it doesn't really matter.
There should be different types of introductory course
to help guide you through the process.
There's a lot of resources online as well.
For example, Y Combinator, they have a very
dedicated up course online that you can look into as well.
So there's quite a few resources.
But I think the most important thing is still to find,
like I said earlier, to validate a problem first and figure out
whether it is something you really want to do.
It's more important to figure out
this is something you really want to work on
and this is really a validated solution through a problem
rather than spending a lot of time learning about finances
or how to get funding and all that goes because all of that
can be secondary if the solution is not really a good solution
to start with.
ARUN BHATIA: Yeah, I'd give the same advice somebody
gave me when I first started at Booth--
network, network, network.
And that's just going out and talking to people.
And even if you don't even know what the questions are,
start talking to entrepreneurs to get
a sense of what a day in the life of an entrepreneur--
understand what they go through, talk to customers,
talk to people.
Courses are really important.
I think, as you figure out what it is you want to do
and you're building knowledge, subject matter, expertise,
that's where courses come in.
That's where institutional knowledge comes in.
But if you're just getting started and you're learning,
get out there and talk to people as much as you can,
even if you don't think they're related
in any way to what you're doing.
But go out and start talking to people, and that helps.
STEVE LEHMANN: Yeah, a variation on the same theme--
be around.
Be around where entrepreneurs are putting together products,
where they're pitching.
Be around the classes where entrepreneurs tend to gather.
At least for the University of Chicago,
be around the Polsky Center, the people who get
on the interesting projects.
And there are tons of interesting projects
at the University of Chicago that need talent.
The people that get on those are the ones that are just around,
and they demonstrate value.
And a lot of the times, it's table stakes
to just walk into the room are to just do something for free,
help somebody out.
If you help out enough people, eventually you're
going to get into something that looks good.
And you don't have to plot it all out,
but just be around, add value, and look for things
you can get involved in.
SAMUEL VOLCHENBOUM: And I think having
mentorship is really important and finding a mentor that you
can trust, that you can go to and, say, listen,
they just gave me this term sheet,
I have no idea what it means, is this a good deal--
somebody that you can really lay it all out for and get
some advice from has always been really important to me.
And it's hard to find those people.
And if you can find them--
I'm sure you'll see them at Polsky and MATTER.
If and you can find those people, it's really helpful.
So this is really useful.
I'm really glad that you guys came together.
Hopefully, you can stick around a little bit
and have walkup questions.
But for now, let's thank our panelists
and let's take a break.
[APPLAUSE]
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