Investor and serial CEO Glen Allscripts in 2012 after building it into a public company with $1.4 billion in sales. But he hasn't left health care. Tullman's latest company, Livongo Health, uses cloud technology to help people manage chronic illnesses, starting with diabetes. Livongo has now completed a successful investing round and launch and has 68 full-time employees. Tullman's Chicago investment firm, 7Wire Ventures, has funded local startups in education, solar energy, apparel, and tea.Tullman left health care firm
--As told to Bill Saporito
I joined the entrepreneurial world by accident. I was coming back from Oxford after studying social anthropology, and I accepted a job in Boston with one of the big consulting firms. And my mom says, "Go visit your brother and his kids." So I get to Chicago to do this favor for my mom, and my brother, Howard [Tullman, Inc. contributor, serial entrepreneur, and CEO of the incubator 1871], sets up a meeting for me with the late Stan Golder, a famous venture guy. Following Golder's logic, which is "You can always go work for a big consulting firm," I said no to Boston and stayed in Chicago.
In Chicago, I joined Certified Collateral Corporation, which Howard had launched a few years before and which became CCC Information Services. We used data to provide real-time pricing on the residual value of autos, which used to be set by red-book and black-book publishers that would say the value of a convertible in Florida was the same as a convertible in Chicago in the middle of the winter--something that everyone knew was patently false. Howard left a couple years after I got there to start another company, leaving me to grow CCC from $30 million to just over $100 million. Then I went to a company called Enterprise Systems, which was in the health care business. Privately held. They asked me to come in as CEO. I took it public a year after arriving, and then a year later we sold it to the medical-information company HBOC at a wonderful valuation.
After we sold, I went to a company called Allscripts. And Allscripts got to Series J financing [that is, the 10th round], which very few living people ever do. You have a lot of enemies, and you've burned through a lot of cash, and that's when I arrived. We bought just over 60 percent of the company for $6 million. Allscripts was two things: a PBM--a pharmacy benefit manager, or specialty pharmacy--and a repackager of drugs. We never really liked the pill business, but what we did like was that there were three billion little pieces of paper with bad handwriting on them. We said, "We can computerize all of those prescriptions, make 'em electronic." And that's what became the first business of the new Allscripts. I sold the PBM. I said, "Look, we can't be in both businesses." Our board said, "But that's the only business that makes money." I said, "I understand, but it has no future." So we sold it. I later found out that the board met separately to say, "Did we get the right guy here?" Then we went to work creating the first electronic business that prescribed at scale. We became the leading electronic health record provider in the country on the ambulatory side. Two years later, I took the company public at a $2 billion valuation.
When I left Allscripts, I went with my longtime business partner Lee Shapiro, who had been president. We formed 7Wire Ventures. We said we're going to invest around a thesis, and the thesis is "intelligent connected health consumer." What does that mean? Intelligent means we want to make people smarter about the health care they buy. Why? Because they're going to have to be, because there's nobody else buying it for them.
We have core investments through 7Wire, and those core investments are in health care and education. The other investments are a function of my broad range of interests, which includes finding great entrepreneurs. In the case of BucketFeet [a shoe company that uses artists to create products], a great entrepreneur came to me. My advisers said, "What do you know about shoes?" But I saw this as art, not as shoes. I was intrigued by the idea that it was fashion. So BucketFeet had rethought how you conceptualize this. I invested. Not long thereafter, Adidas bought a large interest in the company.
The biggest challenge when you build a successful business, and the reason that most people fail the second time, is that things keep getting better. So you start at Motel 6, and then you move up to Marriott, and you end in the Four Seasons. When you restart, you have to go back to Motel 6, and it's very tough to do. One, because we don't have the same resources, and everybody in the company has to understand that. And two, because we want to be scalable. There's nothing wrong with doing something good for one person, but what I do is build scalable businesses, and I want to be able to say to our people: When we get this right, it will change the world.
I'm investing in the player, but I'm also investing in the innovation. What is different about it? In solar energy, we did a very specific play on flat-roof solar with a new design. And our innovation was a combination of technology that didn't require the roof to be pierced, because retailers in particular never want holes in their roof. Another great entrepreneur came to me with Argo Tea. I loved the concept. But what was different about tea? Well, I saw a trend coming. We're moving from soda, we've gone to water, but now that water's flattening out, what's next? We have people who come in to pitch us an idea and talk about an exit strategy. And we can talk about an exit strategy, but I want somebody who is really committed. There are hired guns and there are people who want to change the world, and that's a big difference.
We've made 10 investments through 7Wire, and one of those investments, Livongo, turned out to be something that was near and dear to my heart, which was diabetes. [Tullman's 19-year-old son, Sam, has juvenile diabetes.] This was a better way to redefine the experience of having diabetes. What do you need to do? You need to find a big problem. Diabetes is $245 billion just in the U.S. It's the fastest-growing chronic disease in the world, but it's also the most manageable. We have to develop tools that empower people with chronic disease to live a better life. Livongo is the first remote patient-monitoring chronic-disease application. We have more than 40,000 sold. Probably 7,000 to 10,000 have people using them. And we're changing peoples' lives. So, if I'm using my meter and I have high blood sugar, right after I check it will say, "Drink three glasses of water, walk for 10 minutes, and check again in 15 minutes." Eighty-one percent of the people follow that little tip, which is fascinating. Because the moment you're saying, "What should I do?" there's your suggestion. And if the reading is in a dangerous zone, the phone rings within 60 seconds, and a certified diabetes educator is asking, "How can I help?"
We're going to get better at that kind of response. This is the first stage. We start to learn from people, but pretty soon you're going to say, "I want what they have," because they're going to be better at managing and optimizing their bodies than the rest of us. This is not going to be a small undertaking. This is going to be bigger than anything I've ever done.
(This story was updated on December 19, 2015 to clarify the chronology of Glen Tullman's involvement in CCC and his role at Livongo.)
Just a few of Tullman's investments (and his titles)
Cars: CCC Information Services (president) used technology to remake the market in automotive financing.
Health care services: Tullman took Enterprise Systems (CEO) public, and then sold it to HBOC.
Drugs: Allscripts (CEO) pioneered electronic prescriptions and medical records.
Remote medical monitoring: Livongo Health (CEO) provides immediate advice and help to diabetics using a real-time, cloud-based, GPS-equipped blood-glucose meter (above).