By Rev3 (http://rev3dupage.com)

SPECIAL GUEST: Nic Zito (Rev3 Innovation Center/Choose DuPage). Located right in our backyard, is the startup incubator Rev3. After Matt recently joined Mike in visiting Rev3's "Hoppy Hour" event, we sat down with organizer Nic Zito to talk about entrepreneurship, startups, education, and how Rev3 (and Choose DuPage) are making innovation work for Illinois. From crowdfunding to startup advice, manufacturing to the differences in big and small business, we covered a lot of ground in this one. Recorded 8/2/2015.

 

You can download the episode here, or an even higher quality copy here...

 

Mike & Matt's Recommended Reading:

Rev3 site

Rev3 on Facebook

Rev3 on Twitter

Rev3 on LinkedIn

Rev3 on Google+

Choose DuPage site

Nic's personal site

Nic's blog

Nic on Twitter

Brotein Enterprises site

Bi-Link Joins Rev3

Rev3 6 Month Anniversary

 

Transcript:

Alpha: Welcome to another episode of Robot Overlordz, episode #194. On the show we take a look at how society is changing, everything from pop culture reviews to political commentary, technology trends to social norms, all in about thirty minutes or less, every Tuesday and Thursday.

Mike Johnston: Greetings cyborgs, robots, and natural humans. I’m Mike Johnston.

Matt Bolton: And I’m Matt Bolton.

MJ: And joining us on this episode is Nic Zito. Nic, thanks for joining us.

Nic Zito: Thanks for having me, guys.

MJ: To start at kind of a high level, I know you do a lot of networking, how would you introduce yourself typically to people who aren’t familiar with you?

NZ: That’s a good question, Mike. So I’ve kind of been saying, as of lately, I’ve been working as an entrepreneur for entrepreneurs. So, I guess my “real job” or “day job” is I’m the business services director for Choose DuPage. We do business development for 39 cities here in DuPage county. And as a function of that, I run the Rev3 Innovation Center, we do coworking and business innovation for tech and manufacturing companies. So kind of those are the two primary functions, and aside from that, I work on a multitude of side projects as well.

MJ: And how about your background besides Choose DuPage? I noticed in your bio you’ve also been an entrepreneur yourself?

NZ: Yes. So, I went to the University of Illinois, graduated in 2012 and kind of started up my first company when I was an undergrad there. It was in the fitness and nutrition consumable space, actually. I had kind of an all-organic approach to nutrition specifically for kind of that college fast-paced atmosphere, for student athletes and students. So, that was kind of my first business experience in the startup world. And then aside from that, after I graduated I moved out to Washington, D.C., I did a congressional term out there in Senator Kirk’s office during the 2012 presidential election. So most of my experience kind of before the first startup was local government admin, local campaigns, local government administrations. I kind of like that intersection between how big government and local government works and then combine that with the startup and business realm, because I think for better or worse, they definitely affect each other.

MJ: So as far as Choose DuPage, what then is your role there? You said business services director?

NZ: Yeah, so I’m the business services director and most of responsibility—again, Rev3 was actually started kind of under that umbrella of Choose Dupage. Choose DuPage was a 501(C)(6). Again, very broadly speaking, the kind of three areas that we focus on are business retraction, retention, and growth. So as a function of that, that’s kind of how that board of directors came together and essentially authorized the feasibility study for Rev3. So represented on that Choose DuPage board, we have about 55 company representatives from everything from Fortune 500 companies with DuPage County, examples of that being McDonald’s, Navistar, Molex, all the way down to a couple-person law firms. So there’s really some big business representation on that board, but from their perspective, they really wanted to foster now startups and smaller businesses.

MJ: So, what do you see as kind of the difference between the big business approach and the small business approach, and how do you balance that?

NZ: That’s a good question. I think it’s hard, frankly, because I think it’s two different ways for each size of the company. I think from the big business side, it’s a lot of support; a lot of the main functions of economic development in general is either, again, kind of attracting new companies to come into your municipality, to your county, or helping with relocation needs or maybe any incentives that they need on that side. And again, it’s kind of a complete 180 when you’re focusing on startups because, you know, some of them are solo entrepreneurs, completely by themselves, just looking to get started. Some are the classic ideation phase, idea on the back of a napkin-type of deal. So really for the small business approach, it’s kind of, #1, providing that community and that network, like your first question, networking them in with individuals in the space, and then #2, kind of going above and beyond and actually providing them and surrounding them with some of those services.

MJ: Well, and I suppose that’s a good lead-in then to Rev3. So how long has Rev3 been up and running now?

NZ: So Rev3 is about seven and a half months old—I guess eight months old now. June 1st was our six-month anniversary. We’re partnered with NIU, Northern Illinois, here in Naperville. We kind of had that partnership last August and then we officially moved in our first coworking members December 1st of last year. So we’ve only really had members in the space for just under eight months now.

MJ: Okay. Well, and I guess, confession, I’m a big fan of Rev3. I’ve been to your monday happy hours, and last month Matt actually made it as well. What kind of community are you looking to serve? What kind of community exists already around Rev3?

NZ: Yeah, so it’s really interesting. Again, coming from the economic development background, that board of directors and that original innovation committee kind of looked at the landscape frankly of the entire state. So we used something called the Illinois Innovation Index to kind of track innovation hubs around the state. No surprise to anyone probably: the city of Chicago had about 66 to 70 of these at the time. And again, coworking space, innovation center, accelerator, any incubator, any of those fall under that, and there was a huge overblown need in the suburban collar counties obviously, specifically DuPage here, for that community. There was really not too much when we started. I think now there’s about three or four and it’s still a new hot area that will continue to grow, but for the most part, it’s an emerging industry. So we kind of took a look at that industry and kind of decided it would be best to bring manufacturing into the traditional tech approach for two reasons mainly: #1, from a realistic approach, our demographic is different from the city of Chicago. It’s not all the younger kids, the traditional Mark Zuckerberg stereotype, hoodies, on a bean bag, coding type of background, that stereotype. It’s more of what I coined the term of “corporate” guys and girls, “corporate” startups, meaning people with about 10-20 years of experience in the corporate landscape and now they kind of flip out and start their own company, often times with more money and more time on their hands now to assemble a team and build that. So that was our original demographic, and then we wanted to bring in the manufacturing component, because, #1, DuPage County has a great manufacturing presence from a large company standpoint, so there’s some potential sponsors and partners there. And then #2, we think it’s a good broach of the two industries: arduino, circuitry, PCB work; there’s a lot of hardware/software elements that really play well together.

MJ: Does that include Rev3’s partnership now with Bi-Link? Didn’t they just join?

NZ: Yes, definitely. Yeah, so that’s a perfect example, Mike. Bi-Link is a $100 million manufacturing company, they started as a tool and die; they’re right here in Bloomingdale, right here in DuPage County, and that’s a perfect example of a traditional manufacturing company recognizing the need to partner with innovation spaces, up and coming entrepreneurs in that hardware realm. That’s a perfect example of how it has to work together. So, there’s a lot of opportunities on both sides, from the big company standpoint, coming in, providing expertise, providing trending connections. In Bi-Link’s example, they have great engineers who can come in and help some of my members with physical prototypes. And from their perspective, it’s great to keep a fresh perspective on “old school” manufacturing, because it’s changing.

MB: Obviously a lot of businesses are fleeing Illinois, like they’re running from a burning building. Do you see that as a challenge, or have you not run into that yet? I don’t want to dump on what you’re doing or anything, because I think what you’re doing is great. But do you see that? Has it been a problem at all, trying to get people to either stay in Illinois or open a business in Illinois just because of the way Illinois is right now?

NZ: No, that’s a good question. Like you said, that’s a reality. I think the last time that I checked, I believe Illinois is #1 or #2—obviously this isn’t something we want to be at the top in—in out-migration. So you’re definitely right, people are leaving Illinois. I think this is maybe a good time to bring up something exciting that I’ve personally, on behalf of Rev3, been working on and that Rev3 as an organization has supported: Governor Rauner just signed into law two days ago now Illinois Interstate Equity Crowdfunding, which I, again, personally and on behalf of Rev3, think is going to be huge for startups. So, this is something that, in a traditional kick starter model, small companies will be able to give up equity in return for investment online. This is something that some of our surrounding states have. So again, and kind of to your question of making Illinois a more competitive business space, I think this is an awesome step in the right direction. We work with an organization called the SBAC, Small Business Advocacy Council. Along with that, Matt, they’re also pushing lowering LLC filing fees, which I believe right now 500 hours, the highest in the nation. This proposed legislation might actually take it to one of the lowest in the United States for filing. So again, obviously it’s not an overnight fix, but these are some of those things, steps in the right direction to kind of make that startup community and make this a better destination for big companies, because you brought up a very real concern.

MB: Yeah, I’ve lived in Illinois most of my life and it is kind of sad to see a lot of these big companies just ditching the state .But you can’t blame them, because it’s so poorly run at this point. A lot of the people who are starting these small businesses, are they people who have been laid off from larger businesses? What’s a lot of the background that you’re seeing for this kind of thing?

NZ: Great point. Yeah, again, kind of with that corporate approach, I think it’s a little bit of everything. You’re right, some are out of necessity—they’re laid off, in between, maybe semi-retired, started a consultancy on the side after their last big gig. A couple have even actually had small to medium-sized exits, so they were kind of on “sabbatical” before coming back and launching a new startup. Some are college-age kids who are just recently graduating and, kind of like myself only three years ago, checking out the landscape and maybe deciding that starting a company might be the best option for them. So it’s really, really all over the board. Again, there are some of those out of necessity. Like I said, I think the heaviest thing that I’ve personally seen is people with a precise knowledge of a specific niche or a specific industry from their big corporate experience and now they turn around and kind of maybe try to exploit one of those channels or niches and assemble a team around them. So, we’ve seen everything; we’ve seen a good mix of both.

MB: It seems like—maybe from your perspective too—but obviously with the internet and things like Rev3, it seems like it’s becoming easier and easier to start your own business. Are you seeing that too?

NZ: Oh yeah, 100%. Again, just like we were talking about in the beginning, as long as you have a laptop and Wi-Fi, I mean, it’s kind of cliche, but yeah, you can start something, you can get an MVP up there. Perfect example of that, because I always like to try to speak as tangible as possible: we host an event here at Rev3 called Entrepreneurs Anonymous. And we’ve only had about four or five of these, but I can specifically cite about four instances of people who we bring in at kind of that ideation stage—so Entrepreneurs Anonymous is meant to showcase their idea, spotlight on them, so to speak, before they launch, to just flesh out their ideas. So we run through a startup checklist of criteria and then just kind of have a whiteboard brainstorm session with them. Anyway, point being, we’ve only had five of these events, but I’ve already seen multiple examples of people who have came in, spoke at one of those, found a co-founder—for example, maybe they’re not a technical person—they find a co-founder, and literally within two weeks they have an MVP, website, app, whatever it may be, e-commerce storefront up online and they’re just testing the validity of it. So again, I think with that approach that companies and businesses and startups are easier to start, you’ll find out really quick if it has traction. Or if it fails, it fails, but at least you tried something out and learned something and then can move forward. So yes, that is definitely contributing to kind of the scene that we see around here. Everyone has multiple side projects going on.

MJ: So Nic, having been an entrepreneur yourself, I know you mentioned on your blog a number of the lessons you learned, not really having a mentor, so to speak. What kinds of things did you learn in that process that you think most people maybe don’t think of when they’re doing this for the first time? What kind of mistakes do people make?

NZ: Well personally speaking, I, again, maybe a cliche, but I’ve made a lot. Obviously not perfect, but I have recovered from several of those, and now—I should mention, Rev3, we now house 24 distinct business entities and 24 startups. So just from that perspective of both, like you said Mike, starting my own in college and then actually starting another one here last week, I kind of went live on an MVP with that project, and then working with the 24 other companies, I’ve definitely learned a lot. I think the biggest of that is—actually, kind of to Matt’s question—is just start. I can’t tell you how many times that either, again, personally speaking, I have a notebook of 25 to 30 business ideas at any one time. And me, kind of similar to other people, maybe struggling with this: I have a hard time starting. Either I’m scared, I don’t think I’m the right guy to do it, I have a bunch of questions. But I literally learned you just have to launch and have to start. So again, going back to that Entrepreneurs Anonymous, that’s what is kind of the glue that holds that together and is so good about the community, because you’re with other like-minded people. So to that point about a mentor, I think it’s so important. If you could have a mentor, I think that’s great. But I think it’s also good to have 10 or 20 “mentors” that are actually just peers, even if they’re not in the same industry or tech startup space as you, I think that’s a great benefit, just learning from people who have a proficiency in something that you might not be that great at. So again, personally speaking, I launched an influencer-based marketing platform. I am not a tech guy, I’ve never claimed to be a tech guy. I found my technical co-founder, so to speak, through Rev3, and again, we got an MVP website up there and are now testing the validity. So again, you can try something and get it up there really quick, and if it fails, you can’t let that affect you, and learn and move on. So that’s been the biggest thing, is start, go after it, and regroup and start it again. To steal a quote from Mark Cuban, he always says on Shark Tank, and when I saw him speak at a City Tech event, he says, “No one remembers what you failed on. You only have to be right once.” Definitely agree with that and think it’s true.

MB: I think too, based on what you said and just observing, that because the startup cost is so low, obviously you don’t want to fail, but it’s kind of okay if you do fail because you’re not out—I mean, it’s not like trying to start a huge company and then failing, you know what I’m saying? So like you said, just getting started, you’re not out too much if it does fail.

NZ: Definitely. And I think, too, maybe a disclaimer at this point, and this is kind of stealing off from when I saw Mark Cuban at a Inc. Magazine event, but this is something else, kind of one of those things that I agree with too: everyone always wants to talk about “Oh, it’s okay to fail and you learn,” which is true. But on the other hand, again, this is a personal viewpoint and something that I’ve learned: no one wants to fail, but it is helpful if you can kind of fail fast and then learn, and as long as you don’t make that mistake again then you’re kind of good to go. Obviously everyone wants to be successful, but at that point it might turn into a conversion or numbers game. You might not be right on your first company or idea or partnership for any number of reasons. But if you try 5, 6, 10 ideas, you might hit one or two.

MB: Well, it only takes one.

NZ: Right.

MJ: One of the things Matt and I talk a lot about is education. We’re a bit farther from that than it sounds like you are. [laughs] Do you think that, in general, society does a poor job at preparing people for this kind of thing? Just looking back at my own schooling and stuff, I don’t think it did a very good job of preparing you to really think creatively. It seems like our education system is still more geared to turning out people for—is it Rev3’s site that says about the Second Industrial Age?

NZ: Right, yeah, we kind of call it that. That’s where we got our name from: the Third Industrial Revolution.

MJ: But do you think the education system needs work as well? And is that something that Rev3 is looking to do outside of school? Do you guys have anything in the works, or is that still far in the future, perhaps?

NZ: Yeah, this is a really good question, Mike, and something, again, I’m kind of personally passionate about, being that I just graduated three years ago and now that we’re obviously housed in a higher educational institution. Obviously meriting a much longer discussion, but kind of to sum it up: I think you’re absolutely right, it will require change, which, again, will not happen overnight. But some of the guys from the Entrepreneurs Anonymous meetup and I always joke: we have to start a class called Real World MBA, or Real Life 101. Meaning kids are coming out of school, and they might know advanced calculus and Calc 2, but how does that translate into the real world tasks of starting an LLC, paying taxes for the first time for yourself? Do you go with LLC S Corp, C corp? What are the different tax advantages of that? Again, real life, sometimes simple stuff that you don’t find until you get out there. I think aside from that too, on kind of the reform: it should be encouraged as another life path, if you will. Meaning some people may argue that instead of paying $30,000-$50,000 of tuition a year, you can take that money, similar to what some notable people like Peter Thiel have done… He’s paid high school students $100,000 to take a year off before college—so, not discouraging college—just kind of to take a gap year to explore a business. Because again, I think you learn so much people skills, communications skills, business skills. You also learn a lot about yourself; what do you do well, what do you do not so well? So, I think it does need to be encouraged more, and yeah, I think it does start at that school level, and a lot of that has to do with personal upbringing and who are you surrounding yourself with, our parents maybe encouraging kids to maybe not follow a traditional path and venture out and try to start up their own deal.

MB: When I met you a few weeks ago and you gave me a tour of the facilities and everything and I got to see the building, to me, that would actually be something cool, even for high school students, maybe their senior year, is to go in and maybe have somebody working in that facility and has started their own business, to talk to the high school students and just, “Hey, this is kind of what you can expect, this is what we’re doing.” We didn’t get anything like that in high school. You got a book, you got to solve problems in the book, but there was never any practical… To me, it would be beneficial to see something like that and to be, “Hey, is this something that I would like to do? Do I want to be the next Steve Jobs or Bill Gates? Or do I want college?” I think that would have a great benefit.

NZ: I think you’re spot on, Matt. On the personal side and then on Rev3’s side… O n the personal side, I started doing some guest lectures not so much at the high school level, more kind of the college business level, early freshmen/sophomore, and some of these local universities are having a stronger presence of their entrepreneurship program, they’re doing more startup fests or hacks, or again, just exposure to these kids. But then on the Rev3 side, something tangible that we’ve done is we’ve actually helped some executive MBA students pursue some side projects or passions with our connections to startup services. Specifically, we helped one MBA student secure a patent for something that he was working on. He kind of thought it would start as a side project but now he’s kind of writing his own business plan and taking it a little more seriously. So I think there’s a lot of good connections and partnerships. Obviously, again, us being in NIU, we have connections to their staff and their faculty and their chair of the computer science department to come in and speak at events, so that’s something we need to explore more. But I think in general, I think there needs to be some stronger connections there as well.

MJ: Nic, do you think there’s a gap at the moment between the local and the national/international scene? I guess when I think about it, I loved finding out about Rev3 and stuff like that, but it was sort of coincidental that I did. A lot of the people that I run into just in my day-to-day seem to have no idea that this stuff exists. It seems like there’s this real gap between people knowing about what’s going on in their local communities, that since we’ve had the mass media pretty much in the 20th century, that everybody is looking up to sort of the top of the pyramid. Matt mentioned Steve Jobs, Bill Gates, Mark Zuckerberg, that everybody is trying to be the next one of those, and yet they might be missing a whole range of success at their more local level, that if you wanted to sort of duplicate the success of… I mean, c’mon, there’s only so many unicorns like Bill Gates, or Steve Jobs. Yet there’s room for a lot of people, it seems like, at the local level. Do you think that people are missing out because of the way that we’ve all been brought up in the media environment to kind of look upwards?

NZ: I do think that’s a great point, and as you were talking I was trying to think of exactly what you meant and try to put it into an example. So, there was a company—we had a fireside chat, this is going back maybe over a year ago now, last fall, before we were even officially moved into the space. I had a fireside chat and interviewed Sean Chou, he was the first employee of Fieldglass. Fieldglass was a company started in Naperville, then they had a Chicago office. Anyway, they were acquired for, they didn’t disclose the amount, but it was a rumored $1 to $1.6 billion to SAP. Point in case: that company was started here in Naperville and not that many people actually knew about it. So, kind of two main points: I think #1, you hit it on the head, there needs to be a more informational/share of information approach, which again, is something that I personally ran into, for the suburban demographic and landscape. There’s 39 cities, a million people here, but it’s not as dense as the city and there’s not really that much sharing of information unless, you know, you’re already actively involved. So I think, again, you’re completely right on that; there needs to be more of that, it needs to start in smaller communities and then branch out and grow from there. And then #2, yeah, you’re right, you need to connect in and have that circular reaction of entrepreneurs who have “made it” or hit it big, even if it’s obviously not at that Bill Gates level, right? Which, 99.9% of people don’t. They have to kind of come back and give back and mentor, maybe it’s through angel investments on the VC side, whatever it may be, and then that will encourage more giving, more expertise, more mentor sharing, and I really think a good fostering of people coming up, seeing people who have “success,” whatever their definition of that is, and then maybe pursuing that for themselves. There absolutely needs to be more of that.

MJ: Do you think that’s on each of us? What I’ve noticed in my social circle, for Matt and I for starting up our podcast, people will share the latest buzzworthy, BuzzFeed or Upworthy links, they’ll do all the top ten stuff. And yet they’re very—I would almost describe it as miserly with sharing things that their friends are doing, you know? Like I have a friend, a former roommate of mine, who lives in Perth, Australia actually and he was a musician when I knew him in college, and he actually works by day at a bank. But he’s started again kind of playing music and I guess he busks over there. And, you know, he put out a CD over there, and I keep trying to get him to give me a copy or put it up more internationally. Within the people that he knows over there, a lot of the seem to share it. But the people that I went to school with, none of them will share his stuff, it seems like. The same is true of almost every friend I have who’s doing some kind of project. And I know I’ve talked to some people about crowdfunding and things like that lately, and a number of people have been fairly negative on the concept of, “Well, why would I give to something like that? It’s kind of not at a level to warrant my attention.” I guess that’s what I’m thinking of, is that people seem, in general, certainly within my social circle, they seem rather miserly about it. That seems like a pretty big hurdle to try to jump over.

NZ: Again, I completely agree there, Mike, and the word that I’ve kind of always used is grassroots. This goes back to the sharing of information and getting the word out. From a business perspective, no one cares about what you’re doing or what your project is or how good it is if you can’t get it out there. Look at how us three met. We met at a networking event and kind of started the relationship like that. Again, yes, I think it is on an individual basis, I think it is more that grassroots approach. Tangibly speaking, some things that I’ve done: I’ve spoken in front of chambers of commerce, young professionals groups… At the beginning of the talk, you’d mentioned a couple of other local networking groups you’re involved in. And I agree with you, I just don’t have an easy answer for why there isn’t. But I agree, it has to start more on that hyper-localized level, meaning one to one, and share it. I’ve always had the viewpoint that every one new person who comes into contact with me or who comes into Rev3 is a good thing. And again, like you said, people are always quick to share the buzzworthy BuzzFeed, Elite Daily, whatever it is, but they need to kind of look and share what’s in front of them and then help other people, and then that relationship will come back to them. I completely agree, I just can’t put my finger on one thing of what’s causing that.

MJ: Do you think younger people do it more than older people, that they’re better at it?

NZ: Good question. Yes, I do. Maybe that’s just because that generation or this current generation is just kind of brought up, they’re born with a cell phone in their hand and used to sharing and open to sharing everything. And look at some of these profiles of constant retweets, 50,000 tweets. So again, they’re just doing it, kind of almost by nature. In the school social circles, there’s constant sharing. Obviously in this day and age, people are sharing more, they are putting themselves more out there. It’s funny, I’m actually Periscoping this right now, so I have a tripod with my iPhone next to me and I’m periscoping this, and I’m going to kind of repurpose that and share that. Again, I think things like that and the Snapchat world, so to speak, of sharing constant glimpses into their lives, and the retweets, revines… Yes, I do. Again, maybe that’s just how they’re brought up and then also technology has a huge role to play in that as well.

MJ: For people that are curious about Rev3, how would they find you, how would they maybe attend an event?

NZ: Good question. Our website is Rev3DuPage.com. You can kind of find all of the information there. We’re physically located inside NIU Naperville. So the easiest way, looking back at how we originally connected, Mike, is anyone is welcome to come out, check out a happy hour. We do social events, as well as more educational lecture series/seminars. People are always free to connect with us on our website or meetup and come get involved, like you said.

MJ: Okay. Well, thanks so much for joining us today, Nic.

NZ: That was awesome. I really appreciate it. Thanks for having me, guys.

MB: Thanks!

A: That’s all for this episode of Robot Overlordz. Are you interested in the future and how society is changing? We’d love to have you join our community. Visit our website to learn more and to connect with others that share that interest. You can find us at RobotOverlordz.FM. The site includes all of the show’s old episodes along with complete transcripts, links to more information about the topics and guests in each episode, and our mailing list and forums. We’d also love to hear what you think about the show. You can review us on iTunes or email us.

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MJ: Thanks everyone for listening.

MB: Thanks.

 

Image Credit: By Rev3 (http://www.rev3dupage.com)