For the second part of our series speaking with entrepreneurs, we brought Anthony Lombardo, the president and founder of expex, to the show. The Latham-based startup helps small and mid-sized businesses with their bookkeeping through an automated cash management application. Also joining Lombardo is Bob Manasier, UAlbany's entrepreneur-in-residence as well as a serial entrepreneur and brand builder. The two share their personal pathways to success (and what challenges they had to overcome to get there), entrepreneurial resources available in Upstate New York and programs coming to the UAlbany Innovation Center and Innovate 518 this fall.
For the second part of our series speaking with entrepreneurs, we brought Anthony Lombardo, the president and founder of expex, to the show. The Latham-based startup helps small and mid-sized businesses with their bookkeeping through an automated cash management application.
Also joining Lombardo is Robert Manasier, UAlbany's entrepreneur-in-residence as well as a serial entrepreneur and brand builder. The two share their personal pathways to success (and what challenges they have had to overcome along the way), entrepreneurial resources available in Upstate New York and programs coming to the UAlbany Innovation Center and Innovate 518 this fall.
Read episode transcription.
Innovate 518 is the Capital Region's Innovation Hot Spot and is a NYSTAR initiative by Empire State Development and managed by the University at Albany.
References: Learn more about the I-Corps Short Course at the University at Albany this fall. The two-week course, hosted by the UAlbany Innovation Center, allows faculty researchers working on a technology innovation to "get out of the lab" and talk with customers to identify the best product-market fit. Teams can comprise one to three people.
The UAlbany News Podcast is hosted and produced by Sarah O'Carroll, a Communications Specialist at the University at Albany, State University of New York, with production assistance by Patrick Dodson and Scott Freedman.
Have a comment or question about one of our episodes? You can email us at mediarelations@albany.edu, and you can find us on Twitter @UAlbanyNews.
Sarah O'Carroll: Welcome to the UAlbany News Podcast. I'm your host, Sarah O'Carroll. This is our second episode talking with entrepreneurs in the Capital Region. Today, I have with me Tony Lombardo, the president and founder of expex, and Bob Manasier, the entrepreneur-in-residence at UAlbany. I have Tony and Bob here with me to talk about what it's like to start your own business and work as an entrepreneur in Upstate New York. Tony and Bob, thank you guys so much for being here.
Tony Lombardo: You're welcome.
Bob Manasier: Thank you.
Sarah O'Carroll: Tony, you're the president and founder of Expex, a startup that helps small and mid-size businesses with their bookkeeping through an automated cash management application, as well as the president and founder of The Bajan Group, a print management company in Latham [NEW YORK]. So, I'm curious to know if there is a turning point in your life when you decided you wanted to pursue forming startups, or when you wanted to become an entrepreneur?
Tony Lombardo: Yeah. It was actually at the end of college. I graduated, I had my business degree from the University at Albany. And I had a number of-
Sarah O'Carroll: (Go Great Danes)
Tony Lombardo: Yeah, it was a great foundation. And I had a number of family members that were all business owners. All of them owned small businesses. Some of them were car dealers, one of them had founded a bank, another owned a Goodyear tire facility. And so, to me, it was just a natural thing to say, "Okay, if I'm going to go to business school, eventually I want to own my own business."
Tony Lombardo: So, I started working for a large company. I worked for two different large companies for about five years. And when I was 27, I decided, okay, I'm young, I don't have the mortgage and kids and all that stuff, and I said, "Okay, now is the time."
Sarah O'Carroll: Okay. And did you ever take a class in entrepreneurship, or was there a professor who might have sparked this interest in you?
Tony Lombardo: Back then, there was no such thing as a class in entrepreneurship. You either got a degree in marketing, or accounting or something of that nature. So, I focused in marketing because for me, anytime that you have a business, you need to be able to sell it. Sell the products and services, and do it well. So, that was the focus that I had, and I got my degree in marketing as a result.
Sarah O'Carroll: Now Bob, you also have a degree from UAlbany and you majored in biology. How does someone who majored in biology become a serial entrepreneur and consultant for startups?
Bob Manasier: I was an entrepreneur before I came to college. I started before high school, but I will say, scientists make the best entrepreneurs (no offense, Tony).
Tony Lombardo: [LAUGHTER] None taken.
Sarah O'Carroll: What were you doing in high school?
Bob Manasier: Before high school, I started a property and landscape management company, because I never wanted to work for anybody, which is a whole different story. But, that's completely untrue; when you own your own thing, you work for everybody. But you hear that me saying that a lot. Tony, you can appreciate that.
Tony Lombardo: Yes, indeed.
Bob Manasier: But I really fell in love with servant leadership and the whole entrepreneurial lifestyle because there's a lot of freedom to it. So, I've just continued it for the rest of my life. An "entrepreneur" was not a word we ever used. It was just "business owner."
Tony Lombardo: Yeah. "What do you do?" "I own a business."
Bob Manasier: Right.
Tony Lombardo: Yeah.
Sarah O'Carroll: So, it's something that, maybe, has been part of a newer language when we're talking about the startup culture and everything?
Tony Lombardo: I think so, yeah. The word "entrepreneur" is, I think, maybe eight, 10 years in the making. And then "startups" have become, obviously, super-hot in the last, what? I'd say five years, six years, maybe -- the term "startup."
Bob Manasier: In the last decade.
Tony Lombardo: When I started my business, or when you started yours, nobody used the term “startup.” It was, “You're going into business for yourself,” or something of that nature.
Sarah O'Carroll: Interesting.
Bob Manasier: And then they usually try to make you not do it.
Tony Lombardo: Yeah, everybody says that, "That's the dumbest thing you can do." Right? Yes [LAUGHTER].
Sarah O'Carroll: Well, I'm glad you both have defied expectations. Now, Bob, you're the entrepreneur-in-residence for both Innovate 518 as well as the UAlbany Innovation Center, and the CEO of InFocus brands, among many other titles it seems. But a question for you both: when do you decide that it's time to launch? Because it sounds like you could either prepare, and prepare, and prepare, or you could start too early, and crash and burn. When do you know that it's time?
Tony Lombardo: You want to go --
Bob Manasier: -- You want me to go first?
Tony Lombardo: You go first, yeah.
Bob Manasier: There's always a leap of faith aspect to that. So, you don't really always know. I'll say now that we have a lot more tools to test the market and your technology or product to make sure it fits into a market space. And this fall, as I think you've already reported, we're bringing the iCore system to UAlbany for the first time. So, we'll be running that out of the UAlbany Innovation Center, which is a great kind of customer-discovery workshop. You can figure out if your technology has any meaning to anybody. Because without that meaning -- marketing, right --
Tony Lombardo: Absolutely.
Bob Manasier: -- without that meaning, you have no business. So, there's tools now that didn't exist when Tony and I started our companies, right?
Tony Lombardo: Yeah.
Bob Manasier: We went out there and failed, and then we had to figure it out, or we didn't eat.
Tony Lombardo: Right. I think that the other thing is that, because technology has grown so fast, and not only the technology, but the ability to create a company from a concept today, whereas…When I started my first company, there was a litany of companies out there like mine. It was very easy to get into business, and be reasonably successful with something that may have been, for lack of a better term, an old-school type of company. Whether it be wholesale distribution, or a retail location or something of that nature.
Tony Lombardo: Whereas now, it's, "Geez, I've got this concept, and I don't think anybody's seen it before." So, to Bob's point of testing the market to make sure that people want it before you decide, "Maybe this is something that I should go build, and try to market."
Sarah O'Carroll: Conversely, how do you know when it's time to move on to the next venture? Is there a feeling of, "Okay, my work here is done?" Or is it perhaps clearer where things aren't going in the same direction that you planned? It's probably dependent on the context, but how might you answer?
Tony Lombardo: My answer to that is there's a number of times when you know it is time to move on – if things are not working. If things are working well, it becomes a much trickier decision. Part of that may be driven, obviously, by finance. Some of it is driven by the company that has gotten to a point where it's not fun for me anymore, and I want to go do something else.
Tony Lombardo: Other people say, "At the end of the day, I may want to take a different role. I want to be more strategy as opposed to execution." So, you're maybe stepping back from the day-in-and-day-out, but you're still actively involved in the company. I think it's a very, very personal choice with a successful company. When it's not successful, it's a pretty easy decision. The decision can be made for you.
Sarah O'Carroll: Bob, does that ring true for the kinds of companies you've worked with, or perhaps with your personal career?
Bob Manasier: Absolutely. There's a certain point where you know that you're not bringing energy, passion and value every day. And if you have a really strong team around you, they'll start sharing that with you very bluntly. So, that's one way that other people are starting to see it. More importantly, when you're in business, everything's about the client and your staff. It's not about you.
Bob Manasier: So, when you're not doing that service to either one of those, I think a lot of entrepreneurs and business owners decide, "I have to go somewhere else. This is not for me anymore." Or, "I've outgrown it, or, “It's outgrown me." Because there's different skillsets. Starting a company is very different than managing one.
Tony Lombardo: I think that's a huge part of it. You may have the skill to get a company started and get it off of the ground, but you may not be the person to grow the company. It's funny that you bring that up, because even with expex, there are people that I know that I want to bring into the fold now, as we move forward, that would replace some of what I'm doing. And the reason is because I know they're better at it.
Tony Lombardo: So, if you are an entrepreneur, you really have to kind of take a backseat and say, "It's not," as Bob said, "It's not about me; it's about the company," which means the clients and the employees. And those people all have to grow, and in order to do that, you have to be super objective about your skillset, and what you're capable of doing and the value you're bringing to the company.
Sarah O'Carroll: I imagine that would be one of the challenges, right, because you've poured everything into this idea, and trying to grow the right people around it, and bring them up. But what are some other obstacles that you've run into? This is for you both, again.
Tony Lombardo: Obstacles?
Sarah O'Carroll: Yes.
Tony Lombardo: That's a laundry list. You can start with funding, HR, sales and marketing...Is my messaging correct, are we getting the growth that we're looking for, if we're getting a limited amount of growth and not as much as we want. Then there's operational challenges, new players into the marketplace that you didn't see before, and new technology. The technology is changing faster than you may be able to keep up with.
Tony Lombardo: There is just literally a laundry list of things that you face daily. I don't even think it's something that you wake up one day and go, "Wow, I didn't see that before." It's more like, "Yup, we know all of those things are out there." And how do you manage all of that while you're trying to grow your company? There's just…Being an entrepreneur is not for the weak at heart. It really isn't. You need to understand those challenges are going to be there, and dive in anyways.
Bob Manasier: And the only ones I would add to that list are culture because team dynamics, especially at a startup, are so important. And most entrepreneurs put people who are like-minded around them, and that's one of the first mistakes any business is going to make. Because, as Tony said beautifully, I want people to do the jobs I'm not good at. I need to find people that can actually fix everything I'm really bad at.
Bob Manasier: And that's really hard to do because they don't think alike. And sometimes you just want people to agree with you when you're starting out because everybody else is telling you "no." And so, we spend a lot of time here working on team makeup when you're starting, because that'll destroy your company early on.
Tony Lombardo: I agree.
Sarah O'Carroll: So not just diversity of backgrounds, but also of opinions and perspectives as well?
Bob Manasier: And skillsets.
Tony Lombardo: Yeah, the ability to have objective discussions without them turning into arguments is critical. That's really critical. And so, if you can do that, and sometimes entrepreneurs have unreasonably large egos. So, they're not always known for listening, but I think the really good ones do. They understand that concept, and look for it and the people that are going to communicate with them and know that those people are going to challenge them. And with the right team, the sky is the limit, it really is.
Sarah O'Carroll: So, it sounds like you have to be humble enough to recognize that there are opinions that could really help you, but also have the confidence to not just go...cry in a cave?
Tony Lombardo: Absolutely [LAUGHTER]. Yes, that's a very good description.
Bob Manasier: [LAUGHTER] You can cry in a cave sometimes, though.
Tony Lombardo: You will definitely have a day where you'll cry in a cave. There's no doubt.
Sarah O'Carroll: Expex is an Innovate 518-certified company. So, I want to know what's the most valuable aspect or asset or inducement that UAlbany has provided. And now Bob and I will just stare at you (kidding).
Tony Lombardo: [SARCASTICALLY] Oh, great...
Tony Lombardo: So one of the things that happened early on in working with Bob is that, Bob took out a bull whip and beat me with it until I couldn't see straight over one issue. And it was --
Sarah O'Carroll: -- You mean, figuratively speaking?
Tony Lombardo: Figuratively speaking. [LAUGHTER] Bob has never touched me, I will tell you that. It was one of those situations where I was like, "Oh my God, Bob, I'm doing what you're saying." And he's like, "You're not. You have to drive deeper into this." And the messaging piece was that I was consistently looking at what our product did. And Bob said, "Nobody cares. People care about what it'll do for them."
Tony Lombardo: And, every time I rewrote something, he was like, "You're not there yet. You're not there yet. You're not there yet." And by the time we got done, I ended up with this document. It was a case study that everybody I shared it with is like, "Holy crow, I really get what you do. And I see not only what you do, but why you're doing it, and the value it's bringing to small businesses. I can see why they want it," which was huge. Because, I tend to think about, you know, the product has to do these things to be of value.
Tony Lombardo: And Bob's point was, nobody cares about all those features. People care about conceptually, how is it going to make their life better? How is it going to make their business more successful? How are you going to improve their cash flow? How are you going to make them a healthier business? So, that in...And I say that jokingly, but it was a frustrating experience for me. But by the time we got done with it, the value I got out of it was significant.
Tony Lombardo: And I think that that's a huge issue, because I don't care what you build. You build the greatest mouse trap in the world, if nobody wants it, it doesn't matter. And I think that that's something that most entrepreneurs miss. You need to know that first. What are you going to do for people, and how are they going to react to it?
Sarah O'Carroll: And so --
Tony Lombardo: Just because you've got something cool and interesting that you like doesn't mean anybody's going to want it.
Sarah O'Carroll: It sounds like that connection is sometimes difficult to make, and yet it’s so important to reach those customers.
Tony Lombardo: The reality is, that sometimes as an entrepreneur, you get caught up in what you're doing, because you kind of know what it's doing for you. I owned a business, and I was frustrated by some of the things that were happening in the bookkeeping and accounting space. And I said, "There's got to be a better way to do it. There's got to be the ability to automate some of these things."
Tony Lombardo: And that's why I built it, but I wasn't communicating that effectively to other people. So, that guidance and mentorship was really important. That was the biggest thing for me because I didn't have some of the other things that other entrepreneurs have to struggle with. I understood a balance sheet and an income statement. I understood operations.
Tony Lombardo: I understood financing, I understood banking, I understood HR because I had a company. So, Innovate 518 brings all of those things to the table, but I already had them. So, it wasn't something I needed to take advantage of, but the messaging and marketing piece I did.
Sarah O'Carroll: Okay. Now, Bob, is there some guidance that you often give to startups, along with the messaging, that really seems to resonate with them, and really gets them back on track to a path of success?
Bob Manasier: Well, Tony touched on it. A lot of the other entrepreneurs we're talking to don't have the business experience that Tony has. He brings decades of running a business. So, we don't have to spend any time on that with Tony. Other people don't have that; they're scientists, they're faculty, they're students. They have great technology, but they've never conceptualized what it is like to run a business, or run people, because every business is made up of people at some point.
Bob Manasier: So, that's the whole other piece that we do with the companies, is help them structure properly. This is where we didn't have to spend time with Tony. He already had it; he got it. And I'm going to just add one thing to our ongoing conversation about marketing and messaging. The other part of it is, the entrepreneur or business owner are so immersed in their business, they often forget to think “on it.” So, it's in and on, and that's where we bring that perspective.
Bob Manasier: The other part of it is, we had great conversations. It was a lot of listening to Tony first, because if I'm just trying to talk to him all the time, I'm not getting anywhere. Because I need to understand his business from his perspective. But that features and benefits thing -- every business owner in the world gets wrong at first. They focus on pieces of their company and the features, not the benefit to the client. And it's only about benefit.
Tony Lombardo: Yeah. Because that's the only way anybody's going to buy something, is them seeing that benefit.
Sarah O'Carroll: Have either of you gotten to travel around much for work to get a sense of other startup scenes, and how you might compare the Capital Region to those places, because it seems like both of you could have chosen to go to Boston or New York City and start there, but you chose the here, the Capital Region. So, why is that?
Tony Lombardo: I chose the Capital Region because I started a business here in 1989. So, I've been here for my whole life. It was kind of like, "Yeah, you're settled here, you're not going to go to another city." But, that being said, I don't have anywhere near the experience of Bob in that sense; he can really speak to that at a very high level. I can only tell you what I've experienced, and what I have seen with other companies that we are competing with, and what they have gotten out of being in other cities.
Tony Lombardo: One of the challenges I think that Albany faces for a startup is that...It's very difficult to create a startup community in a place the size of Albany simply from a volume perspective. I look at things, and I see it this way, but I'm not sure exactly whether I'm right, but Bob maybe can add to this. I see Saratoga and Troy and Schenectady and Albany, and it's like four separate pockets.
Tony Lombardo: And even if you bring them all together under one umbrella, it's still super hard to have enough activity, as it were, to be able to really have the entrepreneurs feeding off of each other for when they're having successes and failures and things of that nature, compared to a Boston or an Austin or a Denver or what have you. And --
Sarah O'Carroll: When you walk down the street, and there's coworking spaces on seemingly every street corner.
Tony Lombardo: Yeah, certainly in the area of coworking spaces, I think we have grown substantially and that's really great. But when you're sitting in a coworking space with 30 other ventures, all of whom are venture-backed, it starts to change things very substantially. Especially for a company like ours, because our entire marketing strategy is to go after businesses that exist. The companies that are doing what we're doing in other cities are going after incubators and accelerators because they've got funded companies that say, "Yeah, we're on board," immediately because they understand the value that a company like ours brings.
Tony Lombardo: Whereas in the startup community and in Albany, a lot of them are pre-revenue. So, if you're pre-revenue, you're not going to spend money on a service like ours. And that just goes for good reasons. So, I think that that presents some challenges. The value part of it is that for somebody who's starting up a business, there's so many resources in the Capital district.
Tony Lombardo: So, if you don't understand some of the functional areas we talked about earlier, there's a lot of resources there. So it's like the resources are there, but there's this other issue associated with just volume and, again, separate pockets, I think, as opposed to one umbrella area.
Sarah O'Carroll: Bob, it seems like a lot of your work is bridging those divides and bringing people together and working with those different entities. But, how might you add to what Tony was speaking to?
Bob Manasier: So, I'm not going to disagree with Tony, because we see it, and it's a lot of work to keep people working together. What we do have here are people willing to help outside of charging for it. We have a multitude of seasoned executives that will give time to startups, and they're not just student startups. And Tony's actually been a mentor to others in the innovative bubble, right?
Tony Lombardo: Yeah.
Bob Manasier: So, we try to get that peer-to-peer interaction. The thing that's not driving the needle is risk capital. We don't have capital, and you hear this all the time in Albany. You don't have the pockets of money that will take the risk on the pre-revenue companies. They almost treat every business as...they're doing their due diligence as a venture capitalist instead of as an angel, or just pure risk capital. "I'm going to see where this goes. Here's some money to get started."
Tony Lombardo: That's a critical issue. And I had a conversation with somebody who is deeply entrenched in the venture capital and even seed funding space in Upstate New York. And the reaction that I got when I had the conversation with him was, "You've got to be generating somewhere around $350,000 to $400,000 annually in revenue before you really will be able to start looking at seed capital." And I went, "Okay, we need to do this differently." Because to me, that is a living example of what Bob just mentioned.
Tony Lombardo: If you go to other areas, seed capital is not for post revenue-based companies. They're not. And if you take a $300,000 or $400,000 revenue company that is in the tech space, if they're a distributor of a product with a 30 percent gross profit margin, you're talking about a company that's already achieved a million dollars in revenue. Wait a minute, why are we talking about seed capital with a company that may be at a million dollars in revenue? So, I think that that is a very, very big challenge in our geographic area.
Sarah O'Carroll: Okay. So taking --
Bob Manasier: Can I just add one thing to that?
Sarah O'Carroll: Oh, yes.
Bob Manasier: Because that's a philosophical thing, too, in a lot of other areas. And I've started companies all over the world, actually, and most of my earliest companies were started in New York City. So, I moved here for family and the lifestyle.
Sarah O'Carroll: Good choice.
Bob Manasier: Yeah, it was an excellent choice, absolutely. The other piece of that is the companies that are forming don't think about clients first; they think about raising capital first. And you need clients. One, is just to see what you're doing wrong.
Tony Lombardo: Absolutely.
Bob Manasier: Without a client paying you, you're never going to know what your business does. And your first answer to starting a company is, "I have to go raise money first." It should be, "I need a client or two to figure this out." And I think that's just a shift we'll see eventually, but we're just not there yet.
Tony Lombardo: It's like this big disconnect between the entrepreneur going, "I need money," and the investors saying, "You need to be revenue generating." And it's kind of like the two need to be meeting in the middle in some way, shape or form is my sense, Bob. I don't know what you think, but I think that that's...both ends need to meet in the middle in some way, shape or form to really start generating startups that are growing successfully.
Sarah O'Carroll: Now, lastly, a lot of students at UAlbany are interested in becoming entrepreneurs. Do either of you have any final advice for students, what you might tell them as they pursue these careers, maybe not right after college, but down the line, just like you did.
Tony Lombardo: My advice would be, if you think that you've got something that you will want to use as the foundation for founding a company, it's always a good idea to first go out and work in a workplace and get some experience before you do that. It's really easy now to be able to say, "Yeah, I just want to jump in." And I'm not saying that people, you know, there are certainly concepts that have come out of universities, students that have been fantastic. But that work experience does a number of things for you.
Tony Lombardo: It puts you in a position where you understand, as Bob mentioned, people culture, other functional areas with regards to the business. Working in, hopefully, a related area in some way, shape or form, and just gain that basic business experience, or working experience. Because that'll help you, as an entrepreneur, to understand some of those other areas, and that culture and working within a company with other people from a team perspective.
Tony Lombardo: But in addition to that, go into it with your eyes wide open, and understand that it's...You always have that honeymoon phase where it's like, "Oh, this is great, we're building a product, and everything's wonderful." But, you really have to have your feet on the ground, and it's okay to have your head in the clouds as long as your feet are firmly planted on the ground. And surround yourself with as many resources and smart people as you possibly can.
Tony Lombardo: Realize those things that you don't do well and go find them before you start. That is absolutely critical. Realize your strengths, which you're going to have a handful of, and you're going to have a whole truckload of weaknesses. That's being a person, that's a human being.
Sarah O'Carroll: That's being brutally honest.
Tony Lombardo: Yeah. You're going to be able to do a handful of things really well, and then all the rest of it, you want to pull those resources in so that your likelihood of success goes up. You've got some working experience, you've got a great concept. You've got a team in place, you've got some communication going with some potential clients that may want to use the product. And then you start saying, "Okay, let's build this thing out. And now all of a sudden, your likelihood of success goes up, as opposed to, "I just got this great concept, I'm going to go park myself in my apartment and start working on it." That's not a good idea. It just isn't.
Bob Manasier: And there's so many opportunities that Tony and I didn't have in college. To plug yourself in and become immersed. There's competitions, there's Blackstone LaunchPad, there's UAlbany Innovation Center, which are all the same entity but different touch points.
Sarah O'Carroll: And business plan competitions.
Bob Manasier: Business plan competitions, startup weekends, we have hackathons. You need to immerse yourself in it, just to see if you even like it. But more importantly, and I tell this to every student, you need to build your network now. Entrepreneurs and business people are only successful because of the network they have around them.
Bob Manasier: People that are much higher up in the food chain in business will talk to students. The moment you leave school and you actually have a job, they're not talking to you anymore. So, build that mentor pool now. And just immerse yourself in it, and just plug into everything we're doing because we're all here to help.
Sarah O'Carroll: Well, Tony and Bob, thank you so much for being here.
Tony Lombardo: And thanks for having us.
Bob Manasier: Thank you, Sarah.
Sarah O'Carroll: Thank you for listening to the UAlbany News Podcast, I'm your host Sarah O'Carroll. And that was Tony Lombardo, the president and founder of expex, and Bob Manasier, UAlbany's entrepreneur-in-residence. If you like this episode, you might be interested in listening to the last one we did where we spoke with Shawn Allan. His startup, Lithoz America, LCC, provides technology for the 3D printing of high-performance ceramics.
Sarah O'Carroll: If you're an entrepreneur yourself or a faculty member or student who's interested in technology licensing and startup formation, you can visit innovate518.com for more information. As always, you can let us know what you thought of the episode by emailing us at mediarelations@albany.edu, or you can find us on Twitter @UAlbanyNews.