(upbeat music) - Welcome to At Issue.

Thank you so much for joining us, I'm H. Wayne Wilson.

At one time, the city of Peoria had something called the Peoria Innovation Hub.

Innovation, it's, okay, we can innovate few things and then it turned into a new name.

Not a new job, but a new name.

It's called Distillery Labs.

The name reflects on our history and looks forward to the future of Peoria.

And I'm happy to welcome to Peoria and to the program, Paul Leamon, and a proper pronunciation.

- Lehman - [Wayne] Lehman.

- Yes.

- And it, you are not a Peorian.

So we're gonna talk a little bit.

He's the Executive Director of the Distillery Labs.

We'll talk a little bit about what brought you here and what Distillery Labs hopes to be.

And also with us, Bob Sehring Bob is the board chair of Distillery Labs.

You may know him as the CEO of OSF HealthCare but he's here as the board chair for this program.

And thank you both for being with us.

- Thank you.

- And of course I mentioned Peoria Innovation Hub changing its name to Distillery Labs.

Okay, what is Distillery Labs?

I mean, it's simple question, but see if you can explain that in short order.

- Yeah, so think of Distillery Labs as an incubator for your idea.

You may have an idea that you're thinking about in terms of a new startup company in innovation.

You might be part of a corporation and you're working on some interesting new, innovative ideas or you might be in the community looking to develop a concept that does been a part of a challenge that you've been looking to solve.

And you think you have a solution for that but you're not quite sure how to get that out of your head or at a napkin and into the real world.

So helping people take that next step and set next several steps to figure out if this is a viable concept, how do I get this out and test it and iterate?

Let me test the solution and see if this works, let me come back and revisit the solution if it doesn't, and how to go through that process to hopefully speed up the execution of that startup company, or at least reduce the risk that it would fail if you got it going.

So the Distillery Labs is that incubator for those ideas.

- You mentioned the word incubator, and I'm sure there's some people out in the audience are sitting there going, so why do we need a Distillery Labs?

We've had incubators in the past.

We know what those are, and we have Peoria Next Innovation Center up on main street.

So why Distillery Labs also?

- Yeah, I look at it as a wonderful piece to continue to expand the ecosystem.

The ecosystem that extends, whether it's to Jump to Bradley, ICC, Caterpillar, the Ag Lab all of those organizations have wonderful creative people many with the ideas that Paul referenced.

And again, looking for a way to get that out on a napkin, off of the napkin into execution.

And so Distillery Labs is one of those pieces which will have a focus.

And it does have a focus on a few areas, but to be able to attract those who have those ideas that have place a venue to go to, to help work through those ideas and hopefully see them come to fruition and continue to grow.

And hopefully it's the next company that comes out of those organizations.

- Paul is there a complimentary relationship between Distillery Labs and the Peoria Next Innovation Center?

- Yeah, absolutely.

We really see Distillery Labs being on the very early phase of business development.

So again, back to the thought of back of a napkin idea and where do I start this process?

Distillery Labs is really core to that development.

As that business then begins to flourish and grow maybe adds new employees, but still needs more incubation and development before exiting into the real world.

We see Peoria Next is really being that graduation location for those types of companies.

- So why, I mean, you mentioned the napkin that traditional ideas.

I was sitting here writing something down, what does Distillery Labs or what will it be able to offer the napkin writer so that maybe that idea turns into fruition?

So a lot of different programmatic work that we're looking to develop.

So we're very early phase in developing these.

So nothing is announced yet in terms of these programs but eventually my goal is to really offer entrepreneurs a range of workshops and educational programs all the way through mentor, mentee relationship development, how to connect people into the community in terms of, I've gone through this process before can you help me through these next set of challenges?

And really being kind of a co-founder with you along your journey, right?

You're not alone.

Entrepreneurship is a team sport.

So Distillery Labs is part of that team.

And how can we help educate you around financial literacy of go-to-market strategies?

Development, engineering, work, and support, lot of different components go into play there.

And the educational stream has been able to test ideas in the real market, get that feedback, iterate, and see if your solution really addresses the market need.

So that's really where we were on a fit into that entrepreneurial journey.

And you would come to a Distillery Labs to really be a part of that process.

- This is not the only innovation center or innovation hub in Illinois.

It's part of a broader hub network in the state.

Could you give us a little bit of background as to where that came from and how many there are and where they're affiliated?

- Sure, happy to.

And you're exactly right.

It is part of a broader network.

This was funded by the prior administration and continued by the Pritzker Administration of funding these hubs, the largest of the hubs that be located up in Chicago often referred to as DPI, but there are hubs in many of the major cities, so Peoria, Bloomington, Springfield, Champaign-Urbana, Decatur, and so, and others.

And so a total of about 15, many of them sponsored by universities in those areas, we are somewhat unique in that we are not sponsored by a university but very much engaged with the two colleges here both ICC and Bradley University are important parts of Discovery Labs, and both have positions on the board.

But the benefit really is to be part of that overall network so that we can just, as Paul described see those ideas flourish and especially through other collisions within the organization but we can have some of those collisions but there'll be across Illinois because of the benefit of that network that connects all of these different hubs.

- I want to follow up on that structure in just a moment but first the reference to DPI that is a Discovery Partners Institute located in Chicago.

So with 15 of those Peoria is a little bit unique because to the best of my knowledge, the other 14 are associated with universities or community colleges.

- Correct.

- We're not really structured that way.

How does that work?

- So it's an exciting part I think for Distillery Labs not being directly attached to a university we certainly have educational resources here in through Bradley and ICC that are an active part of developing the concept of Distillery Labs but they're not the sole focus in terms of this just being kind of an educational adjunct part of that process through a university.

So this is much broad through the community whether it be through corporations and our partnerships with larger corporations, community-based organizations across Peoria that are pulling towards the same ideas of innovation in the community and development of an entrepreneurial ecosystem.

So it's exciting to see how this is really much broader for the Peoria community, than some of the other connected hubs universities.

- Such as Illinois State University, who has an innovation hub.

So what's the future like Bob, I mean there's 15 hubs in Illinois and there's cities all over America saying we're going to be the next innovation center of America.

What's the future?

How do you see this evolving?

- Oh, the blessing for us as a country is we're a country that does not lack for ideas.

And doesn't lack for entrepreneurs for those who want to take that idea and see it flourish.

The opportunity for us really is can we create that ecosystem that helps support that in a way that it increases the chance for success?

You're right.

Certainly every city across the country would like to see new entrepreneurs come to their develop organizations, have them grow and we're no different in that respect.

We do believe we are different though in what we can offer.

And again, it's that connectedness that Paul described of the community being really throughout the community and trying to engage all aspects of it.

Certainly the employers certainly education but also the community at large to make sure that we have that engagement.

So again, we can serve as that support to increase the chances of success for those entrepreneurs, those with that idea.

- And I would add to that if I could just in terms of me coming in from the outside and the kind of the vision of Peoria that I see from an outsider's perspective, looking in, I mean, you hear a lot about, if it plays in Peoria and it's certainly a phrase that's been used a lot over decades.

But you think of it as applied to really what we could be doing at Distillery Labs.

I mean, it's a testbed here that looks like main street America, right?

And we've got to have every corner of the community involved, a very diverse set of voices where solutions come and get more robust with every voice that gets added to that solution base.

- So you came here from Glencoe recently you've been in Erie, Pennsylvania, you have been several places.

What is it about this particular facility the structure that brought Paul Leamon to Peoria?

- There's a lot of different aspects that got me very excited a lot of which, getting to know Bob and OSF and other corporations here and the engagement of the community, as I listened to the voices of people that have been trying various things over the last couple of decades.

And I think this really is a fruition of activity in the community that's been working for a long time.

And I think we're right at the edge for Peoria of kind of getting into that next phase.

I've talked a little bit about and in other conversations around kind of various phases of of development through Peoria from kind of the prohibition, pre-prohibition distillery all the way through manufacturing, healthcare, and now kind of this development of an entrepreneurial atmosphere where anybody is welcome to develop a concept and a company.

And it takes engagement from every corner of the community.

And I've been in a lot of places.

I mean, Chicago has certainly had some success but engaging everyone.

I see it happening more here today than a lot of other places.

- When you engage, do you engage with employees of companies, do you engage with individuals, or is it just all of the above?

- Absolutely.

So there's, you could have a spark of an idea at any time.

And in fact, a lot of times in my entrepreneurial journey was through corporations early in my career before I started my first company about 12 years out of undergraduate.

So it can, that spark can happen anytime.

I mean, I used to keep a journal of ideas of problems that I would have, like, boy this could be an interesting problem to solve.

Here's a solution.

Maybe there'll be a time where I can start this.

And so there's never that perfect moment.

You've got to walk through doors when they're given to you.

And that could be mid-career we'd love to see mid-career change in terms of I'm done with this part of my career path and I'm ready to pursue this napkin idea.

- But here's the problem, Bob.

I have a job and I don't want to give up that job.

I think I have a pretty good idea but I'm not ready to jump.

Can you explain how Distillery Labs will hold your hand as you go forward?

Yeah, certainly.

Yeah, because if you've seen one entrepreneur you've seen one entrepreneur in and each of them are different and some of them are that mid career that are looking for a change and others are wanting to continue in their career but still want to proceed with that idea and see if they can have that flourish, and Distillery Labs is there to support both.

And it is really to give them that support that education, that training, the availability of workshops that Paul referenced before.

And so it is in many cases the unknown for those entrepreneurs.

They know about their idea.

They may even have ways of which to execute on it but they don't know about the whole, all of the challenges that certainly Paul has seen in his many years and in his work as an entrepreneur himself of taking an idea and taking it all the way through to all, to work through the issues, to funding, to hiring, to marketing.

And now you're talking about a whole series of opportunities to either excel or unfortunately in some cases see an organization fail because they haven't had access to that training, that education, those workshops.

And so I think that's where Distillery Labs will play a key role in helping the understanding for entrepreneurs.

- And if we can help the decision process.

So if you're a mid-career you've got a great occupation drawing a great salary but you have an idea, how do you begin to chase that ideas?

Whether you call it a side hustle or something else in the evenings and on the weekends.

And at what point do you feel comfortable, taking the leap from the comfort of the corporate suite into entrepreneurial land.

So if we can help through that process of the decision-making process to say here are ways we can test your concept.

Does it have validity?

Are we getting market feedback, customer feedback?

Here's how you work through that iterative loop of testing and learning to be able to get to the point where like there, this has legs here's the plan, I'm ready to roll it out full time.

And I think Distillery Labs can help through that process.

- We'll have memberships.

Do you have to be a member to participate in Distillery Labs?

- Not at all.

We will definitely have memberships, whether it be individual memberships for entrepreneurs individually, potentially corporate memberships as well for corporations to participate from an innovation perspective.

But you do not have to be a member.

We want to have outward facing programs from workshops to educational sessions, meet and greets, storytelling sessions, because you want to hear from other entrepreneurs that have gone down this path before and the challenges they faced and maybe they could be a mentor to you.

- So do you have any members yet?

- Not yet.

I'm working on that business model.

- Well, I want to point out that your four weeks on the job for four weeks, you're still learning- - Putting my arms a lot of things for sure.

- But this is not something, I don't want to leave the wrong impression with the audience that gee, we've got Distillery Labs, and a year from now, we're going to have all sorts of great ideas and we're gonna be just moving along like a freight train.

- This is absolutely a long vision, a long game.

I've read it, there's a handful of authors that talk about entrepreneurial ecosystems and ecosystem development.

And some of the traps you tend to fall into.

If we want to be Silicon Valley to where we want to be Austin, or we want to be even Chicago, right?

So every place is unique has its unique strengths and weaknesses.

And this is something that's gonna take time to evolve.

It's a network and connecting that network that's very diverse can take time.

- So Bob, there are partners that are involved in the creation of Distillery Labs.

Are they all in for the long haul?

- Oh, absolutely.

We have a very committed group of board members today that represent ICC, Bradley, the Economic Development Council, and of course, ourselves and Caterpillar.

And so all of us came together really with the enthusiasm around this idea, this concept, and want to see it to fruition.

And I think there's opportunities to expand the board.

And we certainly want to do that as Distillery Labs now moves from sort of, if you want to think of it from an entrepreneurship, it was an idea on a back of a napkin 18 months ago.

And it has been developed to the point of now having funding, now having a CEO and Executive Director who can help organize and to run it.

And now it's gonna continue to move and it's time to expand.

- Is that funding long-term because right now there was a, I believe it was a $500 million state grant for all 15 innovation hubs.

- Correct.

- That money is not going to last so long.

So financially speaking, is there a commitment for as Paul says, a seven to 10 year plan here to get this up to full steam?

- Yeah.

To be clear that the funding that 500 million and of course we got a small portion of it, but that funding is directed towards capital projects.

So it's really fitting out the building where Distillery Labs will be housed.

It's bringing in the technology, the equipment, the furniture, all of that.

So that's really what that fund that initial grant funding is but there's many opportunities for grants.

And then Paul talked about memberships and memberships as one of the ways that organizations such as Distillery Labs continue to operate and to flourish.

Another one is space.

And so we'll have tenants who are a part of that who view it as important to be part of that ecosystem, to be right within Distillery Labs.

So all of those are funding sources.

And Paul is looking at that development of that business case.

We have a business case.

Paul is refining it and really then to execute on that to be sure that it is financially sustainable.

And we absolutely believe, and we have the commitment for many of the organizations in town to ensure that it is successful.

- Paul if you look at the news releases, it indicates that Distillery Labs will have a focus on food, agriculture, medical.

It's a strength of central Illinois.

- Right.

- But I assume you would be welcoming people that are outside of those particular areas of expertise.

- Absolutely, I mean, those are clusters that certainly drive or build from the strengths of the community.

And those are areas that we will have maybe some additional programs and other work and other partnerships, that we've developed around those programs, but we're open to any concept.

And it doesn't even have to be a high tech concept.

It could be low resolution as another, as a coffee shop or a brewery, a distillery, a retail location, e-commerce, does not have to be around artificial intelligence and machine learning and autonomous vehicles and things.

So we want to make sure that this is part of the inclusiveness that we want to make sure this is a part of with Distillery Labs is is being open to those ideas.

- Bob, Paul mentioned artificial intelligence and just this week, the Distillery Labs received a grant in conjunction with the hub at ISU and at Jump Trading for a child vaccination program using artificial intelligence tools.

Could you explain a little bit about that?

- Well, again, as far as artificial intelligence it really is about identifying the best candidates and really the best processes for following up to ensure of those childhood vaccinations.

But I take a step back and really referenced what I talked about before on grants.

One of the real blessings of a Distillery Labs is to bring together these entrepreneurs, but it's also to bring together the infrastructure to help look at grants such as that and to really develop the best applications because those are typically quite competitive and how do we put our best foot forward?

And again, I had looked to a Distillery Labs and others as opportunities to put Peoria's best foot forward so that we can look at some of these grants that we can bring some of those funding in to develop those ideas.

And it's really oftentimes out of those grants that ideas become companies.

- Earlier, we talked about the relationship between the Peoria Next Innovation Center and Distillery Labs.

How does Jump Trading having mentioned that, how does the Jump Trading Center play into this?

- Yeah, absolutely.

And again, I'd say another important piece of that ecosystem that we talked about.

So Jump has a particular focus, as you might expect as part of OSF and the University of Illinois, College of Medicine in Peoria, and the University of Illinois, Champaign-Urbana, it has a focus on healthcare.

It brings together those expertise from engineering and clinicians, and they come together and really try to solve some of the most difficult challenges for healthcare.

So that is sort of their reason for being so what their focus is.

But in many respects, they do some of the same work that the Distillery Labs will be but they'll do it for a different entrepreneur different group of entrepreneurs.

So they both sort of play in the same space but they certainly don't compete.

They actually, I think are extraordinarily complimentary.

- The Distillery Labs is located in downtown Peoria the old ICC downtown campus, as a matter of fact but there is also something called the Innovation districts in Peoria and real quickly, it's basically from the river up to Jefferson and from Harrison on the South up to main street on the North, a small area, several square blocks in downtown Peoria.

Why Innovation district?

Why do we need that?

- Yeah, Distillery Labs will sit right in the heart of that but it's really thinking through kind of a broader community of innovators, right?

It's not, we may be considered kind of a hub of innovation, but without the other nodes, you're really not going to get very far.

You've got to have that ecosystem.

And I think part of that innovation area downtown is encouraging others to come in and say here's some things that are going on already in this district.

We want to be a part of that.

We want to be kind of where some of this action is taking place.

So having a core hub around innovation I think is important.

- We mentioned seven to 10 year to get up to full steam crystal ball time Bob.

What do you see next for Distillery Labs?

I mean, it's only 18 months since the idea.

- I mean, next really is what Paul was working on, even as we speak.

And that is fleshing out many of those back of the napkin ideas that some of the board members had and applying for this grant and being successful, building a case but not with Paul's expertise and not with his critical eye.

And so that's the expertise that Paul has brought.

And so certainly for the next 12, 18, 24 months, I see Paul bringing that expertise with that funding with the support of the community, and really bringing Distillery Labs to the point where it is serving the community.

It is serving those entrepreneurs.

And I think that would be a great sign of success over this period time.

- Real briefly, Paul, how do you go out and reach out to these people who are literally writing on napkins?

- So we've got to engage intentionally all corners of the community.

So diversity and being a welcoming center is certainly one of our values, but we can't just put that on the wall on a plaque and say that that's what we preach.

We actually actually have to go out and have those conversations.

So engaging in all corners of the community through organizations that already represent a diverse population here, telling them what we're about and saying, you have an idea you may not know how to chase it, or you might think you need capital day one to be able to pursue the idea, you don't, here's some things that we can do with you and alongside you to help take that to the next step.

- Fair, to say a new era might be in the offing.

- Certainly hope so.

We certainly hope it builds on a lot of the success Peoria has and remaking itself over the years.

And we'd love to be that start going forward.

- And let me say thank you to Paul Leamon who is the Executive Director of Distillery Labs.

Welcome to Peoria.

- Thank you so much.

- And to Bob Sehring, who is, I want to say the CEO of OSF HealthCare because that's what I always refer to you as but the board chair of that organization, Distillery Labs thank you for the conversation.

- Thank you- - Thank you.

- And we welcome you to join us next time on At Issue, when we'll be talking about the progress that blacks are making since George Floyd and the Black Lives Matter Movement, all of that information on the next At Issue, please join us then.

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