#27 - The 4th Industrial Revolution is Here w/ Tom Snyder, Executive Director of RIoT

The Gordon Asset Management Podcast welcomes Tom Snyder to the show.  Tom is the executive director of Raleigh NC's RIoT organization.  RIoT is an organization that mentors entrepreneurs, a startup accelerator, and R&D lab, for companies and individuals in the IoT (Internet of Things) space.  On the podcast Tom discusses what happening at RIoT, the business climate in North Carolina, and upside potential for technology during the 4th Industrial Revolution.  For more information about Tom or RIoT, check out www.riot.org.

Transcript

Intro  0:01  
Welcome to the Gordon Asset Management podcast, a show for savers investors and entrepreneurs.  Helping you to stay informed, invest wisely and achieve the unimaginable. Now, on to the show.

Todd Zempel  0:22  
Hello, Hello, Hello, this is Todd Zempel. And you are listening to the Gordon Asset Management podcast. As you know, from time to time, we'd like to invite smart people doing really interesting things to the show. And today is no different. Today, we invited Tom Snyder, who is executive director of the Raleigh Riot organization to the show. Now, Tom, I can talk for five minutes about all your accolades and what you're doing. But I think our listeners would rather hear that directly from you. If you could, let's just start by sharing a little bit about yourself and what Riot is, please.

Tom Snyder  1:04  
Sure. Thanks for having me on the show, Todd. Todd Snyder, I lead the riot organization, I came up through the technology industry, I suppose I'm an engineer by classical education, spent about 20 years in big multinational firms, in primarily in mobile communications, and in consumer electronics. did a little bit of consulting here and there, but, but really, you know, I learned how the world works through the lens of publicly held multinational companies. That was great in that I got to see the world I worked on all kinds of really interesting projects that made you know, billions of dollars revenue.  But it wasn't until this the second chapter by like a bit now that I realized that really hard, I'm an entrepreneur, and I was an entrepreneur within those larger organizations often like driving change, trying to run various innovation and creativity initiatives, advance research other things. But started right back in 2014, really to explore what I see is the next wave of the economy. As we move from, you know, the internet age say that we've been in the last 30 years to now, the data, what I call the data economy, or the real time, information, analytics space, but to do it, where we're supporting a lot of entrepreneurs and startups and other people that, that maybe are looking for that traditional corporate job environment. 

We're kind of an interesting organization. We haven't found anybody quite like us yet. And I don't know if that's good or not, but but I'll take it.  RIoT, I started as a meetup group. Originally, it was the rally Internet of Things is where the name Riot came from. It was an acronym in the early days. And we were looking at interesting technology tipping points that they were happening in the semiconductor space and in wireless communications, and in computation, and cloud and a few other areas that, that I believe were leading towards a fundamental change in the economy. And said, Well, that's a really kind of bold, silly thing to say, let's set up this Meetup group, we'll have some people come in, and really wanted to educate myself. And there were two other co founders who were involved at the time, we were trying to learn about the market in this emerging area, it was called Internet of Things. Very quickly, what we found was that people started coming to us to go to these meetups thinking that we were there to educate, when really, we were there to learn. And that's when, you know, we had this realization that there was an unmet market need, that organizations of all shapes and sizes, with most of which were who you would think are the technology experts. I won't call out anybody by name here, but, you know, big, recognized household brands that you think of as technology they just started, you know, they're coming to us asking for advice around their digital transformations. And so that that's kind of interesting. That's turned this meetup into what looks a little bit more like a trade association. And have companies join us and pay a membership fee for us to then go and scout and learn and, and to advise back on kind of where, where industries are changing because of emerging technology.

We're not a 501C6 I'm sorry. I'll say that again. We are not a 501C6 trade association. We're a C3 nonprofit organization because what we found was that while we can do a little bit of advising such that's great. Really, our focus is on job creation, and what I call job independence. You know, the ability to create new jobs that's good for our economy and the best jobs are created, kind of where emerging technologies are happening, but also enabling people to be in control of their own destiny and to be their own boss. And so ultimately, Riot is involved in two or three key areas is back to your question. If we write his word, we remain a convener yo backdoor will beat up roots, we, I think in 2020, held about 70 events virtually or around the country in 2019, when the world was still in person, we ran about 90 events around the United States, bringing people together for the purpose of education and network building, and business development. It's kind of an outcome of that. And then we also are educators, most well known for running an equity free, excuse me running an equity free startup accelerator in two cities in North Carolina. And we're expanding this year, into additional cities in Virginia and in Colorado. 

Todd Zempel  6:10  
Alright, so let me get this straight, a bunch of Raleigh cyberpunks, quote, unquote, getting together, likely over frosty cold beverages, talking about new and interesting technology, taking that and evolving that into the startup ecosystem. Did I get that right? Is that essentially how things played out?

Tom Snyder  6:30  
Yeah, absolutely. Even down to the beverages. You know, every every riot, games riot, you know, we always have at least one beer sponsor, which is kind of a fun side. Note that it's not about that. But I will say, of the 25 or 30 patents that that I have to my name, at least half of those ideas, I'm sure came over drink. 

Todd Zempel  6:52  
Wow, that's a lot of patents, and quite a few drinks to our most of your patents in the Internet of Things space.

Tom Snyder  7:01  
Most of the time, when I was in that kind of invention, and creation mode was earlier in my career, and most of them are in mobile telephony in some way or another. 

Todd Zempel  7:11  
Got it. That's good to know. Now, being involved in creating new technologies, and in the startup ecosystem, it sounds like you have a little bit of an entrepreneurial streak in you, which is something that I'm passionate about working with entrepreneurs and defending the free market system. It sounds like you're also a fan of this system. Is that correct?

Tom Snyder  7:36  
I am, I'm a huge fan of that. I believe that. You know, the future moves at the pace of technology to some degree, but also at the pace of business. And we're very much in, in the business of helping private enterprises move forward. But I'm also a little bit of a realist in that I would, I would argue that there are very few free markets, they'll help healthcare is a great example we do. I believe that the best healthcare solutions are gonna be pushed forward by private industry, but that there will never be a direct financial ROI for solving rare disease, for example, just as the market isn't big enough to offset that costs. And so when you're in these complicated markets, to be successful, private industry requires a lot of collaboration and a lot of connections back to your regulatory bodies, or to government or to researchers and academic institutions. And so a fundamental part of I believe, why Riot has been successful is we're really good at helping people to build out those professional networks both in in pure private, free market space, if you will, as well as within, you know, regulatory agencies and so on. In a way that kind of all sides benefit. 

Todd Zempel  8:56  
Now, Tom, I'd like to switch gears just a little bit. So obviously, Riot is this organization, you have recent research labs, and a startup accelerator, etc, etc. Do you have any real success stories of individuals or companies coming out of this this riots ecosystem to become successful businesses? 

Tom Snyder  9:17  
Yeah, we were really excited. And I want to be careful here and not take the credit for the success of these companies, right companies that have done very well out of our program, they deserve all the credit for First off, just taking the chance, right, it's really risky to start a new business and it takes a leap of faith and so on. But But over the years, we we started right in 2014. And initially, when we were working with entrepreneurs and startups, we were doing it kind of one on one. And it took us a few years to wise up that wasn't real efficient. So around 2018, early 2018, we moved into more of a cohort style approach where we're working with groups of startups all at the same time doing some parallel processing to get more people into normal people out the door. If you take a look at those two periods together, we can account for companies that we've worked with creating more than 700. And I think over 750 jobs now, raising north of $400 million, and outside investor capital, we are not investors, but we're working in that industry and are happy to help with introductions, and driving, you know, hundreds of millions of dollars in revenue as well. So a lot of success. I don't necessarily like to, you know, pick winners and losers or anything here, but but I'll give you a variety of just the different kinds of companies who have done really well, everything from an industry that I never knew existed, we work with a company called cabana, that is in pet cremation. Who knew I knew a lot of people have passed, but you never think about end of life management for a pet and what that means and how, when a pet dies, it creates a precipitous drop off in customer, obviously, an immediate customer engagement for a veterinary clinic. But that clinic doesn't always get that customer back when a family gets a new, a new pet. And so you know, a company that has done very well and created a lot of jobs here in North Carolina, and is based out of Sanford. And they developed a completely environmentally friendly pet cremation system, but applied some digital technologies and other things to really strengthen that that repeat business cycle of a pet owner that loses a patent a very, that's very difficult time, and then suddenly re engaging with a vet clinic again with that next pet, and so on. So, you know, anything from there to more traditional companies that are doing, you know, enterprise software solutions and things that you read about the paper every day. 

Todd Zempel  12:00  
That's very cool. You know, one of the things I really like about my job. So we're a wealth management firm, right, but about half of our business is serving retirement plans for companies. And through that, we get to see all these really nuanced and interesting jobs that people have and things that people create. And do. You know, one of my favorite stories is this company that produced the little plastic end caps to go on mattresses, right. And you don't even think that something like that even exists, you don't even realize that it's there. But it's this successful business. that affords the the owners of the company very nice lifestyle and supports the lives of all the workers.

Tom Snyder  12:48  
There's millions of ways to make money. And one of the things that I learned more and more every year is the importance of what I call Plumbing Companies, which are Yeah, those companies that are behind the scenes doing something that you never even think about, like the example you just gave with the mattress and caps. Like, there's so many things that are not that sexy. But because of that there's very little competition, and you can just dominate a market. And it's really fascinating. You never think about that little end cap on that mattress until you start getting some damaged product and shipping because it wasn't protected correctly. And all of a sudden, you got a problem, right? 

Todd Zempel  13:29  
So anyway, now Tom being located here in the triangle region of North Carolina, it feels like we're in the right place at the right time, right? There's all this new technology budding big companies are moving in many tech jobs are moving in. And there's this really healthy startup ecosystem as well. What do you think it is about this area that makes this the perfect breeding ground for the new companies and new technology? 

Tom Snyder  13:55  
I'll argue that there's no bigger driver of the economy than technology, not not just now. But throughout all of history, you know, that the way people live was fundamentally changed by the discovery of fire, and then the invention of currency and on and on, you know, technology after technology. And this is a, you know, a tech center that a lot technology going off. So that's a piece of it. I think the other piece, though, is that diversity really matters. There's there's a lot of discussion, certainly in the national dialogue or last 12 months about diversity when you look at racial diversity and gender diversity and all the kinds of things but but industry diversity is also really important. And so when you look at diversity across lots of different factors, you know, this is not a state don't Carolina is not a state, it's dominated by just men devices, or oil and gas are a single industry, and that's really good and it's also a state that has quite honestly a lot of immigration happening. Not because international immigration, but immigration from California and from New York and from other places. And so we have this incredible diversity of talent coming in different perspectives of viewpoint coming into the region, as well as strong technology base in terms of, you know, the sasses. And the IBM is in the Red Hat's and Cisco's and the other very, very large players in the area that you think of as tech companies. And then you've got an incredible education system that's just churning out people and all those things come together to just have a higher mix of the ingredients that you need to be successful in just about any other places in the country or in the world, to be honest. 

Todd Zempel  15:42  
So Tom, we have the right people, we're in the right place. But it also feels like now is the right time. There's a lot of smart people that have talked about the fact that we're going through this fourth industrial revolution right now. The World Economic Forum has put out a lot of information on this as well. Does it feel like we're in the midst of this perfect time as well? 

Tom Snyder  16:07  
There's no question. If you think about industrial revolutions, you know, World Economic Forum is claiming this is number four, there were the startup in all of history four times, right. So you've got your steam power, that the turn is from an agrarian society to one that was largely developed by mass production. And you know, and that created urbanization and the rise of cities and you know, fundamentally change the game. Electricity was the second industrial revolution, we're not going back to a life before electricity, nobody wants that. You know, the third was, was the information agent, information technology and the transistor at which lead then do you know, the internet and mobile phones and information at our fingertips? What's fundamentally different this time, is that we're not talking about real time information, which means what Google did write, they catalogue everything. And in a quick search, you can find whatever you needed moment, the data economy, this fourth industrial revolution is really about in real time, collecting data from anywhere on this planet. And in real time, deciding what that data means and automating what happens as a result. So it's completely automating crop production. It's automating transportation, through autonomous vehicles, it's, it's something that is going to take, like the information age, it's going to take multiple decades to really play out. But it's going to change every single industry. So if you're an investor, that's looking at it a little bit longer game, there's no better time to be investing in data technologies, artificial intelligence machine learning on and on, than right now, if you're an entrepreneur looking to start a new career, it's early days, right? This is when new industries happen. And there are hundreds of competitors. And over the next couple of decades, you know, those of consolidate over time and do a small number of big players like we've seen in in the tech sector over and over again. But this is, to me the most fun part because it's the beginning.

Todd Zempel  18:23  
Now, this is obviously all very exciting stuff, Internet of Things, big data, real time data collection.  Now, my concern is that, and I think a lot of people share this concern is around privacy. How do we reconcile this technological, fourth industrial revolution with personal privacy and personal rights? 

Tom Snyder  18:48  
I think there's two things that we need to do. One is privacy and security getting lumped together a lot of discussion. And we need to stop doing that. Security, your cybersecurity is largely a technology solution that you need to put in place. If you think about, you know, you could put you know, a bank could put your money in a little lockbox or could put it in a vault, right, that's just a higher level of technology, a stronger protection. But privacy is a business decision. It's not a technology decision. Privacy is you as a business trying to decide what is the right way to use your customers information. And we have seen many, many companies that are not doing a very good job of this right now. And unfortunately, a lot of those and a trend that we've seen in the tech sector is, well, I'm not going to charge you any money, right? It doesn't cost you anything to do that Google search or to have your Facebook account or whatever it is. And in return, I'm going to collect all this information and as a business, I'm going to use it however I want. And that's really a betrayal of trust of the audience that the audience bought into Real easy because they don't have to spend any money. And that made it easy to engage with these big companies, I think we're going to see that change going forward. In that, you're gonna start seeing market pushback from end users and consumers saying, we need to take control of my information. We're working with a startup right here in in Raleigh called round. Right now, ROWND, if anybody wants to look them up, that has a really interesting play for managing data for enterprise clients in a way that then every end user can decide for themselves, how that information is going to be used. So I think that's one thing that we're going to see happen is we need to think about privacy, in bigger business terms and start, you know, respecting client data more. And if companies don't do it themselves, you know, the public needs to push back. The second thing that I think is really important to this discussion is, we need to see more people hired into these technology organizations that are not from a technical background, that the last number of years, particularly software as a service companies are the first companies that were able to build with almost entirely just pure technical teams, minimal people in other kinds of business functions, other things, because software scales so efficiently, it doesn't, you have to build a manufacturing line or a supply chain, or all these other things and, and that lack of diversity on the teams has resulted in a lack of diversity into product specification decisions and other kinds of things. And, and my I'm hopeful that the tech sector is going to start hiring more diversity into their tech teams, but also more social science and humanities viewpoints into their teams to think about a little bit more holistically about their products going forward, to be more respectful of privacy. In the meantime, though, in a absence of government regulation coming in, which I don't see, happening very quickly in the US, you know, it's a problem you rightly call it out as such. 

Todd Zempel  22:15  
Yeah, and I think, decades from now, people are gonna look back at the things that we're doing now. And they're gonna be thought of very much like the Wild West, you know, back in the days, you know, rub some cocaine on your toothache, you have a cough, take some heroin, you know, bloodletting, all those ridiculous practices of the days of yore? 

Tom Snyder  22:38  
Yeah, Europe is ahead of us in this area. And but I think that, particularly with the current administration, that we're going to start to follow your lead, I think. 

Todd Zempel  22:47  
Now, Tom, looking out over the horizon, what are some of the things that you find really interesting, and exciting, what what gets you up in the morning?

Tom Snyder  22:56  
The thing I get most excited about is just problem solving it probably because I'm an engineer may go, that was what I was trying to do was go out and use engineering to solve problems.  The technologies that create the most excitement in the long term are the ones that we aren't even thinking about them as technology. So think about, for example, when capacitive touch was developed, yeah, that was a really cool technology. But we didn't realize it was gonna make it so easy to interact on our screens, and to be able to swipe and select by just touching things. Like, that's really cool. But nobody, when you're playing with your smartphone thinks, Oh, this is great capacitive touch, right? We've got cool blockchain and augmented reality. And, you know, all these buzzwords that are the new technologies that right now we're deploying, to prove that we can do them, you know, hey, we made this cool, smart refrigerator. And, you know, why is my refrigerator talking to the internet? Like, when we start thinking a little bit less about technology, specifically, more about problem solving, oh, my god, you're talking to internet because it can do this, this and this autonomously such that I'm not even thinking of it as a smart refrigerator. I'm just thinking of it as a refrigerator. Like that's what I'm most excited about. I don't know if that fully answered your question or not. 

Todd Zempel  24:20  
Now Tom, if people want to learn more about riot, where should we direct them? 

Tom Snyder  24:25  
We're happy to meet with anyone, whether you're an entrepreneur, thinking about your next step would be or maybe a big career trying to think about how do you want to take the second half of your career if you were looking for something different than the first half, we'd love to talk to you. We work a lot with municipal governments. Corporations sponsor us and enable us to provide all of our services completely free, particularly to in smaller rural communities to underserved demographics. You know, we'd love to talk to sponsors. The best way to reach us is just to come to riot. That org is our website. You can find us @RIot on social on various social media platforms engaged there or by email is Tom I adore we'd love to hear from you. 

Todd Zempel  25:08  
All right, Tom. Well, thanks for joining us on the podcast today. As Tom mentioned, if you'd like more information about Riot you can visit their website riot.org. Thanks a lot, Tom. appreciate you joining us.

Unknown Speaker  25:23  
Thanks for listening. If you enjoyed the show, be sure to click subscribe. Gordon Asset Management LLC is a registered investment advisor. For more information about our firm, please visit wealthqb.com.  The information in this podcast is presented for educational and entertainment purposes only and is subject to change without notice. opinions expressed are those of the participants and don't necessarily reflect those of Gordon Asset Management LLC, its producers hosts or guests.  The information presented should not be construed as tax legal or investment advice or a recommendation or solicitation for the sale of any product or strategy. Listeners are encouraged to seek advice from qualified professionals to determine whether any information presented may be suitable for their specific situation. Investments involve risks.  Neither coordinate Asset Management LLC nor its podcast participants shall be liable for losses resulting from decisions based on information or viewpoints presented on this podcast.