From grad school at Illinois to a 24-person enterprise in Chicago

"It all started at Illinois in grad school," according to Andrew Honegger.

More specifically, it started in the research group of Professor Shiv Kapoor and the late Professor Richard DeVor in the University of Illinois at Urbana-Champaign’s Department of Mechanical Science and Engineering. The "it" is Microlution, which is now a 24-employee company that designs and manufactures specialty machines that create tiny, high-precision parts on Chicago's northwest side.

As they worked toward their master's degrees in the mid-2000s, Honegger and Andy Phillip noticed a growing need for extremely small machining parts and that manufacturers were not addressing this space in the market. They decided to focus their work in this territory, not knowing exactly where it would lead.

"My first task was to build a small three-axis machine about the size of my laptop to make parts smaller than an inch in size," Honegger said. “I had never designed a machine like that in my life. Andy was doing something similar, except his machine was a five-axis machine."

The more they worked, the more promise the machines showed. In 2004, they were able to display the machines among other emerging technologies at the International Manufacturing Technology Show (IMTS) at McCormick Place in Chicago.

"We had people come by from places that were cool-sounding to us, like the Jet Propulsion Laboratory, NASA, electronics companies—big-name companies we had heard of—and people would come by and say, 'This is really different than what's out there, and I can really see where this could be useful to me. Have you ever thought of selling it commercially?'" Honegger said. "And at that point we really hadn't thought too much about selling it commercially, but it doesn't take too many people asking that question to start thinking about that."

After IMTS, Honegger and Phillip worked extensively on the business plan for the company that would become Microlution and participated in a number of business plan competitions through Illinois’ College of Engineering.

"The judges at these competitions are real angel investors and venture capital guys, they don’t pull any punches," Phillip said. "You find out right away if they think your idea is any good or not!"

Graduation was approaching, but unlike most of their peers, Honegger and Phillip weren't thinking about employment prospects or a possible PhD route—they were focused on the progress they were seeing and determining whether or not they really had a sustainable business on their hands.

"Eventually, it got to the point in our grad school that we should have been looking for jobs—and Andy and I just weren’t looking for jobs," Honegger said. "We just kept going down this route, and eventually we got to the point where we graduated and said, 'Okay, we’re going to do this thing full-time.'"

Located in Chicago after graduation, the small start-up did not have a finished machine yet and had very little money. As they worked on building that first machine, their workspace consisted of a walk-in closet in Honegger's north-side apartment.

"It was big enough for one person to work in there at a time—two people couldn't fit. And my wife also didn't like it because it was a walk-in closet right off the living room," Honegger said. "And I don't think our landlord liked it either, because we had an air compressor in the basement."

But while they lacked office space and funds, they had the technology. And like in so many success stories, it was just a matter of time before all of the hard work paid off with some good fortune.

"In 2006, we got hooked into a network of investors in mainly the Peoria area, just though complete happenstance," Honegger said. "A guy I went to school with and his dad were coming back to Peoria from the Big Ten Tournament in Indianapolis, and they passed through Champaign. They just happened to pick up the News-Gazette to see what was going on, and in there was a picture of us because we won the Cozad New Venture Competition," an annual contest run by the Technology Entrepreneur Center at Illinois.

"And he says, ‘Hey, I know that guy…'"

Before they knew it, Honegger and Phillip were presenting to new groups of investors and struck an agreement with the right one. This allowed them to launch the business in earnest, and one of their first moves was to hire Onik Bhattacharyya, another Illinois grad. He actually had been part of the Microlution team from the start, working with Honegger and Phillip in grad school and spotting early on the potential in the technology.

"We've been self-sufficient and profitable now for several years and we’ve grown every year," Honegger said. "Even in the economic downturn in 2008 and 2009, which was especially bad for our industry, we grew some."

Microlution now builds four milling products and one turning product. The turning machine is Microlution's newest offering and provides a powerful manufacturing capability for many small biomedical parts. These machines can be customized for customers with very specific needs, and often those customer needs are what lead to new breakthroughs in the company's capabilities.

After working out of their first real office for several years, they moved to a new, larger space in the summer of 2013.

"There are a lot of horror stories that we have about starting the company, and there were a number of times when Andy and myself had a rented U-Haul truck with the entire possessions of the company in the back of it," Honegger said. "You have to assess your strengths and weaknesses, and be really critical of your weaknesses and really try to figure out a way to fill in those gaps. The sooner you find that out and try to address it, the better."