Fear Factor: Palazzo Uses Fear of Failure, Hard Work to Succeed in Business and Life
Written by Doug Goodnough
Fear of failure has always been a powerful motivating tool for Jon Palazzo, ’90.
While a student at Hillsdale College, Palazzo used that fear to focus on his studies with the hope of creating his own company that could provide a good living for him, his wife, and his family and teach others how to do the same.
Before graduating, he accepted an offer from a global manufacturing company, Federal Mogul Corporation, and moved to Raleigh, North Carolina, with the goal of developing expertise in international distribution and logistics to create his own trade/export company. After a five-year career where he learned about the auto parts industry through a well-scaled, mature, and successful company, he built up enough confidence to branch out a bit toward his initial goal. He found a small export business in Raleigh and proactively contacted the owners about joining their company. Although they didn’t have an opening for him at that time, he “forced a meeting” with nothing more than a passion for the business and a “no-one-will-outwork-me!” attitude.
He soon became the youngest trader for the country’s largest exporter of frozen fruit, vegetables, and chicken. He traveled around the world buying, selling, and distributing thousands of fully loaded shipping containers to more than twenty unique ports in ten countries on two continents.
“I had the buying power to purchase the state of Maine’s entire wild blueberry crop on behalf of my clients, and I was only 27 years old,” Palazzo said. “Our specialty was teaching North American processors from the west and east coasts how to produce for the quality standards of Japan and other Asian countries. That was our niche.
“What it taught me is that I’m not risk averse. I’m very keen to bet on myself.”
Although he described the export business as one of the “coolest I’ve ever been a part of,” he quickly realized it came with a slew of dependencies and a lack of control mechanisms, and it was littered with risks that exceeded even his tolerance levels.
After a successful career working in trade, Palazzo leaned into his expertise in the automotive parts and software industries, specifically, internet-based or Software as a Service (SaaS).
“At the time, there were a lot of people who knew automotive or knew software, but not a lot of people who knew both,” Palazzo said.
He took his first leap of faith and moved his family to central Florida in the late 1990s to invest in and become an executive of a publicly traded software start-up company. He ended up having to travel the world once again, but this time pursuing investment banker types instead of food processors.
“I think I met with just about every venture capitalist and international businessman from New York to Tokyo during that time, which is not what I intended,” Palazzo said.
To say he learned a lot from these two years would be an understatement.
“I was getting a fast-paced master’s degree in how not to build and develop a software company,” Palazzo said.
He jumped back into yet another software start-up company in 2001—this time a joint venture created by General Motors, Ford Motor Company, Daimler-Chrysler (now Stellantis) and Bell and Howell (now Snap-on Business Solutions). Located in Richfield, Ohio, the new company called OEConnection (OEC) created just $82,000 of revenue in Palazzo’s first year. Twenty-five years later, OEC is a high-growth, private equity-backed, SaaS company with more than 1,500 employees and 36 global OEM clients, as well as more than 200,000 dealer and shop customers.
Palazzo is an equity holder in OEC and currently serves as vice president and general manager of an eCommerce Business Unit. In between the time he originally joined OEC and now, Palazzo broke away from his second start-up for a good part of a decade and created two companies of his own: TPGInsight, a business development company of which OEC became a client; and CutterCroix, another internet-based SaaS company in which he recently sold his stake.
“This is what my day was like for almost seven years,” Palazzo said of the time when he started the two companies. “I would work a full-time job, eight hours at least, if not more. I would jump in a car and drive 50 miles one way to the GLIDE incubator building on the Loraine County Community College campus where we hatched CutterCroix. I worked into the night with my two partners. I’d leave somewhere between one or two in the morning, and I would drive all the way back home, another 50 miles. And then get up the next morning and do it again.”
Palazzo has embraced his fear of failure many times, experiencing the pinnacle of success and staring into the face of bankruptcy. As someone who has jumped feet first into entrepreneurship, he has some sage advice for those who want to follow a similar path.
“It’s not for everybody,” Palazzo said. “It’s harder than you’ll imagine it to be, especially in the technology sector. I think the failure rate is 80 percent. But it’s very, very rewarding and motivating. Also stressful, not just for you, but likely more so for your family.”
He said having a supportive spouse is a must. His wife, Sandy, often ran the “business” of raising two children and running a household while also managing a career as an occupational therapist. She encouraged him to look at the medical field, which he did briefly. He eventually pivoted to software, where his knowledge of the auto industry and his passion for technology paved the way to his current role at OEC.
“I’ve worked with some of the largest businesses in the world, nationally and internationally, and I’ve worked with a lot of small businesses as well,” he said. “There are many different recipes to build a company, from self-funded to private equity. I would not call myself an expert in it, but I’ve gotten a front row seat to a lot of it. I find it to be quite interesting and a bit intoxicating.”
After living in the Cleveland, Ohio, area for more than a decade and after their two children chose to attend Southeastern Conference schools for college (son Ross to the University of Florida and daughter Gabrielle to Auburn University), he and Sandy decided to move back down south. After a brief time in Alabama, they now reside in Lakewood Ranch, Florida. The 56-year-old said he is currently enjoying a lighter travel schedule; however, he is always looking for new business opportunities.
“Businesspeople say the worst thing you could tell a young man or woman is to follow your passion, because passion will lead you down a road to nowhere,” Palazzo said. “I disagree with that more than I agree with it. I mean, how many people really, truly love what they do for a living? What we’ve told our kids is, work your tails off, develop skills, and couple that with your passions to constantly learn to give yourself and the ones you love options in this life.”
The former wide receiver on the Chargers football team has plenty of memories from his playing days. He caught his first touchdown pass as a sophomore during a game against NAIA powerhouse Central State of Ohio in front of a packed stadium at the University of Dayton. He recalls a thrilling NAIA playoff game against Carson-Newman (Tennessee), which the Chargers lost in overtime. And there was a win or two against conference rival Grand Valley State.
“In the last game of my career, Coach Lowry [then-head coach Dick Lowry] decided to finally throw me the long ball, and I ended up scoring two touchdowns for the first time in my career,” he said. “That was an ironic moment in time for me. I’ve reflected on it often and used it throughout my personal and professional life.”
A member of the Delta Sigma Phi fraternity as a student, the business marketing major remains passionate about his alma mater.
“I am prouder by the day to be a graduate of Hillsdale College,” said Palazzo, who grew up in Grosse Pointe, Michigan. “I used to believe that my only regrets about going to Hillsdale were its size and that it didn’t have the big alumni [network] like that of a Notre Dame, a U of M, or a Florida or Auburn. But of all the small schools to pick, I am blessed that the one that supports key principles that I believe in, and is a trailblazer in its own right, picked me.”
Doug Goodnough, ’90, is Hillsdale’s senior director of Alumni Marketing. He enjoys connecting with fellow alumni in new and wonderful ways.
Published in June 2025