Jesus answered a question that Nicodemus did not ask. At least not directly, that is. So Nick comes to Jesus, by night (perhaps the only time such an intimate conversation would be possible). Nick tells Jesus, "We know you are from God, for no man can do the things you do, save that God is with him". What Nick does NOT say is, "How can it be that a man who does not follow our rules be from God". "Don't we Pharisees know what God is like - but this man comes along and does miracles, and leads them away from us". Nick is offended, but, like Peter, he also knows that Jesus speaks words of Eternal Life, and just where would he turn to?
But Jesus knows Nicodemus' heart. He hears his struggle, and does not condemn him for it. Rather, he just explains to Nick that the reason he cannot reconcile Jesus and his claims to be God is that His Kingdom is totally apart from the world, which knows only a pattern of the real thing. But Jesus is Himself that real thing, and He is standing right there, offering Nick Himself. To get in, Nick, ye must be born again? Say what? Can I enter in to my mother's womb, and be born of water twice? No, Nick. You must be born of water AND of the Spirit. My Spiritual DNA must be planted in you, and a New Creation must be the result.
Jesus answered and said unto him, Verily, verily, I say unto thee, Except a man be born again, he cannot see the kingdom of God.” (Joh 3:3 AV)