Take note, budding entrepreneurs: Providence is open for business.
NuLabel, a Providence startup company founded by three Brown graduates in 2009, sells a new, environmentally friendly label that does not require a liner — the non-recyclable, non-stick backing on most labels. A typical label has a backing that must be removed and thrown away before the label can be attached. The founders of NuLabel want to make this backing — a staple of the $26 billion pressure-sensitive tape industry — a thing of the past.
The company's founders came up with the idea in their final engineering class and eventually decided to locate their business in the city's booming Knowledge District.
"Don't go to Wall Street to start a business," advised Max Winograd '09, one of the NuLabel's founders. "Stay in Providence."
Founders Ben Lux '09, Michael Woods '09 and Winograd gave up other job opportunities to pursue this venture. Since none of them have mortgages or kids to worry about, Winograd said it was easier for them to take the risk.
The founders met in ENGN 1930: "Entrepreneurship I and II," a year-long capstone course where Steven Petteruti, adjunct lecturer in engineering, and Eric Suuberg, professor of engineering, asked them to develop a startup company and set the challenge of developing a label that did not need a backing. The three spent the rest of the course working on a model for their product.
They applied and were accepted to Betaspring, a Providence program that gives entrepreneurs the opportunity to turn their ideas into prototypes, as well as providing them with guidance and mentorship in return for a stake in their new company. The 12-week program also connected them to their first investor, a crucial first step since "nobody wants to jump off the cliff first," Winograd said.
This first investor provided them with the funding to test their prototype, a necessary step to secure more funding. Investors want proof that a product works before they risk their money, but it requires money to test the product, Winograd said.
With investors supplying capital, the founders filed for a patent. Major corporations are slated to use the label in field trials early next year. The founders hope this exposure to large corporations that use billions of labels a year will give the company a foothold in the market, Winograd said. It will also make NuLabel's product more attractive to smaller businesses that look to larger ones for innovative ideas.
NuLabel's early success and growth prospects make it the "poster child of entrepreneurship" in Providence, said Judy Chong, managing director of marketing and communications at the Rhode Island Economic Development Corporation.
NuLabel currently has 11 employees, but a state program will make it possible for them to expand. This year the development corporation began a program to guarantee loans from private lenders to make it easier for promising businesses to access capital.
With a $1.5 million loan from the Bank of Rhode Island that is guaranteed by the state, NuLabel plans to add 39 new employees to its payroll.
The Knowledge District's growing business community provides support and camaraderie for budding entrepreneurs, Winograd said. Business leaders gather once each month for "Geek Dinners," where they go to AS220 Labs for dinner, beer and a business presentation by a local technology company. The Knowledge District is turning into a "new Silicon Valley," Winograd said.
Providence is a great place for talented people, Winograd said, noting that NuLabel has recruited employees from around the country. The city is also home to successful business leaders who are looking for an opportunity to give back by mentoring — and funding — a new generation. One of NuLabel's first investors is a Brown alum.