Hard work, nimble mindset showing dividends

IT TAKES SOME FUN: NuLabel Technologies co-founders Ben Lux, left, and Max Winograd, right, have shown entrepreneurial savvy with their business, which is moving into new space that includes some fun opportunities to go with the work. / PBN PHOTO/RUPERT WHITELEY
IT TAKES SOME FUN: NuLabel Technologies co-founders Ben Lux, left, and Max Winograd, right, have shown entrepreneurial savvy with their business, which is moving into new space that includes some fun opportunities to go with the work. / PBN PHOTO/RUPERT WHITELEY

If at first you don’t succeed, etc., etc., is often a bromide said to comfort those having a string of bad luck. But that attitude is a key ingredient for the burgeoning success of the fast-growing East Providence manufacturer, NuLabel Technologies Inc.
Since 2009, when the basic idea of NuLabel was conceived during a senior-level engineering class at Brown University, the company has fashioned a whole new way to affix labels. NuLabel’s innovations could kick glue and liner-backed papers out of the process of making and applying labels for good. But moving from concept to a product the market is willing to buy required more than a good idea.
NuLabel is the creation of three men who met in that technology-entrepreneurship class at Brown and graduated in 2009. Max Winograd, who studied political science, is the CEO of NuLabel. Ben Lux, who has a master’s degree in polymer chemistry, is the company’s chief technology officer. Mike Woods, who majored in engineering, is applications manager. The adjunct lecturer leading the class was Steve Petteruti, who had a business background in printing. It was he who put the three students on the hunt for a major innovation in labeling.
“From the very beginning, I have been impressed with the maturity and wisdom that Max, Ben and Mike have brought to this enterprise,” said Harry Schofield, who encountered the NuLabel founders through his role in the Cherrystone Angel Group, Rhode Island’s first such investor group, which invested in the business in 2010.
“Ben is a superb chemist; Max is good at raising money,” Schofield said. “They all have innate entrepreneurial skills. They are smart and they grasp concepts quickly. They take advice well, and they listen.
“They are in a complex industry, with multiple channels,” Schofield said. “It has taken a long time to build the product out and get it to market.”
Today’s numbers for NuLabel demonstrate the value of the company’s product and the pace of its growth. Since its founding in 2009, the company has raised $15 million in capital. Revenue increased 73 percent from 2013 to 2014. Also in that period, assets increased 100 percent.
The company had 10 full-time employees by the end of 2011. The full-time staff rose to 17 by the end of 2012 and 23 by the end of 2013. Forty people are expected to be on the NuLabel staff by the end of 2014.
It was Petteruti, the lecturer at Brown, who told the three future NuLabel chiefs that businesses of all kinds had been chafing for a long time under the waste and inconvenience of traditional labeling technology, then confined mainly to cold gluing or pressure-sensitive labels. Winograd, Lux and Wood used Petteruti’s class to begin creating an alternative adhesive method for labeling.
They took a week’s vacation after graduation and then jumped back into the problem, eventually developing a new type of adhesive chemical, along with hardware to apply labels.
NuLabel has created polymer-based chemicals that are applied to paper labels. The paper remains dry until the spray of a fluid activates the chemicals, allowing the label to become sticky. Machinery places the labels on packages as soon as the fluid is sprayed. The process can eliminate waste in several forms, like the time and water used to clean up after messy cold-gluing processes and the waste paper backing from liner-backed labels that goes into the trash.
In the summer of 2009, NuLabel was accepted into an intensive 12-week program offered by Betaspring, a Providence-based startup accelerator. The fledgling company subsequently proved worthy of investment by Cherrystone.
Still, its growth has not been consistent. In its early days, NuLabel focused on hand-applied labels (such as weigh-scale labels at the deli counter). Aiming to reach the marketplace in 2011 or 2012, NuLabel saw negotiations with a large multinational customer collapse. NuLabel’s officers soon concluded their business could not survive that setback.
The company quickly shifted gears, rethought the market and redirected its research and marketing toward the high-volume food and beverage industry. It conducted customer research, finding a better target market in the burgeoning craft-beer market.
After testing in the field and conducting a scale-up of production at some large label makers, NuLabel demonstrated that its technology could achieve an 18 percent increase in line efficiency for breweries. One of the company’s first big customers is Bell’s Brewery, a craft-beer maker in Michigan, said Winograd.
The value of NuLabel’s innovation has been noticed in many corners of its target industry. Dan Muenzer, vice president of corporate marketing for Constantia Flexibles, is quoted in NuLabel marketing materials. “NuLabel’s glue-free, linerless labeling system … could kill cut-and-stack labeling.”
Winograd, the CEO, said the leaders of NuLabel were not deflated or defeated when their original concept for the hand-applied label market fell flat.
“The application was not the right fit, but rather than throw in the towel, we thought, ‘Where could this work?’ ” Winograd said. “You work with the cards in your hand.”
He said NuLabel has an informal, in-house motto: “It takes what it takes.” In his own mind, Winograd said, the meaning of the motto shifts from day to day, but it essentially says, “With limited resources, let’s figure out how to make this work.”
Heidi Munnelly, director of research and development for NuLabel, said “it takes what it takes” means something a bit different for her. It is a signal that she must be willing to step out of her comfort zone and take some risks to achieve the goals of the business.
She said potential customers of NuLabel Technologies also needed to step away from a comfort zone to consider a new way of managing the labeling process. “The business is rooted in tradition,” Munnelly said. Businesses may consider changing the NuLabel technology when they are tired of spending money on waste paper and using employee time inefficiently.
“We are there when they are willing to entertain something new,” Munnelly said.
Like Schofield of the Cherrystone group, Munnelly said the top executives – Winograd, Lux and Wood – each brought a different strength to the project, like “three legs of a stool.” Both observers said NuLabel’s leaders had the inherent optimism and drive that entrepreneurism requires.
“To be successful means staying positive and keeping your message clear,” Munnelly said. •

No posts to display