at Allens Avenue Plant.
Frank M. Lubrano, executive director of the Slater Center for Design and Manufacturing, wishes that there were more manufacturing executives in Rhode Island like Ellis Waldman.
Waldman is president of Walco Electric Co., a 71-year-old supplier of industrial power systems, located on Allens Avenue in Providence. Last year, a Walco application engineer, Boris Sherman, came to Waldman with what he thought seemed like a breakthrough technology for “re-rollers,” a customer segment for which Walco provides automation and control services.
The technology is a gauge that constantly measures the thickness of metal, plastic, paper – basically any material running through a rolling mill. The gauge reads the thickness and electronically sends signals to the machine’s control units to adjust the settings to compensate for deviations.
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Waldman sees a whopping opportunity – annual market potential of $140 million, he says – and has decided to back a new venture under the name Dolphin Measurement System, led by Sherman and two business partners who developed the technology. Waldman has provided seed financing for a $55,000 demonstration machine, which has produced rave reviews from a few customers who have been given a glimpse of the new technology, he said.
There’s just one problem: Funding the product through development and commercialization, Waldman estimates, will cost around $1 million.
“I’ve started companies before, but never the size of this initial investment,” Waldman said. “This is kind of like a whole new ballgame for me.”
Waldman turned to the Slater Center for Design and Manufacturing, one of the four investment arms of the state-financed Samuel Slater Technology Fund. Lubrano, who took over as director earlier this year, said the Slater Center plans to invest in the venture once a few conditions are met.
While the funding won’t even come close to what Dolphin Measurement System needs – Lubrano said Slater rarely invests more than $100,000 in its portfolio companies – Waldman says the mentoring he has received from the Slater Center is even more valuable. Dolphin’s founders got help drafting their business plan and conducting a market survey to help them sharpen their focus on prospective target segments.
“The Slater Center is not just a place to go for the dollars,” Waldman said. “We were able to take advantage of resources that are far more encompassing.”
While most of the 13 firms in the Slater Center for Design and Manufacturing are startup companies, Lubrano said the center also can assist existing manufacturers that have come up with an innovative solution for an industrial problem. Slater will offer its services to any Rhode Island manufacturing venture, regardless of whether funding is included.
“We see a lot of opportunities, especially in manufacturing, with companies that can find a way to make the lives of their customers easier,” Lubrano said. “Ideas that not only improve quality and lower costs, but ideally ones that enable their customers to go after new markets.”
In fact, Lubrano said existing manufacturers often are in a better position to leverage seed funding, because they have a built-in customer base and an intricate understanding of the marketplace.
“Mature manufacturers are further down the runway before taking off,” Lubrano said. “They’ve got a business they’re running, and at the same time they’ve got this great idea that won’t go away. But without the resources and extra support, they’re not going to pursue it.”
Lubrano said the center can help manufacturing startups tap into the trove of design talent in the state. Roger Mandle, president of the Rhode Island School of Design, is on the Slater Center’s board of directors. The center’s portfolio includes a diverse mix of companies: Chomp Inc. has developed a new category of pet treats; eGo Vehicles Inc. markets an electric cycle; ABV Design makes high-quality furniture and home products out of industrial materials.
Lubrano, a U.S. Army Veteran, has spent the last three decades working at the nexus of Rhode Island’s manufacturing and entrepreneurial communities. He began his career as a certified public accountant for Pricewaterhouse in the early 1970s, and later worked as director of business development for the industrial-products group at Rockwell International. Over the last 15 years he has successfully nurtured two startups: research and development firm Fountainhead Technologies in Providence and Universal Medical Scanners Inc. of Warwick.
Trying to be a solution to too many problems is a mistake Lubrano said many manufacturing entrepreneurs make. He said startups need to combat this by “beating back the devils of distraction.
“At first everything looks like it applies to all kinds of markets,” Lubrano said. “But the reality is you’ve got to focus on the market that will bring the best results.”
