Executive Suite 7/1/2012: Chris Crawford and Max Winograd

THE STUNNING IMPLOSION OF
38 STUDIOS AT A COST OF
TAXPAYERS OF
NEARLY $100 MILLION AS MANY
IN RHODE ISLAND WEARY OF
STATE SUPPORT FROM PRIVATE
COMPANIES, BUT 8 TURED YOS
AND TWO OTHER TECH FIRMS CAP
THE SAME PROGRAM FOR MUCH
SMALLER AMOUNT.
A $4MILLION GAR REASON TEE
WENT TO THE CORPORATE
MARKETPLACE IN NORTH
KINGTOWN AND $1.5 MILLION
WENT TO NEW LABEL
TECHNOLOGIES IN PROVIDENCE.
WHAT ARE THEY DOING AND CAN
IT CONTINUE AFTER 38 STUDIOS
COLLAPSE INTHIS WEEK ON
EXECUTIVE SUITE, CHRIS
CRAWFORD OF THE CORPORATE
MARKETPLACE AND MAX.
WELCOME TO EXECUTIVE
SUITE.
THATHANKS FOR BEING WITH
ME TODAY ON THE SHOW.
I WANT TO START OFF WITH
JUST A DISCUSSION OF YOUR
COMPANY BECAUSE YOU ARE NOT
HOUSEHOLD NAMES BEFORE WE
GET THE FACT YOU USE JOB
CREATION GAR REASON TEE
PROGRAM SO LET'S TART WITH
THE BASICS.
CHRIS, I READ AN OLD ARTICLE
THAT CALLED YOUR COMPANY
RELATIVELY INVISIBLE.
WHATS THE CORPORATE
MARKETPLACE MOO WHAT DO YOU
DO WE ACTUALLY TRIED TO HIDE
INITIALLY.
WE ARE A TECHNOLOGY HUB THAT
LITERALLY PLUGS IN TO TWO
DIFFERENT SIDES OF EQUATION
MAKING A PROCESS THAT USED
TO NOT EXIST HAPPEN.
ON ONE SIDE WE PLUG IN TO
THE BEST BRANDS OF THE
WORLD.
ON THE OTHER SIDE, WE PLUG
INTO CORPORATE AMERICA WHICH
IS WIRED AND WE ALLOW FOR
TRANSACTIONS TO HAPPEN THAT
OTHERWISE COULD NOT HAPPEN
PREVIOUSLY.
NOW, I -- CAN YOU GET
INTO MORE OF A LAYMAN'S
DETAILED EXPLANATION OF HOW
THAT WORKS AND WHAT WE ARE
TALKING ABOUTING?
THERE ARE A PLETHORA OF
CORPORATIONS AROUND THE
UNITED STATES AND THE WORLD
THAT USE INCENTIVES TO
MOTIVATE EMPLOYEES.
WE ALLOW FOR THAT PROCESS TO
HAPPEN SEAMLESSLY BY
BRINGING THE BEST BRANDS OF
THE WORLD INTO THAT EQUATION
SO IBM, AT&T, EX CONDITION
ALL CUSTOMERS OF OURS ARE
ABLE ACCESS REWARDS TO GIVE
TO THE BEST EMPLOYEES AND TO
PLACE ON THE SYSTEMS TODAY,
SHIPS TODAY OR TOMORROW
DIRECTLY FROM THE FACT I
HAVE TO THE WINNER OF THAT
PARTICULAR REWARD.
YOU SORT OF BECOME THE
HIDDEN RETAIL ARM OF THESE,
THESE -- CORRECT.
WE HAVE NO INVENTORY.
EVERYTHING IS VIRTUAL.
WE HAVE REDUNDANT SYSTEMS IN
DENVER, SO IF ANYTHING EVER
AP PENS HERE, WE'RE UP AND
RUNNING OUT THERE
INSTANTLY.
I READ, I THINK, YOU GOT THE
IDEA FROM YOUR PREVIOUS, YOU
FOUND THIS COMPANY AROUND
'99 OR 2,000.
WHERE DID THE IDEA COME
FROM?
IT CAME FROM CALLING ON
THE LARGEST HOUSES OUT THERE
THAT MANAGE CORPORATE
PROGRAMS AND SAYING THEY
WERE GOING TO A VERY ARDUOUS
PROCESS OF PAPER DRIVEN AND
WAS COMPLICATED AND
DIFFICULT TO THEM
PARTICULARLY TO GETALL RY
AND RHODE ISLAND BEING
THEALL RY CAPITAL AT THE
TIME ANYWAY ALLOWED US TO
BRING A LOT OF RHODE ISLAND
COMPANIES INTO THE MIX TO
GET SALES THAT OTHERWISE
THEY WOULD NOT HAVE HAD.
INTERESTING.
NOW, NEW LABEL, ACTUALLY,
I WAS SAYING BEFORE WE
STARTED.
I REMEMBER AT THE LAST AT
PROVIDENCE COVERING YOU AS
STUDENT AT BROWN UNIVERSITY
IN THE RHODE ISLAND BUSINESS
PLAN COMPETITION.
I THINK WERE YOU A
SEMITIMISTS.
SEMIFINALISTS SO IT WORKED
OUT PRETTY WELL SO FAR.
WHAT IS TECHNOL HE XY? I
THIS YOU YOU HAVE PROPS TO
SHOW US WHAT WE ARE TALKING
ABOUT.
YEAH.
SO THE PROBLEM AND THE
SOLUTION.
NOW HOLD THEM UP.
THE PROBLEM IS TODAY THAT
EVERY TIME A COMPANY LIKE A
WAL-MART OR UPS PRINTS OUT A
LABEL, THEY HAVE TO PEAL OFF
THE BACK OF THE LABEL.
YOU END UP WITH THIS WAXY
SILICONE TRASH.
SURE.
EVERYONE KNOWS.
YEAH.
THERE IS MILLIONS OF POUNDS
OF THAT THAT GO TO WASTE OR
INCINERATION EVERY YEAR.
THEY ARE ALSO PAYING FOR
IT.
IN THIS DAY AND AGE OF
PROFITABILITY AND
PRODUCTIVITY.
YOU DEAL WITH LABELS THAT
ARE 4% WASTE.
THIS IS WHERE OUR TECHNOL HE
XY COMES IN.
WHAT WE HAVE DEVELOPED.
IT LOOKS THE EXAM SAME.
WE HAVE DEVELOPED A LABEL
THAT DON'T HAVE A BACKING.
IT IS NOT STUCKEY TO THE
TOUCH.
NOTHING TO PEAL.
THE ADHESIVE IS HERE.
IT IS NOT ACTIVE YET.
WE DEVELOPED ACTIVATION
HARDWARE THAT GOES IN THE
FRONT OF LABEL PRINT OTHERS
SO IT IS RETROFOR THE
EXISTING PRINTER OR THE
PHARMACY PRINTER OR THE
SUPERMARKET OR THE BEER
BOTTLE LABELER.
THEORETICALLY, I AM
THINKING OF PRESCRIPTION AT
CRS.
THEY PRINTOUT THE LITTLE
LABELS THAT ON THE PILL
BOTTLE.
IN THE CASE, THEY WOULD BUY
THE HARD WHICH ARE AND THE
PRODUCT AND PUT THAT ON THE
END AND THEY FEED THROUGH
YOU KNOW TED NESI AT THIS
ADDRESS AND THEY VIT NOW AND
THEY STICK IT ON.
YEP.
IT IS INSTANTLY STICKY.
WE CAN STICK TO ANYTHING
WHETHER IT IS PLASTIC, CARD
BARD OR BOTTLE, GLASS.
THE LABEL ITSELF, NOTHING
CHANGES WITH THE IMAGE.
SO THE PRINTING PROCESS IS
THE SAY.
I IS SEAMLESS INTEGRATION,
LOW COST RETROFIT AND
CUTTING COSTS AND
ELIMINATING ALL THE WASTE
TIED TO THE LABEL.
HOW DID YOU COME UP WITH
THIS IDEA?
IS WITH ABLE TO AT BROWN
PARTNER UP WITH THE TWO
CO-FOUNDERS.
BEEN'S BACKGROUND IS IN
SCIENCE.
HE IS GETTING THE PHD AT THE
TIME.
WE CONVINCED HIM TO GET A
MASTERS TO START AT NEW
LABEL.
THEN MUCK'S BACKGROUND IN
MANUFACTURING AND DESIGN.
SO TOGETHER THEY REPRESENT
THE BRAINS BEHIND THE FLEW,
THE BRAINS BEHIND THE HARD
WHICH ARE AND THE GY ON TV,
I GUESS.
WHAT THAT IS NOT A BAD
THING.
THINK I READ THAT YOU LOOKED
AT A LOT OF DIFFERENT
POSSIBLE SOLUTIONS.
YES.
WE DID.
WE LOOKED AT EVERYTHING FROM
WHAT IS OUT THERE IN NATURE
TODAY WHERE YOU GOT BRN
KELLS THAT ARE HARD TO SCRAP
OFF.
WE WANTED TO SEE IF MAB WE
COULD USE THE SPECIAL
ANTI-PROTEINS THAT ARE
INVOLVED.
WE LOOKED AT ENZYMES.
WE LOOKED AT UV HEAT,
PRESSURE.
ALL OF THESE DIFFERENT
TYPES.
NONE OF THEM WERE COST
EFFECTIVE SOLUTIONS FOR
CUSTOMERS OR WERE ABLE TO
SORT OF BE PULLED TOGETHER
AND COMMERCIALIZE IN A SHORT
PERIOD OF TIME.
THAT IS WHAT IT COMES TO.
THE FIRST TO COME OUT OF THE
PRINTER THAT CAN STICK TO
PLASTIC.
VERY COOL.
SOL THE REASON YOU ARE BOTH
HERE IS SOMETHING YOU SAY.
THERE IS NO CONNECTION
BETWEEN YOU OTHER THAN THE
REASON I BROUGHT YOU ON
TODAY.
I APPRECIATE YOU BEG HERE.
YOU BOTH HAVE THE JOB
CREATION GUARANTEE PROGRAM.
MU FOR THE PEOPLE AT HOME.
RHODE ISLAND HAS BEEN IN THE
BUSINESS OF BACKING LOANS
FOR DECADES THERE WAS THE
VILLATIONAL BUILDING
AUTHORITY THAT HAS BEEN
AROUND SINCE THE '50s.
THIS NEW PROGRAM WAS CREATED
TO PROVIDE GAR REASON TEES
FOR COMPANIES LIKE YOURS
THAT DON'T HAVE TANGIBLE
ASSETS, HARD, YOU KNOW, TRKS
OR WHATEVER, HAVE
INTELLECTUAL PROPERTY.
I WAS GOING TO
BE $50 MILLION.
FAMOUSLY, IT GOT UP
TO $125,000,075 WENT TO 38
STUDIOS.
THAT IS A LONG WAY OF SAYING
THIS IS THE 38th STUDIO
LOAN PROGRAM.
WANT TO START WITH YOU,
CHRIS.
YOU SAID THE PROGRAM
SHOULDN'T BE TAINTED BECAUSE
OF ASSOCIATED WITH THE 38
STUDIOS.
WHY?
WHY WAS IT IMPORTANT TO
YOU.
I WOULD LIKE TO SEE IT
EXPANDED.
I THINK AS ORIGINAL
CONSTRUED.
THE PROGRAM WAS DESIGNED
PROPERLY AND WAS A VERY,
VERY GOOD.
IF ANYTHING.
I WOULD LIKE TO SEE SOME
EQUITY MATCHED WITH IT AND
THEN, ALSO, SOME BANKS
MATCHED WITH IT ON THE SIDE
TO CREATE AN EVEN BIGGER
POOL FOR PEOPLE TO BE ABLE
TO PULL.
FOR A COMPANY LIKE
OURSELVES, A SOFTWARE ENTITY
IF YOU WILL, IT IS VERY HARD
TO GO OUT TO GET CAPITAL
FUND BANKS THAT YOU CAN
USE.
THEN LOOKING FOR HARD
ASSETS.
WE ACTUALLY HAD A BANK
SAVINGS.
IF OUT TO BUY $1 MILLION
PRINTING PRESS.
WITH HE A GIVE YOU THE MONEY
TODAY.
WE DIDN'T NEED $1 MILLION
PRINTING PRESS.
IT WAS NICE IDEA.
WE NEEDED CAPITAL TO GROW IN
A DIFFERENT FASHION.
AND THE ONLY WAY TO DO THAT
WASES TO GO WITH THIS JOBS
GUARANTEE PROGRAM.
WE STRUCTURED OUR DEAL QUITE
A BIT DIFFERENTLY THAN THE
DEAL IF YOU WILL.
HOW SO?
IT IS A LOT SMALLER A.
MONEY.
$4 MILLION.
IT IS DOWN $2 MILLION OF
THE $2 MILLION, WE
PUT $1 MILLION IN THE BANK
THAT NEITHER US NOR ED NOR
OUR BANK CAN TOUCH AS A
RESERVE IN CASE ANYTHING
SHOULD HAPPEN.
WE ARE MANAGING THE COMPANY
TO GROW PROFITABLY.
WE ARE ADDING THE NUMBER OF
EMPLOYEES 17 THIS YEAR.
WE HAVE JUST ADDED FIVE NEW
KIDS RIGHT OUT OF COLLEGE
LAST WEEK AFTER A PRETTY
RIGOROUS PROCESS TO FIND THE
BEST KIDS WE COULD GET OUR
HANDS ON AND WE ARE ABLE TO
NOW STEP ON THE GS AND GROW
VERY QUICKLY.
WE ARE ALREADY GREEING 30% A
MONTH.
WE THINK WE CAN DO EVEN
BETTER.
AND WE ARE GOING TO MANAGE
IT.
WE ARE GOING TO BE
PROFITABLE.
WE'LL DRIVE THAT REVENUE,
THEN WE'LL HIT THE OTHER,
BUT ONLY AFTER THOSE THINGS
ACTUALLY HAPPEN.
SO COULD YOU HAVE
CONTINUED TO FRE WITHOUT BEG
ABLE TO TAP THIS?
NOT QUICKLY.
COULD WE HAVE, YES.
OUR GOAL IS, IS TO GROW MUCH
QUICKER THAN THE 49 JOHNS WE
COMMITTED TO.
I WOULD LIKE TO GRE TO THE
HUNDREDS OF JOBS.
I WOULD LIKE OUR COMPANY TO
GROW AS QUICKLY AS POSSIBLY
CAN.
BUT WE'LL DO IT PRU DPTLY.
WHICH MAY BE THE PROBLEM.
ALL RIGHT.
WE HAVE TO TAKE A BREAK WHEN
WE COME BACK WE'LL TALK TO
MAX ABOUT WHAT THE JOB GAR
REASON TEE PROGRAM DID FOR
NEW LABEL TECHNOLOGY AND
GOING TO LOOK MORE AT THE
ARGUMENT IN FAVOR OF HAVING
A PROGRAM LIKE THIS HERE IN
RHODE ISLAND.
STAY WITH US.
YOU ARE WATCHING EXECUTIVE
SUITE.
WELCOME BACK TO EXECUTIVE
SUITE.
I AM TED NESI.
THE FEST THIS WEEK, THE
OTHER COMPANIES THAT USE THE
38 STUDIOS.
WITH HEAR WITH CHRIS
CROWFORD AND MAX OF NEW
LABEL TECHNOLOGY.
BEFORE THE BREAK WE HEARD
FROM CHRIS ABOUT WHY HE USES
THE JOB CREATION GAR REASON
TEE PROGRAM.
TELL US WHY YOU USED IT AT
NEW LABEL AND WHAT YOU GOT
AND WHAT IT HAS DONE FOR
YOU?
SURE.
AS EARLY STAGE COMPANY.
ONE OF THE HARDEST THINGS TO
DO IS ATTRACT FUNDING.
WE ARE TO ATTRACT FINANCING
FROM A BANK AND THIS PROGRAM
SORT OF SAT IN THE MIDDLE
BETWEEN THE TWO FUNDING
GAPS.
FOR US WE WERE ABLE TO GO
OUT AND ATTRACT PRIVATE
FUNDING FROM VENTURE CAPITAL
THEN USE THAT AS A PART OF A
ORIE TO TALK TO THE STATE
AND USE THIS PROGRAM AS
CHRIS DID TO ROCKET FUEL OR
ROCKET BOOSTERS TO HELP US
GROW FASTER.
WE WON A BE HIRING AS
QUICKLY AS WE COULD WITHOUT
HAVING THIS EXTRA STOP OF
THE LOAN GUARANTEE IN
PLACE.
AND I THINK HAVING THAT
ALONG WITH THE PRAIF VIT
SECTOR FUNDING CREATING
ADDITIONAL COMFORT FOR OUR
EXISTING INVESTORS KNOWING
THAT THERE IS MORE CAPITAL
COMING TO NEW LABELS SO WE
ARE FUNCTIONALLY STABLE FOR
A LONGER PERIOD OF TIME.
HOW IG ROUSE WAS THE
PROCESS YOU HAD TO GO
THROUGH?
HOW MUCH DID YOU HAVE TO
TELL HEM?
WHAT DID YOU HAVE TO SHOW?
WHAT WENT INTO THAT?
IT WAS AN IN DEPTH
PROCESS.
THEY HAD SEVERAL SITE VISITS
TO PROVIDENCE TO OUR PA SILL
I TY AND HET WITH NUMBERS ON
OUR BOARD.
THEY LOOK THROUGH ALL THE
BASIC FINANCIAL DOWNS BUT IN
ADDITION TO THAT THEY LOOK
THROUGH A LOT OF PROJECTIONS
TO SEE WHERE WE SAW THAT WE
COULD GRE AND THEY WENT
THROUGH AND THEIR
UNDERWRITERSES DID ACTIVITY
ANALYSIS.
WHAT HAP PEPS IF WE ARE OFF
BY 50 PERCENT AND LOWER OR
FASTER.
WHAT WOULD THAT DO TO THE
COMPANY.
IT IS IT A GOOD INVESTMENT
IN BUS MESS.
EVEN THOUGH THE STATE HAS
NOT MADE ANY CASH INVEST
PRESIDENT IN THE NEW LABEL
THEY ARE OUT THERE WITH THE
GAR REASON SO THEY WANTED TO
MCSHORE THEY WERE CONFIDENT
IN THE SUSTAINABILITY OF OUR
BUSINESS.
THAT IS AN IMPORTANT
POINT.
IN YOUR CASE, THEN, YOU HAVE
NOT THE CASH,
THE $1.5 MILLION.
YOU HAVEN'T RECEIVED ANY
CHECKS YET.
YOU HAVEN'T GOTTEN ANY MONEY
YET.
CORRECT.
I THINK THAT IS PART OF THE
VALUE OF THE NEW GUIDELINES
THAT CAME IN PLACE FOR DEAL
AS WELL AS FOR NEW LABELS
DEAL IS THAT THERE IS
EVENTUALLY THERE IS A
PRIVATE SECTOR COMPONENT AS
WELL AS THE PUBLIC SECTOR
COMPONENT.
FOR US, WE CLOSED ON A SR.S
ARE OF INVESTS FROM PRIVATE
SECTOR AND VENTURE CAPITAL
THREE WEEKS BEFORE WE WERE
ABLE TO CLOSE ON THE JOB
CREATION GAR REASON TEE
FUNDS AND BECAUSE OF THAT.
THERE IS MORE CONFIDENCE
GOING INTO THAT, THAT
INVESTMENT OR DECISION BY
THE BOARD THEN YOU ALSO HAD
THE FACT THAT IT WAS COMING
AT A TIME WHEN THAT WAS HOT
THE CAPITAL.
BECAUSE OF THAT, WE HAVE IT
AS A BACK STOP SO WE CAN
MAKE BETTER BUSINESS
DECISION BECAUSE WE ARE NOT
LIVING HAND-TO-MOUTH EVERY
DAY BECAUSE WE ARE WORRIED
ABOUT OUR CASH PLO INSTEAD
WE WERE ABLE TO TAKE A
LITTLE BIT MORE RISK BUT THE
SAME TIME BE MORE JUDICIOUS
BECAUSE THERE IS A LOT OF
ADDITIONAL ATTACHED TO THIS
MONEY.
I AM CERTAINLY A GAR REN
TURE OF THAT $1.5 MILLION.
SO WE TAKE AND SO ARE MY
CO-FOUNDERS SO WE TAKE THAT
SERIOUSLY.
I GOT TOT ASK THE QUESTION
EVERYONE AT HOME WILL WONDER
WHICH IS, WHAT HAPPENS IF
YOU GO BUSTS?
HOW DO THINGS GO WRONG IN A
COMPANY PEOPLE ARE FREAKED
ABOUT WHAT HAPPENED WITH 3
STUDIO.
WHAT HAPPENS?
WHAT IS THE TAXPAYER SIDE OF
IT?
I THINK, THE TAXPAYERS
ARE PROTECTED IN OUR CASE
BECAUSE WE ARE MANAGING THE
PROCESS A WHOLE LOT
DIFFERENTLY THAN MAYBE IT IS
MANAGED THE PAST.
YEAH.
THINGS CAN GO WRONG.
WE GOT A SAVVY BOARD OF
DIRECTORS AGAIN BACK WITH
EQUITY FOLKS AND I THINK
WHICH WE ARE GOING TO
MARSHAL THE RESOURCES PROP
ARE HI AS WE GROW THIS TO
ALLEVIATE THAT RISKS.
THE BANK IS COMMITTED TO
ACTUALLY BUYOUT THIS
PARTICULAR PROGRAM IN
ADVANCE IF WE CONTINUE TO
HIT THE BENCH MARKSES SO
THAT EDC CAN REDELOY THE
MONEY WITH OTHER COMPANIES.
AS WITH YOU.
I AM CERTAINLY BACKING
EVERYTHING THAT WE ARE
DOING.
MAX, YOU, I MENTIONED
EARLIER, YOU WERE A MAJOR AT
BROWN.
THIS HAS SET A BROADER
DEBATE ABOUT THE INVOLVEMENT
OF GOVERNMENT IN THE PRIVATE
SECTOR AND IN PICKING
WINNERS AS REPUBLICANS OFTEN
SAY.
MEAN, WHAT IS THE CASE IN
YOUR MIND OBVIOUSLY IT IS
HELP YOUR COMPANY PERSONALLY
BUT WHAT IS THE ROLE HERE
AND HOW DO YOU DEFEND THAT.
PEOPLE SAY WHAT JUST
HAPPENED.
YEAH.
I THINK THE CRITICAL
OPPORTUNITY IS.
THERE IS NO WAY YOU CAN
CREATE PROGRAM LIKE THIS
WHERE YOU ARE NOT PICKING
WINNERS FROM OTHER PEOPLE.
BUT IT CAN BE A POOL OF
WESTERN.
IF YOU SAY IT HAS TO BE
PRIVATE SECTOR BACKED BEFORE
THEY EVEN ARE ABLE TO APPLY
FOR THE PROGRAM.
THEY YOU GOT A POOL OF
WINNER T. THEY HAVE GOTTEN
TRACTION FROM SAFE VIZ
SOPHISTICATED
INVESTIGATORSES THAT HAVE
MADE A LOT OF MONEY
INVESTIGATING IN OTHER
COMPANIES.
IN ADDITION TO THAT.
YOU HAVE TO ADD TO THE FACT
THAT SOMEONE IS WILLING TO
BET ON THEMSELVES AND REALLY
PUT THEIR FINANCIAL FUTURE A
PERSONAL GAR REASON TEE ON
THE LINE FOR THIS.
AND AS THEY WOULD WITH A LOT
OF TRADITIONAL BANK LEND SOG
THOSE COMPONENTS MAKE IT
LIKELY THAT YOU WILL HAVE A
COMPANY THAT IS A WINNER AND
ENTREPRENEUR THAT IS A
WINNER THEN PICKING AMONG
THE WINNERS TO FOON THE
GREATEST TUPS FOR SUCCESS
AND THE BIGGEST OUTPUTS FOR
RHODE ISLAND FROM A JOB
CREATION STANDPOINT AND
REGULAR GENERATION
STANDPOINT SO IT CAN BE DONE
AS LONG AS IT IS HOT THE
GOVERNMENT THAT IS FIRST IN
LINE.
IF THEY ARE FIRST IN LINE
THEY ARE PICKING WINNERS AND
LOSERS BUT AFTER PRIVATE
SECTOR HAS COME IN AND
INVESTED AND A PERSONAL
GUARANTEE ON THE LINE.
ALSO IN YOUR CASE,
VALIDATION OF REVENUE.
THE FACT YOU HAVE CUSTOMER.
RIGHT.
WE ARE DOING TENS OF
MILLIONS IN REF NUR A YEAR.
GROWING AT 0%.
AND I FOUND THES ARE SES
WITHIN EDC TO BE EQUALLY
RIGOROUS AND WAS NOT A
RUBBER STAMP KIND OF A
PROCESS.
THINK I SOMETIME THEY GET A
REPUTATION AMONG THE THE
PUBLIC.
I FOUND THEM TO BE VERY
THOROUGH AND SOME OF THE
PEOPLE ON THE FINANCE
COMMITTEE ARE FORMER
BANKERS.
THEY ARE AHEAD OF THE SPA.
THEY DID THEIR DUE DILIGENCE
AND I THINK AGAIN YOU GO
BACK TO THE PREVIOUS
QUESTION IT WILL ALEAF ATE
THE FEAR THAT RHODE ISLANDS
MIGHTER HAVEMENT YOU USED
LOANS EARLIER, TO.
YOU?
PAID THOSE BACK, RIGHT INTO
WE PAID THEM BACK EARLY.
THEY HAD A COMFORT LEVEL IN
WORKING WITH THAT.
ALL RIGHT.
WE HAVE TO TAKE ANOTHER
BREAK.
COMING UP.
THE BIG QUESTION IN RHODE
ISLAND.
HOW DO WE GOT THE ECONOMY
BACK ON TRACK?
WHAT ARE THE TWO SEEING ON
THE GROUND.
STICK WITH US.
YOU ARE WATCHING EXECUTIVE
SUITE.
WELCOME BACK TO EXECUTIVE
SUITE.
I AM TED NESI.
OUR GUEST THIS WEEK CHRIS
CRAWFORD AND MAX THROUGH
LABEL TECHNOLOGIES.
WE WANT TO DO A QUICK GUT
CHECK WITH YOU.
MAX FIRST.
RHODE ISLAND ISED ABOUT FOR
BUSINESS, TRI OR FALSE.
FALSE.
WHY?
IT IS BECAUSE ULT PATELY
THERE IS TWO TYPES OF
BUSINESS.
THEY ARE YOUNG COMPANIES AND
MORE SURE COMPANIES.
YOUNG COMPANIES DON'T CARE
ABOUT TAX RATE AND THE
STRUCTURAL ISSUES THAT ARE
AROUND IN THE NEWSPAPERS.
AND SO, IF WE CAN GET AS
MANY YOUNG COMPANIES THAT
ARE FORCED TO GRE IN ORDER
TO SURVIVE TO COME HERE AND
START HERE AND WE ALREADY
HAVE WITH COMPANY LIKE OTHER
INSTITUTIONS THAT ARE
INCUBATING GREAT IDEAS.
WE WILL BE IN A GREAT
POSITION TO BE THE NEXT
SILICONE VALLEY HERE.
NOW I HAVE TO CHALLENGE
YOU ON THAT.
YOU ARE THE ENTREPRENEUR
AT THE TABLE.
YEP.
YOU KNOW THE IDEA THAT
EVEN A SMALL COMPANY
WOULDN'T BE THAT CONCERNED
WITH TAX AND REG WILLING
STORY POLICIES.
THEY HAVE TO FACT YOU.
WHY DO YOU SAY THAT? I AM
TALKING ABOUT NOT SMALL
COMPANIES.
, CUES ME YOUNG COMPANIES.
BUT EVEN STILL.
WITH YOUNG COMPANIES AS AN
EXAMPLE AS A FOUNDER.
TELEPHONICALLY FOUNDERS PAY
THEMSELVES VERY LITTLE
BECAUSE THEY WANT TO PUT AS
MUCH MONEY AS THAN THE
BUSINESS INTO R AND D AND
GETTING THE PRODUCT OUT
THERE.
MY PARTNERS AND I PAIZ
OURSELVES VERY LITTLE.
I DON'T CARE WHAT THE TOP
MARKET OR MARGINAL RATE IS.
THAT IS NOT GOING TO FORCE
HE TO PICK UP TO ANOTHER
REGION WHERE IT IS
COMPETITIVE.
IN STEAD I WILL PLANT MY
ROOTS IN A PLACE WHERE I CAN
CREATE A BUS MESS THAT CAN
THRIVE AND FIND THE CAPITAL
OF THE HUMAN CAP IT WILL AND
THE FINANCIAL CAPITAL THAT
IT CAN AND ROV DENSE IN THE
LAST LE YEARS THROUGH BETA
SPRING AND OTHER
INSTITUTIONS HAS PROVEN THAT
IT CAN BE THAT EXACT KIND OF
A PLACE AND WE EITHER THINK
ABOUT IT ON A REGIONAL LEF
ARE WE ARE ABLE TO COMPETE
IN THE REGION AND BE A
THRIVING LOCATION FOR HUMAN
CAPITAL AND FOR FINANCIAL
CAPITAL.
FOR THE PEOPLE AT HOME,
RHODE ISLAND CENTER FOR IN
NOVATION AND
ENTREPRENEURSHIP.
THE SAME QUESTION TO YOU.
RED ISLAND IS BAD FOR
BUSINESS.
IT IS VERY GOOD FOR BUS
MESS.
WE BEEN ABLE TO TAP INTO A
PHENOMENAL COLLEGE WORK
FORCE.
YOU LO, WE HAD KIDS AND
INTERNS FROM THE MASTER'S
PROGRAM AT BRI YIP, BROWN,
WE HAVE TARGET THOSE KIDS
AND BROUGHT THEM IN AS
INTERNS.
WE HIRE THEM.
THEY ARE STILL ONBOARD OF.
WE LOVED THE WHOLE EDUCATION
ENVIRONMENT.
I WOULD LIKE TO SEE IT FLUR
SHALLING IN A LITTLE BIT
MORE.
WE HAVE FOUND IT TO BE A
GREAT PLACE MOVEMENT YOU
MOW, I HEAR THAT.
THEN I THINK TO MYSELF.
BOY I JUST WROTE ABOUT 1%
UNEMPLOYMENTP HOW DO YOU IN
YOUR OWN MIND THE CITIZEN
SQUARE WHERE YOU SEE
POSITIVES HERE AND YET
CLEARLY THE STATE HAS SOME
REAL TROUBLE ECONOMICALLY.
IT HAS TROUBLE ECONOMICALLY
CL W THE EDUCATION OF THE
WORK FORCE.
I THINK THAT THERE HAS TO BE
A COLLABORATIVE EFFORT
BETWEEN EDUCATION STARTING
AT THE HIGH SCHOOL LEVEL AND
THE COLLEGE LEVEL THE WORK
FORCE TO BRING THE THREE
TOGETHER TO MAKE IT WORK IN
A MUCH MORE QUICK AND
IMMEDIACY ATTACHED TO AT
THIS TIME BECAUSE THE TUNE
THERE IS AS YOU HAVE SAID.
I THINK RHODE ISLAND HAS THE
ABILITY TO ACTUALLY DO THIS
WHERE OTHER BIG STATES DON'T
WE ALL GET TOGETHER TO GET
ONBARD WITH IT.
HAVE YOU CONSIDERED
LEAVING RHODE ISLAND TAKING
CORPORATE MARKET POLICES
INTO NO.
WE HAD OFFER.
WE HAD ONE TWO WEEKS AGO.
ABSOLUTLEY NOT.
THAT MAY BE ENJOYABLE.
MAX, YOU, YOU ARE FROM
ATLANTIC I BELIEVE.
RIGHT.
YOU TURNED DOWN A
CONSULTING JOB WHEN YOU
GRADUATED TO BUILD NEW LABEL
AND JUST THIS MORNING I KNOW
YOU TOLD A GROUP THAT THE
BEST KEPT SECRET IN THE
COUNTRY.
WHAT WAS THE APPEAL TO YOU?
WHY DID YOU DECIDE TO STAY
WHEN YOU COULD HAVE GONE
HOME OR GONE SOMEWHERE
OLES.
AT THE END OF THE DAY WHEN I
COMMITTED MYSELF AND
PARTNERS WE COMMITTED
OURSELVES TO START THIS BUS
MESS.
WE HEAD TOED TO FIN AND
IDENTIFY WHERE THIS IS BEST
POLICE WE CAN PLAN OUR ROOTS
TO GROW AND THRIVE QUICKLY.
AND WE FOUND THAT RED
ISLANDS WITH THE PERFECT
PLACE TO DO THAT BECAUSE AT
THAT STAGE IN THE BUSINESS.
YOU NEED TO FIND THE BEST
MEPPER TOES, ADVISORS AND
FOLKS THAT YOU CAN AUGMENT
THE FOUNDING TEAM TO GET THE
ADVICE THAT YOU HEED, THE
ACCESS TO CAPITAL, AND THE
WAYS TO IMPROVE THE BUSINESS
PLAN SO YOU CAN OUT TO
CUSTOMERS AND SUPPLIERS TO
BE ABLE TO ENHANCE THE
ABILITY TO SUCCEED.
AND THOSE MENTORS ARE
TERRIFIC HERE IN RHODE
ISLAND IN SUCH A SMALL
ACCESSIBLE STATE.
YOU CAN CONNECT WITH PEOPLE
AND INDUSTRIES.
THAT IS WHERE YOU ARE ABLE
TO DO AND WITH PROGRAMS LIKE
BETA SPRING AS AC HE
SELLRATOR THAT TAKES
START-UPS IN AND FOR 12
WEEKS MENTORS THEM AND GIVES
THEM CONNECTION AND NETWORK
THEY NEED TO SUCCEED IN THE
FIELD WHEN THEY ON THEIR
OWN.
WE WERE ABLE TO TAP INTO
THAT IN THE FIRST YEAR IN
2009 SO WE FOUND THAT ROUGH
DENSE WAS RIGHT IN THE
PERFECT SPOT FOR US TO GRE
AS A BUSINESS BECAUSE WE HAD
THE NETWORK.
YOU FEEL STRONGLY.
HEARD YOU SAY THAT BEFORE.
IS NOT SOMETHING THAT GETS
DISCUSSED A LOT.
YOU THINK OF HAVING A MET
WORK OF SEASONED EXECUTIVES
OR YOU LO BUSINESS PEOPLE TO
TALK.
YOU THINK THAT IS VERY
IMPORTANT TO THE CULTURE.
ABSOLUTELY.
I THINK THE CHEAPEST AND THE
EASIEST WAY AND PROBABLY THE
MOST EFFICIENT WAY FOR THIS
STATE AND FOR THE CITIZENS
OF THE TATE TO EVENTUALLY
PULL OURSELVES OUT OF THE
STRUCTURAL PROGRAM AND GROW
THE PI IN THE STATE IS
THROUGH MENTORSHIP.
IT HAS TO BE ORGANIC.
I HAS TO BE ONE-ON-ONE.
HAS TO BE BASED ON THE SELF
SELECTION OF WHICH PEOPLE
ARE EXPERTS IN THEIR FIELD
OR PEOPLE WHO DECIDE TO
RETIRE BECAUSE THEY LOVE
BEING HEAR THE WATER.
THEY HAVE BEEN ABLE TO THEN
COME OUT TO BE A PART OF
THEIR LOCAL COMMUNITY AND
END TO THE NEXT GENERATION
OF END TRA PRAY NUR YEARS.
AND WE CAN LEVERAGE THAT
OPPORTUNITY AT A COST OF
ZERO TO THE TAX AYERMENT
INTO HE WITH RUNNING SHORT
OF TIME BUT I WANT TO FINISH
UP BY GETTING THE BUSINESS
OUTLOOK FOR YOUR COMPANY
BACK TO WHAT YOU DO DAY TO
DAY.
HOW IS IT LOOKING.
WHAT ARE YOU LOOKING AT
MOVING FORWARD.
VERY POSITIVE WITH OUR
NEW GROUP OF KIDS THAT WE
BROUGHT ON.
WE CAN GET BACK TO WHERE WE
CAN GROW 40-50-60% EVERY
SINGLE MONTH.
WE ARE EXCITED ABOUT THAT.
HOW MUCH HAVE YOU BEEN
AFFECTED BY THE RECESSION.
HAVE YOU DEAN SEEN
DEHAPPENED.
WE WERE AFFECT BUT ONE YEAR
WE HAD A SIGHT REDUCTION IN
REVENUE BUT OTHER THAN THAT
IT HAS BEEN A STRAIGHT RAMP
UP.
NOW MAX, I THINK YOU ARE
EARLIER STAGED THAN
CORPORATE MARKET POLICE
WHERE YOU ARE STILL TALKING
AND STARTING COMPANIES.
SO WE HAVE GENERATED SOME
REVENUE AT THIS POINT.
BUT PITS NOT GNARLY THE $1
MILLION NUMBER YET.
BUT WHAT WE HAVE DONE THOUGH
IN YEAR IS FOR US THIS YEAR
IS THE YEAR OF THE LAUNCH.
SO WE HAVE ALREADY BEGUN
THAT ROLL OUT.
OUR TECHNOLOGY IS GOING TO
BE MAKING S WAY ACROSS A
COUPLE OF DIFFERENT
PLATFORMS AND WE POSITION
OURSELVES TO GROWS FROM A
HEAD COUNT PERSPECTIVE AND
THEN TO A CUSTOMER
PERFECTIVE.
OVER THE NEXT SEVERAL
YEARS.
WE ENVISION DNED GROWTH ON
ALMOST THE EXPONENTIAL LEVEL
FROM A TOP LINE AS WELL AS
JUST TECH HOL LE GOY
ELIMINATE THE WASTE FROM
EVERY LABEL.
THERE IS INTERESTS IN
THE?
YES.
YES.
IT IS A DOUBLE BOTTOM LINE
WIN BECAUSE OF THOR?
ROW WAYS TO PRODUCE THE
CARBON FOOTPRINT.
THAT IS ALL THE TIME WE'LL
HAVE WEEK.
WANT TO THANK OUR GUESTS
THIS WEEK.
I WANT TO THANK YOU FOR
TUNING IN HERE ON TO
EXECUTIVE SUITE.
IF YOU MISSED THE LO, CATCH
IT ON THE WEB SITE
WPRI.COM.
I AM TED NESI.
WE'LL EYOU NEXT WE CAN AND
EVERY WEEK ON "EXECUTIVE
SUITE."