with lorktech, case students poised to enter growing flexible electronics market
Mark Lorkowski was only 20 years old when he came up with the idea for an electronic shelf display powered by a photovoltaic cell that might forever change the face of retail.
Now 22, Lorkowski is finishing up his coursework at Case Western Reserve University, where he will graduate later this year with an engineering degree. As his classmates scour the job market for something that doesn’t involve waiting tables, Lorkowski and his partners are gearing up to launch a tech company.
With some of Northeast Ohio’s most influential entrepreneurial organizations backing it, and venture capitalists knocking at its doors, Lorktech is poised to be the next big thing.
The story of how this group of Case students created a technology that could permanently alter mass retail is a case study of the entrepreneurial ecosystem in Northeast Ohio, which is spinning off new businesses and shaking the rust from its industrial past.
Lorkowski came up with his idea for an electronic shelf display while searching for caffeinated soda to power him through his midterm study sessions. A heavy soda drinker, he immediately recognized that the listed price was incorrect.
“I was walking through Walmart and noticed that cases of soda were 40 cents more than any other retailer,” he says. “I was first annoyed at the price being 40 cents more. But the thing that sparked the idea was the price being wrong."
Lorkowski, whose background is in systems control engineering, soon began obsessing over solutions to this problem. It wasn’t that he cared that much about 40 cents -- although he was living on a student’s budget, he wasn’t that
cheap -- he wanted to know why electronic shelf labeling hadn't taken off in the U.S.
His answer to the problem involved a simple bistable screen -- a technology familiar to Kindle users -- that is flexible, durable and powered solely by the ambient light in a store. It would be updated remotely using an integrated software system.
“Research shows that customers are more likely to buy products that have an electronic shelf label," he explains. Better still, he adds, "this is also a zero paper waste, zero battery waste product."
Electronic shelf displays are common in Europe, but U.S. retailers have yet to adopt them. Moreover, the technology being used in European grocery stores requires batteries and often breaks within the first couple years, Lorkowski says.
Presently, Lorkowski, his brother James, and a team of Case grads are working to develop a prototype and launch their product before anyone else. They’ve already received several investment proposals from venture capitalists, and investors have been trying to lure them to the East and West coasts.
Lorkowski says they’re not only happy in Cleveland, but that the startup resources and technological innovation abundant here provide a competitive advantage.
“We’ve been encouraged by the collaboration that occurs in Cleveland and the people who want you to succeed,” he says. “Northeast Ohio is one of the top segments in the world for flexible technology, and many of our producers are in this area, as well.”
According to the International Electronics Manufacturing Initiative, the global flexible electronics market is expected to grow to a $250 billion industry by 2025. Ever since researchers at Kent State's Liquid Crystal Institute
first invented the twisted nematic liquid crystal displays used in flat screen televisions in the '70s, Northeast Ohio has been a key player in this rapidly growing global industry.
Recently, the economic development organization NorTech
, a regional innovation cluster, to make Northeast Ohio the epicenter of the flexible electronics industry.
To be sure, dozens of local entrepreneurial organizations have helped Lorktech along the way, including Jumpstart
, NorTech, think[box]
and the Case School of Engineering. But it was his business professors at Case who truly inspired him.
“I took an entrepreneurial finance class with Michael Goldberg,” founder of the venture capital firm Bridge Investment
, says Lorkowski. “We talked to 32 different entrepreneurs during the course of the semester. It was a great class.”
A key milestone came when Lorktech took Second Place in the Saint-Gobain Student Design Competition, in which teams of engineering students prototype devices that creatively solve societal problems while addressing energy usage.
“At first, we were upset that we didn’t win first place,” explains Mike Giammo, Lorktech VP. “Then we learned it’s usually the second place winners who start companies. So maybe it wasn’t so bad.”
After assembling a diverse team of Case students and receiving encouragement from faculty, Lorkowski and his teammates grew convinced they were onto something big. They soon ventured out to talk to major players within the industry.
A short time later they found themselves in a conference room at the Twinsburg headquarters of FFR-DSI, a leading supplier of merchandising systems and accessories.
“I didn’t think they’d call us back,” says Lorkowski with a laugh. “The people that we met with were definitely surprised to see how young we were. Yet as we began to explain our process and design for the product, they started to get grins on their faces.”
In the ensuing months, Lorkowski and his partners held dozens of face-to-face meetings with players in retail, including executives at Giant Eagle in Pittsburgh. They made those critical connections through supporters at Case and other organizations. They learned that retailers have yet to implement electronic shelf displays because of concerns regarding durability, life span and the cost of switching systems.
“It would cost about $125,000 to $150,000 per store to roll out a new system,” says Lorkowski. “They posted a five-year lifespan, but the majority of the batteries lasted 18 months. Also, the plastic shelf would die easily, especially when it was hit by a grocery cart.”
The electronic shelf labeling system they are creating addresses the needs of retailers and consumers by offering a solar-powered system they claim will last 10 years or longer. It can also be automatically updated remotely so it’s easy to use.
“Retailers want to be able to get information to customers more quickly, and this allows them to do that,” says Lorkowski. “They can also engage in price optimization, which lets them match demand a lot more correctly than using the current system.”
Perhaps more significantly, retailers will be able to implement automatic price drops as items reach the end of their shelf life, thus reducing waste in stores.
“From a retailer’s standpoint, it costs money to throw something away -- and they can’t donate it past a certain date,” says Lorkowski. “This is helpful for perishable goods.”
The use of a bistable screen, which has only been available since 2008, is a crucial aspect of Lorktech’s electronic shelf display system. And, as evidenced by this video
, the technology is virtually indestructible.
Lorktech has a patent pending for their technology and is now deep into the prototype stage. Though they are being courted by investors, their success is far from guaranteed. Most startup companies fold before they ever turn a profit. The company faces competition from rival firms seeking to implement similar technologies, and, of course, it doesn’t have a product yet.
Despite all that the founders are convinced they’ve found the right formula for success, and they’ve got the entrepreneurial community of Northeast Ohio on their side.
“We’ve patented the right combination of technologies to be successful,” says Giammo.
If Lorktech is successful, solar-powered electronic shelf displays could change the way people shop while improving the sustainability efforts of big U.S. retailers. Consumers may soon be able to scan electronic shelf labels with their smartphones to download reviews, recommendations and coupons.
“We’re creating a platform that will make the whole physical buying experience much more interactive,” says Lorkowski. “We’re putting information into consumers’ hands.”
Photos Bob Perkoski
- Image 5: Rendering of the Lork Tech electronic shelf display