The slow growth of the small business sector on the Navajo Nation can be attributed to a lack of infrastructure, limited small-business financing, lack of support networks and mentors, and a history of exclusion from national and global economies. Change can occur through multi-dimensional approaches and strong entrepreneurial ecosystems.
That’s why Change Labs is building a hub on the Navajo Nation — to foster entrepreneurship and revitalize the Tribal economic base through small business development.
“Projects like Change Labs are an important part of the long-term solution to building our economy,” said Navajo Nation President Jonathan Nez. “‘Buy Navajo, Buy Local’ is a major priority for the Nez-Lizer administration, which means that we are focusing on promoting small Navajo businesses and helping Navajo entrepreneurs. The hundreds of small businesses that Change Labs will serve are key to our nation’s long-term job growth and prosperity.”
Change Labs’ founding team members consist of Heather Fleming, founder and former CEO of Silicon Valley-based Catapult Design, and Jessica Stago, former program manager of the Native American Business Incubator Network (NABIN), a former initiative of the Grand Canyon Trust.
In 2014, Catapult Design and NABIN co-established a virtual business incubator for Native entrepreneurs based in and around the Colorado Plateau. The initiative called Change Labs helped small business owners navigate regulations, permits and financing options, in addition to offering peer professional development and more.
The new Change Labs — a business by the same name, rebranded and reimagined, and co-founded by the core team members of Catapult and NABIN — takes business incubation and entrepreneurial networking to new heights. Finally, Change Labs will grow roots — in the form of a 4,000-square-foot space in Tuba City, Arizona, on the western side of the Navajo Nation.
Business counselor Trish Reznik is on board as well — and a host of new jobs are opening up, such as community manager and financial controller, as well as another business counselor position. Change Labs will also add a summer internship position.
Come 2020, when the 4,000-square-foot space is open, multiple positions will be posted to Change Labs’ jobs board.
But in April 2019, a smaller version of the forthcoming 4,000-square-foot space will open to community members. Fleming is excited about this as yet unreleased news: Change Labs Studio, a 600-square-foot space on the Hopi side of Tuba City, will be available for co-working and business incubation to selected applicants.
“It’s small. It’s a way to get our [Change Labs] community jumpstarted, while we wait for our 4,000-square-foot building to finish construction,” Fleming shared with Native Business Magazine.
Change Labs — the Navajo Nation’s first creative workspace for entrepreneurs and small businesses — will drive four core programs.
Applications for both the Artist Residency and the Business Incubator programs will open in early April and close in the beginning of May. Change Labs will finalize the selection by end of June.
The new cohort of entrepreneurs — including artists in residence and business incubates — will begin their training in July 2019, working from the studio space in Tuba.
Change Labs’ four programs include: co-working, business incubation, artist residency, and data collecting and reporting.
Co-working: Leapfrogging Barriers to Entrepreneurship
Change Labs will soft-launch its co-working space in April with Change Labs Studio — a 600-square-foot space that’s a mere fraction of the official Change Labs location forthcoming in early 2020. “It’s going to have color printing, simple tools, computers, Internet,” Fleming shared.
The 4,000-square-foot building will provide co-working space (fee for service) to dozens of community members at a time, featuring conference room space and meeting spaces, in addition to many more tools and equipment. “We’ll have desk space people can rent, in addition to all the typical amenities you find in a modern co-working space,” Fleming said.
Community members can use the small space for free starting in April. Fleming added: “We’ll have workshops, business counselors and legal advice.”
Business Incubation: Supporting High-Potential Entrepreneurs
The business incubator will carry on Change Labs’ former work, previously performed virtually — “where we select a cohort of 10 Native-owned small businesses or startups that have high-potential entrepreneurs behind them and high-potential business ideas, and we provide them with one year of training and mentorship support, and also access to a microloan program,” Fleming said.
“For some of them, it’s really to lay the foundation of their business, and for some of them, it’s to ready them for growth of their business,” she continued.
Change Lab’s team accepts 10 Native American entrepreneurs every six months into its cohort, and each receives 64 hours of technical training on business modeling, branding, and accounting over one year — as well as one-on-one monthly support from one of our business counselors, who will work with the entrepreneur to set realistic goals to achieve within one year.
“At the program’s conclusion, cohort entrepreneurs are eligible to apply for loans from our loan program partner, Co-op Capital, Nusenda Credit Union Foundation of New Mexico. The incubator is intended for high-potential Native entrepreneurs who have existing businesses on the cusp of profitability,” Change Labs states.
Artist Residency: Strengthening the Creative Economy
Change Labs’ new Artist Residency Program is actually an evolution of the Change Labs has been engaging local artists for the past three to four years.
“We hired Native artists to work with the entrepreneurs in our business incubator. They would help us design marketing materials, such as a logo, a business card or signage. For us, it was a great way to take all of our talent as Native artists and channel that talent toward creating and supporting small businesses,” Fleming said.
Now the Artist in Residency program creates a more permanent role to support that vision and goal.
“The artist resident will work with the business incubates. He or she will help them create marketing materials and support their artistic vision. And he or she will also be commissioned by Change Labs to create one public artwork — that’s defined broadly. It could be a sculpture, it could be a mural, it could be a comic book, who knows. One public artwork that illustrates the intersection of Navajo culture and entrepreneurship. Our goal there is really just to instill more pride in our Native identity as entrepreneurs.”
“Doing Business on Navajo” Business Analysis: Providing Evidence for Decision Making
Over the course of five years of operating on the Navajo Nation, Change Labs realized the severe lack of data that exists to quantify entrepreneurship. When presenting to the Tribal Council last fall, they struggled to underscore — with hard data — the economic benefit of small businesses on Tribal land and the importance of small businesses in creating a balanced economic strategy.
“Without real numbers, I feel like some Tribal Council members don’t even believe that there are small businesses that need to be supported on Navajo,” or there is a misnomer that small businesses don’t really exist across the Navajo Nation, which is “so not true,” Fleming stresses. She added that the regulatory environment on Navajo is not optimized or ideal.
The annual report “Doing Business on Navajo” will utilize established indicators by the World Bank that will help create a baseline for the Navajo Nation.
“I pulled up the World Bank data, and by my estimates, the Navajo Nation is a worse place to do business than Haiti or Venezuela. We’re pretty much at the bottom of the list. I hope that just knowing that triggers a response in our leadership. We’re worse than some of the most devastating places in the world in terms of doing business,” Fleming said.
The former iteration of Change Labs collected informal data on more than 500 Navajo small businesses — from individuals selling at the flea market to home businesses. “Regardless, it’s business transactions that they make regularly under some business name,” Fleming said.
To Fleming’s knowledge, that’s more than anybody else has done in terms of trying to quantify how many business on Navajo rely on those sources of income for their livelihood.
“The more we can collect that data, the more we can demonstrate that, yes, there is a prominent community of small businesses on Navajo, and they get no support from the Tribal government. I hope that leads to some strategic things our government can do to support those 500-plus businesses,” Fleming said.
Fleming added that she’s hopeful, with the pending closure of the Navajo Generating Station, that it will trigger a governmental action plan for this year and next year that supports small businesses. “Not to say that small businesses contain a solution for all of them. But I’m guessing that several of them already have small businesses that they run on the side, and if this new administration can do anything to help those families — whether it be through training or creating financing mechanisms or helping them access services like Change Labs to grow those businesses, to formalize those businesses — then I think that’s going to be a plus,” she said.