Entrepreneurship | February 27, 2018

Heather Fleming: Bringing global social innovation home to the Navajo Nation

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New Revivalists is a series from ImpactAlpha and Village Capital profiling the people, places and policies reviving entrepreneurship — and the American Dream.

New Revivalist: Heather Fleming, CEO of Catapult Design
The Navajo Nation, U.S. Southwest
Mission: Change Labs, led by Catapult, is accelerating entrepreneurship as a path to economic development and poverty alleviation on the Navajo Nation
Follow: @heatherfleming and Catapult_Design

Economic development on tribal lands has long meant mostly casinos and coal mines. Heather Fleming, founder of Change Labs, wants to change that to social entrepreneurship and the digital economy.

It’s a grand challenge for Fleming, a native of Tuba City, the largest city on the Navajo Nation with a population of 8,611. Fleming studied design at Stanford before founding Catapult Design, which helps design products for underserved communities worldwide. With Change Labs, she’s bringing global social innovation back to the reservation.

Entrepreneurship, she says, can turn a wealth of need into wealth-generating opportunities. “There’s no one working on recycling, clean water, electricity access,” she says. “Is there a great idea out there for how to bring electricity to the 20% of the population that’s completely disconnected from the grid?”

Unemployment rates on the reservation reach 60%. Basic infrastructure barely exists, let alone internet and mobile penetration. But dig a little deeper, says Fleming, and you’ll find a community of informal entrepreneurs, trading crafts and jewelry, making and selling food and hawking chopped firewood.

“They’re all entrepreneurs, they just don’t see themselves that way,” she says.

When Change Labs organized its first entrepreneurship lab five-years ago to explore challenges faced by small-business owners, Fleming expected maybe 30 people. More than 100 turned up. Today, Change Labs hosts quarterly pop-up entrepreneurial labs across the reservation to help Navajo founders spot challenges and turn ideas into registered businesses. In May, Change Labs gained access to land where it plans to open a co-working space for entrepreneurs.

ImpactAlpha: What is Change Labs?

Heather Fleming: Change Labs is an initiative to build entrepreneurship on the Navajo Nation. We host annual and quarterly events with workshops, speakers, and an Expo for entrepreneurs. We bring together different partners for each event to talk about barriers to entrepreneurship on the reservation and give people the tools and agency to use business as a way to drive change in their communities.

Catapult Design is the architect. Our biggest partner is the Native American Business Incubator Network in Flagstaff, Ariz. Other partners include conservation organization Grand Canyon Trust; the Kellogg Foundation, which is our biggest funding partner; National Endowment of the Arts; a few family offices; and New Mexico Community Capital, a CDFI outside of Albuquerque, N.M.

Each year we bring in different partners. Four years ago, our first year hosting a Change Labs event, we worked closely with University of New Mexico, Gallup — Gallup is the biggest border town to the reservation — and Diné College, a tribally-owned college. The second year, we worked closely with Navajo Technical University. We’ve had MIT Media Lab come to teach design. We’ve featured some of Catapult’s clients and other startups working globally that have relevance to the reservation, like PayGo Energy in Kenya, which is selling pay-as-you-go gas cookstoves, and Sarvajal, which is building drinking water ATMs in India. We’ve also pulled in people from Google and Facebook. We called it “Silicon Valley coming to the reservation.” People loved that.

Change Labs events are supposed to be fun and inspirational and address topics and themes to entrepreneurship that people wouldn’t otherwise have access to on the reservation. There isn’t anything brick and mortar to any of it, though that is part of our plan for the next five years. We want people to go away feeling empowered, thinking, “Ok, I can do this.”

ImpactAlpha: What is the context around the current economic and entrepreneurial environment on the Navajo Nation?

Fleming: The Navajo Nation is about the size of West Virginia, with a population of around 190,000. The largest towns have a population of about 8,500. It’s tough for small businesses on the reservation because the population is really rural and their market is so limited. And there’s just so much need in every sense. We lack the infrastructure that most developing countries lack: water, electricity, roads. Internet and mobile penetration are really low.

Also, unemployment is really high. Most estimates suggest it’s 50% to 60%. The Division of Economic Development mostly focuses on supporting casinos and coal mines. I think that’s a lost opportunity, because when you drive across the Navajo Nation, you see thriving flea markets, you see people selling burritos and coal and chopped firewood. Most of those “unemployed” folks are working in the informal economy. They’re all entrepreneurs, they just don’t see themselves that way. They say, “Oh, I don’t run a business, I just sell burritos.”

ImpactAlpha: Amid all those other needs, how did you identify entrepreneurship as the key issue to focus on?

Fleming: I see the lack of formal employment opportunity as the biggest factor in why Navajo communities continue to be impoverished, year after year. Our economy is still mostly rooted in crafts and jewelry. Right now, the way business is done is people go to the trading posts, and then white traders — which sounds so 1800s — buy their rugs for $300 and turn around and sell them for thousands of dollars. We want to give artisans a way to put their things on Etsy, at least.

But there’s also a wealth of need on the reservation that I would like to see people tackle through entrepreneurship. There’s no one working on recycling, clean water, electricity access. Is there a great idea out there for how to bring electricity to the 20% of the population that’s completely disconnected from the grid? I would love to see people motivated to taking up these issues and put their skills to use for higher level needs in their communities. That will allow us to diversify the economy over time, too.

ImpactAlpha: Have you seen any examples of this kind of entrepreneurship at work on the reservation already?

Fleming: A woman who came to speak at one of our events, Penny Emerson, used to be a nurse at the Indian Health Service. She was frustrated that a lot of her high-needs patients weren’t able to keep their appointments because they weren’t able to get to the hospital. So she quit her job and started picking up patients in her truck and driving them to the hospital herself. Over time, she turned that into a business. Now she has a fleet, going places where the Navajo Department of Transportation doesn’t go, like down people’s dirt roads, and she offers a number of other services. She may be the first Navajo social entrepreneur on the reservation. We need more people like her who see a need and are able to turn that into a business opportunity that benefits the community.

ImpactAlpha: How has the vision and model for Change Labs evolved since it started?

Fleming: When we started five years ago, there weren’t many organizations looking at entrepreneurship and small business as a way of affecting economic development, so we just started with the simplest thing you could do, which was to organize an event. We wanted to see who was out there and who would come and find out what their challenges and needs are. We advertised our first event in Shiprock by radio, in the Navajo Times, by word of mouth — those are the only marketing channels on the reservation. We thought maybe 30 people would come. One hundred showed up. We were blown away by that.

Change Labs hosted an annual event for the first three years. Last year we also started organizing quarterly pop-up events in different towns, or “chapters”, on the reservation. There are 120 chapters. Some, like White Cone, are small, with 200 people, maybe less. We start by polling people on the biggest challenges they face, what their vision is for their community, and what skills they have that they can share with others. Then we design a program around that.

At the White Cone pop-up, for instance, we did a round-robin, where we brought in business coaches, business counsellors, and designers. We had people start at the business canvassing table for help with their business model, then move on to the Build Navajo table where they could pick up the forms they needed to register their business, then go to the logo, sign and poster-making station. They walked away with all the forms they needed, a stack of business cards or a sign, and a thumb drive with all of those files on it.

Change Labs has also developed a web-based tool and an app to supplement the events.

ImpactAlpha: You mentioned that mobile and internet penetration is low on the reservation. What’s the utility of developing and teaching digital tools when people can’t actually use them?

Fleming: We have to acknowledge that the entrepreneurial activities that rural people can do remotely will be largely internet-based. Most towns have internet access. Within the next 10 years, the whole reservation will have internet access. We need to be training people now on how to leverage digital skills.

ImpactAlpha: Ten years is a long horizon to plan for when the immediate needs are so acute.

Fleming: It’s difficult for people outside the reservation to appreciate how long things take. We can’t do anything on a whim, because everything requires persistence and planning. We’re trying to inspire a cultural shift at the end of the day. To do that, you have to be patient.

It’s the same thing we see happening in developing places globally. A clean cookstove that is on the market today might not appeal to the women running the households now, but it will appeal to their daughters. To make change, you have to be willing to wait for that shift.

ImpactAlpha: What’s the plan for Change Labs going forward?

Fleming: We have a five-year plan in place to build a co-working and incubator space in Tuba City, the reservation’s largest city. We know there’s already so many incubators and accelerators out there, but there are none on the Navajo Nation and none catering to our unique needs.

Last May, we cleared the biggest hurdle: getting access to land. We expect it will take us a year to get the space up and going, then we can start with support and tracking metrics — things like how many businesses we help get set up, how much they’re contributing in taxes and revenue generation, etc.

ImpactAlpha: How is a brick-and-mortar space going to support current and future business owners who will likely be reliant on digital business models?

Fleming: I had a woman near Tuba City call me the other day who was trying to figure out how to use Airbnb. Ecotourism is growing. People are excited about letting tourists come stay in their hogan. She’s says, “I’m trying to use Airbnb, and I can’t figure out how to do this.” I spent 45 minutes on the phone with her and I thought, “If we just had the office, I could refer her there so someone could help her.”

Even for formal business owners, starting and running a business on the reservation is really challenging. Business site leasing is a three-year process. And then there are other challenges like access to capital. We just got our first CDFI last year. The only other bank on the reservation is Wells Fargo, and we have no credit unions.

Ultimately, I think access to capital is the biggest gap in the ecosystem. We can try to build businesses all we want, but they’ll be crippled if they can’t access capital to grow.

ImpactAlpha: Do you see potential for scaling Change Labs and its co-working/incubator model to other parts of the Navajo Nation and other tribal lands?

There are so many other tribes that have this same issue. We have started talking to other tribes about their challenges, successes and failures in entrepreneurship building. There’s a group called Thunder Valley in the Dakotas that has taken on a similar initiative to Change Labs, while other tribes are still trying to figure out a path to start. We would love to create something that other communities can replicate.

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