Cooperatively-Organized Business Incubator

The Work Hard Pittsburgh Coop equitably supports tech & traditionally entrepreneurs by systematizing shared ownership, talent, & capital.

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Eligibility

  • I am not an employee of BNY Mellon, or an immediate family member of a BNY Mellon employee
  • I am over 18 years of age
  • My organization is incorporated as a non-profit, for-profit, or hybrid organization, or I have a partner that is incorporated and could accept funds on my behalf
  • I have already piloted my initiative and have some initial evidence of impact
  • My organization is headquartered and creating impact in the United States

Gender

  • Not specified

Where are you making a difference?

Pittsburgh | PA |15210

Focus Areas (required)

  • Business & Social Enterprise
  • Civic Engagement
  • Development & Prosperity
  • Human Rights & Equality

Date Started

06/15/2013

Organization Type

  • for-profit

Project Stage: Select the description below that best applies to your approach.

  • Scaling (expanding impact to many new places or in many new ways)

Budget

  • $500k - $1m

Website or social media URL(s) (optional)

https://instagram.com/workhardpgh
https://www.youtube.com/user/TheHardwareStorePGH

Twitter URL

https://twitter.com/workhardpgh

Facebook URL

https://facebook.com/workhardpgh

1.Founding Story: Share a story about the "Aha!" moment that led the founder(s) to get started or the story of how you saw the potential for this to succeed.

In 2011 the founding team of Work Hard Pittsburgh participated in a traditional west coast-style business incubator. The company’s website allowed users crowdfund the distribution of political advertisements during the 2012 Presidential election. It was a mission-driven, and in our home market of Pittsburgh, not fundable by traditional angel or venture capital.

We quickly recognized that investment models practicing 10x returns can only support a small fraction of businesses. Alternative models needed to be developed that maximized resources, talent, and learning of more and different kinds of entrepreneurs.

In 2013, we launched Work Hard Pittsburgh with the mission to rethink how entrepreneurs equitably access resources and capital.

2. The Problem: What problem are you helping to solve?

The rate of business failure is high, due to under-capitalization and lack of resources. Current models of investment, focused on 10x returns, do little to support 99% of businesses looking to start and scale. When traditional capital participates in a funding round, the entrepreneur is poorly positioned to negotiate favorable terms. Risk averse lenders like banks and credit unions face rigorous regulations that prevent their support.

3. Your Solution: How are you planning to solve this problem? Share your specific approach.

Work Hard Pittsburgh is a cooperatively owned and operated business incubator that provides training, resources, sales support, and access to capital for its Members. Our mission is to make it easier for any entrepreneur to start, scale, and sustain a business venture, while adhering to the standard cooperative values of self-help, self-responsibility, democracy, equality, equity and solidarity. We are mindful of our position within the community and our responsibility to promote sustainable development while working broadly to create a more just and equitable society.

We’ve created a diverse community dedicated to mutual benefit through systematized action & created process. Member-owners are empowered by access to: a) capital in the form of 0% interest loans or direct investment, b) tech talent via collaboration with our member-owned web developer boot camp, c) gig economy contract jobs via our member-owned creative agency and process-driven member-to-member time bank, d) mentorship, expertise, and subsidized capacity to increase member-owned business performance, e) participation and earned equity on product teams taking new coop-owned solution to market, & f) lead sharing.

4. Example: Please walk us through a specific example of how your solution is working to solve the problem.

Coop entrepreneurs find unique value in system. Each extracts different resources to varying degrees while contributing back through 50 hours of community service annually.

A typical use case is well represented by, Rob, an African American college dropout who graduated from our member-owned web developer boot camp. He secured a full time job as a junior developer making $65k/year in 2016 after graduation. In 2017, he quit his job and launched Twelve Five Designs, and independent web development studio. In 2017, he made $65k running his own business and expects to make $85k in 2018. The coop’s member-owned creative agency routinely frequently subcontracts Twelve Five Design on client work. This quarter, his company is taking on a recent graduate of the our web developer boot camp as an intern. Twelve Five Design’s office is located inside our facilities that Rob cooperatively owns.

5a. Too many people in the U.S. have unmet needs for financial products and services. How is your work reaching a population(s) that is currently underserved? If it is not reaching an underserved population yet, how might it in the near future?

Mandates around equity and inclusion are written into the coop’s operating agreement. Before any dividend or capital event can occur, the coop must exceed the rate of national small business ownership for women and African Americans in our membership. We are on pace to meet this goal by 2019, with 8 of the last 10 new coop-track members fitting that demographic profile. Also, our member-owned web developer boot camp reserves half of its slots for groups of people underrepresented in tech.

5b. Please specify if the population you are reaching is underserved due to any of the following characteristics:

  • illness
  • work status
  • race/ethnicity
  • religion
  • sexual orientation
  • gender
  • age - youth
  • socio-economic class
  • other (please specify on question 5a)

6. Marketplace: Who else is addressing the same problem? How does the proposed project differ from these approaches?

Incubators, even cooperatively organized ones exist in a many of markets and verticals. They are always narrow in scope and never leverage high-growth tech economy to support traditional entrepreneurs. In our model coop entrepreneurs, a) have access to tech talent via our web developer boot camp. b) have access to contract work to mitigate personal financial risk via our creative agency. c) have access to friendly capital in the form of loans, direct investment, and peer-to-peer service exchange. d) are economically and culturally invested in the success of other member-owned companies.

7. Impact: How has your project made a difference so far?

Our coop is owned by 50 entrepreneurs. That number will grow to about 150. Currently around 40 member-owned business find benefit. 80% of our member-owned businesses are still ongoing concerns after 3 years. Members have done 2,350 hours of pro bono work for small business and been provided $700k of contract work.

Bigg Dog Commercial Cleaning
African American-owned
Borrowed $10k from an internal loan fund
Received a pro bono website build

MUSICat
Woman-owned startup
Accepted $2,000 of ongoing contract work to subsidize living
Received over 20 hours of free childcare

Meta Mesh
Nonprofit building democratically-owned wireless networks
Woman co-founder w/ chronic illness
Help securing $75k of grants
Received two years of free office space & $5k of subcontracts.

Academy PGH
Web Developer Boot Camp
1/2 of grads from groups underrepresented in tech
75% placementments

8a. Spread Strategies: Moving forward, what are the main strategies for scaling your impact?

Replication is forthcoming in 2019. A satellite location will launch in a economically distressed neighborhood 6.5 miles from our base of operations. This wheel and spoke model will ensure that geographically locked entrepreneurs have access to the same opportunities.

White papers capturing process are already being written by university partners. Organizing documents are open source and available for download. Income will be generated via trainings and accreditation as appropriate. Startup costs to replicate in other cities are estimated to be less than $1M for 3 years of run away.

8b. If applicable, which of the following scaling strategies have you launched?

  • Organizational Growth
  • Franchising, Licensing, Accreditation
  • Organizing Conferences
  • Trainings, Consultation
  • Open Sourcing
  • Lobbying, Policy Change
  • Industry Standards (labels, certification, awards, etc.)

9. Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

The cooperative launches around a dozen products every year with member-owned founders. The deal terms are case-by-case. Sustainability is created by income generated by these new companies. To date, our web developer bootcamp, commercial real estate company, and creative agency have all generate meaningful revenue back into system. Revenue is used to cover expenses and seed the next set of income generating companies and future expansions into other markets.

10. Team: What is the current composition of your team (types of roles, qualifications, full-time vs. part-time, board members, etc.), and how do you plan to evolve the team’s composition as the project grows?

Members earning a unit of ownership in any given year are required to do 50 hours of service to the coop. Members form committees to address day-to-day tasks like marketing, project management, diversity, and culture. An executive committee oversees finance and business development. Through the entire ecosystem, there is only one salaried employee, our instructor of the web development boot camp. All other members act as contract workers picking up 1099 jobs from our creative agency as needed.

Help Us Support Diversity! Part 1 - Which of the following categories do you identify with? (optional)

  • White (for example: German, Irish, English, Italian, Polish, French)
  • Hispanic, Latino/a, or Spanish origin (for example: Mexican, Puerto Rican, Cuba, Salvadoran, Dominican, Colombian)
  • Black or African American (for example: African American, Jamaican, Haitian, Nigerian, Ethiopian, Somalian, etc)
  • Asian (for example: Chinese, Filipino, Indian, Vietnamese, Korean, Japanese, Pakistani)
  • Self-identify race, ethnicity, or origin

If you replied "Self-identify race, ethnicity, or origin" in the question above, please specify. (optional)

Our members represent many races, genders, and ethnicities.

Help Us Support Diversity! Part 2 - Do you identify as part of any of the following underrepresented communities? (optional)

  • Communities of color
  • Disability community
  • Low-income community
  • LGBTQ community
  • Religious minority (non-Christian)

If you replied "Other" in the question above, please specify. (optional)

Our members identify as communities of color, low income, LGBTQ, and religious minorities.

How did you hear about this challenge?

  • Other

If you replied "Other" in the question above, please specify. (optional)

Our non-profit partner, New Sun Rising shared this application.

Evaluation results

3 evaluations so far

1. Overall, would you champion this entry as a excellent example to move forward to the next phase of the challenge and become a semifinalist?

Yes, absolutely! - 33.3%

Yes/maybe - 66.7%

Maybe - 0%

Maybe/no - 0%

No - 0%

2. Is this entry INNOVATIVE?

Yes, absolutely! - 66.7%

Yes/maybe - 33.3%

Maybe - 0%

Maybe/no - 0%

No - 0%

3. Is this entry IMPACTFUL on financial wellbeing?

Yes, absolutely! - 66.7%

Yes/maybe - 33.3%

Maybe - 0%

Maybe/no - 0%

No - 0%

4. Is this entry SUSTAINABLE?

Yes, absolutely! - 0%

Yes/maybe - 66.7%

Maybe - 33.3%

Maybe/no - 0%

No - 0%

5. What are some of the HIGHLIGHTS of strengths of this entry?

Connection to underserved community - 50%

Clarity of Model - 50%

Clarity of Writing - 50%

Idea Originality - 50%

Understanding of the marketplace or sector - 0%

Impact measurement - 0%

Impact Potential - 100%

Financial Sustainability - 0%

Team - 100%

Partnerships - 50%

Potential to scale - 50%

6. What are some of the areas for IMPROVEMENT of this entry?

Connection to underserved community - 50%

Clarity of Model - 50%

Clarity of Writing - 100%

Idea Originality - 0%

Understanding of the marketplace or sector - 0%

Impact measurement - 50%

Impact Potential - 0%

Financial Sustainability - 0%

Team - 0%

Partnerships - 50%

Potential to scale - 50%

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