Being an entrepreneur has many positives - you get to be your own boss, work on things that interest you, creatively solve problems and maybe even serve your community. There are well-known drawbacks, too, including feeling lonely, taking risks and getting investment. If you run a small business or are thinking of starting one, you have to think of yourself as someone who can defy the odds. Figures from the United States show that 20 percent of small businesses will fail within a year; but this number rises to 70 percent after a decade.

For entrepreneurs who come from a Native American background and are living on reservations, the obstacles to success are even greater. Back in 2008, in fact, the Navajo reservation was called capitalism’s last frontier in The Economist. Looking to turn this around is Change Labs. The nonprofit organisation is creating and supporting the next generation of Native changemakers from the Hopi and Navajo nations in the Colorado Plateau, encompassing the four corners of New Mexico, Utah, Arizona and Colorado. 

At the helm is Jessica Stago, one of the founders and the director of business incubation. This is the time, she says, to start laying the foundation for going in a new direction, one that seizes on the creative spirit and resilience of indigenous communities.

“For the first tim we have the opportunity to build our own economies that are based on our values and our traditional knowledge," she tells Invest for Good from her home in Arizona.

Jessica_Stago_Change_Labs_originalIt’s an inspirational message about empowerment, yet it’s not an easy one to drive home. For a start, there is no word for entrepreneurship in tribal languages. Many people on tribal lands don’t see themselves as business owners, even when they are selling goods and services. Everybody has some sort of hustle, Jessica notes, whether it’s fixing cars, tinting windows or cutting hair. She gives the example of a woman on the reservation who would sell burritos outside a place of work, every single day, no matter the weather. Even though she sold something to earn a living, this woman didn’t see herself as a business owner, let alone as an entrepreneur. So one of the first things that Change Labs does is to try to change people’s perceptions. 


Native American perceptions of business 

For indigenous people, Jessica explains, doing business has some negative connotations. Many of them think of a man in a suit coming to kick people off their land and breaking up communities. Or they think of people offering predatory loans with impossible repayment terms. Over time, the perception developed and it stuck, so there is some logical wariness that must be overcome. “We try to make them understand that business is a good thing,” says Jessica, “and that we can do business in such a way that benefits our community and is not extractive, or it’s not manipulative and harming the community.” 

For those who already have a business idea, there are few places to turn to for support, mentorship or advice. There are many regulations for Native entrepreneurs hoping to start a business on a reservation, including trying to get a business site lease from the federal government. This can take anywhere from three months to five years; the average is a year and some will never get it. “If you live on a reservation you’re probably one of the most highly regulated people on the planet,” observes the co-founder, who believes the arbitrary rules stifle growth.

Many adapt by working out of their home, but it can raise complicated tax issues as well as not having access to the infrastructure you may need to scale. So Change Labs is creating a network of entrepreneurs encouraged to dream big and share their ideas with those who are supportive and empathetic, because too often they are told, ‘You can’t do this, you can’t do that.’ 

Jessica envisioned this place to dream as a physical space, but even Change Labs has encountered problems finding a business premises. Their headquarters in Tuba City, Arizona, is a compromise of sorts, but it’s small and on loan. Then COVID came along, making it impossible to meet in person. Trying to provide their service in a virtual format has been difficult, Jessica admits.   


Native American entrepreneurs: a growing force 

In spite of these setbacks, the organisation has attracted a range of people, proving that there is demand and a growing interest in entrepreneurialism. Many of them are artists and people from creative backgrounds. One of these is Crystal Dugi, who specialises in modernising Native American art. She originally took up the discipline as an outlet to living with bipolar disorder. She never thought it could be turned into a business until a friend referred her to Change Labs. Crystal gained practical skills, but it was the camaraderie she most valued. “There are people that are in there with me, that are participating, and we're all kind of learning together and that makes me hopeful," she said at the time. 

Before Change Labs formally came together in late 2018, Jessica ran a business incubation programme that would try to identify businesses with start-up potential. The director admits they started by inviting their friends to come and talk to them over a meal. One that came through the programme was the Shash Diné Eco-Retreat, a glamping business that capitalises on the natural beauty of the area by hiring out bell tents to tourists. The incubator - now offered through Change Labs - helped the entrepreneurs with a logo, photography and marketing, all while balancing the need to be respectful of ancestral lands. 

That was in 2015 and there are now plans to build a luxury hotel from local materials, one with a small environmental footprint and supportive of traditional values. It’s a potentially exciting outcome for a business that started with such modest ambitions. 


Tribal land impedes success 

For every success story, however, there are those who didn’t get as lucky. A turning point, Jessica explains, was the financial crisis in 2008. When the banks failed, people on the reservations and those in neighbouring communities started to wonder why they were turned down for money. “I think that opened the floodgates for all of these people who have struggled to get capital to say, ‘The reasons you’re giving me for not banking with people of colour don’t make any sense, because this failure shouldn’t have happened if you’re adhering to what you’re saying.’” It was from that point on that Jessica started to question everything bankers told her. 

The relationship with the banks is long and complicated, as is the relationship between Native American tribes and the federal government. Between 1887 and 1934, the US government took nearly two-thirds of all reservation lands and sold them to settlers in allotments without offering any compensation. In 1934, the Indian Reorganization Act sought to reverse the damaging policy of “allotment” but it had mixed success. 

Some tribal land ended up in trusteeship, creating a patchwork of land tenures and property rights that continue to this day. Crucially, non-transferable, allotted-trust land cannot be collateralised, sold or developed. It has contributed to poverty that is twice the national average. One study found that “Native American households are missing out on billions of dollars, in land and wealth, because they lack the basic property rights that are critical to development”, including a healthy lending environment. 


Financial discrimination 

Change Labs’ recently published report, Doing Business on the Navajo Nation, found that the credit environment should be strong but it is not, an indication that some institutional discrimination is at play. Many banks point to the complicated legal environment of tribal law for making lending too risky, yet that isn’t supported by facts. “From a regulatory perspective, the Navajo Nation has nine of the 12 protections for both lenders and borrowers that have been shown to facilitate lending in economies around the world,” Jessica points out. In her experience, however, there are very few examples of lending and business growth on Navajo. 

It’s a familiar story of exclusion and one that is not only common to the United States. In Canada, for instance, indigenous people were shut out of the economy for many years, unable to determine their own fortunes. Invest for Good spoke to a woman looking to reframe the way in which indigenous people are seen as part of Canada’s national identity. She even coined a term, “indigenomics”, to shift the perception of indigenous people as a country’s burden to economic powerhouses. 

In Jessica’s view, the history of native peoples in the United States, like in Canada, has long been erased or manipulated, something which impacts their daily lives. Change Labs is battling that reality as it works to develop a strong native economy. 

With 2019 CL Biz Inc Graduate Marissa Mike

Building a coalition to change policy 

In the United States, Change Labs is teaming up with similar, mission-driven organisations to form a coalition advocating for changing policy so that it benefits entrepreneurs and allows them to thrive. Jessica believes the land issue is one of the biggest obstacles to growing their economy in a way that makes them self-sufficient.

“I think Change Labs is really the one to change this, because we know the value that’s been lost if we continue to export our entrepreneurs to communities that are off the reservation.”

Many younger entrepreneurs are lured away from the reservation as a result of feeling that there are too many hurdles, yet there is opportunity for those willing to try. Jessica points to a lack of fresh fruit, fresh vegetables or access to running water as everyday problems that need innovative solutions. Even coffee shops, the mainstay of just about every city, are in short supply, despite the fact that people on the reservation love coffee. So there is plenty of scope but not enough support. Change Labs hopes to turn this around, making reservations places of inspiration, not places to flee.  

Heather Fleming, one of Change Labs’ founders, is herself an example of someone who sought opportunity elsewhere. She grew up on the outskirts of a reservation in Vanderwagen, New Mexico, and ended up in Silicon Valley, where she launched a business called Catapult Design. Its aim is to work with clients who would like to use design and engineering services to lift people out of poverty in underserved communities around the world. When Heather received a grant to do some work closer to home, she jumped at the chance to use business principles to drive change in the communities she knew. 

In the beginning, Change Labs was envisioned as a one-day event for would-be entrepreneurs looking for advice, but the team found that interest far exceeded expectations. They were hoping to perhaps attract a handful of people to their event; roughly 80 showed up. It was a convincing argument for running the enterprise on a full-time basis and they received funding that allowed them to do it. Today, their online workshops can attract 100 people, while Rez Rising - a directory of Native-owned businesses the organisation compiled - has listings for over 600. 

At the Launch of Rez Rising

Change Labs: serving the community 

There are reasons to be optimistic, even after the setback of the pandemic is taken into account. The nonprofit, for example, is changing how people feel about borrowing. It has launched a kinship lending programme in partnership with a credit union, to help finance the dreams of those looking to build a strong native economy. The loans are small but they make a difference to those who have generally relied on nothing. So far, they have dispersed nearly $200,000. 

Many of the entrepreneurs Change Labs works with talk about wanting to serve their community or create jobs for others. Their focus is not necessarily on big profits at the expense of their traditions. They are rightfully cautious of investment that could do harm to that. “Investors put pressure on companies to grow and that becomes harmful not only to the entrepreneur but also to the community itself,” Jessica reasons. She believes Change Labs attracts those who dream about solving problems closer to home. “That’s what’s going to create growth, that’s what’s going to create success and that’s how Change Labs can make the funds flow in a way that’s positive for our communities,” she adds. 

She advises entrepreneurs, whether Native American or not, to always think about the value proposition: How will your product or service create value for the people you want to serve? Organise your thoughts in a way that gives you a plan, focus on the end goal. “I think it helps people to keep focused on the end result,” Jessica says. “I think most entrepreneurs want to do well for the community they’re serving and we’re helping them to complete that mission.”


Jessica Stago is the co-founder of Change Labs and the director of business incubation. You can donate to Change Labs and help Native entrepreneurs looking to build strong economies in their communities.