Native American Entrepreneurs Face Unexpected Challenges
Jerome Tsosie worked as an elementary school teacher on the Navajo Nation for a decade before he decided to start his own technology business called Native Innovation.
“It was scary, scary as heck,” Tsosie said. “It was scary because we have a family. I have little mouths to feed. I have four kids.”
But Tsosie had a winning idea: to develop a Navajo dictionary app and sell computer supplies. No one else was doing it. And there was a reason for that.
“People were really against it,” Tsosie said. “You’re sharing our language with the whole world… I mean we’re trying to push the envelope. We didn’t get permission from our tribe to do anything like this.”
So, Tsosie took out a personal loan.
“Being a private corporation, we had the ability to skip all that and just start creating things,” Tsosie said.
So they did. And more than 8,000 people have downloaded the Diné Bizaad app since.
Last year his company did $1.5 million in computer supply sales and now employs five people.
As much as the tribe needs jobs, tribal policies often stand in the way of small businesses getting off the ground. Start-up capital is hard to come by. Investors are rare in communities where the majority of people live below the federal poverty level. And tribal bureaucracies slow down time-sensitive opportunities. Something as simple as finding office space takes too long.
“You had to fill out this paper go to this office ... the process was too much,” Tsosie said. “Whereas here (in Flagstaff) I can go directly to somebody that has a building open and say, ‘Ok can I move in tomorrow? Here’s the lease.’ That simple, it was that fast.”
In recent years, Tsosie and other would-be entrepreneurs have been able to get help from a unique organization called the Native American Business Incubator Network.
“The Navajo Nation government was created so it could execute mineral contracts, oil and gas contracts,” said Natasha Hale, NABIN program manager. “A lot of the codes and way our government is set up is set up so we can accommodate these large corporations. But it’s not set up in a way that is helpful to budding entrepreneurs.”
Hale said they need tribal policy change. In the short term, she and her incubator staff are teaching entrepreneurs to work around the red tape.
Like Tsosie, the first hurdle entrepreneurs face is getting a small business loan. Native people can’t use their homes as collateral because tribal land is held in federal trust.
“If they want a building, they have to figure out what’s the status of the land that the building sits on,” said Jessica Stago, Native business counselor. “Is there a way they can get a lease?”
And, in many places, they have to get permission from the tribal government for the most basic infrastructure-- like water and electric lines, roads and parking lots…and pay for it themselves.
There are also cultural challenges. Stago, who is Navajo, learned how to navigate the business maze when she tried to open a medical supply company on the reservation. She had to learn how to talk about herself.
“Being humble is a cultural trait that we’re taught from a young age,” Stago said. “As a business owner you have to market yourself. You have to talk about your successes. On a cultural sense it’s kinda like you’re being boastful.”
Adrian Manygoats, the incubator’s marketing coordinator, said growing up on the Navajo Nation, where many people still herd sheep and grow their own food, most parents don’t talk about money to their kids. So she said many of their clients don’t know how to budget or pay their tribal, state and federal taxes.
And many craftspeople have asked her how to price their rugs or jewelry, especially when they depict sacred images.
“There’s this idea you can’t put a price on that,” Manygoats said. “It’s something that you can’t really profit off of that. Those are things we talk about with our entrepreneurs. How do you do that? Who do you have to get permission from? What prayers do you say?”
So far the incubator has helped launch eight businesses and there’s a long wait list for their services. Since their federal grant wasn’t renewed, the staff is scrambling to piece together alternative sources of funding to pay for workshops in 2016.