More Details from Fledge’s First Class of “Conscious” Companies

9/11/12Follow @curtwoodward

The first time I wrote about Fledge, the new Seattle-based “social enterprise” incubator program, I had to make educated guesses about a few of the startups involved. Fledge’s director, Michael “Luni” Libes, politely let me know that some of those guesses weren’t exactly on the mark.

But hey, you have to try. Some of these companies are at the earliest stages, after all, so their own products and plans can change a lot during even the compressed timeline of an incubator or accelerator program.

And that’s kind of the point: Get entrepreneurs with an idea and some early progress into a nurturing environment where they can work intensely on product development.

A couple of weeks ago, I stopped by to see Fledge’s inaugural class in action at the new SURF Incubator downtown. (Future classes will likely be held at the still-developing new space for HUB Seattle). And I came away with a much better picture of what everyone was working on. So it’s only right that I revise some of those early, not-quite-right guesses with more detail from the entrepreneurs themselves.

First, a bit of recap: Fledge is one of the more prominent examples of a developing effort to make Seattle a national center of socially minded entrepreneurship. Broadly speaking, that means fostering businesses and investors who want to help improve society in some way.

Put another way, it’s using capitalism to accomplish goals that might often be targeted by nonprofits.

Libes is a longtime mobile-industry entrepreneur who started Fledge after working with student entrepreneurs, particularly at the Bainbridge Graduate Institute, a private school whose signature offering is an MBA in sustainable business.

Libes says he found that sustainable business students’ ideas for new companies would wind up getting set aside once they graduated and got into the working world, even if the early kernels showed some promise.

The idea of adopting business and product development methods usually reserved for technology startups for socially focused businesses was tested out earlier this year at SocEnt Weekend, a Startup Weekend-inspired hackathon aimed at fostering early ideas with small teams. Fledge was the next step.

The accelerator program is now counting down to its demo day on Sept. 23, a free event being held at the Intiman Theater in Seattle Center. Here are a few of the companies that will be presenting, with more information than I was able to uncover the first time around:

—Learning Lights: This company is aiming to help spread industrial education to people in Africa. It plans to do this by providing relatively inexpensive materials and practical lessons that will help students learn the principles behind energy technologies like wind and solar power.

The first prototype for that work is a simple lamp powered by a small solar cell that can be used in places without electricity. “Instead of bringing a pre-assembled lantern, we bring the parts. We show people how to do it. And then we challenge them—what else would you make?” co-founder Alma Bone Constable says.

In a sort of time-warp moment that shows the kind of huge leaps being enabled by mobile communications, Constable says early market testing showed that people in Africa actually wanted something that could charge their cell phones, too.

Constable and co-founder Mike Greenberg have both worked on social projects in Africa, and met as students at Bainbridge Graduate Institute. They believe that increasingly cheap components can allow people to affordably learn about energy generation technologies, in the same way that ever-more affordable digital technology is advancing in the developed world.

“Our theory is, look at what happened in America in a generation when you made computers cheap enough, and accessible,” Constable says. “What would happen if not only individuals, but communities could control their energy destiny?”

—Local Tools: Previously called Sharebox, this company is working on a software system to help rental businesses and neighborhood tool lending libraries streamline their operations.

Partners Gene Homicki and Patrick Dunn were co-founders of the West Seattle Tool Library, a community lending operation that allows people to have access to tools without having to buy them.

They developed a software system for tracking the library’s inventory and rentals, and thought there could be an application to other similar operations around the country. It also turns out that Local Tools could have a ripe business target in supplying rental businesses, Homicki says.

Not only is there a lot of money in the rental business, with everyone from The Home Depot to countless local small businesses, but “it’s also a market that hasn’t really been modernized to this point,” Homicki says.

“A lot of it’s still done on paper and pencil,” he says. “A lot of companies, you don’t know that they exist, or know that they do rentals. Even big companies like Home Depot and REI don’t have their rental inventory up online.”

So what’s the social-good bent of this business? By making rental more efficient and accessible, Local Tools figures that it can cut down on the amount of things that people buy to use once or twice, and then leave sitting in the garage.

“We want to make it easier to rent than it is to over-consume and buy stuff,” Dunn says. “The more we can get people to connect to their local rental shop, their local lending library, the more stuff they’re going to be doing—and it’s a real driver for the local economy as well.”

—Community Sourced Capital: At first glance, I thought this company might be a crowdfunding service taking advantage of the recently loosened federal regulations around platforms akin to Kickstarter for startup companies.

But it’s a little different. Community Sourced Capital’s idea is to have loyal customers support local businesses by lending them money. The loans themselves would be revenue-based financing, that alternative financing model we’ve seen in the Seattle area through the startup LighterCapital.

That means, if my local bakery needed to raise some money to buy a new oven, it could borrow money from its customers through Community Sourced Capital, and repay them by sending back a portion of revenue. The individual stakes would be pretty small, between $25 and $250, for instance.

Unlike in commercial lenders who use revenue-based loans, however, the customers wouldn’t get a big interest payment for risking their capital. Community Sourced Capital’s model contemplates the customer loans as a zero-interest arrangement, with the idea that they would get their money back quicker if the business does well, since the repayment would be a percentage of revenue.

“We not only get small businesses access to capital quicker, it’s also from people that they know. And by basing the payback off of revenues, we’ve created a relationship where these hundreds of investors are vested in the revenues of the business,” co-founder Casey Dilloway says. “We believe that their loyalty will grow, and the overall local movement will grow as well.”

There will be limits on how much lenders can pledge, co-founder Rachel Maxwell says, and Community Sourced Capital will also examine the businesses’ books on an ongoing basis to help protect lenders. But the company will make sure that people know there are no guarantees.

“We’ll make it clear to you that there’s a real chance that you could not get your $100 back,” she says. “And at the same time, though, you will know the business. So, part of our hope, our intent, is to create this circle of community around responsibility.”

—Here: This digital community startup took root after the New York apartment building that Sean Kean called home tried to clean up some clutter by clearing off the community bulletin board that neighbors had been using to keep each other updated on open rooms, concerts, parties, and other things going on in the community.

With that retro social feed gone, Kean built a simple website to replace the bulletins, and found an eager group of users. “Within six months, the building was all doing it and it turned out to be this really effective form of communication,” he says.

Now, Kean and co-founder Nina Carduner are hoping to expand that concept for communities everywhere. The idea has grown to become much more visual, taking inspiration (as so many have done) from the out-of-nowhere rapid growth of Pinterest, the visual-centric social network that is particularly popular with women.

Tying back to that original apartment-building experience, Here thinks it will have success building a user base by focusing on existing communities and offering the service as a way to amp up their community interactions. That could mean finding other places that are already active posting handbills and flyers, Kean says.

“We’re trying to go to the physical world first. We post up our own flyer there saying, ‘Hey, this whole board has been captured on Here—check it out,’” he says. “Imagine this as a way to bookmark all of these, to pin that poster into your own personal thing.”

“It doesn’t require a huge population to be already present on the site and actively using it,” Carduner says. “You can start to engage more actively, or you can be a more passive user for a while.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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    Thanks for the write-up. We hope to impress in person on Demo Day too!