house family by family we're focusing on business creation business development economic development and culture it's a wonderful conversation a robust conversation one of the relations my brother takes on a musical journey th opportunity access and environments that grow businesses in our community my guests today are two gentlemen who work in that space to help bring new businesses online silas houston i the c e o of the metro area small contractors alliance a unique model for creating effective business collaboration and contract opportunities for contractors philip porter is the loan officer and business advisor for in d c it's a neighborhood development center in st paul an organization that over twenty years now has been providing both loans and technical assistance to community businesses with a strong emphasis in serving african american black community businesses gentlemen thank you for being here and i think you've assigned us let me start with you you and i talk all the time about barriers to business for black people but we don't talk about it in a way that is gloom and doom or moaning and crying we talk about the resilience and the capacity of our people to understand the market and to drive ideas innovation and collaboration that both brings product and services to the market and creates profit and growth in our community that's the proposition for a mascot i believe tell me about the organization i would agree who all of which he said in and we mask really is the result of a group of african americans who got together and decided that we wanted to do business with each other and we didn't really know what we meant for a while we were doing and we did business in our separate silos of things that we did but we saw a space where our collective skill set could maybe go to the marketplace together and so when the city of st paul back in two thousand and eight got hit with their voluntary compliance agreement which was a really volunteer but it changes a b and we saw that in its draft form and if the group decided hey this is going to change things what could it mean and so for us it was certainly about self determination about coming out what our own solutions and so from there we started on a journey and had brought us here six we talk to all of those different people to find out what was happening and why wasn't more developing met development with and really african americans but minorities overall was the issue but being african american or it ma primary issue for us a moving what are some issues that you have going into doing this research what were you looking to and what did you expect you're going to find you know as interesting we certainly women into it  hoping to be true analysts and having no assumptions were quickly found out that we really did have some because we started being surprised by what we file which said we had some assumptions you know the assumptions really were around believing that the issues him unaided strictly from discrimination strictly from you know exclusionary practices and found that that was certainly a part of it but it didn't tell the whole story there were a whole host of other things both obvious and not so obvious that really combined to create an environment that made it very difficult for development to take place and we were development is different from giving somebody a part of a project or they get a job or a work they do some work development means that when i see you next year you're better off than you were last year and you're bigger and you're more developed we saw very little development in our research although it  your thought that you could do things together to bring the sort of cultures collective to market better than anyone to come to market individual is that correct and that's really where we found that was that was a critical thing that we found that a kind of mia scale as we think of it is that you're too small to get all of what you need and nobody's making allowances for you not have an m and so we believe that working collectively working together in a shared resource model but we also believe in sin found that within our community is all the skill sets necessary for us to be successful right we found the people with construction back around finance background process background risk management background all of those people operating doing business working for other people living right in our community and so that's what we tapped into to design i had our own model and when we looked at that model it became clear that there were other people out there doing things to try to make it work but they were are separate in so folks like the neighborhood development center who i work for back in in the late ninety's and now partnering with now we saw that they were there temping to help these contractors but operating in that silo they were more of a burden to the contractors and they were being helped because they get paperwork and things that they need that required that make sense that these guys know nothing about individually don't have the time energy know how to be able to provide so they're saying give me the application and i'll help you and their family i need help to get the application in so we really found that by coming in organizing ourselves or green to work together originally investing in our sales that we can overcome some of those barriers so that we can begin to see development take place in the principles of determination principles most of the self determination but self determination means self investment and so we are for profit entity our contractors own a portion of us and as we grow in our value grow they will share a net value equity will grow as what they have to own their solution and that's where mask is different than other solutions in that we are directed in work directly for the contractors that we're given service to they are our bosses we work at there and so when we look for solutions those solutions have to be first and foremost working for them but also working for the partners who are fart of this whole deal if it works for us but doesn't work for n b c then it's going to be difficult for them to continue to work and support for and support us so those are really the kind city of minneapolis you know the met council people like that those are the really the top of the line that's who we're working for they're providing the money there and then you get below that you have developers who have projects that they're doing and you work for them then you have general contractors that are there then you have a large serve there may be a large paintings in the bin for small guy like us we could end up working for any number of those folks anywhere on th in the further we get from where the money start the smaller our profit margin gets and so we really are trying to bring ourselves back up to the top and work more directly in projects that make sense and pallies we offer services to minister about he's helping them come up with innovative ways helping to redo their policy so that those here in land mines that they're not aware of that event in development from taking place can be  removed and we offer our services them on a contracted basis general contractors and developers we work for them when they have outreach diversity requirements to get go out into the community and find contractors or work on their project go out and provide that services and do the marketing in whole pre built conferences and bring contractors in for them and then we primarily work for our diversity contractors who we provide day to day back office support managerial support helping them do estimates take off all of those types of things and within that all of those people have a relationship with each other that's how daft the uniqueness of our model is is that the minister power  were working for also has a general contractor working for them which then has our subcontractor track they're working for them and their ideal world we're in a controlled environment working for all of them and then we bring in our nonprofit partners who give loans and support to those small contractors and then we run this model around and around and around the questions you are responding to or are answering the statements you're responding to as the idea of opening up their vendor their supplier base creating and providing more opportunity to make that not just the old boys network but to look at other people that are providing goods and services and they make grand eloquent proclamations about their commitment to diversity to inclusion but if you examine the bottom line they'll say well that's our idea that's our thought and their intent but when we look we can't sign them we can't plan or they say we came from qualified right so these are both in my view rogue and bogus excuses but business is fraught with reasons why things can everybody is ready to think about the pain points that the minority contractor has but they don't think about the pain points that the others have right in when you start talking about these municipalities their number one pain point and we found is that we've now what we've now after we've aberrated in both the regulated environment in the non regulated environment in the paperwork requirements to go and have somebody look out for you and protect you and make sure that you get in is prohibitive to you get nina style where i mean a kill you would pay for in so when you start with the application and to say that your minority is a twelve paid i mean like how hard can it be to say that a minority but it's a twelve page process that is actually tougher than gone insane and i'm poor being in section three i mean so those kinds of things then given him with the position of well we've got all this program but nobody's coming in from us is saying well you're creating barriers when you're supposed to be open up avenues and so we start from assuming that if they knew better they would do better and so we tend to go and explain to him ok look this is what's going on but the truth of the matter is is that the solution has to come from us and that has been our number one issue is one of ok we know why you guys are doing a bad job because you're not the one who can come up with the solution so when we come up with a solution and bring it to you it is your job to support it and once again that's where someone like in d c is important for us because as we've been testing this model we come to this knowing fully who we are and when we are coming to the table and saying to everybody look we have a solution on how this can work the first thing they're going to ask us is who are you by whatever you've done  before and we can give a whole list of things that we've done before but since this is never been done before we can't say we've done this before so what do we do we went in did it we went in did the project and put our model together and brought contractors a gather and shared services and went after projects and did a project found partners got them alone money paid the money back so now when we go back to those minister powers which is what we're doing right now we're saying remember when we talked to you three years ago and we told you we had a pla you keep asking us what have we done when we were brand new and you know nobody had done it before why you are now we should say we've actually done it in so they are in even more pressure because they wasted all this time trying to figure out what's going on still don't know and we're needing solutions and so we're pushing the envelope by saying we have the solution we'll tell you how it should work we don't care about your pre set programs right tell us if you've got something better let's see it and so there is a lot of frustration that these folks do a lot of talking and don't give in don't have a lot of result we see that  we're very confident that as we continue to move forward that they will get in alignment because nothing they have is working and what we have is working and so that's kind of where what does in d c do well and this is do we help a lot of small businesses i mean that's what we do that's what my tamale a founder of the neighbor development center that's what it was founded i help actually mean like a teaching them how to fish and when we say that we mean we have entrepreneurship training classes so when they done the act they have a business plan that they can actually go to a bank or institution after pi for funding but we just don't leave it there we have a relationship with allow firms so they need legal assistance and the c will be  intermediary and that making that happen as well technical assistance what we call technical assistance all those tools and resources that a business needs to succeed whether at web site development where is brand awareness whether marketing whatever that it is we provide that assistance to the business owner so we say what you're in with in the sea in a polite if you want to so as a business grows so we don't start working with you just because you finished a class just because you have five employees and now you so we have a long as you need the help we provide best the market in busy loves we love that marketplace and i go with long term is make them to the point where they don't have to come in the sea for lindy right they can go to any institution in the country get the financial lending that they that they need so our whole model was an athlete teach them how to manage their own business and hopefully if we teach them they can teach their kids welcome back to culver stations with tell me farland broadcasting from the marcus garvey house in north minneapolis important conversation about business business development business access the challenges the problems and the opportunity m porter who's a loan officer with in d c in d c is the neighborhood development center in st paul they serve the entire metro area and silas houston who is the c e o of a project that business called mas metro area small contractors alliance and so you know two things philip in the twenty years what have you discovered to be the ongoing persistent maybe some how seemingly intractable challenges for black people minorities getting in the business what have been the greatest barriers well graded barriers if you look at it from a high high perspective we do work with a lot of first generation business owners as a result of that they don't have a model history of actually running an operating a business they have very good technical skills so they might be excellent chef they might be a master barber or they might be a good plumber and contractor but some of the weakness that we seen is on the business on the business side of the  minority businesses but somebody listening watching might say well you know who gives white businesses a break how come we need special assistance when this is a nation that is entrepreneurial and small businesses really into our community and make that plea and asked offer that help and so when we say white businesses get the business get the support they need i think what comes to mind is our federal response to the need to promote entrepreneurship by creating legislation in establishing something like the small business administration right here yes it's a global response to in sure the vitality and the health of small businesses  grow them and so the question is have we been able to have access to that same set of resources oryx or have parallel strategies and resources that are targeted to our experience what do you think we have access but silence actually really tough you know touched on it when there's a you can have access but you can fill out the documentation to actually get the loan i mean it's not an easy process to go   when the question is are the forms often intentional barriers to preclude our engagement and access to the the resource i don't think that's always the case but i know that there is a is coming at it from a slightly different angle i think when you look at investment and who is making new investment and who's deciding what who gets invested in and who doesn't  e you look at who's that is is rarely us even though a lot of time is our money that's been invested so we have the average african american investor invested in for one k s and all their retirement plans and old dollars are being given an accumulated input into the hands of someone who never invested in our community right and so now we go and look and say ok what is our willingness to stop giving the money to them and invest it directly in our community and are we willing to live in wait the twenty thirty years to get to return to we when they have it and so when we start saying who is why is no one investing in our community then we've got to ask  ourselves why are we investing in our community and why do we continue to give our money to people who don't invest in our community because it's our money and we in in we give it for the folks who work jobs in corporations they give it every paycheck right none of it comes to us none of it comes into our community so part of what we're looking at from master we say so of determination and self investment when i was talking about our contract we talk about our community those folks who can we can build enough confidence and who said you know are given then the money in waiting for them to give it back i'm given to you and i'll wait for you to give it back and i'll trust you with it and i'll give you part of my check every two weeks for the next fifteen years and wait another fifteen to get it if we had that kind of investment in ourselves we wouldn't be having this discussion is about where the money come from and why can't we grow and why is there no development in our community so i ask every person who i run into and we've had this conversation before our which is a if we're not going to invest in our community why are we surprised that they won't either and so we're in someone who here in the community has made my stake here make my living here  way you know two things have to work in any of these situations they african american business owner there's things that they have to do and many things they have to do it's been my experiences we've never share with them for example that they have a need to have a decent credit score many of them the first conversations they're having about credit is when they come and tell us now you go to a bank they won't take the time to have that discussion so it's not like their mom or their dad disasters sit down at a family reunion and talk about credit i mean so there are strains that they have to do and so that banker and even in that situation he knows just in a general sense when african american walk again in a general sense they going to have less the going have lower credit they're going to have these are these other issues but if we have people that were more sensitive to those needs u have talked about a success that you're having that is also a problem and your organization has created some contract business for your contractors through a union shop right and so there's a question of how people are being paid and what you discovered in connecting hooking your team up to this work is that there was a differential and money that should have been coming to those businesses or those individuals was being taken for service there was love being provided to them tell me that story because i want to i want to see what my point of asking this is that even we when we think we're on the right track there are structural systems and processes that will disadvantage just in that we are expected to not challenge and as individuals we typically don't because you know we don't know we don't know we don't know and then we fear retribution if we raise our voice so tell me what to tell the story first on the project has what they call a project labor agreement which is a relationship with the union saying that even though the general contractor slash developer is not union but for this one project they will be on your side in a kind of a temporary agreement to be union so glad diversity contractor section three contractors can participate on the project without doing this job which is a public job as you got to be union now that it was a volunteer in thing for them to decide to be union because of how they wanted to get the project done and so you don't necessarily  once there is a project that is over two hundred fifty thousand dollars in the city's monies into it and there right then and there is a union contract or they have to put a p l a in place so that project basis is what happened was is that we come into the project where that talk to them explicitly about ok our guys are coming they're going to bring their current staff their current crew with them and with that the crew they've got to be able to bring their current crew with them to work on a project they said ok no problem when we get there they say your current crew has now got to join the union pay into a union phones and  minute they are not union contractors and why would they pay into your fund and i said well you sign the p l a that means they must join and why join a union is always voluntary you can't make anybody join but our issue with it was is that it requires a payment into the unions pension fund that has a multi year investing period for someone who's only going to be in there at best four months maybe for the duration of that project in and they were talking eight dollars in sixty three cents an hour which you like that's more a minimum wage that they would be given away and would never get anything for because they would out is that the way that this thing is structured if you follow it through foot to expect a small diversity contractor to sort this out on their own you start off with an eighty six page agreement with the general contractor within that is a one paid letter of a set that refers to a nine page project labor agreement which is not an earring were first to which that agreement then refers to a three hundred page union document and they're saying that because this guy sign this agreement in stennis one piece of paper that he should understand all of that in known the general position was one of this is what we always do this is been going on and who are you to question us and so that became a bone of contention not because we were wrong  because we had the nerve to question and when we had detailed information to back up what we were saying their response was i don't have to say it in writing when i call you on the phone and say it to you just do what i say which made no sense to us whatsoever i mean so we heard from city officials we heard from attorneys we heard from also two people nobody will in the put their position in paper on writing even as we're sitting here now the issue is on resolve they haven't minneapolis and in st paul for years and we are the first people to refuse to pay so that means that there's been a number of past low income they got a record of everybody's money they took right they got a lot built this year and that's where so we're we're not here to try to make that kind of fight when we're here to say is that hard on our deal want to pay we're not going to pay but we're here more so to say that the reason why we were able to discern this when others could not is because we brought we have a group of professionals who this is what they do right this is their trade they're not they didn't they know nothing about painting but they know everything about a contract where they know nothing and so when we bring those things together then it makes it possible for us to have this story to tell to you when it's been happening to hundreds of people but we're the one who can tell a story because our model brains that love or protection brings that level of oversight because it's dead day to day houston meska mascot is metro area small contractors alliance we're talking about business development of the premiership how to make it happen i want to talk about how do we work together to create this identity in the black community so advisor also silas houston who was the principal of the c e o of mask mask a is metro area small contractors alliance and this is a great conversation at the end of the day i'm interested in what we together and collectively can do to change the pitcher the the the vision of who we are i envision us as entrepreneurial people i'd like to see our people looked at and looking at each other walking down the street and saw his own those people their business people how do we do that is not a desirable is that a could be doing is every allowance that we would like someone else to give to us in terms of being willing to invest or we're willing to help then we should be willing to give to each other right and so if we want to lower the paperwork requirements for getting the money if we had our own money when we can make the requirements with whatever it is that we that we want it to be so i think that we have to really accept the notion of we are our own solution and that nobody else is coming to save us in that every time we think what needs to happen then we need to think about what we are going to do to make it happen i get it back i mean we would we would not have the we wouldn't be having a capitalization issue we were in you have a capitalization question we wouldn't be talking about what somebody else needed to do for us we re talking about what we ourselves can do and we can look at the young folks in our community who are ready and able to work but their starting point is less productive starting point than other people that's just a starting point where we're not willing to make that allowance to bring them up to a level of true productivity when we shouldn't be surprised nobody else has either and so i believe through self investment i believe through shared resource model between us coming together collectively deciding clearly that it makes more sense for us to work together than to compete against each other and go and compete with others i think that the sky's the limit on what we can accomplish and we would never have to go to a bank or an institution or whatever the reality is is that we have a confidence issue in each other we don't really have a lot of capital people say trust me that doesn't really can finance precede action in so we need to build confidence in each other so that we can then feel comfortable giving our resources to each other be feel comfortable with somebody looking like us control in those resources and feel comfortable saying to whoever else is not alignment with us we don't care what your belief in your position is we are investing in us for our betterment that's never exclusionary but it doesn't include everybody in ask the part that we have lane and our lane is where there is lending where it's providing that support are worth providing that entrepreneur that contractor with some problem on legal services whatever tools that we can provide that's what we like the provide inside and for you to really promote those outcomes and those results so when mascot does this job it's got three or four contractors on a major project in st paul when the project is done maybe we should interview all of the african american that was involved and all the employees mask the contractors and say this what was actually done we actually do want some positive thing now let's repeat that tell the story you know we didn't really tell the story within our community that there are some positive things but we really need to tell the story but the story has to be with the entrepreneur out front the story don't have to be about in d c is about the entrepreneur who has to be with that in there rich state a healthy state unemployment as low as three points of thing for the state in general at the same time in this neighborhood north minneapolis and point it at sixteen percent or higher and so these disparities exist across the spectrum what are we going to do about i'm thinking that there's enough attention being brought to the pervasive and consistent and perennial existence of these problems that those who have been presented and present themselves as our friends but who've managed our misery they've got the money managing it yes somebody's got to be accountable and i think that we're we are now is that this is a breakthrough moment for the black community the misery the pain is such that something's got to happen something happened and the what's got to happen is the capacity of our people to step up and take charge of providing solutions for our people what do you think agree with you one hundred percent mascot is that they do in there and to your point i mean these are level but these are very good wages you know there's been paid to african americans in that area in that field and so we need to continue on with that we need a capitalized but we have to need to grow it in the faster we can grow it the better you know the various relationships because of you have a model ok if we did it with four contractors that we're working with next year maybe we should be doing with two dozen because we know we have the model that works we got some resources there that works but i'd say we do want to control there but this is actual something that we can actually say that x amount of people was working on a job but getting this kind of money now how can we take it and replicate it but weapon created quickly and we replicate it quickly because we don't have time to waste on it we just don't we need to replicate it very very quickly so the model was there and more those partners you proximity that do business in a way that is good for the collective and that when we say it takes a village that's what we main and so on we look at the village that's here there's obviously the diversity contractors who need to come together and work together there's a nonprofit entity such as meeting in d c and folks like that who have resource but then actually it philanthropic slash investment community that have dollars and resources to put into something that is they want to see growth and development within the community and then there's also those developers and nonprofit developers and draggin for profit developers who have projects that they're doing within the city within the neighborhood that they need people to work on and then the people who we really are talking about is those low income worker from within that community who can be tapped into working for these diversity contractors who get support from the nonprofit developers investment from the philanthropic community and work consistently for the nonprofit developers and other developers that are working w something in get something now right so the investor puts their money in but they get a return on their investment but they also get development within the community jobs created you have a nonprofit economic development agency who gets is construction is for a lot of people and their motto a part time job because i go work on a project i get laid off i don't know when i get hired again in so what we're looking to do is to create a model where we have predicta and projects laid out through our partnerships on a project by project basis so someone starting to work knows i'm not only going to work on this project i want to work on a one afternoon want to improve that we can get them transferable skills we can move them towards being a journeyman and we can get a reduction of probably a increase of wealth of transference of skills in everybody within the motto has a reason to maintain a motto because they're getting something a lot of it we that we can then create a little bit ways jobs where people are working and right here within the community we can create consistent work opportunities where they can go from being i don't know nothing to be in a journey to be in a superintendent to own in their own company and we can do all of that without really even having to venture outside of the community for the word nonprofit developers in minneapolis and st paul number you know hundreds of rack residential rehab building the new houses you have developers and general contractor to work on projects that get major funding from city of minneapolis and st paul that are doing projects that can utilize this model make a relationship with these guys of opposed to hiring them on a project and through that we can begin to grow a local workforce and have them be supported through local opportunities that is all possible because of the alignment event of individuals and because we're not asking anybody to do something just to do it right are the barriers then to moving forward on this what were were will the resistant be people are used to doing what they are doing people who are not ready for somebody who looks like us to come in tell man we've got a better way i mean i'm just an artist about right and  effort and they can say to the reporting authority i tried the problem with that is a if they don't achieve the goal say in construction for example of a hundred million bucks worth of business and the goal is thirty five percent going to  businesses of color and they end up getting ten percent participation not thirty five percent participation that means our community is leaving twenty five million dollars that we're supposed to get that the regulations require be awarded to our community but there has been a willingness to say oh you know wink wink we tried did we really and the reality is how do we get to where we say you know what oh hell no my money and i want my money what do you think that i think that the reason why mask is doing what we're doing is so bad we can take away all of the excuses for not doing major business with us and then we can say exactly what you're saying hey where's our money right because hey we got the structure we got the know how we have the financing  we have the insurance we have the equipment we have the capitalization the working capital so why are you not given the this opportunity where the other thing is they say disadvantage and then they expect us to be the cheapest if we could be that cheap is how we disadvantage right and so we have to take away that notion of oh you can't be the cheapest so there's something wrong what you said we was disadvantaged which means that we can site we bring that training aspect of them we bring that grow fast bex there but we cannot do is right now be the cheapest and that's of discussion we begin to have we've had it with men that we presented them baseline understanding you know we got something we need to do so that we can do business correctly but you have something that you need to change as well not business rules but just basic common sense of i can ask him to compete with people and be the cheapest and save disadvantage at the same time why would why we need these programs if the result of being disadvantaged does not make you an it will be the cheapest then you really have not been  disadvantaged and so vast the part that our research shows more than anything is that the fault in the system is we say they're disadvantaged but we ask them to be the cheapest i mean and they do it everywhere and so our relationship is trying to build relationships that allows operate and a cough plus not to exceed environmental and not a little bit environment it's doomed the dialogue change the narrative both within the community but also in the business community so that the language we speak of the language that in abel's and empowers our people to be our best selves to be entrepreneurial to be successful to create wealth