CASE STUDIES: Agnes Underground and Central Co-op

Models of Social Entrepreneurship

Ashley Propes Models of Social Entrepreneurship

Dr. Tiffany Espinosa 2/10/2014

INTRODUCTION

The essence of socially responsible, bike riding, vintage shopping, and coffee drinking life is immediately sensed as you enter the Capitol Hill neighborhood of Seattle, Washington. This trendy and vociferous neighborhood has the presence of the wealthy, modest, young, old, somber, flashy and all of the in-between. It is Seattle’s most densely populated neighborhood with 11,722 people per square mile.1 The community has many unique and progressive characteristics, but it is not free from all social concerns.

The fight for space to rent, space to play, and space to work have become recent issues due to the abundance of new construction projects. The already highly populated community is growing at noticeable rates, causing the locals to voice concerns for their space and sense of community.

Fortunately there are multiple organizations and groups within the neighborhood addressing aspects of these concerns. Looking to these groups as social entrepreneurial models, we can compare and contrast how they exist, what challenges they address, and how they are crafting a sustainable neighborhood.

Social entrepreneurs are pioneering strategists moving forward with approaches to the challenges and unmet needs of a community. Through the application and blend of traditional business models, non-profit models and original platforms, models of social entrepreneurship take form. Looking to Agnes Underground and Central Co-op as separate examples of social entrepreneurial organizations located in Capitol Hill, we can begin to better understand what elements are in place and how they are being used to initiate a sustainable business structure with qualitative and quantitative measures of success.

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This map displays the short distance from Agnes Underground to Central Co-op and their location in the Capitol Hill neighborhood.

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CASE STUDY 1: Agnes Underground

BACKGROUND

Agnes Underground opened their doors in February of 2012 as a project designed from the Seattle based development company Dunn & Hobbes.2 Agnes Underground is a shared workspace offering membership through various plans. The startup business is located in the basement of the Agnes Lofts on the corner of 12th and Pike in Seattle, WA. Founder of Dunn & Hobbes, Liz Dunn was inspired to create the open workspace after experiencing co-working culture at the Hub in London.3

Projects established by Dunn & Hobbes are known for reusing certain aspects of existing buildings to readapt their use to current needs of the people and the city. Their mission is to maximize urban living conditions by creating workable and livable spaces. It is their intention to create “urban villages” and in doing so they approach each project with the following objectives4:

to express strong design values that help “raise the bar” for quality of architecture and urban design

to contribute something unique to a neighborhood while respecting and incorporating its existing fabric

to enhance the experience of living, working, shopping and playing in an urban environment

Agnes Underground occupies the space that was historically the Balagan Theater and fulfills the innovative approach to recreating space as functional for the existing needs of the Capitol Hill neighborhood. Through the recent assembly of Agnes Underground the community gains the opportunities and advantages of collaborative space.

USING A CO-WORKING MODEL

“As the Capitol Hill neighborhood has become more densely populated in recent years, the lack of creative, affordable office space has become a growing challenge for many. The Agnes Underground helps fill this void by offering space to individuals, and small groups, on a month-to-month basis.” -Agnes Underground Press Release

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Agnes Underground is not the only example of co-working space in Seattle. The Seattle Collaborative Space Alliance (SCSA) is a local organization bringing people from the community together to support and promote the use of shared working space. SCSA helps members find a place to best support their interests and foster their creativity. There are currently 24 separate co-working spaces within the city of Seattle and 5 of those are located within the Capitol Hill neighborhood. With the philosophy of finding the best place to promote yourself as well as your business, most of the spaces offer unique approaches that keep them from being in direct competition with one another.

Assistant property manager at Dunn & Hobbes, Erica Bechard helped iron out questions as to how Agnes Underground works as a unique co-working space. During a guided tour and interview I had with her, she uncovered the benefits of membership and what to expect on a day-to-day basis.

I arrived early to our interview and as I walked into the faintly lit pastel space, aromas of coffee burst through the air. Before I could spot the caffeinating station my eyes landed on a few cushy beanbags, green shag rugs, and a dog curled into the corner. I couldn’t quite figure out how I would accomplish anything in this seemingly “retro” place, but the atmosphere was oddly tempting. I grew curious to understand how a cup of coffee and a few beanbags created a workable setting.

Bechard explained how the environment was created to stimulate productivity through simple comforts. The open floor plan prevented the sense of enclosure. This helped to encourage organization, opposed to cluttered and distracting corners. I could feel how it served to steer the senses away from the stressful streets above. The dim lights were one of my favorite features of the physical space, however Bechard stated they were not the original lights they had planned for. A few months after opening they decided to switch out the original fluorescent

“The SCSA shares the core values of co-working: community, collaboration, openness, sustainability, and accessibility” –SCSA Philosophy

This list shows the current members of Agnes Underground.

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lighting for the dim-track lights. Although the co-working space does not have a committee to ensure these collective opinions, Bechard said it was a simple mutual decision.

We then discussed the costs and benefits of joining the space. Bechard said many members approach joining as a way to get out of the coffee shop and into a collaborative space. In most cases, members pay less per month for a flexible desk space at Agnes Underground than they would for a daily cup of Seattle’s high priced latte or cappuccino. Along with the membership fees for a day desk, monthly flex desk, or a fixed desk, all members have access to the conference rooms, kitchen, coffee machine, fitness bikes, and wireless Internet.

My final inquiries were to understand the means Agnes Underground was working with to create “intentional community” or if this was something they were interested in creating. Bechard explained quite clearly, the new business hadn’t had the time or resources to plan and generate an outreach calendar of events. She also mentioned the natural organization of outings members coordinate on their own, and

how this was what they were interested in promoting instead of a “forced hangout.” She recommended I look to other co-working

spaces if I wanted a weekly calendar of events.

ANALYSIS

Set pricing for Agnes Underground desk space, amenities and services.

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It is useful to return to developer Dunn & Hobbes’ original objectives for creating the co-working space when analyzing how the space functions. Agnes Underground’s structure models how they used their planning values to “raise the bar” in urban design and architecture by turning the large vacant space into an area of thriving enterprises and individuals. The community and neighborhood benefits from the co-working model on various opportunistic levels. Local restaurants and coffee shops are gaining afternoon business while the residents of the community gain access to a place to work beyond their distracting home offices and local cafes. The location of Agnes Underground is another feature that promotes the usefulness to the structure’s encouragement of an urban village due to the excellent access it has to multiple main bus routes.

The membership fees are one aspect of the co-working model that may hinder the extension of reaching out to the community, however Agnes Underground is a for-profit organization that does not mislead their customers into a return of monetary investment or financial assistance to those who cannot otherwise afford the space. The inclusion of members is open to those who can pay for the space and for those who enjoy what the space gives to them in return.

I would critique this model of co-working in its efforts to promote intentional community when comparing it to calendars and events of other co-working spaces. However there are cultural differences from one city to the next, as in one neighborhood to the next. It should not be assumed that all co-working spaces seek to create a formal community, but they create the space for the community to gather and promote itself. Office Nomads is another co-working example in Capitol Hill. After talking with Erica about events, I feel Office Nomad’s following statements may hold true to the mentality of what the neighborhood is in search of:

“We do not create community, we create a strong platform on which community grows. We believe in co-working without a filter. Our community is strong when it is diverse.”5

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CASE STUDY 2: Central Co-op

BACKGROUND

The desire for local foods, products, and space is more than a trend in Seattle Washington; it is a way of life. The city is trading high fructose corn syrup for high quality baked goods, prepared on multiple levels of local. The community is returning to the corner store rather than the super-sized markets and alongside of this comes the locally sourced foods stocked on their shelves.6 The Central Co-op has been a part of housing this movement since 1978, after becoming one of the first food cooperatives on Capitol Hill.

Throughout years of constant market changes and mainstream food demands, Central Co-op claims to have retained their structure as a cooperative by adopting the internationally recognized Seven Cooperative Principles.7 These principles are as follows8:

1. Voluntary and Open Membership 2. Democratic Member Control3. Member Economic Participation 4. Autonomy and Independence 5. Education, Training and Information 6. Co-operation among Co-operatives 7. Concern for Community

Central Co-op functions as a consumer owned cooperative model. Customers have the opportunity to become shareowners through the purchase of membership. The current price of membership is $60, with the option of paying $5 a month until fully paid. Once a membership is obtained, the individual is from then on referred to as an owner (or until they sell their share back if desired). With over 12,000 owners, Central Co-op generates 24 million dollars in food sales.

Through a democratic structure, the Co-op desires to generate a community driven market where product, people, and place matter most. Their motto is: Stronger Together.

Central Co-op Mission: a member-owned natural foods cooperative in the heart of Seattle dedicated to sustainable practices, community accountability, and the local food economy.

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USING A COOPERATIVE MODEL

Central Co-op is structured as a cooperative, dedicated to serving customers, owners, community members, community partners and neighboring businesses. The tiny food market is located at the intersection of Pike Street and Madison. Upon walking into the Co-op, one is immediately welcomed by the scent of fresh garlic and fragrant oils. The tight concrete and wooden shelved space offers no room to shop two by two, but the customers weave in and out with smiles on their faces and local products filling their carts.

After reaching out to Central Co-op with questions of democratic structure and member motivations, I was put in touch with community outreach administrator, Webster Walker. During our interview Walker quickly ran through the history of the Co-op and the exciting 35 years of business they had just celebrated. He was eager to discuss the updated outreach programs and changes in member benefits. He also elaborated on his role at the Co-op and how his job required him to “keep his eyes and ears open.” Recognizing how owners use the Co-op demands attention to the details outside of surveys and forums.

I questioned how the Co-op maintained a democratic tone throughout each decision and in daily routines. Walker’s response went beyond answering the trend of Central Co-ops consumers; he dove deeper into his interpretation of our society’s response to participation. He said that beyond shopping and “voting” with their dollars, owners followed the trend of being comfortable without being engaged, so long as everything was running smoothly. Quorum percentages were recently lowered for voting purposes because they were experiencing difficulties meeting the required minimum. Walker stated they were not the only co-op with this issue.

Central Co-op’s Board of Trustees work hard to determine what programs and member benefits will best engage the community of the Co-op, but participation is inconsistent, making it difficult to track the measure of social impact/return. Walker mentioned that while the Co-op can evaluate their financial success, they would like to expand to measuring themselves against a triple bottom line approach in order to prove the standards they are holding themselves to.

“It’s an impossible fight to meet quorum.” – Webster Walker

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ANALYSIS

The cooperative model encourages members to commit to remaining active and present in the politics of the co-op. It is extremely important for shareholders to express their concerns as well as their comforts with the co-op because it is the only way in which change for the community can begin to occur. Walker stated he is incessantly encouraging members to vote, speak, and act about what they care about most. He said again and again, “it is their market to shape”. In particular, a consumer-based co-op has the element of “voting with your dollars” and this encourages or discourages certain trends to occur in the market. Central Co-op has a core base of programs, benefits, and even a department of employees such as Webster Walker, dedicated to outreach and inclusive community.

The reciprocal relationships created from a cooperative open the door for inclusion of all community members, creating strength in numbers and diversity. Programs such as the Healthy Community Program at Central Co-op allow for members of the community who are struggling or do not have the resources, to join as an owner without cost. This plan helps to ensure the Central Co-op is truly servicing the entire community it exists within. The resources and unique solutions for community presence offered by cooperative models such as this are what truly start to bridge the gaps of disparity and community representation.

The most concerning aspect of the Co-op is how members of the community approach their democratic rights; it creates a lack of ownership on their part outside of their initial investment. I would have guessed members would be more active, vociferous, and supportive of their local market in this neighborhood. Perhaps it indicates their trust in the Board’s decisions.

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COMPARITIVE ANALYSIS

Agnes Underground and Central Co-op are both in search of providing services and platforms to help sustain the individuals and community of the Capitol Hill neighborhood. The social entrepreneurship models they use to reach their objectives are distinctive from each other; still they create worthwhile contrasting points along with notable comparative qualities.

Agnes Underground is a for-profit, co-working organization seeking to promote the creative space for local business and individuals to thrive and unite. Central Co-op is a collaborative food market also interested in promoting local businesses. They have the capacity to do this through featuring local products on their shelves.

Opportunities for expanded representation and multiplying potential are created from both models. Agnes Underground markets a local business within the co-working space and generates representation throughout the smaller network of interconnected businesses. Central Co-op can place local produce and merchandises on their shelves that will give consumers the chance to try it, creating opportunity for both initial and expanded exposure.

The correlation of becoming a part of a community and creating the community you become a part of contrasts in both context and relationship with each of these models. At Agnes Underground the space is owned by landlords, Dunn & Hobbes and can be rented with the purchase of memberships. Democracy of decisions and inclusion is not their centered philosophy, although they promote and encourage collaboration within the members of the co-working space. The space is there, as a platform for community, but has no specification on the representative process members can gain to recreate the community once they become members. Central Co-op operates as a consumer owned collaborative, returning a portion of their profits back to their shareholders based on patterns of consumption. Democratic and legal relationships come from buying a share of the collaborative. It encourages members to actively participate in the democratic commitment of the model, allowing for the shareholders to genuinely craft the community they are a part of through shared rulings.

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IMPLICATIONS FOR FURTHER RESEARCH

The points of intersection between the two models cross over and over again, but it’s important to remember their contrasting points as well. The intersections are what allow for them to function successfully within their community. Both organizations are fulfilling a niche in the densely populated neighborhood. The importance of different models within the same community can be further acknowledged as a highly effective way to sustain communities. Multiple models refrain from creating a greater divide. Instead they turn to one another in abstract correlations as they close the gaps of the community’s unmet needs.

Researching how organizations cooperate, collaborate, and coordinate their efforts to grow forward together without creating a competition for the same resources would be a topic for further research. I would question if organic relationships mold out of a community’s social issues or are partnerships a deeper element, taking place behind the scenes.

I would also investigate how cooperatives around the country engage their owners on a regular basis. I sensed the genuine frustrations of Webster Walker as he said he often times had to refrain from growing angry with people for not participating more, because it did not mean they cared less. I would explore why members join, why they stay, and why they remain silent.

CONCLUSIONS

The research here is limited to exploring features of two specific organizations with separate social entrepreneurship models. The goal was to investigate the ways in which social entrepreneurship transcends boundaries of traditional models of business, where success is measured by economic capital.

Through research, interviews, and comparing models to each other I felt a stronger sense of what social entrepreneurship could look like, act like, and react to. Learning the avenues of how factions such as Central Co-op and Agnes Underground build their bridges, presents to the community, and myself, a worthwhile approach as to how sustainable futures are designed by models of social entrepreneurs.

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NOTES

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1 http://www.city-data.com/neighborhood/Capitol-Hill-Seattle-WA.html2http://www.dunnandhobbes.com/press/hood/Agnes_Underground_Press_Release.pdf3 http://www.nytimes.com/2012/02/14/business/apps-make-the-most-of-spare-time-in-a-strange-city.html?_r=1&scp=1&sq=agnes%20underground&st=cse4 http://www.dunnandhobbes.com/about.php5 http://officenomads.com/join/6 http://www.capitolhillseattle.com/2013/09/big-capitol-hill-names-behind-cone-and-steiner-grocery-market-project/7 http://www.centralcoop.coop/history.php8 http://ica.coop/en/what-co-op/co-operative-identity-values-principles