Jun 15, 2021 - Economy

Chicago-based startup builds workers-only app for organizing

Illustration of a mouse cursor that forms a raised fist

Illustration: Annelise Capossela/Axios

Meet Chicago-based Frank, a startup with $2 million in VC funding that’s been in beta for the past year, and provides a communication space for employees (no managers allowed) to chat.

Why it matters: It's capitalism building tools to push back on ... capitalism.

Details: Frank's app lets coworkers create chatrooms to discuss issues and campaigns around a particular demand they want to make of their company, and they can even use it to organize a unionization effort.

  • It includes ways for coworkers to approve others they trust, and keeps records of polling, approvals, and more.
  • Founder Logan LaHive started getting involved in and researching labor issues and organizing following the 2016 election and leaving his prior startup, Belly.

The big picture: The growing movement from workers to gain more power and say in the workplace has been boosted by the pandemic — with employees demanding more flexibility, higher wages, and even quitting jobs that aren’t meeting their needs.

Between the lines: "For a company to manage their workforce, there are tons of tools but there are barely any that are for workers to manage their workplace," says LaHive.

Similarly, a startup named Unit is building software to make it easier for employees to unionize with turnkey tools (and also raised VC funding).

  • To be sure, there is some skepticism that tools like this are even needed as the hard part of unionizing has to do with people.

The big question: Whether companies like Frank can both build a sustainable for-profit business and navigate the capitalistic forces around it.

  • It currently has no revenue, though it plans to eventually introduce ways for users to pay for the service, likely through some form of tipping or other flexible pricing.
  • The company opted for B-Corp certification as a way to show commitment to its social goals, but it's a for-profit company nevertheless. LaHive tells me he doesn’t believe that being a non-profit should be the only structure for organizations working on such issues.
  • During the company's fundraising (via SAFE, which keeps its investors at arms distance, for now), LaHive says he was yelled out of a few rooms. "Some of the questions like, 'why should workers have more power?'" he adds. "They couldn't get over that they're venture capitalists and have some companies that are actively trying to avoid unionization."

Still, Frank raised from Hyde Park Venture Partners, Starting Line, Hyde Park Angels, and Shomik Dutta from Higher Ground Labs, suggesting at least those VCs don’t see this as a contradiction.

  • "I view the real American worker as our constituent," Starting Line's Ezra Galston told me via email. "The better they are compensated and the more aligned their work lives are with their needs, the better I believe our portfolio will perform holistically. If Frank is successful, I believe it is accretive to our portfolio, not detrimental."

The bottom line: The future of work could include some new workplace power structures.

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