Former El Paso mayor and businessman Joe Wardy is the new CEO of the Hub of Human Innovation, a boot camp for startup companies.
The nonprofit technology incubator was launched in Downtown in 2011 as part of a broader effort by city leaders to create more high-skill, high-wage jobs by cultivating fast-growth tech companies in the region.
The Hub is getting ready to embark on a major fundraising campaign, Wardy says. The incubator leans heavily on the city of El Paso and the state, which provided funding for the Hub to launch. But the goal was always for the Hub to become a privately funded operation.
Wardy succeeded Cathy Swain, who retired as the Hub’s founding CEO in November and moved to Vermont to be closer to her grandchildren.
Since it was founded, the Hub has worked with 46 startups, 36 of which are still active, according to the most recent data collected by the Hub. The incubator’s clients have raised a total of $1.4 million in investment capital and have combined revenues of more than $15 million.
Wardy, 63, graduated from the University of Texas at El Paso with a degree in finance. He pursued a career in transportation, serving as the chief operating officer of Herman-Miles Trucking in El Paso until the company was purchased by United Parcel Service, UPS.
Wardy was mayor of El Paso from 2003 to 2005. He ushered in the city manager form of government in 2004 and hired El Paso’s first city manager, Joyce Wilson. He was defeated for re-election and left office in June 2005.
Later, Wardy helped lead the turnaround of the troubled National Center for the Employment of the Disabled, now ReadyOne Industries. He served as president of the nonprofit for a year, from 2006 to 2007.
After that, Wardy worked for Stagecoach Cartage and Development as vice president of strategic development. Then he was the last CEO of the nonprofit Visiting Nurse Association of El Paso, which closed in 2013.
Today, Wardy serves as vice chair of the Camino Real Regional Mobility Authority, which has an estimated $1 billion in transportation projects under its management, including the streetcar project. He also serves on the UTEP Development Board.
For 18 years, Wardy has officiated high school and junior college football games. He says he is also a full-time granddad. He and his wife Delores have two sons and two grandsons.
Wardy spoke with El Paso Inc. at his Hub office, seated in front of an old brick wall and industrial piping. He talked about the challenges faced by startups in the region, what he’s doing to raise private capital and why he won’t be running for mayor again.
Q: What is your vision for the Hub?
We have some real challenges. The financial sustainability of stand-alone incubators is very difficult. Our primary funding has come from the city of El Paso and the Texas State Energy Conservation Office. We are getting ready to embark on a major fundraising campaign, because we’ve got to have much more private capital involved.
I’m calling it an investment. Law firms, accounting firms and the banks – the startups at the Hub are their clients of tomorrow. I want to better incorporate the business community, and we’ve got to get the word out.
Q: How so?
We recently addressed the three entrepreneurship organizations in the College of Business at UTEP. As a result of that, we had a student entrepreneur night at the Hub. We had 44 students come.
There was a really good exchange of ideas, so in the fall, we are going to attack science and engineering. We are also working with El Paso Community College.
The Hub was just started in 2011; it’s a long process. Some of the people I’ve met who run incubators have said, “Look, you’re going to be 10 years old before you really hit your stride.”
Q: What is it going to take to get the Hub to that point?
We need some successful startups to come through here. We have Limbs International, which was incubated here and is a success. Success breeds success. And we have some pretty exciting startups that are pre-revenue that are technology based.
Maybe when we started, we tried to do too much. We’ve got to be focused on results right now.
I’m a bootstrap entrepreneur. I know what is required, and it is hard work. There has to be a commitment, because it is not 8 a.m. to 5 p.m. to be an entrepreneur.
Q: What is the Hub’s budget?
It’s close to $500,000.
Q: How large is the staff?
There are four of us.
Q: For now, the Hub is dependent on public funding, including a $1-million grant from the city paid over four years. Will the Hub ever be self-sustaining?
That’s the goal. We can’t count on the city funding us forever. We are putting the finishing touches on the campaign to raise private capital.
We will reach out to the successful entrepreneurs and organizations in our community to ask for a multi-year commitment. We don’t need a huge sponsor; we just need a bunch of small ones.
Q: What is the fundraising goal?
Over the next year and a half, we’d like to see if we can raise $100,000. That would help sustain the operations of the Hub for a couple of years and demonstrate our value to the community.
Q: How do you describe what the Hub of Human Innovation does?
At the 30,000-foot level, the Hub promotes entrepreneurship and innovation. How do we do that? Our job is to mine the talent in our community. We provide a place for entrepreneurs, or future entrepreneurs, to get help turning their idea into reality – a startup.
The hope is they will be successful and create high-paying jobs in El Paso. Most cities have at least one business incubator.
Q: Last time I counted, Austin had 26 tech incubators.
Yeah. They have all sorts of different types.
We don’t promote entrepreneurship enough in the El Paso region. We talk about everybody graduating from college and going to work for a mega corporation, but in truth, 80 percent of people in the United States are employed by small businesses.
So a sustainable economic development plan has to have a component to grow businesses organically.
Q: What are some of the biggest challenges facing startup companies in the El Paso region?
Access to capital. That’s something that can discourage people from going forward, but there are a lot of ways to do it.
When you’ve got a year or two generating revenue under your belt, you can approach a bank. But before that, you’ve really got to go to nontraditional sources of financing. There are no two cases alike.
I think it used to be easier, maybe, to start a business. And I was part of that. Today, with all the challenges, there are a lot of things a person needs to know to become a successful entrepreneur.
Q: The lack of venture capital in the region is a common complaint. Is there any seed funding available?
Yes. There was an angel investor group that fell apart many years ago because there was a lack of deal flow.
Now we have a new life sciences incubator at the Medical Center of the Americas, a tech incubator in Juárez and the Hub. We have the ability to generate some deals for people to look at.
There is a venture capital fund that was created by businesspeople in El Paso and Juárez, there’s a venture capital fund out of Albuquerque and you have Cottonwood Capital Partners, which was backed early on by El Paso businessman Woody Hunt.
There are also a significant number of angel investors here. So I would say that it is becoming more fertile.
Q: The Hub was founded in 2011 as part of a broader effort by city leaders to create more high-skill, high-wage jobs by cultivating fast-growth firms in the region. Is it working?
There is a real dearth of entrepreneurial skill in the region, so a very big component for us is mining entrepreneurs and educating them on what they need to do to be successful.
Q: What do you mean when you say there is a dearth of entrepreneurial skill?
People don’t have the skill set. There was a study done last year by Stanford nationwide that found Latinos are starting businesses more frequently than the overall population, but they bring in less revenue – there is a ceiling.
It’s not that they aren’t good businesspeople or have good ideas. They lack the skills to scale.
Q: What potential does this region have?
For years, we have exported talent. The engineering and science schools at UTEP have produced brilliant people who leave because the opportunities aren’t here.
That is a huge resource for our community. We have work to do. Both UTEP and El Paso Community College are extremely interested in developing entrepreneurship opportunities in the region for their graduates.
Q: There’s a new incubator in Juárez, Technology Hub. How are you working together?
Ricardo Mora, who founded Technology Hub, is on our board. Ricardo is a visionary. Tech Hub is privately funded; he and his partners have funded it. They have transformed the old U.S. Consulate General into a technology campus.
Q: And they have a slide from the second floor to the first floor.
A lot of our members work on both sides of the border. They are welcome to use the Technology Hub’s cubicle here in El Paso. We have a client who uses their offices over there when meeting clients in Juárez.
Q: What services does the Hub here offer?
We have a mentor program. We have a list of 35 mentors who have volunteered – professionals in our community from every discipline. They will sit down with you one on one.
If the startup is pre-revenue, they pay $100 a month for the use of all of these facilities so they have a place to work – not Starbucks or their garage.
The other piece is the education component. So we have classes and seminars where there is a free exchange of ideas with other entrepreneurs.
We have a customer discovery class. You come to me with an idea, and in your mind you think it is the greatest idea. I’m not going to disagree with you, but you have to validate that concept.
So we are going to help you build a survey. During that class, you will canvas 40 people on Facebook and LinkedIn or the mall and grocery store. It can be very sobering.
We don’t have the ecosystem in El Paso, and we are also tasked with helping to create an ecosystem for entrepreneurship.
Q: What do you mean by ecosystem?
There are three components to an entrepreneurial ecosystem: good ideas, talent and access to capital.
Then you need things like fab labs, mentorship and places to exchange ideas.
Q: Why take this job?
I found out about this position by accident. I had heard about the Hub, but didn’t really know much about what they were doing. I learned more through a series of interviews.
The Hub really makes a difference in our community. I’ve had a great career in this community, and this is my opportunity to give back a little bit.
Q: Do you think you might run for mayor again?
No. Timing is everything in life. It was a tremendous experience for me to serve in public service. I am not a politician; I really don’t care for it.