human-I-T is Saving the Planet One Laptop at a Time
On an auspicious day in 2012, an affluent-looking man walked into a repair shop, slammed his laptop on the counter, and told the IT technician, “I don’t want to spend one more dime on this computer!” He wanted a new one—because, apparently, this one had a virus.
As the tech looked at the laptop—a computer far nicer than the one he owned himself—he was disheartened to hear his manager advise the customer to throw it out and buy another.
James Jack, the technician, knew this computer was easily fixable. He knew that computer hardware is filled with materials toxic to the environment and e-waste shouldn’t just be thrown out. He also knew that this high-end laptop, about to wind up in the trash bin, would be life-changing to countless people in his community who lacked resources and access to this kind of technology.
Frustrated but inspired, James told his friend, Gabe Middleton, what happened, and the two saw it as a chance to take action.
“The fact that you should be able to recycle a laptop was a no-brainer for us, but when we Googled ‘electronics recycling,’ all we could find were metal recycling shops,” said Gabe. “Then we asked ourselves, ‘How big of a problem is electronic waste?’”
“We found e-waste was a growing issue and that it accounts for 70% of all toxic waste, and that’s when we decided to start human-I-T.”
A ‘Salvation Army for Electronics’
Working on a shoestring budget of just $1,000, James and Gabe began running human-I-T out of the 50 square foot lobby of a cell phone repair shop in Glendale, California.
“The guy who ran the repair shop was losing customers because he wasn’t a one-stop-shop for all technology. So we offered to repair everything other than cell phones for him if we could work out of a portion of his shop [rent-free].”
It was there that Gabe and James began repairing, refurbishing, and reselling donated electronics that would have otherwise gone to landfills.
In the beginning, their biggest struggle was cash flow, made all the more difficult by the fact that human-I-T was— and is—a nonprofit.
“We didn’t have equity that we could hand out like you do with a for-profit business, so we couldn’t offer equity in exchange for capital, and [use that capital to] scale,” said Gabe.
“[Beyond that], no one would give us any loans. All of this meant that we had to ensure our business would be profitable immediately, which was extremely difficult.”
Gabe and James ran human-I-T on razor-thin margins, getting by on what Gabe described as ‘penny pinching to a crazy extent.’
“I figured out that if you go to Jack in the Box, and you order a sausage patty with a hamburger bun instead of a biscuit, you can get it for 98¢ instead of $2.19,” said Gabe, almost laughing. “It was that kind of thing, just to survive.”
The team got by on their resourcefulness, hard work, and passion. Eventually, a small family foundation donated $10,000, enabling them to get their first warehouse.
That warehouse gave human-I-T the much-needed space to house and repair more electronics and expand the business. It also gave them the opportunity to continue to tackle another serious problem: the digital divide.
In the US, over 80 million people currently lack access to the internet and computers—a divide that keeps them socially and economically disadvantaged. human-I-T had already begun tackling the digital divide by selling refurbished electronics at significantly reduced prices, but they wanted— and needed—to do more.
“I grew up in East LA,” Gabe explained. “In my community, I understood that folks didn't have access to the internet or a good working computer. It wasn't a part of our culture to even understand what being a digital citizen meant.”
“In today's digital age, if you don't have rudimentary digital skills, you're in trouble. You’re not going to get that [good] job.”
Being acutely aware of this, human-I-T began hiring their first unskilled employees from the other side of the digital divide, training them in IT and computer repair, and paying them good wages.
They approached corporations and asked them to donate their used electronics, offering impact reports and donation receipts as tax write offs.
Though the business model was sound, Gabe explained that the problem of the digital divide remained mostly unknown to the general population, and the team still struggled to generate revenue.
“Part of the challenge of generating the capital was just having to create awareness,” said Gabe.
“People didn't even know what the digital divide was. They were like, ‘Oh—doesn’t everyone have an internet connection in their home?’”
human-I-T’s Pandemic Pivot
Then came the socio-economic reckoning of the pandemic. With corporate offices closing down nationwide, human-I-T’s main source of recycled electronics had dried up just as schools nationwide went exclusively online. Computers and laptops were more essential than ever, and, though the pandemic had brought attention to the issue, the digital divide affecting disadvantaged families and communities was deepening.
CFO Aaron Wilkins recalled, “We knew there had to be a business model pivot. Gabe is a visionary that way. He said, ‘Look, even without knowing what the projections are, we’re not going to be able to do this donated model during a pandemic.’ And he was right.”
Aaron, Gabe, and James moved people around departments, out of donation services and into support for the influx of requests for laptops from low-income families.
They made the huge decision to pivot from the donation model to a system where human-I-T purchases large amounts of used electronics and does the work themselves. The team also added services such as 24/7 tech support, and began to distribute low-cost broadband hotspots with unlimited data to support online education, a hugely popular initiative for those without crucial access to the internet during the pandemic.
Another big change was opening an account with Brex.
Since these new services and radical changes to their business model required investment, the team needed to find additional sources of capital and funding.
“Brex gave us the flexibility we needed,” Aaron told us. “How can we use our larger credit line to make sure we’re providing value to customers? We had access to capital we didn’t have before.”
Because of the dynamic credit limits and additional lines of credit Brex offered, they were able to take advantage of an increase of cash flow that helped fund the investments necessary to get their new business model really working.
“It allowed us to go after larger volumes of equipment and larger purchase orders to then be able to turn around and fulfill all these requests,” Aaron added. “It’s a circular economy; it starts with being able to establish relationships, fulfill the orders, offer services, and support these low-income families and impact the most people.”
“In 2019, we did as much impact as we had in our prior 6 years in business, and then in 2020, we doubled that.”
“We certainly could not have had a successful 2020 without you guys,” Aaron told us. “I 100% believe that at my core.”
Remembering ‘Why’ You Started
Suffice it to say, human-I-T has experienced exponential growth and change in just the past few years, and are excited about the future of socially-conscious entrepreneurship.
We asked co-founder Gabe if he had any advice for young entrepreneurs seeking to do good.
“You need to understand your ‘why,’” Gabe responded emphatically. “If you’re starting out, start with the problem, not the solution. What problem are you trying to solve?”
“I think a lot of entrepreneurs are scared and never start because they feel like they don’t have everything figured out,” Gabe added. “That’s never the case. You don’t have to have it all figured out. You have to work hard and discover things about yourself, and learn to deal with what you don’t know in order to find the solutions to the problems that you’re laser-focused on solving.”
“That’s really how you accomplish things, and that’s how it’s done.”
human-I-T is an LA-based nonprofit that refurbishes electronics that would otherwise go to landfills, then resells them at affordable prices. They accept charitable used electronics donations, all of which go to a just cause, and also offer high-speed broadband internet.