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Pie for Providers - using technology to help child care providers build stronger businesses.

We help child care providers navigate government programs so they can increase their revenue and spend less time doing administrative work.

Photo of Chelsea Sprayregen
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Updates: How has your idea changed or evolved throughout the Prize? What updates have you made to this submission? (1500 characters)

Since we submitted the earlier version of our application on December 22, Pie for Providers has made the following changes and met the following milestones: First, as described above, we defined the next version of our software (moving from pilot to MVP). Additionally, we signed a contract with a development firm and began development. We will finish this phase of development by the end of March. At that point, we will onboard our pilot users and begin charging them a monthly subscription fee. Second, we identified a need to update our 18-month plan to allow for a more agile product development process. We are currently reworking our plan to allow for continuous customer discovery and iteration, rather than frontloading development immediately after closing our investment round. These changes are not yet reflected in the financial model we have shared. Third, we have changed our name from Provide to Pie for Providers. This will allow us to secure a .com website and a better SEO strategy. Our official rebrand will take place the first week of March. Fourth, we have seen our market develop. Even in this brief period, it has become clear that several startups are developing software to meets the business needs of the small businesses that dominate the child care market. Within that space, we have more clearly defined ourselves as the best option for providers serving low-income communities.

Name or Organization

Provide Care, LLC

Geography

Chicago, Illinois. We intend to expand to serve the entire USA.

What is your stage of development?

  • Early Stage Innovator, with at least one-year experience in ECD

Type

  • For-profit

What is the stage of your proposal?

  • Prototyping: I have done some small tests or experiments with prospective users to continue developing my idea.

Describe how your solution could be a game-changer for your selected Opportunity Area (600 characters)

Pie for Providers is built to alleviate the biggest pain points of small child care businesses that serve low income families. Virtually no other child care business software is designed for this segment. Our service meaningfully improves providers’ working conditions, increasing their revenue and reducing their administrative burden. Ultimately, we seek to bring more providers into the workforce and give them the time to focus on offering high quality education. We are bringing business software into a market where it is not often used and where it will have a huge impact.

Select an Innovation Target

  • Technology-enabled: Existing approach is more effective or scalable with the addition of technology

Tell us more about your innovation (1500 characters)

Pie for Providers uses technology to help child care providers build stronger businesses. We offer a digital assistant that helps providers navigate government programs so they can increase their revenue and spend less time on administrative work. Specifically, we offer support for government subsidies, licensing & accreditation, and expense tracking. Through simple tools like a case management dashboard and interactive checklists, we are creating the conditions for a better child care economy. We envision a future in which providers have stable careers and low-income families have better access to care. Our customers are child care businesses in the United States. In particular, we serve family child care providers and small daycare centers. Our service is most valuable for providers who serve low-income families.

What problem are you aiming to solve? (3 sentences)

To fund and operate their businesses, child care providers must navigate a complex maze of funding, licensing, and accrediting agencies, and bear the risk of bureaucratic errors and delays. Providers fail to claim thousands of dollars in revenue each year for which they are eligible - up to 36% of their annual income. This system also discourages providers from accepting low income families who pay with subsidies, a major source of revenue risk for providers.

Explain your idea (5000 characters)

Problem Child care providers’ work benefits their own families and all of society. Yet their labor is systematically undervalued. Providers - 96% women and 40% people of color - earn only $23,000 per year on average, despite working 64 hours per week and having over ten years of experience. On top of these challenges, providers face heavy regulatory burdens that make it hard for them to do their jobs. To fund and operate their businesses, providers must navigate a complex maze of funding, licensing, and accrediting agencies, and bear the risk of bureaucratic errors and delays. Each year, providers fail to claim thousands of dollars in available revenue that they desperately need - up to 36% of their annual income. Specifically, providers fail to claim revenue from the following channels: Subsidies: $2100 per year. Government subsidies directly pay providers who care for low-income families. Because of preventable errors and missed deadlines, providers do not claim all the subsidy revenue for which they are eligible. Licensing and Accreditation: $5481 per year. Providers who obtain licenses qualify for a 100% increase in their subsidy reimbursement rate. Providers who meet quality standards qualify for an additional 15-20% increase. However, many providers fail to claim these benefits because of the administrative complexity of qualifying. Business Expense Tracking: $1000 per year. Home-based providers qualify for tax deductions on their business spending. However, many providers do not track their business expenses, and thus are unable to claim these deductions. Providers who serve low-income neighborhoods face the greatest risk of unclaimed revenue and the highest administrative burden, largely because of the challenges of the subsidy program. As a result, providers are discouraged from serving the families who need them most, and they have little time to focus on offering these families high quality education. Solution Pie for Providers streamlines providers’ compliance to increase their income, reduce the time they spend on administration, and make it easier to accept subsidy payments. Key functionality includes: Subsidies. Providers access an online dashboard to easily manage and update their subsidy cases. Text message reminders ensure providers never miss an application deadline. Pre-filled forms ensure applications are complete and accurate. Monthly billing reconciliation ensures payment accuracy. Licensing & Accreditation. Checklists reconcile and prioritize the overlapping requirements of multiple agencies. Policy updates make it easier to track changes in rules. Pre-filled forms save providers time and ensure accuracy. Text message reminders ensure that providers monitor their compliance consistently and efficiently. Expense Tracking. Providers upload receipts or send them via text message. Pie for Providers sends them monthly and annual reports to help with tax accounting and business management. This simple process ensures providers track expenses regularly and completely, so that they can easily claim all the tax deductions for which they qualify. Competitors Few small child care providers use business software, which is typically built for large businesses and does not support government compliance. However, there is a growing interest in serving this market. For example, Wonderschool offers administrative support to those looking to start family child care businesses. KidKare processes Child Care and Adult Food Program reimbursements. The success of KidKare demonstrates that providers use software when it helps them claim much needed funding. Compared to our competitors, Pie for Providers serves a more robust set of compliance needs. We also better serve providers and families in low-income neighborhoods, as exemplified by our focus on subsidies. National Expansion After validating our model in Illinois we will expand nationally. We are targeting states in which the demographics and policy setting will allow us to deliver the highest value to providers. Specifically, we selected states that have high rates of subsidy eligibility, generous subsidy programs, and large, urbanized populations. High priority states include California, Washington, Michigan, Ohio and Georgia. Pie for Providers will operate in five states by 2021. Pie for Providers seeks a $500,000 pre-seed investment, including from the Early Childhood Innovation Prize. This funding will allow us to validate our model in Illinois and build software that supports national expansion. We are projected to break even in July 2019. At that point, we will have a proven business model and software ready to export rapidly to other states.

Who benefits? (1500 characters)

Pie for Providers serves family child care providers (licensed and license-exempt) and independent daycare centers. Our customers are 96% women and 40% people of color. The average provider earns $23,000 per year, despite having ten plus years of experience and working 64 hours per week. Pie for Providers increases providers’ revenue and reduces the time they spend on administrative work. Specifically, our business management tools streamline government compliance, while helping providers claim a larger share of the revenue for which they qualify. Because of our focus on government subsidies, Pie for Providers is most valuable to providers who serve low-income families. These families also benefit from our service. Today, subsidies are vastly underutilized. By reducing their administrative burden and risk, Pie for Providers is making it easier for low-income families to access care. Moreover, because we serve family child care providers, our service disproportionately benefits children aged zero to three, who often receive care in these settings. Our team has significant experience working with our beneficiaries. Co-founders Chelsea and Rebecca previously worked helping families access government programs. They worked closely with numerous low-income working families, including members of New York City’s family child care provider union. Our team has also pursued formal, user-centered customer discovery since our launch (described in detail below).

What kind of impact will your idea have? (1500 characters)

By increasing providers’ incomes and simplifying their administration, we are helping women entrepreneurs - disproportionately women of color - support their families and build stable careers. In the 18 months after closing our current investment round, Pie for Providers is projected to deliver $2.2 million in revenue to providers that they would not have claimed without our service. This includes over $300,000 in additional revenue monthly by September 2019 (see financial model). At scale, Pie for Providers will create the conditions for a better child care economy. Our customers will have more time and energy to offer high quality care. They will stay in business longer, offering more stable environments for children. They will offer more spots to low-income families in these improved educational environments, leading to better long-term outcomes for children. By changing the conditions of child care work, we will bring more providers into the market, further increasing access to care for families. With more reliable child care, low-income parents - especially mothers - will pursue better career opportunities. Pie for Providers will also work directly for policy change with our customers. Specifically, we will connect them to advocacy efforts for increased subsidy funding and better eligibility systems. We envision a future in which early childhood education is fully funded and universal. We will do our part to achieve that vision.

How does or how could your idea impact low-income children? (1500 characters)

Pie for Providers will increase access to care for low-income families by streamlining the administration of government subsidies. These subsidies directly pay child care providers who serve low-income families. Today, only 15% of eligible children in America are enrolled in subsidies. The subsidies are vastly underutilized, in part, because they come with a heavy administrative burden and risk for providers. Missed deadlines and preventable errors are frequent and cause providers to lose income. As a result, providers who accept subsidies fail to claim all the revenue for which they qualify. Other providers simply refuse to accept this form of payment. Pie for Providers helps providers claim the subsidy revenue for which they qualify and spend less time doing so. In the 18 months after closing our current investment round, we are projected to serve 1700 providers who in turn serve 3300 subsidy-enrolled children. As noted above, we will help these providers claim $2.2 million in additional revenue. Of this additional revenue, $1.9 million will be in the form of child care subsidy reimbursements. This additional revenue for providers will directly help low-income children access care, and it will enable greater continuity of care for these children. Our business management tools also reduce providers’ stress, giving them more time and mental energy to focus on high quality care for the children who need it most.

Innovation: What makes your concept innovative? (5000 characters)

Pie for Providers is innovative in three ways. First, we are bringing business software to a market segment in which it is infrequently used. Our team’s experience in civic technology (working to improve Medicaid and SNAP service delivery) helped us see an analogous and overlooked opportunity in the child care space. Although there are many existing daycare software options (e.g. Procare), our research shows that small providers typically manage their administration on paper, in an ad hoc fashion. Traditional daycare software is simply not valuable for the small businesses that dominate the market. Instead, it is designed for larger businesses and therefore too complex for most providers. Moreover, traditional software does not support compliance, the biggest administrative burden in child care. In contrast, Pie for Providers is truly valuable to small providers and to providers who serve low-income families. For the first time, these providers will have a software option that significantly improves their business operations. Our human centered design approach has helped us understand our customers’ pain points at a granular level and design software to improve their daily lives. Second, Pie for Providers is using technology to scale the existing shared services model. Shared services alliances seek to reduce costs by helping providers pool back office work. Today, alliances often hire back office staff to serve a handful of daycares. They could serve many more businesses - and thus enable profitability across the industry - by outsourcing back office work digitally to Pie for Providers. Our team is actively in conversation with national leaders of the movement and with the only shared services alliance in Illinois. We look forward to continuing to collaborate across the child care sector to build a better ecosystem for providers. Third, we are helping small child care businesses adapt to a changing policy environment. Specifically, policymakers have recently prioritized improving the quality of early childhood education. Yet too often, efforts to professionalize the field do not offer providers the support they need to meet new standards. This dynamic particularly hurts low income providers, who lack the time and resources to keep up with changes that can require dozens of hours of training and education. Pie for Providers specifically supports these low-income providers. By reducing the time they spend on administrative work, we are creating an environment in which providers can focus on quality improvements, while keeping existing care options available for families.

Scale: Describe how your idea could reach a significant number of end-users. (1500 characters)

We will charge providers $2 per month per child under care (an average of $13/month for family child care providers and $107/month for daycare centers). Pie for Providers is projected to break even in July 2019. Our market includes 1 million family child care providers and 100,000 day care centers nationally. To start, we will focus on the 370,000 providers who already accept the subsidy. Long term, we will grow the market by encouraging more entrepreneurs to open child care businesses and to accept the subsidy. Based on monthly subscription fees alone, our total addressable market for our first product is $322 million. However, our opportunity is much bigger. Child care is a $41 billion industry and one of the fastest growing professions in America. As Pie for Providers grows, we will offer additional services to child care businesses, including income smoothing loans (in partnership with microfinance institutions) and support for other government funding streams. Two key barriers to scale are customer acquisition costs and state level policy differences. Our customer acquisition plans are described in detail below. To accommodate state level policy differences, we will build software that is customizable on the front end. Rather than performing additional development for each state, Pie for Providers’ staff will be able to easily update agency names, form fields, etc. for each state.

Feasibility: Where are you with understanding the feasibility of your idea? Describe what you’ve done so far and your plans. (3000 characters)

Validation from Customers and Stakeholders Pie for Providers has adopted an iterative, human centered approach (described in detail below). To date, we have recruited 40 providers for our pilot, and we have a waitlist of 50 additional providers. The most important evidence of our feasibility is our users’ interest. In addition to interviewing providers, we have also interviewed dozens of other stakeholders. Many of these groups offered to partner with us in distributing our pilot. Key partners include the Women’s Business Development Center, YWCA, Austin Childcare Providers Network, and Accion. These stakeholders’ interest in supporting our work is another key piece of validation. Funding and Other Traction Pie for Providers has obtained $96,000 in funding from the University of Chicago, including a $66,000 first place prize from the Social New Venture Challenge. We are currently raising a $500,000 angel investment round. Investors have already committed $100,000 toward this goal, and we have a strong pipeline of interested funders. Pie for Providers was named one of Chicago Inno’s 2017 50 on Fire companies. We are a member of 1871’s 6th Women in STEM cohort and of the Village Capital Pathways program. Staff Our team is committed to building a profitable company that will serve providers and families for decades. We have had two full-time co-founders and one part-time co-founder for nearly a year, plus several part-time staff. Upon closing our current investment round, we plan to hire a third full-time employee. Technical and Operational Issues We do not anticipate major technical challenges, as our innovation is in applying simple business software to a new market. Our initial software development team was led by Professor Raghu Betina of the University of Chicago on a pro bono basis. We are currently under contract with the South Bend Code School. We expect to spend half of the investment we are currently raising on development. As a SaaS business, we do not expect major operational issues. By design, our service does not require us to work directly with government agencies or to obtain their approval. Next Steps Our key next step is demonstrating providers’ willingness to pay. We are currently conducting experiments to determine the right price and to better understand the sources of the value we deliver to our customers. We must also demonstrate that we can acquire customers at scale in a cost effective way. Upon closing our investment round, we will have the resources to test our most promising channels and understand the ideal mix of tactics. Pie for Providers is a rare scalable investment opportunity in early childhood education. We look forward to continuing to serve our customers, improve our product, build partnerships, grow our team, and work with mission-aligned funders.

Business Viability: How viable is your business model? (5000 characters)

Pie for Providers is applying a well-tested, SaaS (software-as-a-service) business model to a new market segment. We will charge customers a low monthly subscription fee. To make this profitable, we will focus on keeping CAC (customer acquisition cost) and churn low. Customer Acquisition Today, our CAC is $41 per user, using high-touch, costly acquisition methods. We have acquired our users primarily through in-person presentations. At scale, we will use more cost effective tactics. Therefore, we estimate that our CAC will decline by fifty cents per month over the next 18 months. We will reach providers where they already find business support, both online and offline. Our three most promising customer acquisition channels are: (1) online advertising; (2) partnerships; and (3) incentivized referrals. First, providers are active in lively online support communities (e.g. on Facebook and Pinterest). We will reach these providers through ads on social media and Google. We will also engage in content marketing that leverages SEO. Second, we will partner with large organizations that already serve providers. This will include advertising (e.g. at conferences). It will also include direct bulk purchasing. For example, unions have already expressed interest in purchasing Pie for Providers as a membership benefit. National associations and government agencies might also be interested in distributing Pie for Providers. Third, we will leverage providers’ dense social networks, building a brand ambassador program and offering discounts for referrals. Churn While our churn is virtually nonexistent today, we project a 5% monthly churn based on comparable companies. To keep churn low, we are using the best practices of iterative, human-centered design to build software that is highly valuable to our users. We do the work every day to understand our customers’ lives, from their hopes for the future to the minutiae of their filing systems. To minimize churn, we will focus on: (1) ease-of-use; (2) emotional support; and (3) recurring value. First, we are building software that fits seamlessly into our customers’ daily lives. For example, we are focused on responsive design, cross-browser compatibility, and text messaging features. This approach ensures providers can access our service from any device during their hectic workday with little effort. Second, we have already seen that users value our service not only for administrative help, but also as a source of emotional support. We will seek not only to increase our customers’ revenue, but also to reduce their stress and make them feel less isolated and more valued for their work. For example, we will send providers encouraging text messages customized for their particular goals and daily schedules. Third, we will seek to build recurring value into our product. Through features like daily checklists and monthly billing reconciliations, Pie for Providers will be an important part of essential and frequent business operations. Willingness to Pay Our customers are price sensitive and may not have a budget for business software. To mitigate this risk, we have set our projected price at a low $2 per month per child under care. Additionally, we will test multiple pricing schemes, including a free trial and contingent pricing. We are already delivering value to users, and we are confident providers will pay for our service. While most of our customers do not use business software, the notable exception is KidKare, which processes Child Care and Adult Food Program reimbursements. The success of this software demonstrates that small providers use software when it helps them claim much needed funding. We are further mitigating the risk of price sensitivity by diversifying our revenue streams. As noted above, we intend to develop bulk purchasing agreements with groups that serve providers. We also see potential, at scale, for ad revenue from ethical partners (e.g. public health, CPG). Overall Approach Our team is prepared to iterate until we find the best business model for our market. We will tackle both our expected and our unexpected challenges directly, using a human-centered approach.

HCD: How have you used human centered design to build or refine your concept? (5000 characters)

We have built an iterative, human-centered design approach into the DNA of our business. At our launch, the co-founders already had experience working with child care providers. However, our first step was a formal customer discovery process, including one-on-one, in-person interviews with 41 providers. Initially, these interviews were open-ended. We focused on understanding providers’ business routines, technology use habits, and personal and business concerns. Over time, we focused our interviews to answer questions, e.g. the specific pain points for time-consuming administrative tasks. These interviews were also an opportunity to understand providers’ physical work spaces. We took photographs of their filing systems, play spaces, and offices. During this phase, we also completed card sorting exercises with two groups of providers to learn how they understand and prioritize their administrative work. These exercises confirmed many of the learnings from the individual interviews. They also generated conversations among the providers themselves, helping us understand the provider community and the range of experiences within it. Additionally, we released an anonymous survey through a local CCR&R to further aggregate and quantify our findings. This initial research phase also included dozens of stakeholder interviews, including CCR&R staff, policymakers, union leaders, trainers, software engineers, funders, and more. Through these interviews, we began iterating on a business model alongside product development. We learned, for example, which groups would benefit from partnerships with us and which groups took different or even conflicting approaches. We also gained a broader perspective on previous efforts like ours and why they have failed. Our team quickly incorporated the learnings from this first phase of customer research into a pilot. Less than a month after our launch, our free pilot was in market with an initial set of users. Today, we have recruited 40 users. This pilot is text-message only, which allowed us to avoid investing in costly software development upfront. To develop this service, we isolated a handful of high impact interventions that could generate value for our users through text message. We send providers reminders about upcoming deadlines for their subsidy cases. We also generate monthly and annual spending reports for providers, who send us their business receipts via text message. From our pilot, we learned that providers are excited to obtain support for their government compliance. They are willing to share private information about their business, and they are interested in engaging with us on a weekly and even daily basis via text message. We initially expected that a higher level of service would be necessary to deliver value to providers. To test this assumption, we piloted a “concierge model” in which Pie for Providers staff managed cases on behalf of providers with CCR&R’s. Through this experience, we learned that providers actually prefer a lighter touch service, which offers basic organizational tools and frequent but lower impact support. We decided to abandon the concierge model, significantly simplifying our operations. Today, we are incorporating our learnings from the free pilot into building a minimum viable product (MVP) of a fully automated, online version of our service. The MVP will include a case management dashboard for subsidy cases and a set of text message reminders (see product demo video). We will always keep customers at the core of our product development. Our next set of research includes: -Testing and iterating on the MVP. We will gradually build a more robust set of services on the subsidy, and we will offer online versions of expense tracking, licensing and accreditation. -Parent research. Providers often interact with parents to ensure that they have completed their required paperwork. Ultimately, our platform will likely include some basic functionality for parents to complete parts of the subsidy application. We will do in-depth research to understand their experience of the subsidy application process and how to ensure our features alleviate their specific pain points. -Price testing. As noted above, we are transitioning our users from a free pilot to a paid monthly subscription. This process will involve both large scale user research that leverages SEO and more in-depth conversations and research exercises with providers.

Tell us more about you (3000 characters)

Our team has an unusual combination of business and public policy experience. We bring a fresh perspective to the child care world which makes us uniquely positioned to identify opportunities for innovation. We are excited about early childhood education because of its crucial effect on so many social justice goals. Building a better child care economy is necessary to achieve better long-term outcomes for low-income children, pay equality for women, and good jobs for working parents. On a day-to-day level, we simply love serving child care providers, who work incredibly hard to deliver a vital service that is often unappreciated. Providers’ work allows society to function, and we are proud to make their lives a little bit better every day. At Pie for Providers, Chelsea and Rebecca are directly applying our expertise in using technology to streamline government programs. We first developed the idea for Pie for Providers while working closely together at BeneStream, another early stage social enterprise. While helping working families access unclaimed Medicaid and SNAP benefits, we saw a similar unmet need in the child care space. Because of our experience at BeneStream, we understand the unique needs of overburdened working families with limited time and experience with technology. We also understand the challenges of working with government agencies. Finally, we know just how much tenacity and creativity we will need to build a sustainable, scalable social enterprise in a complex and under-resourced environment. Chelsea and Hannah met while pursuing our MBAs at Chicago Booth. Through Booth’s social enterprise programs, we had the chance to systematically study the opportunities and pitfalls of different social business models. We also improved our ability to communicate Pie for Providers’ mission and goals in different settings, from high pressure pitch competitions to written proposals. Our backgrounds in organizing and public policy have motivated us to use our platform to directly support political advocacy. These experiences will also help us navigate the complex policy context in which we are working.

Do you have the people and partners you need to do what you’ve described? (600 characters)

We are prepared to move forward with our current team. After closing our investment round, we will hire one additional staff member to allow us to serve more providers more quickly.

As you consider your next steps, what kinds of help could you use? Is there a type of expertise that would be most helpful? (1800 characters)

Pie for Providers is looking for opportunities to grow our partnerships with stakeholders in the early childhood space. First, we would love to work with any organizations that currently serve providers to partner with us on customer discovery and acquisition. Potential partners include CCR&R’s, associations, shared services alliances and small business assistance organizations. Second, we want to begin developing partnerships with government agencies interested in distributing this service to providers on a large scale, potentially as part of QRIS. Third, we are seeking advisers with technical expertise in child care business administration and software development.

Would you like mentoring support?

  • Yes

If so, what type of mentoring support do you think you need? (1200 characters)

An ideal mentor would help us build partnerships with government agencies, unions, associations and other groups to distribute our product to providers nationally at scale. Additionally, we would benefit from mentorship on product development and design, to help us identify the right product development strategy, recruit and hire developers, and execute our iterative product development plan.

Are you willing to share your email contact information submitted on OpenIDEO with Gary Community Investments?

  • Yes, share my contact information

[Optional] Biography: Upload your biography. Please include links to relevant information (portfolio, LinkedIn profile, organization website, etc).

Chelsea Sprayregen, CEO. https://www.linkedin.com/in/chelsea-sprayregen-b4104645/ Hannah Meyer, COO. https://www.linkedin.com/in/hannah-meyer-65125343/ Rebecca Karasik, UX Designer.https://www.linkedin.com/in/rebecca-karasik-8b34109 www.provide.care WGN radio (“Provide: Working towards giving parents a “predictable and stable” work day,” Amy Guth, 6/29/17) Chicago Booth Magazine (”A Solution for the Caring Economy,” Blair R. Fischer, Fall 2017)

[Optional] Video: You are invited to submit a 30-60 second video that introduces you and/or your team and your idea.

Mentorship: How was your idea supported? (5000 characters)

Our mentor helped us work through several issues. First, she helped us understand that we were not communicating our competitive advantage clearly enough. Pie for Providers is a unique product, and we hope that our answers on this application communicate its potential to address some of the root problems in the child care space. Second, after our conversation with Tamara, we began calling our tool a “digital assistant,” not simply “software.” This has helped us easily communicate not only the type of functionality Pie for Providers offers, but also the way that providers might use it and the kind of value it adds to their daily lives. This language also fits well with our brand identity as a company that takes the business of child care seriously and values providers’ time. Finally, Tamara helped us set up a meeting with her colleague Angela Fowler at Town Square. After an initial conversation, we established mutual interest in a partnership. We look forward to continuing this conversation.

Updates: How has your idea changed or evolved throughout the Prize? What updates have you made to this submission? (1500 characters)

Since we submitted the earlier version of our application on December 22, Pie for Providers has made the following changes and met the following milestones: First, as described above, we defined the next version of our software (moving from pilot to MVP). Additionally, we signed a contract with a development firm and began development. We will finish this phase of development by the end of March. At that point, we will onboard our pilot users and begin charging them a monthly subscription fee. Second, we identified a need to update our 18-month plan to allow for a more agile product development process. We are currently reworking our plan to allow for continuous customer discovery and iteration, rather than frontloading development immediately after closing our investment round. These changes are not yet reflected in the financial model we have shared. Third, we have changed our name from Provide to Pie for Providers. This will allow us to secure a .com website and a better SEO strategy. Our official rebrand will take place the first week of March. Fourth, we have seen our market develop. Even in this brief period, it has become clear that several startups are developing software to meets the business needs of the small businesses that dominate the child care market. Within that space, we have more clearly defined ourselves as the best option for providers serving low-income communities.

Name or Organization

Provide Care, LLC

Geography

Chicago, Illinois. We intend to expand to serve the entire USA.

What is your stage of development?

  • Early Stage Innovator, with at least one-year experience in ECD

Type

  • For - Profit

What is the stage of your proposal?

  • Prototyping: I have done some small tests or experiments with prospective users to continue developing my idea.

Describe your submission in one clear sentence

Pie for Providers offers a digital assistant that helps child care providers navigate government programs so they can increase their revenue and spend less time on administrative work.

Describe how your solution could be a game-changer for your selected Opportunity Area (600 characters)

Pie for Providers is built to alleviate the biggest pain points of small child care businesses that serve low income families. Virtually no other child care business software is designed for this segment. Our service meaningfully improves providers’ working conditions, increasing their revenue and reducing their administrative burden. Ultimately, we seek to bring more providers into the workforce and give them the time to focus on offering high quality education. We are bringing business software into a market where it is not often used and where it will have a huge impact.

Select an Innovation Target

  • Technology-enabled: Existing approach is more effective or scalable with the addition of technology

Tell us more about your innovation (1500 characters)

Pie for Providers uses technology to help child care providers build stronger businesses. We offer a digital assistant that helps providers navigate government programs so they can increase their revenue and spend less time on administrative work. Specifically, we offer support for government subsidies, licensing & accreditation, and expense tracking. Through simple tools like a case management dashboard and interactive checklists, we are creating the conditions for a better child care economy. We envision a future in which providers have stable careers and low-income families have better access to care. Our customers are child care businesses in the United States. In particular, we serve family child care providers and small daycare centers. Our service is most valuable for providers who serve low-income families.

What problem are you aiming to solve? (3 sentences)

To fund and operate their businesses, child care providers must navigate a complex maze of funding, licensing, and accrediting agencies, and bear the risk of bureaucratic errors and delays. Providers fail to claim thousands of dollars in revenue each year for which they are eligible - up to 36% of their annual income. This system also discourages providers from accepting low income families who pay with subsidies, a major source of revenue risk for providers.

Explain your idea (5000 characters)

Problem Child care providers’ work benefits their own families and all of society. Yet their labor is systematically undervalued. Providers - 96% women and 40% people of color - earn only $23,000 per year on average, despite working 64 hours per week and having over ten years of experience. On top of these challenges, providers face heavy regulatory burdens that make it hard for them to do their jobs. To fund and operate their businesses, providers must navigate a complex maze of funding, licensing, and accrediting agencies, and bear the risk of bureaucratic errors and delays. Each year, providers fail to claim thousands of dollars in available revenue that they desperately need - up to 36% of their annual income. Specifically, providers fail to claim revenue from the following channels: Subsidies: $2100 per year. Government subsidies directly pay providers who care for low-income families. Because of preventable errors and missed deadlines, providers do not claim all the subsidy revenue for which they are eligible. Licensing and Accreditation: $5481 per year. Providers who obtain licenses qualify for a 100% increase in their subsidy reimbursement rate. Providers who meet quality standards qualify for an additional 15-20% increase. However, many providers fail to claim these benefits because of the administrative complexity of qualifying. Business Expense Tracking: $1000 per year. Home-based providers qualify for tax deductions on their business spending. However, many providers do not track their business expenses, and thus are unable to claim these deductions. Providers who serve low-income neighborhoods face the greatest risk of unclaimed revenue and the highest administrative burden, largely because of the challenges of the subsidy program. As a result, providers are discouraged from serving the families who need them most, and they have little time to focus on offering these families high quality education. Solution Pie for Providers streamlines providers’ compliance to increase their income, reduce the time they spend on administration, and make it easier to accept subsidy payments. Key functionality includes: Subsidies. Providers access an online dashboard to easily manage and update their subsidy cases. Text message reminders ensure providers never miss an application deadline. Pre-filled forms ensure applications are complete and accurate. Monthly billing reconciliation ensures payment accuracy. Licensing & Accreditation. Checklists reconcile and prioritize the overlapping requirements of multiple agencies. Policy updates make it easier to track changes in rules. Pre-filled forms save providers time and ensure accuracy. Text message reminders ensure that providers monitor their compliance consistently and efficiently. Expense Tracking. Providers upload receipts or send them via text message. Pie for Providers sends them monthly and annual reports to help with tax accounting and business management. This simple process ensures providers track expenses regularly and completely, so that they can easily claim all the tax deductions for which they qualify. Competitors Few small child care providers use business software, which is typically built for large businesses and does not support government compliance. However, there is a growing interest in serving this market. For example, Wonderschool offers administrative support to those looking to start family child care businesses. KidKare processes Child Care and Adult Food Program reimbursements. The success of KidKare demonstrates that providers use software when it helps them claim much needed funding. Compared to our competitors, Pie for Providers serves a more robust set of compliance needs. We also better serve providers and families in low-income neighborhoods, as exemplified by our focus on subsidies. National Expansion After validating our model in Illinois we will expand nationally. We are targeting states in which the demographics and policy setting will allow us to deliver the highest value to providers. Specifically, we selected states that have high rates of subsidy eligibility, generous subsidy programs, and large, urbanized populations. High priority states include California, Washington, Michigan, Ohio and Georgia. Pie for Providers will operate in five states by 2021. Pie for Providers seeks a $500,000 pre-seed investment, including from the Early Childhood Innovation Prize. This funding will allow us to validate our model in Illinois and build software that supports national expansion. We are projected to break even in July 2019. At that point, we will have a proven business model and software ready to export rapidly to other states.

Who benefits? (1500 characters)

Pie for Providers serves family child care providers (licensed and license-exempt) and independent daycare centers. Our customers are 96% women and 40% people of color. The average provider earns $23,000 per year, despite having ten plus years of experience and working 64 hours per week. Pie for Providers increases providers’ revenue and reduces the time they spend on administrative work. Specifically, our business management tools streamline government compliance, while helping providers claim a larger share of the revenue for which they qualify. Because of our focus on government subsidies, Pie for Providers is most valuable to providers who serve low-income families. These families also benefit from our service. Today, subsidies are vastly underutilized. By reducing their administrative burden and risk, Pie for Providers is making it easier for low-income families to access care. Moreover, because we serve family child care providers, our service disproportionately benefits children aged zero to three, who often receive care in these settings. Our team has significant experience working with our beneficiaries. Co-founders Chelsea and Rebecca previously worked helping families access government programs. They worked closely with numerous low-income working families, including members of New York City’s family child care provider union. Our team has also pursued formal, user-centered customer discovery since our launch (described in detail below).

What kind of impact will your idea have? (1500 characters)

By increasing providers’ incomes and simplifying their administration, we are helping women entrepreneurs - disproportionately women of color - support their families and build stable careers. In the 18 months after closing our current investment round, Pie for Providers is projected to deliver $2.2 million in revenue to providers that they would not have claimed without our service. This includes over $300,000 in additional revenue monthly by September 2019 (see financial model). At scale, Pie for Providers will create the conditions for a better child care economy. Our customers will have more time and energy to offer high quality care. They will stay in business longer, offering more stable environments for children. They will offer more spots to low-income families in these improved educational environments, leading to better long-term outcomes for children. By changing the conditions of child care work, we will bring more providers into the market, further increasing access to care for families. With more reliable child care, low-income parents - especially mothers - will pursue better career opportunities. Pie for Providers will also work directly for policy change with our customers. Specifically, we will connect them to advocacy efforts for increased subsidy funding and better eligibility systems. We envision a future in which early childhood education is fully funded and universal. We will do our part to achieve that vision.

How does or how could your idea impact low-income children? (1500 characters)

Pie for Providers will increase access to care for low-income families by streamlining the administration of government subsidies. These subsidies directly pay child care providers who serve low-income families. Today, only 15% of eligible children in America are enrolled in subsidies. The subsidies are vastly underutilized, in part, because they come with a heavy administrative burden and risk for providers. Missed deadlines and preventable errors are frequent and cause providers to lose income. As a result, providers who accept subsidies fail to claim all the revenue for which they qualify. Other providers simply refuse to accept this form of payment. Pie for Providers helps providers claim the subsidy revenue for which they qualify and spend less time doing so. In the 18 months after closing our current investment round, we are projected to serve 1700 providers who in turn serve 3300 subsidy-enrolled children. As noted above, we will help these providers claim $2.2 million in additional revenue. Of this additional revenue, $1.9 million will be in the form of child care subsidy reimbursements. This additional revenue for providers will directly help low-income children access care, and it will enable greater continuity of care for these children. Our business management tools also reduce providers’ stress, giving them more time and mental energy to focus on high quality care for the children who need it most.

Innovation: What makes your concept innovative? (1500 characters)

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Scale: Describe how your idea could reach a significant number of end-users. (1500 characters)

We will charge providers $2 per month per child under care (an average of $13/month for family child care providers and $107/month for daycare centers). Pie for Providers is projected to break even in July 2019. Our market includes 1 million family child care providers and 100,000 day care centers nationally. To start, we will focus on the 370,000 providers who already accept the subsidy. Long term, we will grow the market by encouraging more entrepreneurs to open child care businesses and to accept the subsidy. Based on monthly subscription fees alone, our total addressable market for our first product is $322 million. However, our opportunity is much bigger. Child care is a $41 billion industry and one of the fastest growing professions in America. As Pie for Providers grows, we will offer additional services to child care businesses, including income smoothing loans (in partnership with microfinance institutions) and support for other government funding streams. Two key barriers to scale are customer acquisition costs and state level policy differences. Our customer acquisition plans are described in detail below. To accomodate state level policy differences, we will build software that is customizable on the front end. Rather than performing additional development for each state, Pie for Providers’ staff will be able to easily update agency names, form fields, etc. for each state.

Feasibility: Where are you with understanding the feasibility of your idea? Describe what you’ve done so far and your plans. (3000 characters)

Validation from Customers and Stakeholders Pie for Providers has adopted an iterative, human centered approach (described in detail below). To date, we have recruited 40 providers for our pilot, and we have a waitlist of 50 additional providers. The most important evidence of our feasibility is our users’ interest. In addition to interviewing providers, we have also interviewed dozens of other stakeholders. Many of these groups offered to partner with us in distributing our pilot. Key partners include the Women’s Business Development Center, YWCA, Austin Childcare Providers Network, and Accion. These stakeholders’ interest in supporting our work is another key piece of validation. Funding and Other Traction Pie for Providers has obtained $96,000 in funding from the University of Chicago, including a $66,000 first place prize from the Social New Venture Challenge. We are currently raising a $500,000 angel investment round. Investors have already committed $100,000 toward this goal, and we have a strong pipeline of interested funders. Pie for Providers was named one of Chicago Inno’s 2017 50 on Fire companies. We are a member of 1871’s 6th Women in STEM cohort and of the Village Capital Pathways program. Staff Our team is committed to building a profitable company that will serve providers and families for decades. We have had two full-time co-founders and one part-time co-founder for nearly a year, plus several part-time staff. Upon closing our current investment round, we plan to hire a third full-time employee. Technical and Operational Issues We do not anticipate major technical challenges, as our innovation is in applying simple business software to a new market. Our initial software development team was led by Professor Raghu Betina of the University of Chicago on a pro bono basis. We are currently under contract with the South Bend Code School. We expect to spend half of the investment we are currently raising on development. As a SaaS business, we do not expect major operational issues. By design, our service does not require us to work directly with government agencies or to obtain their approval. Next Steps Our key next step is demonstrating providers’ willingness to pay. We are currently conducting experiments to determine the right price and to better understand the sources of the value we deliver to our customers. We must also demonstrate that we can acquire customers at scale in a cost effective way. Upon closing our investment round, we will have the resources to test our most promising channels and understand the ideal mix of tactics. Pie for Providers is a rare scalable investment opportunity in early childhood education. We look forward to continuing to serve our customers, improve our product, build partnerships, grow our team, and work with mission-aligned funders.

Business Viability: How viable is your business model? (1500 characters)

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HCD: How have you used human centered design to build or refine your concept? (1500 characters)

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Tell us more about you (3000 characters)

Our team has an unusual combination of business and public policy experience. We bring a fresh perspective to the child care world which makes us uniquely positioned to identify opportunities for innovation. We are excited about early childhood education because of its crucial effect on so many social justice goals. Building a better child care economy is necessary to achieve better long-term outcomes for low-income children, pay equality for women, and good jobs for working parents. On a day-to-day level, we simply love serving child care providers, who work incredibly hard to deliver a vital service that is often unappreciated. Providers’ work allows society to function, and we are proud to make their lives a little bit better every day. At Pie for Providers, Chelsea and Rebecca are directly applying our expertise in using technology to streamline government programs. We first developed the idea for Pie for Providers while working closely together at BeneStream, another early stage social enterprise. While helping working families access unclaimed Medicaid and SNAP benefits, we saw a similar unmet need in the child care space. Because of our experience at BeneStream, we understand the unique needs of overburdened working families with limited time and experience with technology. We also understand the challenges of working with government agencies. Finally, we know just how much tenacity and creativity we will need to build a sustainable, scalable social enterprise in a complex and under-resourced environment. Chelsea and Hannah met while pursuing our MBAs at Chicago Booth. Through Booth’s social enterprise programs, we had the chance to systematically study the opportunities and pitfalls of different social business models. We also improved our ability to communicate Pie for Providers’ mission and goals in different settings, from high pressure pitch competitions to written proposals. Our backgrounds in organizing and public policy have motivated us to use our platform to directly support political advocacy. These experiences will also help us navigate the complex policy context in which we are working.

Do you have the people and partners you need to do what you’ve described? (500 characters)

We are prepared to move forward with our current team. After closing our investment round, we will hire one additional staff member to allow us to serve more providers more quickly.

As you consider your next steps, what kinds of help could you use? Is there a type of expertise that would be most helpful? (1800 characters)

Pie for Providers is looking for opportunities to grow our partnerships with stakeholders in the early childhood space. First, we would love to work with any organizations that currently serve providers to partner with us on customer discovery and acquisition. Potential partners include CCR&R’s, associations, shared services alliances and small business assistance organizations. Second, we want to begin developing partnerships with government agencies interested in distributing this service to providers on a large scale, potentially as part of QRIS. Third, we are seeking advisers with technical expertise in child care business administration and software development.

Mentorship: How was your idea supported? [Relevant only for our early submission participants] (1500 characters)

Our mentor helped us work through several issues. First, she helped us understand that we were not communicating our competitive advantage clearly enough. Pie for Providers is a unique product, and we hope that our answers on this application communicate its potential to address some of the root problems in the child care space. Second, after our conversation with Tamara, we began calling our tool a “digital assistant,” not simply “software.” This has helped us easily communicate not only the type of functionality Pie for Providers offers, but also the way that providers might use it and the kind of value it adds to their daily lives. This language also fits well with our brand identity as a company that takes the business of child care seriously and values providers’ time. Finally, Tamara helped us set up a meeting with her colleague Angela Fowler at Town Square. After an initial conversation, we established mutual interest in a partnership. We look forward to continuing this conversation.

Are you willing to share your email contact information submitted on OpenIDEO with Gary Community Investments?

  • Yes, share my contact information

[Optional] Biography: Upload your biography. Please include links to relevant information (portfolio, LinkedIn profile, organization website, etc).

Chelsea Sprayregen, CEO. https://www.linkedin.com/in/chelsea-sprayregen-b4104645/ Hannah Meyer, COO. https://www.linkedin.com/in/hannah-meyer-65125343/ Rebecca Karasik, UX Designer.https://www.linkedin.com/in/rebecca-karasik-8b34109 www.provide.care WGN radio (“Provide: Working towards giving parents a “predictable and stable” work day,” Amy Guth, 6/29/17) Chicago Booth Magazine (”A Solution for the Caring Economy,” Blair R. Fischer, Fall 2017)

[Optional] Video: You are invited to submit a 30-60 second video that introduces you and/or your team and your idea.

https://www.youtube.com/watch?v=Eqp8j3Lo5W8

Attachments (1)

Pie for Providers Mock Ups.pdf

Select mobile mock ups of our software

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Stumbled upon this and wanted to say that I appreciate the thought put into this product. I think there is a very big need for the product, both in terms of reducing governmental bureaucracy and improving a social condition. Not only is child care a crucial part of childhood neural and behavioral development, but low income communities would benefit most from this product.

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