Suzanne McKechnie Klahr is offering students in low-income urban America a way to succeed in business and in life.
The New Idea
Suzanne Klahr realized that many low-income students who are not motivated to succeed in school are interested in making money. She decided to use that interest to help students stay in school, learn how to succeed, and go to college. Her idea is to offer them what they want—the chance to start and run a profitable business—if they stay in school. Suzanne founded Businesses United in Investing, Lending, and Development (BUILD) to add a four-year entrepreneurship program to the curriculum offered at low-performing high schools. Understanding that certain inner-city youth need a “real-world” rather than an academic experience to attract and hold their interest, Suzanne created a way to engage university students, young professionals, venture capitalists, and community volunteers in helping students plan, launch, and operate small businesses. She saw this entrepreneurship opportunity as a way to reach those poor and minority students who had lost interest in school. To change the economic outlook for youth in low-income communities, Suzanne needed the effectiveness and economic resources of the private sector as well as the compassion and community knowledge of the citizen sector. BUILD engages volunteers from both sectors, creating mutual awareness and social capital that strengthens the entire community. BUILD redirects students from the fringes of the educational system to a college-bound path. With the support of mentors and specially-trained, caring teachers, Suzanne is proving that through a structured entrepreneurship program and the experience of starting a business, students can gain the academic and social skills they need to succeed. By setting high expectations and helping students meet them, inner-city young people discover and develop their own potential. Their success, in turn, heightens their aspirations and wins them advocates in their schools, neighborhoods and communities.
There is a crisis of low graduation rates for poor and minority students in America. In California only 60 percent of Latino students and 56 percent of African Americans graduate from high school. Nationwide, students from families in the lowest 20 percent of all income groups are six times as likely to drop out of high school as their peers from the top 20 percent income group. The National Youth Employment Coalition points out that “the odds of graduating on time among ninth graders in some school districts or in some ethnic groups are closer to 50/50. These dropout rates threaten our economy, the safety of our communities, and the life prospects of so many of our young people.” The wasted potential of a high school drop-out has not only personal but economic and community consequences. Youth advocates contend that increased performance standards are not enough; services must also be strengthened to keep struggling students in school. Only recently have leaders begun to consider changing curriculums to motivate students to graduate.In underserved communities the cycle of school failure starts long before children enter school. In the primary grades, many children from disadvantaged backgrounds begin to experience failure and loss of self esteem. Their schools are under-resourced, prone to violence, and often seem forgotten; these realities are internalized by students. By middle school, these students often exhibit behavior problems. They may actually have high potential to succeed, but they have little faith or interest in academics. Students who drop out often assert that they could excel in school, but choose not to and lack incentive. Often, low-quality and boring curriculum is to blame. In inner-city high schools, teachers lack the resources and time to reengage these students, help them catch up to grade level, and prepare them to compete with students from more affluent backgrounds for admission to college. The business community is a largely untapped resource in solving this problem.
In 1999, Suzanne founded BUILD to offer students a real-world entrepreneurial experience designed to keep them engaged in high school, improve their academic performance, and help them gain admission to college. Starting in one school in East Palo Alto, the program is now offered at eight partner high schools in the Bay Area, including four Oakland high schools. Suzanne and her team go into the poorest neighborhoods to recruit eighth grade students who are under-performing, disinterested, even viewed as behavior problems, but who are bright, energetic, and excited about starting a business. They look for students who are at risk of dropping out, but could be motivated to go to college through BUILD’s unique program. At first, the students apply to BUILD because “they just want to make money”. However, to stay in the four-year program, the students must maintain and improve their grades. After an introduction to basic entrepreneurship in a ninth grade elective, students break up into small groups to select and research a business endeavor and, with the help of volunteer business mentors, develop and write a 20 to 30 page business plan. BUILD complements traditional classroom learning with case studies, role playing scenarios, field trips to local companies and universities, and off-site sessions with mentors in work settings. In ninth grade, an academic advisor makes sure each student is enrolled in courses required for college admission. The first year course culminates in a business plan competition at the Stanford Graduate School of Business for the East Palo Alto students and at the UC Berkeley Haas Business School for the Oakland students. At these standing room only competitions, student teams present their business ideas to a large audience and a prestigious panel of judges. Winning teams gain acceptance into the BUILD Youth Business Incubator. Other students may reapply to continue in the program. Over the summer, students attend a 40 hour “boot camp”—an academic training disguised as business education. In their sophomore and junior years, students produce and sell their products, and gain the experience of running a business. After school, BUILD’s staff offices house the incubator and provide a base of operations for the young entrepreneurs. The teams work with a venture capitalist, who provides seed money and oversight. Profits are distributed each summer; however, the initial capital is reserved for scholarships for graduating students. Through the Venture Capitalist Advisory Program, the youth learn essential skills—how to interact with people from the business world, how to advocate for themselves, and how to ask for help. Examples of profitable BUILD youth businesses include: Glo handmade candles; Latin Style rag accessories; Hear Me Out, a teen poetry book; and Work in Progress, a floating night club for teens.The students’ academic achievements and aspirations are enhanced by access to mentors, tutors and SAT preparatory courses. BUILD students attend the private test prep courses at a reduced rate; families must contribute $100 of the fee, but if the student attends all sessions they get a full refund. In their senior year, students wind down their businesses but continue to work with mentors, attend College Summit workshops, and focus on choosing and applying to colleges. To date 100 percent of BUILD’s seniors have graduated from high school and gone on to college (ranging from local community colleges to Harvard, Columbia, and Stanford). Many come back to mentor other BUILD students. They become success stories in communities where few success stories exist and they change perceptions about the value of education. BUILD views volunteers, business advisors, teachers, and administrators as important constituents of the program. Through their involvement with BUILD students, they gain a new perspective on the potential of these young people to succeed in school and contribute to society. Suzanne is intent on replicating BUILD while carefully maintaining its quality and culture. To prepare for expansion, the organization is moving to a “hub and spoke” management system. Each region has a Site Director, central office, and business incubator serving a cluster of several high schools. Site Directors will be trained through a new two-year Teacher to Manager Fellowship Program designed for Teach for America alumni. BUILD’s experience in Oakland, its first expansion city, will inform its expansion into other cities, statewide, and into other states. Aspire Schools plans to incorporate the BUILD program into each new charter school. BUILD has cultivated venture philanthropy investment as part of a diverse base of funding and increased the presence of Silicon Valley business leaders on its executive board. As the program expands, it will take advantage of economies of scale. Suzanne and her board are exploring strategies to accelerate the spread of the program and create earned income, such as licensing its program components or providing training on a fee for service basis.
Feeling that she was “born a social entrepreneur,” Suzanne credits the empathy and efficiency she learned to early role models. Her mother taught in Harlem. Her Scottish father rose from poverty to become a successful businessman. Their combined message might have been, “It’s important to serve, but maximize your effort and do it efficiently.” Her grandmother was a role model as well: at age 67, newly widowed, she earned a degree in gerontology and started a non-profit, Elder Concern. As a child growing up in Manhattan, Suzanne enjoyed finding ways to make money. In primary school she sold her used toys on the street. While still in elementary school she published Little Apples, a children’s newspaper. As a teen, she started and ran an earring business, “Beaudangles by Suzanne”. She also volunteered at a home for the aged. In high school, Suzanne got involved in human rights work, building her high school’s Amnesty International chapter and volunteering for Prisoners of Conscience. As an undergraduate at Brown University and after graduation, she interned at the Lawyers Committee for Human Rights and worked for a law firm where she assisted on immigration cases. While pursuing a law degree at Stanford University she provided pro bono legal services to low-income adults through the East Palo Alto Community Law Project. She saw that residents of East Palo Alto lacked access to the information, networks and institutions that allow people to rise out of poverty. Many of the people seeking legal help also sought help in starting their own businesses. Troubled by the gulf between the inner-city residents and the dot-com business entrepreneurs in Silicon Valley, she set out to develop a bridge between them. In 1999 Suzanne won a Skadden public service fellowship to start a counseling program for adult entrepreneurs. One day, four high school students walked in and said “are you the business lady?” One of them, a Mexican boy about 14 years old, said “Lady, we’re done with school and want to start a business. We were told you can help us.” Shocked that these young teens felt they were done with school, she decided to take the leap, with one condition: “I’ll help you start a business if you work hard in school.” They agreed, and through this experience BUILD was born. Suzanne taught the four students basic entrepreneurship, and helped them incorporate their t-shirt and sweatshirt company. She also helped them locate and “pitch” their plan to potential investors. Suzanne is currently a Lecturer at Stanford Law School where her course, Introduction to Social Entrepreneurship, allows law students to work on projects for local non-profits. Not wanting to be “just another do-gooder who’d be gone tomorrow,” and understanding that East Palo Alto is a place where people know their neighbors and trust comes slowly, Suzanne moved in to be part of the community. Today Suzanne and her family own a home in East Palo Alto where many BUILD students live. Living in the community she serves, Suzanne continues her commitment to bringing the two worlds together.