Wednesday, March 01, 2006
Thursday, February 16, 2006
Venture Capitalists Are Investing in Educational Reform
By JAMES FLANIGAN
Venture capitalists of Silicon Valley, who have backed hundreds of high-technology entrepreneurs, are eagerly financing a new group these days: schoolmasters.
"We give education entrepreneurs money to start or to speed up building their companies," said L. John Doerr, who over 26 years has helped start dozens of ventures, including Sun Microsystems, Amazon.com and Google. He help found the New Schools Venture Fund in San Francisco six years ago for a new breed of entrepreneur — the kind who doesn't have to produce a profit.
Unlike Kleiner Perkins Caufield & Byers, the venture capital firm where Mr. Doerr is a partner, New Schools does not earn the standard three to five times its investment in five years. It earns nothing, because it is "a philanthropy held accountable by the rigors of venture capital financing," as Mr. Doerr describes it. The financial professionals of the fund oversee the business operations of the schools it backs.
Recipients of the fund's investments are not whiz kids eager to become the next Bill Gates. Mainly, they are public school teachers with a passion to improve the ways poor children are taught. The companies they form are nonprofit charter school management organizations, capable of running publicly financed elementary and secondary schools that are freed from some rules and regulations in exchange for producing educational results better than those of the large urban school district. Almost all their students are eligible for free or reduced-price breakfasts and lunches.
Financing from New Schools and charitable foundations helps them to build or buy school properties and to get elementary, middle and high schools up and running. But their operations are expected to quickly become self-sustaining on the stipends paid from local, state and federal taxes for educating each student.
New Schools Venture Fund is still investing its first $80 million, contributed by individuals like Mr. Doerr and organizations like the Bill and Melinda Gates Foundation, which gave $22 million. New Schools has begun raising another $125 million to expand the reach of charter schools as models of reform for traditional public school systems.
For example, New Schools has contributed $3.3 million to help Michael Piscal and his Inner City Education Foundation start View Park elementary, middle and high school in the poor neighborhood of South Los Angeles. Mr. Piscal, 39, was a teacher at one of Los Angeles's highest-rated private schools until 1994, when he decided to try teaching children in what is considered an underserved neighborhood.
Today, with three schools open and growing, Mr. Piscal plans to start 20 more schools in the same South Los Angeles area. "We have a waiting list of parents wanting to send kids to View Park," Mr. Piscal said.
The View Park schools have 47 teachers who are not members of a union but earn salaries similar to the $42,000- to $54,000-a-year range of the Los Angeles Unified School District. View Park teachers can earn bonuses based on the performance of their students.
Mr. Piscal says the middle school — grades six to eight — "has the highest test scores in math for African-American students in all of California," according to a foundation that supports education.
Brian Taylor, principal of the middle school, explained that such performance was achieved by concentration on the students.
"If kids are struggling, we pull them out of physical ed one day or two a week and give them assistance," Mr. Taylor said. "In a school of 375 students, we know all of these kids. You couldn't do that in a typical high school with 4,000 to 5,000 students."
The return to smaller schools — fewer than 400 students for elementary and middle schools and 500 for a high school — is a refrain among the education entrepreneurs in the charter school movement.
Judy Ivie Burton was a teacher, principal and superintendent for 37 years in the Los Angeles Unified District but is now chief executive of the Alliance for College-Ready Public Schools, a charter organization that since 2004 has opened three high schools and a middle school. It has ambitions to open 16 more in the next six years.
Ms. Burton is seeking $11 million more from New Schools Venture Fund and other donors to achieve the alliance's 20-school goal, in a collaboration with the Los Angeles Unified District to help meet huge classroom needs for the area's expanding population.
But Ms. Burton says she has chosen the charter school path because it gives her flexibility to employ her own ideas about improving student performance. Those ideas include increased instructional time, she says.
"We do 190 days in the school year, compared to 163 days for L.A. Unified," Ms. Burton said. "And we do three two-hour periods, plus study hall, per day compared to six, one-hour periods."
The charter school movement began to grow rapidly in California in 1997, when teachers and those in the business community persuaded the Legislature to remove limits on how many such schools could open.
Donald Shalvey, a longtime teacher and principal, was instrumental in winning that legislative victory and today runs Aspire Public Schools, a 15-school chain that was one of the first recipients of New Schools Venture Fund investment.
Not all charter experiments have been successful. A four-school network named California Charter Academy was forced to close two years ago because of financial difficulties and is under investigation by the state Department of Education.
And teachers' unions are understandably skeptical of the largely nonunion charter movement.
"We are neutral on charter schools," said Joe Nunez, associate director of government relations for the California Teachers Association. "They're good when they respond to local needs of families and teachers," Mr. Nunez said. "But some of them are trying to grow statewide and move beyond their original mission."
With 3,000 charter schools operating nationwide, and other reforms changing traditional public school structures, large issues clearly are revolving around the American classroom.
And New Schools Venture Fund is thinking big. Last year the organization hired a new chief executive, Theodore Mitchell, a former president of Occidental College and dean of the School of Education at the University of California, Los Angeles, now the education adviser to Gov. Arnold Schwarzenegger.
Mr. Mitchell's first goal is to raise an additional $125 million to finance charter school expansions, as well as to help their performance by financing teacher training, information processing centers and other ancillary services.
At a recent session in Silicon Valley, Mr. Mitchell grilled charter school organizers from Chicago who were seeking $4.5 million to expand from one high school to seven. The New Schools board approved the investment in Chicago because the organizers "stressed the basics of improving educational performance," Mr. Mitchell said.
Then he added a quotation from a speech by William Butler Yeats: " 'Education is not the filling of a pail but the lighting of a fire.' We provide the fuel for that fire," Mr. Mitchell said.
Asked to contrast the high-tech entrepreneurs he has backed over the years with the educators he is financing today, Mr. Doerr responded without hesitation:
"The education entrepreneurs have it harder. They must overcome massive institutional resistance," he said. "And if the high-tech entrepreneurs succeed, they get rich. The educators' rewards will be more important in life, but they're not going to get rich."
This column about small-business trends in California and the West appears on the third Thursday of every month. E-mail: jamesflanigan@nytimes.com.
By JAMES FLANIGAN
Venture capitalists of Silicon Valley, who have backed hundreds of high-technology entrepreneurs, are eagerly financing a new group these days: schoolmasters.
"We give education entrepreneurs money to start or to speed up building their companies," said L. John Doerr, who over 26 years has helped start dozens of ventures, including Sun Microsystems, Amazon.com and Google. He help found the New Schools Venture Fund in San Francisco six years ago for a new breed of entrepreneur — the kind who doesn't have to produce a profit.
Unlike Kleiner Perkins Caufield & Byers, the venture capital firm where Mr. Doerr is a partner, New Schools does not earn the standard three to five times its investment in five years. It earns nothing, because it is "a philanthropy held accountable by the rigors of venture capital financing," as Mr. Doerr describes it. The financial professionals of the fund oversee the business operations of the schools it backs.
Recipients of the fund's investments are not whiz kids eager to become the next Bill Gates. Mainly, they are public school teachers with a passion to improve the ways poor children are taught. The companies they form are nonprofit charter school management organizations, capable of running publicly financed elementary and secondary schools that are freed from some rules and regulations in exchange for producing educational results better than those of the large urban school district. Almost all their students are eligible for free or reduced-price breakfasts and lunches.
Financing from New Schools and charitable foundations helps them to build or buy school properties and to get elementary, middle and high schools up and running. But their operations are expected to quickly become self-sustaining on the stipends paid from local, state and federal taxes for educating each student.
New Schools Venture Fund is still investing its first $80 million, contributed by individuals like Mr. Doerr and organizations like the Bill and Melinda Gates Foundation, which gave $22 million. New Schools has begun raising another $125 million to expand the reach of charter schools as models of reform for traditional public school systems.
For example, New Schools has contributed $3.3 million to help Michael Piscal and his Inner City Education Foundation start View Park elementary, middle and high school in the poor neighborhood of South Los Angeles. Mr. Piscal, 39, was a teacher at one of Los Angeles's highest-rated private schools until 1994, when he decided to try teaching children in what is considered an underserved neighborhood.
Today, with three schools open and growing, Mr. Piscal plans to start 20 more schools in the same South Los Angeles area. "We have a waiting list of parents wanting to send kids to View Park," Mr. Piscal said.
The View Park schools have 47 teachers who are not members of a union but earn salaries similar to the $42,000- to $54,000-a-year range of the Los Angeles Unified School District. View Park teachers can earn bonuses based on the performance of their students.
Mr. Piscal says the middle school — grades six to eight — "has the highest test scores in math for African-American students in all of California," according to a foundation that supports education.
Brian Taylor, principal of the middle school, explained that such performance was achieved by concentration on the students.
"If kids are struggling, we pull them out of physical ed one day or two a week and give them assistance," Mr. Taylor said. "In a school of 375 students, we know all of these kids. You couldn't do that in a typical high school with 4,000 to 5,000 students."
The return to smaller schools — fewer than 400 students for elementary and middle schools and 500 for a high school — is a refrain among the education entrepreneurs in the charter school movement.
Judy Ivie Burton was a teacher, principal and superintendent for 37 years in the Los Angeles Unified District but is now chief executive of the Alliance for College-Ready Public Schools, a charter organization that since 2004 has opened three high schools and a middle school. It has ambitions to open 16 more in the next six years.
Ms. Burton is seeking $11 million more from New Schools Venture Fund and other donors to achieve the alliance's 20-school goal, in a collaboration with the Los Angeles Unified District to help meet huge classroom needs for the area's expanding population.
But Ms. Burton says she has chosen the charter school path because it gives her flexibility to employ her own ideas about improving student performance. Those ideas include increased instructional time, she says.
"We do 190 days in the school year, compared to 163 days for L.A. Unified," Ms. Burton said. "And we do three two-hour periods, plus study hall, per day compared to six, one-hour periods."
The charter school movement began to grow rapidly in California in 1997, when teachers and those in the business community persuaded the Legislature to remove limits on how many such schools could open.
Donald Shalvey, a longtime teacher and principal, was instrumental in winning that legislative victory and today runs Aspire Public Schools, a 15-school chain that was one of the first recipients of New Schools Venture Fund investment.
Not all charter experiments have been successful. A four-school network named California Charter Academy was forced to close two years ago because of financial difficulties and is under investigation by the state Department of Education.
And teachers' unions are understandably skeptical of the largely nonunion charter movement.
"We are neutral on charter schools," said Joe Nunez, associate director of government relations for the California Teachers Association. "They're good when they respond to local needs of families and teachers," Mr. Nunez said. "But some of them are trying to grow statewide and move beyond their original mission."
With 3,000 charter schools operating nationwide, and other reforms changing traditional public school structures, large issues clearly are revolving around the American classroom.
And New Schools Venture Fund is thinking big. Last year the organization hired a new chief executive, Theodore Mitchell, a former president of Occidental College and dean of the School of Education at the University of California, Los Angeles, now the education adviser to Gov. Arnold Schwarzenegger.
Mr. Mitchell's first goal is to raise an additional $125 million to finance charter school expansions, as well as to help their performance by financing teacher training, information processing centers and other ancillary services.
At a recent session in Silicon Valley, Mr. Mitchell grilled charter school organizers from Chicago who were seeking $4.5 million to expand from one high school to seven. The New Schools board approved the investment in Chicago because the organizers "stressed the basics of improving educational performance," Mr. Mitchell said.
Then he added a quotation from a speech by William Butler Yeats: " 'Education is not the filling of a pail but the lighting of a fire.' We provide the fuel for that fire," Mr. Mitchell said.
Asked to contrast the high-tech entrepreneurs he has backed over the years with the educators he is financing today, Mr. Doerr responded without hesitation:
"The education entrepreneurs have it harder. They must overcome massive institutional resistance," he said. "And if the high-tech entrepreneurs succeed, they get rich. The educators' rewards will be more important in life, but they're not going to get rich."
This column about small-business trends in California and the West appears on the third Thursday of every month. E-mail: jamesflanigan@nytimes.com.
Sunday, February 12, 2006
Snowed in here on the east coast! It is Sunday and the snow is outside piled up here in Washington, DC. I doubt I will go out at all today, but it is a good day to be snowed in...I plan to do some work and then maybe if I am brave venture out to Borders or Barnes and Noble and read a few books and magazines! I bought a shredder last week and have been enjoying shredding all of this damn paper in my office! Shredding! Shredding! Shredding some more! Fellow pack rats out there will understand my love of the shredder. Enjoy the day and remember to give everything your best!
Friday, February 10, 2006
Friday, February 03, 2006
Well it is Friday night. I am trying to get up the energy to go out for a drink. I actually had a quiet and relaxing day. I went to do a few "girlie" things. The female business owners will understand. Working as hard as I do, scheduling things such as nails, hair, waxing, etc., happens when you get a spare moment. I have been very prodcutive tonight! Got a spreadsheet and payroll worksheet completed that I have been procrastinating on for months. Tonight if I don't go out, I have a ton of work to do. On a good night. I received a few great phone calls this week. I am honored to be asked to be a part of the Prince Georges County Economic Development Technology Advisory Commission. Also, I got a call from Discovery supplier diversity program. They want me to come in next week! Sweet!!! Have a good night everyone!
Wednesday, February 01, 2006
Monday, January 30, 2006
I found a new magazine today - New American City. What a great magazine! I am attaching a recent article in the magazine.
Issue 9 - Segregation & Integration - November 2005
CORPORATE RETAILERS AND THE AMERICAN GHETTO: How Starbucks May Help Save South Central
by Josh Sides
The recent opening of a Starbucks in the notorious Los Angeles suburb of Compton may offer area residents much more than a three-dollar latte. It is, of course, another example of the decade-old trend in which major corporate retailers target "urban markets" in America's poorest minority communities. But the project, a joint venture with Magic Johnson's ambitious Johnson Development Corporation, might also be a blueprint for an entirely new way of thinking about inner-city revitalization: a way that emphasizes civic discourse just as much as it employs more traditional paths to revitalization, like economic development. Recent Economic History Since the 1960s, policymakers sympathetic to the plight of African Americans and other minorities have sought to expand both employment and consumer opportunities in America's ghettos. However, four decades of well-intentioned federal and local employment initiatives have failed to mitigate the decline of decent jobs in inner cities. In South Los Angeles, the historic home of greater L.A.'s black community, this decline is particularly apparent in the flight of thousands of unionized automobile and steel jobs from the regionUs manufacturing center. While South L.A.'s manufacturing base has continued to grow, it has not grown in ways that portend an economic revival for the region. Well over half of the regionUs manufacturing employees work in low-paying and non-unionized apparel and textile industries, and thousands more toil away in food processing plants. Far worse than the inferiority of jobs has been their scarcity: the unemployment rate among African Americans is now about twice that of all workers, and far higher for black youth. Until recently, things were hardly better for inner-city consumers. Inner-city retail had begun to decline across America in the 1950s, when white flight and urban decay destabilized the market. In Los Angeles, the 1960s were marked by violent riots, which scared off many of the remaining white retailers. Stalwarts tended to offset the risk of doing business in the ghetto by overcharging customers who lacked the means to shop elsewhere. This problem hit particularly hard for residents without cars, since Los Angeles has historically provided little public transportation to better shopping opportunities in the suburbs. It is little wonder then that residents of Watts, one of South L.A.'s tougher communities, have always complained about the inadequacy of consumer options in their neighborhood. Nor is it surprising that small retailers were the chief targets of destruction in both the 1965 and 1992 riots. But the situation may be turning around for residents in South L.A. and other poor, minority communities throughout the nation. A new model for development has begun to shift the way businesses, planners, and policy makers conceive of the inner city. Long overdue, this shift has the potential to permanently change what we mean when we say "ghetto." Looking to the Inner City Beginning in the mid-1990s, large corporate retailers turned their attention to the "last retail frontier," the American ghetto. This made good business sense: in a "conservative" 1998 estimate by the Boston Consulting Group and the Initiative for a Competitive Inner City, America's inner cities represented more than $85 billion in annual retail spending power--equal to the total purchasing power of Mexico. Retailers have been encouraged by the nationwide decline in crime and by the increased attractiveness of cities to affluent families, gays, and grumpy commuters. Almost overnight, Target, Home Depot, Wal-Mart, and dozens of smaller retailers began to infiltrate historically black ghettos. Equally important in luring corporate retailers to the inner city has been the phenomenal growth and economic progress of the nation's Latino population. Reflecting a nationwide trend, the famous "black community" of South Central Los Angeles is now more than 55 percent Latino. As the Latino population grows, so does its purchasing power: a recent national estimate put the Latino market at $400 billion. In Southern California, that purchasing power has been most evident in the housing market, where Latino homeownership has surged by over fifty percent in the last decade. Corporate marketing has tuned into these growing inner-city demographics: in 1998, Target launched its own magazine for Latinos, Familia, and mailed it to over 750,000 thousand Latino households in California. And a recent Wal-Mart television advertisement features a young African-American woman who was recently hired by the retail giant, and who emotionally expresses her gratitude. Corporate retail forays into the inner city market, however, have not been without controversy. Across America, minorities--particularly African Americans--have protested what they see as "ghetto colonialism": massive corporate entities eviscerating neighborhood character, exploiting local poverty, replacing no jobs with bad jobs, busting unions, flouting environmental protections, and intensifying traffic congestion. From Chicago's South Side to East Oakland, residents have marched, picketed, and petitioned city councils to keep "big box" retailers out. A recent debate in Inglewood, a predominantly minority suburb just south of Los Angeles, exemplifies this tension. In April 2004, Wal-Mart spent $1 million on a campaign to convince voters to pass a city measure allowing one of its "Super Centers" (the size of 17 football fields) to open without conducting environmental impact reports, traffic studies, or public hearings. The referendum confirmed the suspicions of many residents, who resoundingly voted it down after weeks of heated protests. "They need to come in through the front door in the light of day," said Inglewood Councilwoman Judy Dunlap, "not sneak in the back at night." Hope in Southern California The defeat of the Inglewood Wal-Mart, however, should not sour policymakers, planners, and activists on the prospect of corporate investment in the ghetto. As the case of Starbucks reveals, corporate investment can be a boon for companies and residents alike. The new Starbucks in Compton is one of almost seventy "Urban Coffee Opportunities" (or "UCOs") that have opened throughout the country since the unique partnership between Starbucks and the Johnson Development Corporation began in 1998. In addition to serving as anchor businesses in sagging commercial districts, the UCOs also provide desperately needed jobs for the young and unemployed. And they provide more than just a meager salary. Unlike many other large corporate investors, Starbucks offers comprehensive health care packages to even part-time employees. When combined with the stock option offering new employees receive, the health package lays the foundation for a sustainable, if modest, career. Two years ago, a Starbucks opened at a new $60 million, 22-acre shopping center called Chesterfield Square at Slauson and Western Streets in the heart of South Central. Approximately one mile from the infamous intersection of Florence and Normandie Streets, where trucker Reginald Denny was brutally beaten during the 1992 riots, the new mall also features a Home Depot, a Food 4 Less, and a Subway sandwich outlet. On opening day, Starbucks received over two hundred applications for employment--a sign of the intense demand for work in the area. Shortly after the grand opening of the mall, Helen Wilkins, a longtime African American resident of South Central, told a New York Times reporter, "It has really changed the neighborhood a lot. It has provided jobs--a lot of jobs--for our youngsters to keep them off the street." On a recent Saturday morning, black and Latino residents of the Chesterfield Square area crowded through the entrance of Home Depot, filling carts with tools, hardware, and potted plants. Significantly, shopping may soon become one of the few American pastimes where race no longer matters. But to view the opening of the Starbucks UCO in Compton in purely economic terms would be to overlook much of its significance. The coffee shop is also important for the deceptively simple reason that it is a safe, quasi-public space for people to talk. In Southern California, the reckless underdevelopment of public space and overuse of private transportation has left the region with an infamously detached, disengaged citizenry. In parts of Compton and in vast swaths of South Los Angeles, such isolation is compounded by violent crime. There, public playgrounds and parks--as well as streets--have been monopolized by gang members who define and defend it as "their" private territory. Coffee shops and bookstores are one solution to this problem. More so than Wal-Mart or Target, the coffee shop--at its best--is not simply a place for the exchange of commerce, but also a place for the exchange of ideas. National Trends Residents have likely warmed to the Johnson projects, at least in part, because they are perceived as coming from within the community, and Magic's conspicuous appearances at ribbon-cutting ceremonies reaffirm this for potential patrons. But there are signs that African Americans don't require the imprimatur of black celebrities to welcome corporate interests into their communities. The Chesterfield Square across town is not black-owned, and neither is the impressive Harlem USA complex in Harlem, featuring a nine-screen Magic Johnson Theater, an Old Navy clothing store, and several other retail outlets. Nor are black consumers solely interested in "practical" retailers of household essentials. In 2003, bookseller Borders opened a new store in Detroit's badly depressed downtown. Its brisk business has surprised store managers. Behind the scenes, there are also organizations pushing for the very kind of investment that has made Magic Johnson famous all over again. One of the most important has been The Initiative for a Competitive Inner City (ICIC) in Boston, a non-profit organization founded by Harvard Business School Professor Michael E. Porter. Porter and his colleagues have been conducting research and sponsoring initiatives for inner-city investment nationwide since the organizationUs founding. Distraught by the persistence of inequality and "the fact that too many of our citizens [were] not enjoying the prosperity that America enjoys as an economy as a whole," Porter founded the path-breaking organization in 1994. "Without a viable business base," Porter continues to preach ten years later, "you [cannot] have a healthy and viable community." In San Francisco, Business for Social Responsibility (BSR), a non-profit business association dedicated to stimulating ethical business practices, has been working to bring development to inner-city communities since the early 1990s. Matt Hirshland, Senior Manager of Communications at BSR, is heartened by what he sees in the inner-city Starbucks and Borders enterprises. Those business ventures have succeeded, he surmises, "because they make residents feel that they are truly stakeholders in the business." That communal investment resonates with his work: "We are helping businesses to be responsive to the demands, values, and environment of the communities in which they do business." It may be too soon to call these developments "the future," nor is it at all certain that ghetto investment will be a centerpiece of the next American city. But one thing seems clear: Starbucks is doing more for South Central than anyone expected. Beyond just bringing commerce to places too-long overlooked and overcharged, these developments may help end the debilitating sense of social, political, and economic isolation that still threatens ghetto life.
Issue 9 - Segregation & Integration - November 2005
CORPORATE RETAILERS AND THE AMERICAN GHETTO: How Starbucks May Help Save South Central
by Josh Sides
The recent opening of a Starbucks in the notorious Los Angeles suburb of Compton may offer area residents much more than a three-dollar latte. It is, of course, another example of the decade-old trend in which major corporate retailers target "urban markets" in America's poorest minority communities. But the project, a joint venture with Magic Johnson's ambitious Johnson Development Corporation, might also be a blueprint for an entirely new way of thinking about inner-city revitalization: a way that emphasizes civic discourse just as much as it employs more traditional paths to revitalization, like economic development. Recent Economic History Since the 1960s, policymakers sympathetic to the plight of African Americans and other minorities have sought to expand both employment and consumer opportunities in America's ghettos. However, four decades of well-intentioned federal and local employment initiatives have failed to mitigate the decline of decent jobs in inner cities. In South Los Angeles, the historic home of greater L.A.'s black community, this decline is particularly apparent in the flight of thousands of unionized automobile and steel jobs from the regionUs manufacturing center. While South L.A.'s manufacturing base has continued to grow, it has not grown in ways that portend an economic revival for the region. Well over half of the regionUs manufacturing employees work in low-paying and non-unionized apparel and textile industries, and thousands more toil away in food processing plants. Far worse than the inferiority of jobs has been their scarcity: the unemployment rate among African Americans is now about twice that of all workers, and far higher for black youth. Until recently, things were hardly better for inner-city consumers. Inner-city retail had begun to decline across America in the 1950s, when white flight and urban decay destabilized the market. In Los Angeles, the 1960s were marked by violent riots, which scared off many of the remaining white retailers. Stalwarts tended to offset the risk of doing business in the ghetto by overcharging customers who lacked the means to shop elsewhere. This problem hit particularly hard for residents without cars, since Los Angeles has historically provided little public transportation to better shopping opportunities in the suburbs. It is little wonder then that residents of Watts, one of South L.A.'s tougher communities, have always complained about the inadequacy of consumer options in their neighborhood. Nor is it surprising that small retailers were the chief targets of destruction in both the 1965 and 1992 riots. But the situation may be turning around for residents in South L.A. and other poor, minority communities throughout the nation. A new model for development has begun to shift the way businesses, planners, and policy makers conceive of the inner city. Long overdue, this shift has the potential to permanently change what we mean when we say "ghetto." Looking to the Inner City Beginning in the mid-1990s, large corporate retailers turned their attention to the "last retail frontier," the American ghetto. This made good business sense: in a "conservative" 1998 estimate by the Boston Consulting Group and the Initiative for a Competitive Inner City, America's inner cities represented more than $85 billion in annual retail spending power--equal to the total purchasing power of Mexico. Retailers have been encouraged by the nationwide decline in crime and by the increased attractiveness of cities to affluent families, gays, and grumpy commuters. Almost overnight, Target, Home Depot, Wal-Mart, and dozens of smaller retailers began to infiltrate historically black ghettos. Equally important in luring corporate retailers to the inner city has been the phenomenal growth and economic progress of the nation's Latino population. Reflecting a nationwide trend, the famous "black community" of South Central Los Angeles is now more than 55 percent Latino. As the Latino population grows, so does its purchasing power: a recent national estimate put the Latino market at $400 billion. In Southern California, that purchasing power has been most evident in the housing market, where Latino homeownership has surged by over fifty percent in the last decade. Corporate marketing has tuned into these growing inner-city demographics: in 1998, Target launched its own magazine for Latinos, Familia, and mailed it to over 750,000 thousand Latino households in California. And a recent Wal-Mart television advertisement features a young African-American woman who was recently hired by the retail giant, and who emotionally expresses her gratitude. Corporate retail forays into the inner city market, however, have not been without controversy. Across America, minorities--particularly African Americans--have protested what they see as "ghetto colonialism": massive corporate entities eviscerating neighborhood character, exploiting local poverty, replacing no jobs with bad jobs, busting unions, flouting environmental protections, and intensifying traffic congestion. From Chicago's South Side to East Oakland, residents have marched, picketed, and petitioned city councils to keep "big box" retailers out. A recent debate in Inglewood, a predominantly minority suburb just south of Los Angeles, exemplifies this tension. In April 2004, Wal-Mart spent $1 million on a campaign to convince voters to pass a city measure allowing one of its "Super Centers" (the size of 17 football fields) to open without conducting environmental impact reports, traffic studies, or public hearings. The referendum confirmed the suspicions of many residents, who resoundingly voted it down after weeks of heated protests. "They need to come in through the front door in the light of day," said Inglewood Councilwoman Judy Dunlap, "not sneak in the back at night." Hope in Southern California The defeat of the Inglewood Wal-Mart, however, should not sour policymakers, planners, and activists on the prospect of corporate investment in the ghetto. As the case of Starbucks reveals, corporate investment can be a boon for companies and residents alike. The new Starbucks in Compton is one of almost seventy "Urban Coffee Opportunities" (or "UCOs") that have opened throughout the country since the unique partnership between Starbucks and the Johnson Development Corporation began in 1998. In addition to serving as anchor businesses in sagging commercial districts, the UCOs also provide desperately needed jobs for the young and unemployed. And they provide more than just a meager salary. Unlike many other large corporate investors, Starbucks offers comprehensive health care packages to even part-time employees. When combined with the stock option offering new employees receive, the health package lays the foundation for a sustainable, if modest, career. Two years ago, a Starbucks opened at a new $60 million, 22-acre shopping center called Chesterfield Square at Slauson and Western Streets in the heart of South Central. Approximately one mile from the infamous intersection of Florence and Normandie Streets, where trucker Reginald Denny was brutally beaten during the 1992 riots, the new mall also features a Home Depot, a Food 4 Less, and a Subway sandwich outlet. On opening day, Starbucks received over two hundred applications for employment--a sign of the intense demand for work in the area. Shortly after the grand opening of the mall, Helen Wilkins, a longtime African American resident of South Central, told a New York Times reporter, "It has really changed the neighborhood a lot. It has provided jobs--a lot of jobs--for our youngsters to keep them off the street." On a recent Saturday morning, black and Latino residents of the Chesterfield Square area crowded through the entrance of Home Depot, filling carts with tools, hardware, and potted plants. Significantly, shopping may soon become one of the few American pastimes where race no longer matters. But to view the opening of the Starbucks UCO in Compton in purely economic terms would be to overlook much of its significance. The coffee shop is also important for the deceptively simple reason that it is a safe, quasi-public space for people to talk. In Southern California, the reckless underdevelopment of public space and overuse of private transportation has left the region with an infamously detached, disengaged citizenry. In parts of Compton and in vast swaths of South Los Angeles, such isolation is compounded by violent crime. There, public playgrounds and parks--as well as streets--have been monopolized by gang members who define and defend it as "their" private territory. Coffee shops and bookstores are one solution to this problem. More so than Wal-Mart or Target, the coffee shop--at its best--is not simply a place for the exchange of commerce, but also a place for the exchange of ideas. National Trends Residents have likely warmed to the Johnson projects, at least in part, because they are perceived as coming from within the community, and Magic's conspicuous appearances at ribbon-cutting ceremonies reaffirm this for potential patrons. But there are signs that African Americans don't require the imprimatur of black celebrities to welcome corporate interests into their communities. The Chesterfield Square across town is not black-owned, and neither is the impressive Harlem USA complex in Harlem, featuring a nine-screen Magic Johnson Theater, an Old Navy clothing store, and several other retail outlets. Nor are black consumers solely interested in "practical" retailers of household essentials. In 2003, bookseller Borders opened a new store in Detroit's badly depressed downtown. Its brisk business has surprised store managers. Behind the scenes, there are also organizations pushing for the very kind of investment that has made Magic Johnson famous all over again. One of the most important has been The Initiative for a Competitive Inner City (ICIC) in Boston, a non-profit organization founded by Harvard Business School Professor Michael E. Porter. Porter and his colleagues have been conducting research and sponsoring initiatives for inner-city investment nationwide since the organizationUs founding. Distraught by the persistence of inequality and "the fact that too many of our citizens [were] not enjoying the prosperity that America enjoys as an economy as a whole," Porter founded the path-breaking organization in 1994. "Without a viable business base," Porter continues to preach ten years later, "you [cannot] have a healthy and viable community." In San Francisco, Business for Social Responsibility (BSR), a non-profit business association dedicated to stimulating ethical business practices, has been working to bring development to inner-city communities since the early 1990s. Matt Hirshland, Senior Manager of Communications at BSR, is heartened by what he sees in the inner-city Starbucks and Borders enterprises. Those business ventures have succeeded, he surmises, "because they make residents feel that they are truly stakeholders in the business." That communal investment resonates with his work: "We are helping businesses to be responsive to the demands, values, and environment of the communities in which they do business." It may be too soon to call these developments "the future," nor is it at all certain that ghetto investment will be a centerpiece of the next American city. But one thing seems clear: Starbucks is doing more for South Central than anyone expected. Beyond just bringing commerce to places too-long overlooked and overcharged, these developments may help end the debilitating sense of social, political, and economic isolation that still threatens ghetto life.
Sunday, January 29, 2006
Working on Sundays
I know I should not do it, work on weekend, however, I have no choice. The life of a small business owner!!! I am watching Law & Order but can't concentrate.
This friday, we handed in three proposals! Wow! What a week!
Today I am reading the new February issue of Black Enterprise and The Network Journal.
Some great articles this month!
Anyone else care to share thier weekend reading?
Below is an article from the current issue of the The Network Journal? Perhaps there is a market in consulting churches.
New York Daily News - http://www.nydailynews.com
Spiritual - and economic - revival Saturday, November 6th, 2004 The Rev. Dennis Dillon would like to see every black church in Brooklyn involved in some kind of economic development program - and, he says, that definitely includes the hundreds of small, under-the-radar congregations in every poor neighborhood.
"Even the little churches can take on a project," he said this week. "God's Battalion of Prayer, a [Pentecostal] church in Flatbush, runs a bakery. Another church makes greeting cards. The opportunities are all over out there."
It is this thinking that inspired Dillon, the publisher of a free weekly newspaper, The New York Christian Times, to organize a day-long workshop Monday that he hopes will lead to more economic cooperation between the business and religious communities.
The Black Church Means Business Conference will begin with breakfast at the New York Marriott in downtown Brooklyn and continue with seminars all day. Dillon will wrap up the event with a dinner speech.
"We've already got about 300 churches signed up," he said. "We're going to talk to them about franchising, fund-raising, incorporation, tax laws and a lot of other subjects they don't teach in seminaries."
Dillon, 45, organized a similar conference 10 years ago. He called it a success that, among other things, led dozens of smaller churches to start modest projects that help their pastors pay the bills and give their flocks a stake in the community.
For the big churches, with their large memberships, budgets and ambitions, projects range from affordable housing and schools to nursing homes and senior centers. Projects also can include businesses that, Dillon said, currently range from car services to print shops.
"What we can do is show churches what they can do and then motivate them to do it," said Dillon, who also is pastor of the nondenominational Brooklyn Christian Center in Bedford-Stuyvesant, which he founded two years ago in a former window factory.
The Christian Times, which he started 15 years ago, is distributed through churches. Its motto is "Good News for a Change," and its circulation, he said, is about 44,000. It isn't a religious publication in the usual sense because, despite its name, it focuses more on community news - including health, personal relationships and immigrant issues - than on church happenings.
"It has a spiritual foundation," Dillon said. "But I want black church communities to think as much about the here-and-now as they do about the sweet by-and-by."
One of the messages he preaches is that business begets business. "Open a store and another store will open nearby," he said. "You create a commercial center, one business at a time."
In a way, it is the same thing with churches. There are several in the neighborhood where Dillon established his own congregation, but he said his church, which calls its Sunday worship "celebration" instead of "service," fills a niche.
"Our ministry is specifically intended for up-and-coming professionals who want to know how to succeed as well as how to live," he said, "and we do some things no one else does."
One, he said, is to open a scholarship fund for every child dedicated in the church, with the first $100 donated by the church itself.
Dillon's double role as publisher and preacher fulfills an ambition that he said he first expressed to his mother when he was 12. "I want to preach and write," he told her, and she said, "You can do it."
Dillon was born in Kingston, Jamaica, moved to Hackensack, N.J., as a teenager, studied journalism at Sheridan College in the Canadian province of Ontario and returned to New Jersey, where he spent a few months as a reporter for The Record of Bergen County. He said he got the idea of launching his own publication while working for a black-owned newspaper in Englewood, N.J., where he was managing editor when he left for New York.
"The Christian Times has grown in some surprising ways over the years," Dillon said, "and I believe the church will, too."
The average attendance on Sunday is about 80, with members traveling from as far as the Bronx, he said. Parking is no problem; on the block of Atlantic Ave. the church occupies, there are few cars on the weekend.
"One of my prayers," he said, "is for traffic jams on Sundays. That will tell me we're doing it right."
I know I should not do it, work on weekend, however, I have no choice. The life of a small business owner!!! I am watching Law & Order but can't concentrate.
This friday, we handed in three proposals! Wow! What a week!
Today I am reading the new February issue of Black Enterprise and The Network Journal.
Some great articles this month!
Anyone else care to share thier weekend reading?
Below is an article from the current issue of the The Network Journal? Perhaps there is a market in consulting churches.
New York Daily News - http://www.nydailynews.com
Spiritual - and economic - revival Saturday, November 6th, 2004 The Rev. Dennis Dillon would like to see every black church in Brooklyn involved in some kind of economic development program - and, he says, that definitely includes the hundreds of small, under-the-radar congregations in every poor neighborhood.
"Even the little churches can take on a project," he said this week. "God's Battalion of Prayer, a [Pentecostal] church in Flatbush, runs a bakery. Another church makes greeting cards. The opportunities are all over out there."
It is this thinking that inspired Dillon, the publisher of a free weekly newspaper, The New York Christian Times, to organize a day-long workshop Monday that he hopes will lead to more economic cooperation between the business and religious communities.
The Black Church Means Business Conference will begin with breakfast at the New York Marriott in downtown Brooklyn and continue with seminars all day. Dillon will wrap up the event with a dinner speech.
"We've already got about 300 churches signed up," he said. "We're going to talk to them about franchising, fund-raising, incorporation, tax laws and a lot of other subjects they don't teach in seminaries."
Dillon, 45, organized a similar conference 10 years ago. He called it a success that, among other things, led dozens of smaller churches to start modest projects that help their pastors pay the bills and give their flocks a stake in the community.
For the big churches, with their large memberships, budgets and ambitions, projects range from affordable housing and schools to nursing homes and senior centers. Projects also can include businesses that, Dillon said, currently range from car services to print shops.
"What we can do is show churches what they can do and then motivate them to do it," said Dillon, who also is pastor of the nondenominational Brooklyn Christian Center in Bedford-Stuyvesant, which he founded two years ago in a former window factory.
The Christian Times, which he started 15 years ago, is distributed through churches. Its motto is "Good News for a Change," and its circulation, he said, is about 44,000. It isn't a religious publication in the usual sense because, despite its name, it focuses more on community news - including health, personal relationships and immigrant issues - than on church happenings.
"It has a spiritual foundation," Dillon said. "But I want black church communities to think as much about the here-and-now as they do about the sweet by-and-by."
One of the messages he preaches is that business begets business. "Open a store and another store will open nearby," he said. "You create a commercial center, one business at a time."
In a way, it is the same thing with churches. There are several in the neighborhood where Dillon established his own congregation, but he said his church, which calls its Sunday worship "celebration" instead of "service," fills a niche.
"Our ministry is specifically intended for up-and-coming professionals who want to know how to succeed as well as how to live," he said, "and we do some things no one else does."
One, he said, is to open a scholarship fund for every child dedicated in the church, with the first $100 donated by the church itself.
Dillon's double role as publisher and preacher fulfills an ambition that he said he first expressed to his mother when he was 12. "I want to preach and write," he told her, and she said, "You can do it."
Dillon was born in Kingston, Jamaica, moved to Hackensack, N.J., as a teenager, studied journalism at Sheridan College in the Canadian province of Ontario and returned to New Jersey, where he spent a few months as a reporter for The Record of Bergen County. He said he got the idea of launching his own publication while working for a black-owned newspaper in Englewood, N.J., where he was managing editor when he left for New York.
"The Christian Times has grown in some surprising ways over the years," Dillon said, "and I believe the church will, too."
The average attendance on Sunday is about 80, with members traveling from as far as the Bronx, he said. Parking is no problem; on the block of Atlantic Ave. the church occupies, there are few cars on the weekend.
"One of my prayers," he said, "is for traffic jams on Sundays. That will tell me we're doing it right."
Friday, January 27, 2006
Talent alone does not cut it!
One of the things I have learned the hard way is that no matter how talented you are or may think you are. Your business success does not depend on talent alone. You need help! You need people that will open doors, assist you, recommend you, validate you, and help you as you move your business forward.
Do not dismiss any contact, business card, friend of a friend or associate. You never know what door they can help open for your business.
Stay humble!
Karen
One of the things I have learned the hard way is that no matter how talented you are or may think you are. Your business success does not depend on talent alone. You need help! You need people that will open doors, assist you, recommend you, validate you, and help you as you move your business forward.
Do not dismiss any contact, business card, friend of a friend or associate. You never know what door they can help open for your business.
Stay humble!
Karen
Thursday, January 26, 2006
Hey folks!
The best business magazine on the market for small businesses is INC magazine. I wish I would have subscribed years ago when I first started Alston Marketing Group (www.alstonmarketing.com) I learn so much every issue.
This issue this is a great article on Ashley Stewart founder Dan Bitts - Thor Equities.
Make the investment and purchase INC magazine or visit your friendly local book store and read it for free. You will be happy that you did!
KMA
The best business magazine on the market for small businesses is INC magazine. I wish I would have subscribed years ago when I first started Alston Marketing Group (www.alstonmarketing.com) I learn so much every issue.
This issue this is a great article on Ashley Stewart founder Dan Bitts - Thor Equities.
Make the investment and purchase INC magazine or visit your friendly local book store and read it for free. You will be happy that you did!
KMA
Today is the first day of my online journal of the successes and challenges of running Alston Marketing Group. I started this blog to give back and share with other business owners the complex day to day issues of running a small business. I teach entrepreneurship in Washington, DC and other places. Some folks view me as a success. I wanted to share the highs and the lows of running a small business.
I invite others to share thier views and provide feedback. Welcome!
Karen
I invite others to share thier views and provide feedback. Welcome!
Karen
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