One recent evening in the auditorium of Lionel Wilson High School, five freshmen were pitching their idea to make air fresheners designed to cover up the sweaty smell of gym bags. They described a survey they had conducted among 118 people, which showed that women who played sports would be their best potential customers. After all, the students noted, their company's satchels would be filled with bath beads that could be used in the tub once they had accomplished their first mission.
Then the students answered the questions of a panel of four judges who were evaluating their presentation. "What would you do if there's an accident and the air freshener breaks?" asked AOL sales manager Adam Wright.
Chief executive Alfredo Sanchez didn't hesitate. "We would give the money back," he said.
And as for the more important question of how to get apathetic teenagers interested in admission to a four-year college, the nonprofit organization BUILD thinks it has found the answer: turn them into entrepreneurs.
Using real-world business experience as a way to engage students is not a new idea. Organizations such as Junior Achievement have long taught business skills, and the program Spark offers workplace apprenticeships to seventh- and eighth-grade students in San Francisco and Los Angeles. Thomas Friedman of The New York Times recently touted the Network for Teaching Entrepreneurship, which has a business competition program for low-income students.
But what Businesses United in Investing, Lending and Development (BUILD) offers is an intensive, four-year program that ties entrepreneurship to academics and provides the help of tutors and mentors. Perhaps just as important for the students, who often go to BUILD several times a week after school, the organization gives them a peer group where it's cool to brag about their accomplishments and an environment where they can win prizes for each milestone they reach.
At the recent business-presentation contest, the auditorium of East Oakland's Lionel Wilson School was filled with East Bay ninth graders pitching their business ideas. All were trying to win the night's prize, a $5 gift card to Starbucks. Their families watched and cheered. In May, at UC Berkeley's Haas School of Business, the students will compete in a business plan competition against students at other schools BUILD partners with. Their presentations will include PowerPoint presentations, detailed financial information, twenty- to thirty-page business plans, and the ability to maintain eye contact with adults.
The evening's event was just one small part of a four-year process that will involve students creating and selling their products. If they stick with BUILD, the organization promises, they will get admitted to college, and some will go on to major universities.
"One thing that excites me as someone who wants to see change in education is injecting the relevance factor into the conversation with students," said Nereyda Salinas, director of the leadership degree programs at Stanford University's school of education. "Why do I need math? Because I want to balance the books. Why do I need to balance books? I want to have a profit. They understand profit."
BUILD was started in East Palo Alto in 1999 by Suzanne McKechnie Klahr, a Stanford law school graduate. Klahr was working in East Palo Alto on a Skadden public service fellowship that involved starting a counseling program for adult entrepreneurs. Four teenagers walked into her office asking for help starting a business, since, as they told Klahr, everyone drops out of high school. With the caveat that they stick with their studies, Klahr met with the students after school to help them with their T-shirt and sweatshirt company. Over time, she said, she realized that creating a small business is "a great vehicle for propelling people academically to college." The four students all graduated from college.
Ten years later, BUILD is now in five classes in four schools on the peninsula. Six years ago, the program expanded to Oakland, where public high school graduation rates are among the lowest in California. Currently, BUILD is in five Oakland schools, and works with students from three other schools in the region, and there are plans to beef up its presence in East Oakland. Two years ago, BUILD opened an office in Washington, DC, and it plans to open in other locations such as Boston.
While academic retention can be a challenge, the organization continues to meet one of its chief goals: 100 percent of those who graduate from BUILD are accepted to college. "We want to be able to expose our kids to the community, the schools, the corporations, and show that by re-engaging young people in education, even those who are left behind, we can propel them to college," Klahr said.
Students are mostly Asian, Latino, and African American and from families where they are often the first to go to college. During their freshmen year, students take a business class as an elective and work on their business ideas and team presentations with mentors from the local community such as Wright of AOL. As sophomores, students operate their businesses with the help of volunteer venture capital advisors and mentors. Juniors, while operating their business, go on state college tours with BUILD staff and begin to focus on the college essay and SAT preparation. Seniors shift their focus toward applying for college.
"What attracted me to BUILD was not that they peddled a product," said Sheilagh Andujar, the principal of Oakland Technical High, where twenty freshmen take the BUILD elective course. "But that they have a methodology and philosophy on how to get students to see their own power from within and they start right away putting together a business plan, and developing and marketing their product."
The organization, which is headquartered in Palo Alto, has plans to keep following its students to make sure they have what they need to graduate from college.
All this, of course, takes money. The top priority for BUILD's leaders is fund-raising. For the fiscal year that ends June 30, the organization's budget, which is raised entirely from donations, is $3.4 million, an 11 percent increase over last year in what was a difficult fund-raising environment for many nonprofits. This year's goal is to grow the budget. The organization currently receives about 70 percent of its funding from foundations. The rest comes from individuals, who doubled their contributions to BUILD this year, said Elizabeth Gardner, the organization's director of individual giving.
In Oakland, BUILD faces several challenges such as raising its profile to attract mentors and potential contributors. Keeping students in the program, particularly freshmen, can be hard. In 2008-2009, BUILD retained 87 percent of freshmen, up from 68 percent the year before. At Oakland Tech, seven out of a class of 27, nearly one-fourth of the class, dropped or were dropped from the freshmen class. The organization recently revamped its freshmen year program to make it more fun for students. Pizza parties, ice cream socials, and prizes also help engage students.
Denise Yamamoto, a nonprofit consultant who is the chair of BUILD's Oakland advisory board, is also a mentor at the Castlemont Business and Information Technology School in East Oakland, where she said the organization is still not well known. Just thirteen kids are in the BUILD freshmen class, although there is room for 25 to 30.
"Because not many kids know about it yet, I think it's been difficult to attract and retain kids in the program," she said. "I have a feeling that the longer BUILD is in a school, the more successful it can become."
In 2009, BUILD Oakland had 24 graduates, up from 12 graduates the previous year. This year, it expects to have 36 graduates. More students are in the pipeline: It has 107 freshmen this year. Last year, 105 freshmen started with BUILD and 98 of those began the program's sophomore year.
When Belinda Turner moved from Oakland to Vallejo to live with her grandmother, it was unclear whether she would still be able to attend Oakland High School and still work with BUILD. The organization helped her figure out how to get to school in the morning with bus passes. Most evenings after BUILD, her mentor Katya Rivas, an affirmative action officer at the University of California's office of the president, takes her home.
"It keeps me going," said Belinda. "Instead of just going home and doing nothing except homework and lollygagging, it keeps me doing stuff. They are always here for me. They try to help me get me through the best they can." Belinda, whose business sells handmade soaps, hopes to work in the medical field.
At the BUILD office in downtown Oakland one recent Monday, sophomores watched Super Bowl ads to get ready to make their own commercials for their products. "What are they trying to sell? Who are they targeting?" Lyndsey Ballinger, business incubator manager, asked the group.
In another room, twelve seniors were busy at computers filling out financial aid applications. On a wall was a display with their names, photos, and the colleges they had received acceptances from. The 36 graduating seniors had applied to 333 schools and received 69 acceptances to date.
Chinese food arrived to celebrate the sophomore's good school report cards.
Xavier Taylor, a sophomore at California College Preparatory Academy in Berkeley, said he recently raised his hand in church when the call went out if anyone knew about making a spreadsheet. When church members gave him a quizzical look, his mother said her son knew about business.
"Strangers are often surprised," said Xavier, a budding behavioral analyst. "Teenagers making a profit off a legitimate business?"