High Schools Train Students to be Entrepreneurs

NewsHour Special Correspondent for Education John Merrow reports on a program that trains high school students to be entrepreneurs. http://www.pbs.org/newshour/bb/education/jan-june07/entrepreneurs_01-15.html JOHN MERROW, Special Correspondent for Education: Seventeen-year-old high school senior Yesenia Mercado lives in Providence, Rhode Island. Ahead of her is a very important day. YESENIA MERCADO, Student: I’m kind of nervous. What’s at stake is pretty much everything for me. I’ll call you as soon as I find out if I get the money or not. MOM: Love you. YESENIA MERCADO: Love you, too. JOHN MERROW: Today, Yesenia and 12 of her classmates will get a chance to launch their own business. YESENIA MERCADO: We’re hoping to raise $10,000 to start the Big Picture Soda Company. We have a group of investors coming in. Hi, how are you? I’ve been dying to meet you. Basically, we’re going to be presenting the business plan to them. They’re going to taste the soda, and they’ve come down to either yes or no. The Big Picture Soda will sell carbonated drink. It’s made out of all-natural flavors. POTENTIAL INVESTOR: How much money do you expect to make? YESENIA MERCADO: The first year, we expect to make a little — like, $5,000 for the first year. But that’s just thinking minimum. It’s a different appeal, a different taste. You’re going to love it. And all the money is going to go to college scholarships. POTENTIAL INVESTOR: Excellent. OK. So who’s in charge of marketing here? Teaching entrepreneurship JOHN MERROW: The idea for a soda company came out of a class in entrepreneurship offered at Yesenia’s high school. Bill Daugherty teaches it. BILL DAUGHERTY, High School Teacher: I love teaching, and I think the kids are terrific, but I also felt great building a company of 175 people. JOHN MERROW: Daugherty is an entrepreneur himself. In 2004, he sold the Internet company he founded for $350 million. Now he volunteers to teach this class. BILL DAUGHERTY: I look at business, you know, as an expression of who you are. Each kid in the class comes up with, writes, and develops, and researches their own business plan. Everybody has an idea, but you want them to have a really great understanding of the fundamentals of business. But most importantly, we want them to know that they can do it. JOHN MERROW: Small businesses drive America’s economy, creating between 60 and 80 percent of all new jobs every year. But public schools rarely teach classes in entrepreneurship. In nearly half the states, studying basic economics is not a requirement for high school graduation. STEVE MARIOTTI, New Foundation for Teaching Entrepreneurship: That’s my big complaint. And that’s what NIFTY really is trying to change, that every child learns the basic principles of owning a small business before they graduate from high school. JOHN MERROW: Steve Mariotti is the founder of NIFTY, the National Foundation for Teaching Entrepreneurship. NIFTY brings business classes, like the one taught by Bill Daugherty, to some 600 public schools, most in poor neighborhoods. STEVE MARIOTTI: The biggest civil rights issue of our time is that many children from low-income communities are not given an opportunity to learn about ownership. BILL DAUGHERTY: The at-risk community, from an entrepreneurial standpoint, from business generation, is clearly left behind. And NIFTY and things that we’re doing here are intended to jumpstart the process. STEVE MARIOTTI: For some low-income children, it’s a matter of life and death, because if they can’t make a livelihood, they end up selling a corrupt or evil product. TEENAGER: My cousin will come home everyday with bags and jerseys and like show it off to me, and be like, “You can never get this one day.” Everybody wants the fancy cars, the nice clothes, the jewelry. I’m going to get that one day. I’m going to get that one day and not choose to sell drugs just like him. Finding a way out JOHN MERROW: These teenagers have been charged with drug dealing and robbery. They are inmates here in RikersIsland jail in New York City. CARMEN MORALES, RikersIslandAcademy: Give me an example of a service business. JOHN MERROW: Rikers has its own high school, where NIFTY runs a class in entrepreneurship. CARMEN MORALES: Guys, you cannot do things the way you’ve been doing it. Once you become an entrepreneur, your whole mindset has to change or else you lose the business, OK? JOHN MERROW: Carmen Morales is the teacher. CARMEN MORALES: You know, we have guys here who are used to making like tons of money doing illegal things, all right? So I say, listen, we’ve got to change your hustle. The only way you can make a profit is if you double or triple the product that you’re selling, double or triple it. JOHN MERROW: Prison officials brought entrepreneurship education here in hopes of lowering recidivism rates. Currently, 60 percent to 80 percent of inmates are rearrested. CARMEN MORALES: The problem is, they can’t find work. Because when they fill out the application, at the end of the application where it says, “Have you ever been convicted of a felony?” as soon as they check yes, the application is pushed to the side. If no one is going to hire them, then they have to be able to hire themselves. JOHN MERROW: As in all NIFTY classes, students here learn the basics of business by creating a plan for a business of their own. MICHAEL BERMUDEZ, Student, RikersIslandAcademy: Good morning. My name is Michael Bermudez, and I’m a student for NIFTY. Mine was the arcade store. The name of the arcade store would be the Home of Fun. It has games, tournaments, food, refreshments, and everything to keep the kids off the streets. MICHAEL WALKER, Student, RikersIslandAcademy: My business is Neighborhood Needs. I wanted to start my own flea market, me selling products that the neighborhood needs and whatever. I know how many hours I’m going to put in, and I know how much I’m going to get each hour for me working, and then the rest of the money I put in my business will just keep growing, because nobody works for free. CARMEN MORALES: All right, so let’s say he pays $100 for it, right? JOHN MERROW: Graduates from this entrepreneurship class have yet to start a business. CARMEN MORALES: I’ve been teach NIFTY for two years. And every year, I say, OK, this is the year, this is the year we’re going to get a kid to start a business. But I’m hoping this year. I’m banking on my three guys. MICHAEL BERMUDEZ: I’m here for robbery, so the money I robbed I could have made that all in one day. JOHN MERROW: Do you feel like you know a better way to make money now? MICHAEL BERMUDEZ: Yes, there’s a lot of ways to make money now. There’s a lot of options. MICHAEL WALKER: You can get a pack of water for — there are 36 waters in there for only five or six dollars, and sell them a dollar each. You’re making more than double. You’re making triple. CARMEN MORALES: If I can walk into any one of their businesses, I’m floored. I would be their best customer. Even if I didn’t need anything, I would be their best customer. Preparing students for change JOHN MERROW: While Carmen Morales hopes for the best, she also wishes public schools would do more to teach entrepreneurship. CARMEN MORALES: Because this is what the kids need. If you don’t have the parent at home to spend time with you, to actually figure out what it is you want to do in the future, then you’re really just lost. And you’re like, “OK, I know I have to get a job. I know I have to get a job.” And that’s so ingrained. “I know I have to get a job.” What if there were no more jobs tomorrow and you had to create your own space? How would you do it? BILL DAUGHERTY: I think outsourcing is increasing, and I think jobs are going to be different. Change is accelerating. A person who does not have the understanding of business and they don’t have the skills and the attributes of entrepreneurship is threatened by change. An entrepreneur, a businessperson, seeks change. JOHN MERROW: Why? BILL DAUGHERTY: Because change creates opportunities for new businesses. I think, through NIFTY, we are preparing kids very well for a changing economy and a changing marketplace. JOHN MERROW: But in most public schools, entrepreneurship education takes a back seat to more traditional subjects, and test scores have become the measure of success. STEVE MARIOTTI: The concept of memorizing facts is not what you’re going to need to compete over the next 40 or 50 years. You’re going to have to have critical thinking. You’re going to have to be flexible. You’re going to have to be full of energy and have a love of learning. And you’re going to have to be entrepreneurial. JOHN MERROW: Back in Providence, that’s what Yesenia Mercado and her classmates are learning to do. INVESTOR: Investors, are you all ready? Well, after careful deliberation.. JOHN MERROW: But they’ll still need $10,000 from these investors to get Big Picture Soda Company off the ground. INVESTOR: They have decided that they want to pursue funding for this project with a… YESENIA MERCADO: It was just phenomenal, the excitement, also, the adrenaline. And I just smiled. Thank you so much. With me, I never would have thought I’d be doing something like this. I feel like my mind is already like at 21, 22. Maybe that’s bad. But I’m 17. And I just feel like I’m so ahead of the game. JOHN MERROW: In early December, Big Picture Soda produced its first 100 cases and found a buyer, Whole Foods Supermarket, in Providence. JIM LEHRER: And the soda went on sale at the Whole Foods store last week.