'94 Alumni Startup
In the three-block stretch of East Palo Alto known as Whiskey Gulch, between the wig salon and the drug rehabilitation center, you will find a short alley. Climb the cement ramp at the alley's dead end into a small, simple office furnished in Early Salvation Army style. You have just entered one of the most ambitious startups to come out of the Business School in the past few years. Its name is both a description and an exhortation, representing both its founding impulse and its mission.
Start Up, a micro-enterprise program promoting economic development in and around East Palo Alto, was created by five MBA '94 classmates who developed the idea during their first year at business school. A training, mentoring, and loan center for selected local entrepreneurs who want to start their own businesses, it began operating last fall.
Three times a year, about 20 clients begin Start Up's 10-week training program. Many already have one or more jobs, and some have already begun their businesses but seek additional help. Most are in their mid-thirties; all live or work in the community. Clients spend the first three weeks of training assessing the feasibility of their businesses and the remaining seven preparing business plans and studying subjects like sales and marketing, finance, management, taxes, and the law.
Ongoing support
Completion of the training program is only the beginning of their relationship with the center. Graduates who have finished their business plans are eligible to apply for a 6-month micro-loan of $250 to $500. If the loan is repaid on time, they can apply for longer-term loans of up to $5,000. Professional business counselors offer one-on-one assistance with loan management, as well as general business advice. People with experience in small business serve as mentors, and Stanford MBA students are available to give technical business support.
Start Up started winter quarter 1993. Meeting once a week for breakfast at an off-campus, short-order restaurant, then first-year MBAs Kris Hagerman, Steve Kessel, Greg Sands, Lee Zimmerman, and Mike Zimmerman talked about how they could best use their resources to serve the nearby community. All had previous experience in government, social services management, or economic development. They hoped to found a nonprofit enterprise that would continue once they left Stanford and eventually be run by the community it serves. "We were also looking for something that we could get up and running in a year and a half," says Kessel. By the end of winter quarter, they'd come up with the idea of Start Up.
Like any entrepreneurs launching a new venture, Start Up's upstarts began with a business plan. Like many student entrepreneurs, they wrote the first draft as an independent study project. When the five separated to take summer internships, weekly conference calls replaced the breakfast meetings, and by summer's end, they were ready for the next step, finding venture capital -- or, in Start Up's case, donations. Fund-raising and fine-tuning took the students' entire second year, and then some. By fall 1994, they had $200,000 in individual, corporate, and foundation gifts, an office full of donated secondhand furniture, a board of directors -- most of them from the community -- and their single full-time employee, executive director Janis Eggleston, who brings more than a decade of bank and development board experience to the nonprofit center. The five founders have since gone on to private-sector jobs; only Kessel currently serves Start Up as a director.
More than just a good idea
Start Up's first class graduated in October 1994, prepared to launch a video store, a mobile automobile detailing service, a gourmet coffee shop, an African fabrics store that also offers tax services, a mobile automobile repair service, a travel agency, an online information service, a paralegal typing service, a nonprofit thrift shop, a landscaping service, a bowling alley, an African art and jewelry store, a hair and nail salon, a bookstore, an environmental design service, a hot dog and soul food wagon, and A Taste of Philly, a fast-food deli specializing in Philadelphia-style hoagies and cheese steaks.
Said "Philly's" Gail Noble: "Plans to start a business consist of more than just a good idea. Start Up is helping me to realize my dream and is giving me the insight I need to be successful in starting a business of my own. The deli is still in the planning stages, but soon it will be a reality -- thanks to Start Up and everyone who has made this program possible for the people of East Palo Alto."
Start Up's second class graduates this month.
-- Janet Zich
Fellows recruit for 1600 Pennsylvania Avenue
Four former white house fellows returned to Stanford in November for a
panel discussion sponsored by the Career Management Center.
(Left to right) Kien Pham, MBA '85; Les Denend, MBA '73, PhD '77; Jamie
Floyd, a postgraduate fellow at the Stanford School of Law; and Kevin Grimes,
MBA '93, encouraged students to apply for the one-year government positions.
Two Stanford Business School alumni are White House fellows this year --
Janet Abrams, MBA '87, and Mickey Levitan, MBA '85. The Business School has another connection to the 30-year-old program: it was the idea of John W. Gardner,
lecturer in organizational renewal and leadership, who originally suggested it
to President Lyndon Johnson when Gardner was president of the Carnegie
Corporation.
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