Skip Navigation LinksHome / News & Events / Babson Magazine / Summer 2012 / Seeking Opportunity Among the Concrete and the Crowds
Seeking Opportunity Among the Concrete and the Crowds

Daymond John at the FUBU offices in New York City’s Empire State Building
Photo: Jordan Hollender

Seeking Opportunity Among the Concrete and the Crowds

Starting businesses on the streets and sidewalks of urban communities, entrepreneurs can find empowerment, success, and a better life. Through their ventures, they also impact neighborhoods that often are overlooked and forgotten.

Growing up, Daymond John didn’t like to be dependent on his mother for spending money, so he hustled to make a buck. He sold pencils. He operated an informal bicycle repair shop. He shoveled snow and raked leaves for neighbors.

That entrepreneurial spirit never went away. As a young man living in Hollis, a lower-middle-class neighborhood in Queens, N.Y., famous for hip-hop artists such as Run DMC who sprang from its streets, John launched a venture selling tie-top hats. Having spotted the hats in a rap video, he initially wanted to buy one for himself, but after discovering how expensive it was, he had a better idea. Armed with the sewing skills his mother had taught him, John began making the hats and selling them on the streets. One day, he and a friend sold $800 worth of the hats, and John realized something important: People wanted urban-style clothing, but they had nowhere to buy it.

John went to work. He began selling his own sweatshirts, T-shirts, and jerseys and convinced rap star L.L. Cool J to appear in a promotional campaign. As demand for John’s clothes grew, his mother backed her son’s fledging enterprise in a big way, mortgaging their family home for $100,000 in startup capital. Then she moved out and four of John’s friends moved in. They took out almost all the furniture, brought in sewing machines, and slept in sleeping bags. “We were like brothers,” John says. “We created a makeshift factory.” The house bustled with activity, which worried the neighbors. Seeing seamstresses coming and going and John and his friends creating so much trash that they started burning it in the backyard, concerned neighbors frequently called the police. “They didn’t know if it was a crack house or a whorehouse,” he says.

The company they created was FUBU, the influential and hugely successful urban apparel brand. Today, John is FUBU’s president and CEO, as well as an entrepreneur in residence at Babson, and FUBU headquarters resides not in a makeshift factory but inside the Empire State Building. That exhilarating climb, from the streets and sidewalks of Hollis to a skyscraper in Manhattan, illustrates entrepreneurship’s potency.

For those from neighborhoods where economic opportunity is hard to find, entrepreneurship can be empowering. It can offer not only survival and a decent living but also a chance to rise above one’s circumstances. “Entrepreneurship is the most transformative force to help people help themselves,” says Mike Caslin, P’07, managing director, strategy and development, of Rising Tide Capital, an organization that promotes entrepreneurship in low-income areas, and a former adjunct lecturer of entrepreneurship.

At the same time, urban entrepreneurs can bolster neighborhoods in need with the products and services they offer. “You can transform your life, transform your family, and transform your community,” Caslin says.

Obstacles to Overcome

Not that every urban entrepreneur ends up wildly successful. On the contrary, inner-city entrepreneurs face many obstacles, some as hard and tough to crack as the concrete under their feet. Everything from aging infrastructure to lack of parking to negative perceptions about an area, whether justified or not, can prove challenging. Just think about hiring. “Who do you employ?” says Professor Candida Brush, the F.W. Olin Distinguished Chair in Entrepreneurship and chair of the Entrepreneurship Division. “If you want to support the community, you have to hire locally.” But to hire locally, you may be passing up better-qualified candidates, given the often inadequate education levels seen in disadvantaged areas.

Even becoming too successful can pose problems. If a venture caters to an ethnic enclave, that group may not appreciate the business trying to expand beyond the neighborhood. “That can be perceived as copping out,” says Brush, who has co-authored research papers on urban entrepreneurship and taught in Goldman Sachs’ 10,000 Small Businesses program in New Orleans, where new businesses were helping to lift the city out of the catastrophic aftermath of Hurricane Katrina.

Of course, operating in a distressed area can have a few advantages, including low rents and low-interest loans that are available from some agencies and towns. Brush once visited an old, nondescript warehouse in Boston’s Roxbury neighborhood and found three businesses inside: an educational publisher, an Internet retail company, and an event planner. “It was right in the middle of Roxbury,” she says. “It was basically an incubator.” She asked one entrepreneur why he was there. “I can be anywhere,” he told her. “The rent is good, and I thought it was important to show revitalization.”

Director Mary Mazzio and grip Dennis Gomez

Director Mary Mazzio and grip Dennis Gomez
Photo: Richard Schultz

At its most nitty-gritty, entrepreneurship is simply a way for some city folks to get by day after day. Mary Mazzio, Babson’s filmmaker in residence, witnessed this firsthand while making The Apple Pushers. Her latest documentary follows five immigrants who operate pushcarts selling fruits and vegetables in New York City’s poor neighborhoods. The immigrants came to the U.S. hoping for a better life for them and their families. “It’s the story of America,” Mazzio says.

The pushcart operators are part of an NYC program to bring fresh produce to disadvantaged areas, known as “food deserts,” from which supermarket owners shy away. The grocers would rather build in the suburbs, where space is plentiful and red tape is less troublesome. Additionally, they may harbor preconceived notions about safety, theft, and poverty in the inner city. “The knee-jerk reaction is, ‘I will be able to have a greater profit in an affluent, suburban location,’” Mazzio says.

Where grocers fear to tread, pushcart vendors venture forth. Working long, hard days, they navigate tight profit margins and face city regulations and occasional police harassment. Their small rolling businesses are precarious. Not all the carts Mazzio follows in the film pull through. “They are killing themselves for their children and their children’s children,” she says.

Caslin also has seen entrepreneurship at this basic, fundamental level. Located on a struggling commercial strip in Jersey City, N.J., Rising Tide Capital offers training, networking, and credit assistance to low- to moderate-income entrepreneurs. Like the immigrant cart pushers, these people aren’t looking to be the next Bill Gates or Mark Zuckerberg; they just hope their ventures can make their lives a little better. About a quarter of program participants are single moms, 28 percent are unemployed, and 9 percent were formerly incarcerated. “We see opportunity in communities where others lock their doors and drive through,” Caslin says. “We see resiliency and spirit that are indispensable in the face of great odds.”

Caslin co-founded the Network for Teaching Entrepreneurship, which offers entrepreneurship education to young people, and spent 20 years as its CEO. He also founded NFTE’s New England chapter and its partnership with Babson in the 1990s. He sees Rising Tide’s programs almost as an adult version of NFTE. Rising Tide’s participants are connected with mentors and go through a 12-week course in business management and planning. Because participants typically have little or no credit, Rising Tide helps them build credit by partnering with microlending organizations, which provide a $200 savings account, a $200 debit card, and a $200 loan, with access to larger loans made available as a business grows.

Since 2006, more than 500 entrepreneurs have graduated from Rising Tide’s programs. Its legacy includes 254 businesses in operation and another 200 in the planning stages. Among graduates, the use of public assistance drops from 29 percent to 10 percent, and for those starting businesses, their median annual household income jumps from about $26,000 to $40,000.

The businesses that graduates start are usually small, with one to three employees, but the enterprises operate in a wide range of fields, from child care and manufacturing to hairdressing, food, and janitorial services. Across poor neighborhoods, these businesses create a ripple effect. For every $1 invested in Rising Tide programs, $3.80 is generated in local economic impact. “Wealth and value creation in communities of need is one of the most pressing and urgent opportunities to be addressed in our country,” says Caslin, who will be working to expand Rising Tide programs across the U.S. “We believe entrepreneurship shines a light in economic decline.”

Impacting a Community

Daymond John at FUBU

Daymond John at FUBU
Photo: Jordan Hollender

If new urban ventures take off and soar, they can address needs that are overlooked. In the early days of FUBU, hip-hop was a growing cultural force, but department stores wanted nothing to do with the clothes associated with rappers. When John approached the stores about carrying his apparel, they told him the clothes would be stolen and would serve only to intimidate people.

Undeterred, John then took his clothes to smaller specialty shops. “They bought the product,” he says. “They believed in it.” The shops pushed the FUBU brand, and as John’s company grew, so did they. “We paid attention to a culture that everyone ignored,” John says. “We filled that need.” Eventually, the department stores, seeing that they were missing out on new customers, wanted to sell FUBU as well.

In many ways, urban entrepreneurs like John are the embodiment of the FUBU credo, For Us By Us. Over the years, John has heard from many people who, inspired by that slogan, took action to improve their lives and, in the process, helped their communities. “I decided to start my own accounting firm,” someone once told him. “You took my blinders off.” John advises young entrepreneurs to stay and make a difference in their own communities. Don’t leave for supposed greener pastures. “Always try to be a superstar in your own neighborhood,” he says. “The grass is not always greener.”

Richelieu Dennis ’91 understands how entrepreneurship can influence a community. He’s the founder and chief experience officer of Sundial Brands, an Amityville, N.Y., company that sells natural personal care products with certified organic ingredients. Sundial’s story begins when Dennis came to the U.S. from his native Liberia to attend Babson. When civil war erupted back home, he couldn’t return, so he began looking for opportunities in America after graduation. He ended up in New York, a city full of street vendors whose small entrepreneurial enterprises reminded him of his grandmother.

Richelieu Dennis ’91 at Sundial Brands headquarters in Amityville, N.Y.

Richelieu Dennis ’91 at Sundial Brands headquarters in Amityville, N.Y.
Photo: Jordan Hollender

During summers as a boy, Dennis helped his grandmother, who made shea butter soaps and other products and then set up a table at a village market to sell them. Inspired by those experiences, he decided to try the same venture on the streets of Harlem. Using her recipes, he and his partner, Nyema Tubman ’91, sold homemade, all-natural bath and body products. They set up a table right on the sidewalk, just like the city’s many other street vendors, and covered it with their wares.

Most of the black folks passing by were unfamiliar with the African products, so the vendors spent much time engaging people one-on-one and educating them about the items’ origins and benefits. Word spread about their products, and Dennis began studying the marketplace. He noticed that other street vendors had a hard time restocking during the day. They might have to take the subway across town to buy more merchandise. So Dennis and Tubman began supplying their bath and body goods to the other vendors. The pair would be paged by a vendor and then hustle over in a van with whatever was needed. Between making and delivering products, the partners worked many hours, from 5 a.m. till well into the evening. “It was a long, long day,” Dennis says. But the work paid off, as the business continued growing. Family members were hired, and production was moved out of a Queens apartment into a small warehouse.

Nowadays, Sundial Brands products can be found in much bigger places: Target, Walgreens, and Whole Foods. By selling in big chain stores, Dennis wants to “democratize” beauty care. Many people assume that organic, natural products can be found only in high-end shops in upper-class neighborhoods. “Folks in the suburbs are not the only ones who desire quality products,” he says. “Everyone should be able to access and afford this.”

Taking Action

Jeffrey Brown ’86 also knows firsthand the judgments people can make about inner-city businesses and their customers. He’s the founder, president, and CEO of Brown’s Super Stores. Based in Westville, N.J., Brown operates 10 Philadelphia-area ShopRite supermarkets, six of which are in food-desert areas like those in Mazzio’s film. His store in West Philadelphia, for instance, sits in an area of 100,000 people and no competitors. “It’s row home after row home for miles with no grocery stores,” he says.

Jeffrey Brown ’86 in the bakery of one of his ShopRite supermarkets in Philadelphia

Jeffrey Brown ’86 in the bakery of one of his ShopRite supermarkets in Philadelphia
Photo: Gene Smirnov

Walk into one of his supermarkets, and you’ll see a life-sized cutout of Brown himself standing by the entrance as if he’s welcoming people to the store. “I’ve gotten a little older and a little fatter,” says Brown, looking at the cutout. As he walks around the supermarket, customers constantly approach him, asking questions, telling him he’s doing a good job, praising the store’s sweet potato pie. This open, friendly give-and-take with customers is something Brown works hard to foster. “There’s a relationship there,” he says. “I am part of the brand.”

The entrepreneur also works hard to create a sense of community in his supermarkets, which offer health clinics, meeting rooms, pharmacies with low-cost prescriptions, and credit unions with no-fee checking services. “We’re building a hub for an urban community,” he says. Business decisions often are made on the basis of the dual bottom line of profit and people. For example, Brown’s stores have participated in gun buyback programs in which people bring in firearms to be taken off the streets. Participants receive a ShopRite gift card. “If people are shooting each other, I won’t have a successful store,” he says.

Despite all the good will and community Brown has created, his urban supermarkets faced hard reality on the ledger sheet before they were built. Profit margins for supermarkets are tight, about 1 percent, but those margins typically drop a critical 5 percent in depressed areas. The culprit for this isn’t theft, as many might suppose, Brown says. The reason is the modest means of customers. They buy small orders to take on the bus, and they buy more of the staples (milk, baby formula, bread) that have minuscule margins. Adding to the unprofitability is the workforce, which hasn’t been adequately prepared by the educational system. “Society didn’t get the job done,” he says. “The cost of training that workforce is more expensive.”

Faced with these challenges, inner-city grocers sometimes try charging customers more, or paying employees less, or providing lower quality merchandise in a bare-bones store. “All of these things have resulted in failure,” he says. “People get angry. It’s insulting.”

Brown knew there had to be a better way. At a meeting about 10 years ago in Philadelphia, politicians, civic leaders, and grocers gathered to talk about the food-desert issue. Brown watched his competitors. They were skeptical anything could be done. “I heard them whispering,” he says. “It seemed risky to them.” But Brown, a fourth-generation grocer who started helping in his dad’s West Philadelphia grocery at the age of 8, thought that opening new inner-city supermarkets was possible, as long as the government could provide some initial support. “If you have no competitors and the government says they’ll help you, I thought there must be a way to do that,” he says.

In 2005, Brown received grants and loans from the Fresh Food Financing Initiative, a Pennsylvania public-private partnership committed to spurring supermarket development, to open his first food-desert store. More have followed, and all have proved as profitable as his suburban stores.

That success has caught the attention of the White House, where making sure families have access to healthy food is one of the concerns of first lady Michelle Obama’s Let’s Move initiative to fight childhood obesity. Three cabinet secretaries have visited Brown’s supermarkets, and administration officials frequently call asking his opinion on policy. A couple of years ago, he was a guest of the first lady during a State of the Union address and met the president. “Personally, I found them engaging and very nice,” Brown says. “They were both really warm and interested in solving this problem.”

Entrepreneurs such as Brown are making a difference in tough neighborhoods. His food-desert stores operate in areas with high rates of unemployment, incarceration, and violence. Faced with such an environment, one might be tempted to assume that change isn’t possible, that problems of poverty and scarce economic opportunity are larger than any one person.

Entrepreneurship rejects this view. Brown chose to invest in inner-city areas; John and Dennis built up businesses after selling their wares on the streets; and Mazzio’s cart pushers and Rising Tide Capital’s participants had faith that starting a venture could improve their lives. They didn’t throw up their hands and let the urban environment determine their destinies. They acted. “The Entrepreneurial Thought and Action view is that people act on the world,” says Rising Tide’s Caslin. “That gives me hope.”

blog comments powered by Disqus