The Stanford Daily

April 10, 1997

By Bimal Shah
Staff Writer

An innovative program launched by students at the Graduate School of Business is helping train entrepreneurs and revive the business community in East Palo Alto.

The program, called Start Up, is a partnership of the Business School, Silicon Valley's private sector and community organizations in East Palo Alto.

The program provides entrepreneurs from in and around East Palo Alto with in-class training, loan funds and technical assistance.

Would-be entrepreneurs come to the program with an idea for a business they want to develop. They attend a four-week course designed to assess the feasibility of their ideas. About half continue on to an eight-week course in which they learn about cash flow management, customer service, marketing and other issues.

Participants also develop more detailed business plans and apply for funding. Out of about 18 loans made to date, there have only been two or three defaults, said Mike Zimmerman, one of Start Up's founders and the current chairman of its board of directors.

Using their loans, entrepreneurs have launched a variety of businesses including a landscaping service, a record label, an Internet service provider and a 3-D chess company.

The program was the product of several different strands coming together, said Jim Thompson, director of the Business School's Public and Global Management Program and a member of Start Up's board.

Each year the Business School undertakes a public management initiative, Thompson explained. In 1994 the focus was urban development.

There were some students with a deep interest in the subject, he added. Under the supervision of Political Science and Business Prof. David Brady, several of them undertook an independent study project.

They did a thorough survey of best practices for economic development, Thompson said. One student went to South America to study lending issues. Using what they had learned from their research, the students began Start Up.

Zimmerman said that he and other students wanted to see how they could apply their skills to helping East Palo Alto. "We wanted to really try to do something that had a longer-term impact," he added.

According to second-year business student and board member John Mark Rodgers, about 30 or 40 Business School students currently participate in Start Up.

Economic development is interesting to many students who would like to combine business skills and community service, Thompson explained. "There's a lot of interest in helping disenfranchised people."

"Start Up provides a framework in which students here can contribute and be valuable to the business community in East Palo Alto," Thompson said.

Business School students can reap other benefits from involvement as well, several of them pointed out.

"For one thing, it's a nice way to be connected with the community outside the Business School and Stanford," Rogers said.

"It's pretty enjoyable to hear about business plans, the ideas [the entrepreneurs] have," he added.

It is also an opportunity to take theory and test its practicality, Zimmerman said. "Some of the basics [of business] are very, very helpful."

Students can help entrepreneurs deal with marketing, inventory and pricing, among other concerns, they both said.

Of course, there are significant differences in age, cultural background and socio-economic status between the students and the entrepreneurs they are helping, Rogers admitted.

He said the key to overcoming these potential barriers is to be a good listener and not believe that one has all the answers. "Most of the entrepreneurs appreciate another set of eyes and ears," he said.

Start Up aspires to become a prototype for efforts throughout the country, "but we sort of want to perfect the model here," Zimmerman said.

There are several enhancements planned to the program. Start Up hopes to have an alumni network for the about 100 graduates of the 12-week program running in about six months. "People need continuous support," Zimmerman emphasized.

Start Up will introduce a Spanish language class in the fall. "The program's been heavily focused on the African-American community in East Palo Alto," Thompson said.

Yet 40 percent of East Palo Alto's residents are Latino, and at least some portion of this population would be more comfortable learning in Spanish, Zimmerman explained.

Start Up also hopes to serve as a complement to three major redevelopment efforts going on in and around East Palo Alto. "Lots of community organizations are trying to work together to make sure East Palo Alto participates in the redevelopment," Zimmerman said.