Palo Alto Weekly

December 27, 2000

By Jennifer Deitz Berry

It's been four days since Maria Perez graduated from East Palo Alto's Start Up program in early December, and she worries that she may get too sentimental if she tries to talk about it. For Perez it's been a long and trying year, ever since she was let go from her job as a quality-control inspector.

Perez has 20 years' experience as an inspector, working at various companies, but that career came to an end not long after an on-the-job accident that injured her knees and back. Doctors operated on her broken knee, but even after extensive physical therapy and routine exercise, her health continued to trouble her, making it difficult to perform at her job. A year and half after the accident, the company let her go.

"They always want more and more out of you, and when you can't give any more they let go of you," Perez said.

That was five months ago. After being laid off, Perez took care of her and her husband's four children at their home in East Menlo Park and thought about her next step. Frustrated by the way she'd been treated as an employee, Perez wanted to go into business for herself.

"My dream is to start a taqueria," she said.

That's when she talked to a friend and longtime business-owner who recommended she sign up for an entrepreneur-training course at Start Up, a nonprofit organization. Perez took his advice and signed up for the fall course that was offered in Spanish. "I went there and they were very nice," she said. "They treat you like family."

Start-Up was founded in 1994 by six students at Stanford's Graduate School of Business to help promote economic development in and around East Palo Alto by providing technical assistance and training to residents who want to start new businesses or improve upon existing ones.

The six students had been struck by how difficult economic conditions were in this community just three miles away from the wealth and prosperity of Palo Alto and Stanford. Hoping to help diminish this gap, they developed a partnership between East Palo Alto's community leaders, Stanford students, and local corporations.

Six years later, the nonprofit organization receives funding from an extensive list of foundations, individuals, corporations and venture capitalists in order to offer free services and workshops to East Palo Alto residents (although non-residents may also participate for a $50 fee). Six 12-week training sessions are offered each year--three in Spanish and three in English.

Workshop topics include how to get tax benefits for small businesses, obtaining a business license, using accounting software, managing legal issues and improving marketing strategies.

The program is overseen by executive director Faye McNair-Knox, a long-time resident of East Palo Alto who holds a doctorate from Stanford. She and her staff work out of small offices in the old Drew Medical Center off University Avenue, while Start Up's training sessions, drop-in hours and networking events are held in classrooms at OICW, a nearby worker- training program.

A key component to Start Up's operations is its corps of volunteers. More than 100 students from Stanford's Graduate School of Business as well as employees of local corporations assist Start Up participants. They man the "drop-in hours" that allow participants to meet one-on-one with a volunteer for half-hour sessions in order to work on business or marketing plans, or ask advice on other business-related issues. Once a month, Start Up also invites corporate leaders to mingle with participants during networking events, so they can meet and share ideas with the new entrepreneurs.

Erik Ragatz is a second-year student at Stanford and co-coordinator of the business school's Start Up volunteer group. He says he appreciates the way the Start Up program allows would-be entrepreneurs to "pull themselves up by their bootstraps." Instead of taking a "top-down" approach, in which outsiders direct participants in what to do, the program asks volunteers to act as resources, providing participants with tools and suggestions.

For many, graduation from Start Up is only the first phase of involvement with the nonprofit. As participants move further along in their plans, they can continue to receive consulting services from "Carry-on Teams" consisting of a group of two to three Stanford students. First-year business-school student David Fischer has also recently organized a mentoring program that pairs Start Up graduates with an established business owner or professional. Graduates who develop convincing business plans are also likely to receive micro-loans from Start Up to help cover the costs of starting a new business.

Both Ragatz and Fischer agree that volunteering at Start Up has taught Stanford students a thing or two as well. They say the opportunity to participate has become one of the "draws" of Stanford's business school, because it allows students to apply what they're learning in the classroom.

"We come here and actually get a real education--in thinking through the real-world issues that people are facing in the here and now in terms of getting a business off the ground," Fischer said.

Fischer says that continuing to carve out time for volunteer work is also one way he tries to make sure he stays grounded, rather than follow the pattern of some business-school graduates who get caught up in the high-end world of business and finance and forget to look back.

Since its inception, more than 370 participants have used Start Up's services, and as of last summer, 240 local residents had graduated from the entrepreneur-training course. There are now more than 60 graduates successfully operating businesses that they started or expanded through their participation in Start Up.

Based on these successes, Start Up has gained a reputation that has made it easier for graduates to find loans and financial backing, the organization's executive director says.

"If you come out with the Start Up stamp, people will respond differently to you," asserts McNair-Knox.

With so much new development taking place throughout East Palo Alto, developers are now coming to McNair-Knox looking for local entrepreneurs to lead new businesses, including running a shuttle service from the hotel being built in the old "Whiskey Gulch,' and operating an eatery in the new shopping center.

Donna McCraney was among the group of 31 entrepreneurs who went through the formal graduation ceremony held at East Palo Alto's City Hall recently. McCraney turned to Start Up to help strengthen and expand a business she now calls "Africana De Kongo," which offers classes in Congolese dance for both adults and children.

While currently employed full-time at Texas Instruments, McCraney's been allowed to work flexible hours in order to also teach dance classes, participate in Start Up and restructure her own dance troupe. Through Start Up, she says, she's learned strategies to improve her marketing and is now sending out press releases, posting flyers and has even secured an interview on a local radio station to promote her business.

McCraney is also discussing partnering with another Start Up entrepreneur to share rent on a dance space that would house her program along with an aerobics classes. She hopes that these and other additions will help make "Africana De Kongo" profitable enough that she can devote herself to teaching dance full time.

It will probably take longer before Maria Perez sees her dreams of owning a business realized, but graduating in itself marked a profound first step for her. She wasn't able to graduate from high school, and is just now going back to earn her GED.

"For many of these folks, this is clearly their first experience graduating," McNair-Knox said.

Perez and McCraney were both asked to speak at the graduation, as were many others, including founder and board member Mike Zimmerman and East Palo Alto Council member Patricia Foster. The accompanying catered banquet also featured a special treat--"Ola's Texas Sweet Potato Pies," contributed by a Start Up graduate who's made a business out of her pie-making.

Perez's daughter came with her boyfriend to see her mother graduate, but the rest of the family was absent. Perez says her husband has been reluctant for her to move forward with her idea for a taqueria because of the financial risks. But Perez remains confident she can succeed. Within the next year, she plans to sell off stock she purchased in the company she used to work for, take out an additional loan, and then open the business she'll call "Senora Taqueria."