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EMPLOYEE BENEFITS

To Steve, with Love
 

The story of how a businessman started teaching entrepreneurship in the inner-city.
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A particular hell awaited former businessman Steve Mariotti when he became an inner-city schoolteacher. Then, remarkably, he found for both himself and his students a singular way out

A decade ago, when Steve Mariotti began teaching math at Boys & Girls High School, in New York City's Bedford-Stuyvesant slums, entrepreneurship was the furthest thing from his mind. He'd already had a business career as a financial analyst at the Ford Motor Co. and as the operator of his own import-export company. Teaching in one of New York's most notorious schools ("Teacher Beaten and Dragged Down Stairs," noted a headline at the time) seemed to Mariotti to be the best way to overcome his fear of life in a large, potentially dangerous city and to find a job that felt like something more than mere work. He succeeded on both counts, though not in the ways he'd imagined. His wars and discoveries in that first classroom -- described in the following excerpt from his forthcoming book, The Young Entrepreneur's Guide to Starting and Running a Business (Times Books) -- led him eventually to launch the National Foundation for Teaching Entrepreneurship (NFTE), which he still heads. They led him also to understand anew why he loved business in the first place, and how the things he loved about it -- the ways it can arouse our passions, uncover our talents, connect us to our community -- can electrify inner-city kids just as they do seasoned businesspeople. His story reminds us why we love business, too. We join Mariotti during his second week in class. . .

* * *

I began to lose control of my classroom almost daily. One student actually set fire to the back of another's coat -- the student with the coat was as astonished as I was. In a rage, I ordered the arsonist out of the class, and he was expelled the same day. On another occasion, I was locked out of my eighth-period class. Finally, one of the girls took pity on me and opened the door, just as I was going to admit total defeat and find a security guard. In each of my three remedial classes, there was a group of six or seven kids whose behavior was so disruptive that I had to stop the class every five minutes or so to get them to quiet down. In my third-period class, I once threw all the boys out. Ironically, those young men provided me with the valuable insight that set me on the road to teaching entrepreneurship. I took them out to dinner and asked them why they had acted so badly in class. They said my class was boring, that I had nothing to teach them.

Hadn't anything I'd said in class interested them? I asked. One fellow spoke up: I had caught his attention when I discussed my import-export business. He rattled off various figures I'd mentioned in class, calculated my profit margin, and concluded that my business was doing well. I was dazzled to find such business smarts in a student the public schools had labeled borderline retarded. This was my first inkling that something was wrong not only with my teaching but also with the standard remedial curriculum.

In my eighth-period class, I was too afraid of the boys to throw them out. The most disruptive boys were Mills, Braddock, and Morrow. They would disrupt the class by making animal noises, cursing me viciously, and treating their fellow classmates with great hostility. I would calmly threaten them with failure. I tried not to lose a joking manner, which, it turned out, they saw as a sign of weakness. One day I knew I was off to a particularly bad start when I sat in my seat and felt something stick to the back of my jacket. I got up, looked at my chair, and saw a large wad of gum. The class roared. Then, seeing the hurt and disgust on my face, the group fell silent. A student named Therese came up to me and said, "You all right, Mr. Mariotti, you have gum on your back; let me help you." She pulled off as much of it as possible.

I tried to start a new subject, but asking them to learn something new at this point just made them anxious. A radio suddenly blared from the back of the room. The noise level soared, and Mills and Braddock got out of their seats and began dancing at the front of the room. The rest of the class began to clap in unison. I ran to the back of the room and threatened, "Turn it off, or I'm going to fail you." Mills got up on my desk and continued to dance.

"Turn off the goddamned radio, you twerp!" I yelled. Someone, imitating me, yelled back, "No swearing, Mr. Mariotti!" I grabbed the radio and went to the front of the room. To my relief, Mills got off my desk and sat down in his seat, cursing me as he went. I could feel my face twitching. "Look, Mariotti's having a nervous breakdown!" said another troublemaker. "You can't control this class, Mariotti, because you don't have juice," shouted Mills. "Shut up and sit!" I shouted back. "Continue with the assignment."

All of a sudden, I was hit in the eye with a spitball. I felt another wave of anger. "Who threw that?" I yelled. The class was again in total chaos. I walked out, and as I did so, I was hit in the back with a wad of paper.

I didn't know how to deal with the situation. I wanted to leave the school and call it quits, but I realized that I couldn't do that. As I stepped into the hallway to regain my composure, I thought about that dinner with my third-period students. They had said I was boring -- except when I talked about business, about money. After about three minutes in the hall, I walked back into the classroom and, with no introductory comments, started a mock sales pitch, hypothetically selling the class my own watch. I enumerated the benefits of the watch, explaining why the students should purchase it from me at the low price of only $6. I noticed immediately that as soon as I started to talk about money, and how to make money by selling something, they actually quieted down and became interested. I didn't know it at the time, but that incident, born of desperation, pointed me toward my real vocation -- teaching entrepreneurship to inner-city kids.

When I had their attention, I moved from the sales talk into a conventional arithmetic lesson: if you buy a watch at $3 and sell it for $6, you make $3 of profit, or 100%. Without realizing it, I was touching on the business fundamentals of buying low and selling high, and on the more advanced concept of return on investment.

I realized I would have to start getting tough -- no more Mr. Nice Guy. That evening I practiced my expression in the mirror. I decided I had to come to my classes ready to be instantly angry. I knew I had to stay very alert. I couldn't let a few of these students make me lose my livelihood. Unless I could bring my classes under control, I was of little value to the students who were actually there to learn -- and many of them were. Not only would I be tough, I decided, but I would begin to develop a curriculum around my students' obvious interest in business.

They noticed the difference the very next day. The behavior in all my classes immediately improved.

Finally, the eighth period arrived. This was the class whose behavior had precipitated my change. I got to the classroom early, cleaned up the debris, and straightened the chairs. I stood at the door, awaiting the students' arrival. They sensed instantly that something was different, that I had been pushed too far. Some said a quiet "Hi" as they walked in. On the blackboard I had written: "DO NOW: SIT DOWN. TAKE OUT A PIECE OF PAPER. PREPARE FOR QUIZ."

The late bell rang, and I locked the door and passed out the daily assignment. About five minutes later, I heard the telltale profanity coming from down the hall. The gang that had humiliated me on the previous day had arrived. They kicked at the closed door, and I felt a sudden burst of adrenaline. It was them or me.

I opened the door. Mills tried to come into the room, but I put my hand on his shoulder and pushed him back. Had I assaulted him? I didn't care. I felt the elation of being right.

"Hey, man, what you doin' pushing me?"

I said nothing.

"What's wrong with you?" Braddock asked with genuine curiosity.

"We didn't mean nothing yesterday," Morrow muttered. Mills was just watching intently.

"I want an apology. I want a written apology."

"What's wrong, Mariotti? No one touched you."

I began to talk seriously. "You jerks ruined the class yesterday. You kept your own people from learning anything. What kind of idiots are you?"

"Mariotti, chill, man," someone said. "No one wants to hurt you, man."

"Shut up, you little wimp," I continued over their noises of astonishment. "Understand this: I'm here to help you learn. If you aren't interested, don't come to class. I'm trying to teach math to your people. Don't get in my way."

"Mr. Mariotti, are you all right?" It was one of the students in the classroom. The whole class was now listening to the exchange. I ignored the question and continued.

"If you don't know basic mathematics. . . . " I caught myself; I was ruining it with syrup. "If you ever disrupt my class again, you'll never get in this room again, and not in this school, either. Do you understand me?"

No one spoke.

"All right," Mills said. They started to come into the room.

"No, I want a written apology from each of you. Here's paper and a pencil. Write apologies, and when you're finished, slide them under the door." I closed the door and walked back to my desk. The whole exchange had taken five or six minutes. The class had obviously overheard everything. They were awaiting the outcome, just as I was. "Please get back to work," I said.

I could hardly believe it: one by one, the pieces of paper were slipped under the door. I waited a minute and then went over and picked them up. I felt the elation of victory as I read the apologies, but by now I'd learned to show no emotion. I opened the door and said, "Please take your seats."

The behavior of all my classes improved markedly after this episode. Mills and Braddock, particularly, showed improved conduct. I had them sit in the front of the class with me while I did problems on the blackboard. At first they were embarrassed by the special treatment; Braddock asked me to keep my voice down as I was explaining to him what percentage meant. As I'd suspected, these two kids knew no math, and their embarrassment had prompted much of their behavior.

Over the next several weeks, the classes were orderly enough to give me time to think about how I might teach better, how I could get these kids to learn basic mathematics. When I went to class one day, I had the students make change in a retailer/customer scenario. The "retailer" had to make 10 correct transactions -- or lose the turn if he or she made a mistake. Nobody wanted to make a mistake.

This game treated math as a practical reality rather than an abstraction. More subtly, it put the students in the position of a shopkeeper -- an entrepreneur. What had begun as an intuition slowly developed into a certainty: whenever I could manage to focus a lesson on some phase of entrepreneurial business, I had the students' attention. I began to do that consciously, using all my ingenuity to get across the bedrock principles of business: buy low, sell high; keep good records. I wanted these young people to appreciate the principles of free enterprise: (1) ownership, and (2) honest relations with other human beings through the rational self-interest of voluntary trade.

Next, I had the students make mock sales calls. (Later, when I had the funds, the sales calls were videotaped for peer review.) This game taught them that to sell something to somebody, they had to be civil and polite. They had to persuade the customers to buy from them; they could not coerce them.

Other teachers and administrators were constantly urging me to stress reading, writing, math, communication skills, and "good citizenship." I found that approach to be nonproductive. When these young people got interested in starting their own businesses, they wanted to know how to write and add; they knew they needed those skills to conduct business effectively. They also knew that politeness and respect for the people with whom they were doing business were essential.

Knowledge of the principles of business modified the behavior of these kids. Entrepreneurship changed the structure of their psyches. One of my students, Maurice, although not one of the worst-behaved, was still angry, belligerent, mean, and threatening. He took to salesmanship, however. He became so good that I encouraged him to make actual sales. He invested a small sum in a dozen pairs of sunglasses, which I helped him buy wholesale. As he began to make a small profit through selling the glasses, his whole facial demeanor changed. Instead of being angry, he was conversational and polite. He had learned to assert himself nonaggressively through the selling process. By the end of the school year, he was making about $60 a week in his spare time through sales. The increase in his confidence and self-esteem was incalculable.

It became apparent to me that many of these young people had a natural aptitude for entrepreneurship. Their challenging lives encouraged independence of spirit, toughness, unself-consciousness, and a natural ability in salesmanship. They were comfortable with risk and ambiguity. Those same qualities -- along with difficulty in doing well in a traditional, structured environment -- characterized many great American entrepreneurs such as Henry Ford and Conrad Hilton. I found that the negative characteristics of my students, when channeled into entrepreneurial activities, became positive. The benefits they reaped went far beyond the areas of education and business and academic subjects. For Maurice, business skills had also, imperceptibly, become social skills.

Other social behavior would change, too. I eventually observed that of the girls in my class who became interested in entrepreneurship, fewer became pregnant or got married or dropped out of school. When the female students became economically literate, they were not so quick to tie themselves down with children at an early age.

Running their own businesses helped my students make better decisions in their personal lives because it taught them about delayed gratification. The primary act of business -- buy low, sell high -- takes place over time, with money as a reward. As a result, people seem to make better decisions in general after starting a business. Many times I saw that the way a student looked at the future was expanding right before my eyes.

I was eager to test my entrepreneurial theories in a new environment, and at the end of the year, I put in for a transfer so I could teach at other schools in the system.

My last day at Boys & Girls High was more affecting than I would have thought possible just a short time before. One class gave me a card saying I was the best teacher they'd ever had. In my business-math class, the students applauded and made so much noise my supervisor came in, thinking there was a fight. I was particularly gratified when Braddock told me, "I've decided to start my own business."

* * *

In the series of schools I was subsequently assigned to, spreading my "entrepreneurial message" began to require more and more subterfuge. It wasn't until I was assigned to Jane Addams Vocational High School, in the "Fort Apache" section of the South Bronx, that a principal, Pat Black, understood the potential value of what I was talking about. She gave me permission to teach a class in entrepreneurship. Instead of disguising entrepreneurial principles, I could now offer what I considered to be a crash course in capitalism and free enterprise to young people who didn't even know that the United States operated in a free-market system.

Such concepts aside, what my students could see clearly was that if they had their own businesses, the amount of money they could make would depend on their own hard work and how they conducted themselves. They realized that what they might have formerly considered irrelevant (reading and math), abstract (economics), and facile (advice on how to dress or behave) affected how one made one's livelihood. Entrepreneurship gave them a sense of importance and a seriousness of purpose -- after all, they were the presidents of their own companies, however modest.

Much of what they were learning they would have never encountered outside of M.B.A. courses, but there were virtually no business concepts that could not be made comprehensible to them. Even such "dry" business topics as the balance sheet provided unexpected bonuses. My students seemed to think that the local retailers, who were mostly Asian, made a profit of somewhere between 50¢ and 90¢ on every dollar. That notion contributed greatly to a resentment based on race. When they discovered that those retailers, who worked long hours, made closer to 4¢ or 5¢ per sale, my students looked at such businesses, and the people who ran them, very differently.

Eventually, my core curriculum came to include such subjects as supply and demand; entrepreneurship as the fulfillment of consumer needs; cost-benefit analysis; business ethics; record keeping; the present and future value of money; business communication, with an emphasis on concise memo writing and speaking on the phone; debt-versus-equity financing; the advantages and disadvantages of sole proprietorships, partnerships, and corporations; how to register one's business; time management and goal setting; quality, or the importance of pleasing the customer; negotiation strategies; advertising and marketing; and, of course, how to make a sales call.

Not all entrepreneurship students end up owning their own businesses, but one of my most significant findings over the years is that graduates of my programs do make better employees. They are better able to join the mainstream because they know how to be participants in our society instead of feeling they are merely some of its victims.

I am especially cheered by the success of some of my students from my first year of teaching. Mills and I actually stayed in contact for several years. He graduated from high school and credited that fact to his interest in entrepreneurship. After graduation, he got a job as an assistant manager of a flea market, got married, and was raising a family.

Around 1991 I ran into Therese, who, then 24, was vending on the street clothes that she had purchased wholesale. She had a city license. She said that when she had enough money she was going to rent a storefront and would eventually own several stores. She was attending Bronx Community College at night and had even gotten her mother interested in business. She'd kept the handouts I used to distribute in my classes and used them to help her run her business. "Thanks to you, Mr. Mariotti," she said, "I have always been able to take care of myself and make a living." I have never received a higher compliment.

* * *

Adapted from The Young Entrepreneur's Guide to Starting and Running a Business, by Steve Mariotti and Tony Towle, copyright ©1996 by the National Foundation for Teaching Entrepreneurship (NFTE). Reprinted by permission of Times Books, a division of Random House Inc. NFTE, based in New York City, can be reached by phone at 212-232-3333.

Last updated: Apr 1, 1996




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