STRATEGY

Curricular Extras

SuccessLab, the #16 Inner City 100 company in 2001, shores up the academic moorings of kids in poor school districts.
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The Inner City 100

SuccessLab shores up the academic moorings of kids in poor school districts

Just like any good CEO, Marjorie Schaffner can describe her company's end user in great detail. He is a first-grader with so little exposure to books that he doesn't know how to turn the pages. A child who has to switch schools in the middle of kindergarten because his mother is always moving. A little boy who sleeps in a bathtub at night to protect him from bullets.

SuccessLab Learning Centers (#16), a $4-million company based in Chicago, has tailored services for just such at-risk children. Working out of dedicated classrooms in 26 schools and six community centers in the city's toughest neighborhoods, the company tutors children in grades 1 through 12 -- most of them African American or Hispanic -- in reading and math. Instruction is individualized with a three-to-one student-teacher ratio, and customized lesson plans are available to instructors on laptops. The company emphasizes strong relationships, both between instructors and students and between SuccessLab's staff and the teachers and principals at its host schools. "We approach our schools as partners," says Schaffner. "We don't set ourselves up as a private entity that somehow is smarter, better, wiser than they are."

The SuccessLab model was developed by Ken White, who grew up on Chicago's West Side and founded the company in 1993. To test his system, White structured SuccessLab as a not-for-profit; for several years he provided free instruction to wards of the state. In 1996 he converted to for-profit status and a year later brought in Schaffner, who injected some of her own money into the enterprise.

Today federal and state education funding pays for SuccessLab's school program, which provides two-thirds of the company's revenues. Parents pay for services in the community centers, where rent-free space allows SuccessLab to charge about 45% less than traditional tutors do. Title I school allocations, based on the percentage of low-income kids in a given area, have risen every five years since 1965, and Schaffner sees no halt to that trend. Nor is she concerned that the slowing economy will force trims in state education budgets. "I think any downsides at the state level will be offset by increases at the federal," she says. And if gentrification decreases funding? "We'll continue to grow by finding new schools," she says.

Those new schools could be as far away as the Detroit or St. Paul areas, which are among 10 midwestern school districts that the company is studying. SuccessLab hopes to enter two new markets by September and have a total of 58 centers by 2002. "We looked to urban markets where we could support 10 to 12 centers within two to three years," says Schaffner. To aid that growth, she hired a business-development person to look for new markets. The company is also trying to raise $5 million to $8 million in venture capital.

Schaffner says the challenge to geographic expansion will be maintaining the company's close ties with client schools. Staffing, too, will be difficult. The company's 150 teachers work 25 hours a week and get health insurance and retention bonuses. But their annual salary roughly equals what a substitute teacher makes, and center directors earn less than teachers in public schools. Obviously, money is not the driver here, she says. "I describe us as schizophrenic capitalists because none of us would be doing this if we were making widgets," says the CEO, whose own starting salary at SuccessLab was just 20% of what she earned as a corporate executive. "The mission is incredibly important."

Thea Singer is an associate editor at Inc.


The Inner City 100

Comeback Markets
Most companies have taken a pass on the huge inner-city service market. Some smart CEOs are eagerly filling the void.
Curricular Extras
SuccessLab shores up the academic moorings of kids in poor school districts
Doctors Without Orders
Molina Healthcare gives physicians freedom to match the treatment with the culture.
These Old Houses
Rego Realty brings dilapidated buildings back to life -- and livelihood.
Mother's Giant Helper
Allegheny Child Care lifts a burden from welfare-to-work moms.

City Lights
There are a million stories in the inner cities. These are some of them.

Who Wants to be a Milliner?
The story of this year's #1 Inner City 100 company.

The Inner City 100 Almanac
Fast facts about the Inner City 100 CEOs and their businesses.

The List
The fastest-growing private inner-city companies.


Please e-mail your comments to editors@inc.com.

Last updated: May 1, 2001




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