Breaking Out Of The Prison Cycle Into Entrepreneurship

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More than 43 businesses have been started by Prison Entrepreneurship Program graduates — representing nearly 15% of the program's graduates, which is a higher business start rate than either Harvard or Stanford Business School alumni. By Catherine Rohr (Founder, Prison Entrepreneurship Program)

T-shirts get printed every day — some in huge warehouses, others in mom-and-pop startups. On this day, A Perfect Print is delivering an order of t-shirts to the headquarters of a large corporation in the Dallas area. Sounds perfectly normal, right? Free enterprise, capitalism, and the pursuit of happiness — so what's the big deal?

The big deal is that the entrepreneur in the driver's seat of this van isn't your typical business owner. In fact, if you look past the ink stains and lacquer, you'll find that, somewhere in the past, James Gorman, entrepreneur, was James Gorman, convicted felon.

For James, going to prison was the least likely track to entrepreneurship. But that ended up being his exact path. Deemed a "career criminal" after returning to prison for the second time for possession of a controlled substance with intent to deliver, James knew something had to change in his life — something in his core. In prison, he began taking steps to create a successful life for himself — attending faith-based classes, picking up skills, and removing himself from the destructive behaviors that plagued many of the men in prison. He was taking action, not waiting for life to cut him a break, and surrounding himself with productive activities.

Four years of self-examination behind prison walls went by, but James waited patiently, knowing he was there due to his own actions and that a tough road was ahead of him when he got out. He used this time to prepare himself for his fresh start upon release.

That fresh start came in 2004 and from the most unlikely place, in prison. James happened upon the Prison Entrepreneurship Program (PEP).

What I had seen in the news and movies painted prison as the ultimate bad-news industry. I had completely written off the entire prison population — the one in 15 Americans who does time in his lifetime — as being in the "bad pile." At best, my mentality was described as "lock 'em up and throw away the key;" at worst, I favored mass executions of these people who wasted tax dollars. I was prepared to see wild, caged animals when I was invited inside for the first time. I remember the ugliness I held in my heart — my unforgiving approach, my labels for men I had never met. I was surprised when I met real human beings who challenged my beliefs. I embraced the concept of grace for my own sins, but, with this group, had been unwilling to extend it. It took a prison visit to humble myself and open my eyes to the beauty of imperfection.

As a venture capitalist, I had been trained to recognize opportunity and talent. In that first prison visit, I had conversations with dope dealers and gang leaders, from whom I learned that gangs are run by boards of directors and have commissioned sales structures and bookkeepers. They understand distribution channels and risk management. And the men certainly understood concepts like execution! I saw the greatest ROI potential imaginable — a completely untapped pool of great talent.

When I started PEP in May 2004 with my husband, Steve, I knew that accountability was going to be the key to success. I only took men who were already leading transformed lives, men like James, and I equipped them with tools to help them achieve success.

In addition to teaching James every possible skill he would ever need to operate a small business, PEP challenged him to develop the intangible skills required to be a servant-leader: live a good life, give and command respect, and engage in fellowship with accountability.

I realized that providing an education in prison was not enough for these men who face extreme rejection upon release, so we started building out post-release programs. PEP provides job placement, housing, medical care, executive mentoring, continued education, access to financing, weekly social activities, and a large dose of accountability. We "do life" with these men, and we leave them with no excuse to fail.

Unfortunately, of the 600,000-plus prisoners who are released in the United States each year, two-thirds return to the criminal justice system within two to three years. Since PEP's inception, less than 5% of our graduates have returned to prison. More than 43 businesses have been started by PEP graduates — representing nearly 15% of the program's graduates, which is a higher business start rate than either Harvard or Stanford Business School alumni. 98% of PEP graduates are employed within a month of release, and one-third of them go into sales and management positions.

More importantly, though, is that these men, like James, who were once society's worst "takers," now give back — 75% of our graduates give back financially to PEP. They also return to prison frequently to share their experiences with new classes. They mentor each other and are being called upon by their communities to come forward as examples of positive transformation and as mentors to the next generation of young men — the positive role models they never had.

The Kauffman Foundation believed in us before everyone else got on the bandwagon. The Foundation made a generous grant to us in our early days, when we were week-to-week on fundraising. Kauffman's support brought us credibility and the capital to begin our journey of scale.

We have grown aggressively ever since. Our revenue has grown from $230,000 in our first year to $1.7 million last year, our third year. PEP has been, and intends to remain, 100% privately funded. This year (2008), we project $3.2 million as we touch more lives than ever before. In four years, we've graduated 370 men in eight classes, but we also get to serve their children and families through our Family Program. We've also reached 1,000-plus CEOs and venture capitalists, more than 400 MBA student volunteers from 24 programs, and the prison officials and staff. We have 42 staff members — 11 of whom are our own graduates.

With the permission of the Texas Department of Criminal Justice, we now exist only at one facility in Cleveland, Texas (forty miles from Houston), but we recruit, interview, and transfer men from more than sixty prisons throughout Texas to the facility where we operate. This keeps us lean and mean. Within five years, we hope to graduate up to 1,000 men per year, and help them start 500 new businesses upon release. 60,000 men are released in Texas each year, so we have our hands full for the foreseeable future.

James was released in August 2005. Today he works 60 to 70 hours a week as a welder and pipe fitter, making $24 an hour. In his spare time, he is working to grow his t-shirt business, A Perfect Print, into a fully operational print shop. James lives in Houston, where he recently bought his first home. He is now a PEP volunteer and serves as an inspiration to PEP's aspiring entrepreneurs.

Offender, transformed, underdog, success. That's the route James Gorman and his fellow PEP graduates take. Hopefully that inspires you, as it does me every day, to believe in the potential of the imperfect.

This post was originally posted at Kauffman Foundation.

About the guest blogger: Catherine Rohr is the Founder of Prison Entrepreneurship Program, a non-profit oranization that leverages the skills of senior business executives to equip inmates and former inmates with entrepreneurial training – enabling them to productively re-enter society. Prior to founding PEP, Catherine worked in private equity and venture capital for six years in Palo Alto, California and New York City. Catherine holds a BS degree in Business Administration from UC Berkeley Haas School of Business.