These Entrepreneurs Succeed Because They Have Nothing to Lose

Defy Ventures helps turn former prisoners into legal entrepreneurs.
April 25, 2017

Off to the side of a clamorous hundred-person gathering in a hip co-working space in Manhattan’s Chelsea neighborhood, Gary Valentino Hollis says that he was incarcerated for 24 years and eight months. Two things come to mind. First, that is a very long stretch. And second, it’s unsettlingly specific. There’s no nudging upward to the big, round number, not when you’re counting down the days until you’re released from San Quentin State Prison.

Dressed in dark slacks and a white shirt with French cuffs, goldenrod tie knotted tight and high against his throat, Hollis, ex-con turned budding entrepreneur, explains that once he got out of prison in 2015, he went back to what he knew in the ’80s: cleaning. In the small business he’s running now, he employs a handful of people who, like him, were formerly incarcerated. They specialize in power washing, waxing and buffing floors, and polishing marble and limestone.

“Each individual has a vision of running a company, of being the CEO or founder of a company,” he says, “because you never get rich working for someone.”

Related: 5 Leadership Lessons From Ex-Cons

For him to be working for anyone, let alone running a small business, is a testament to his determination to move past an attempted murder conviction, and one of a growing list of successes by a program for prisoners and former prisoners called Defy Ventures. He linked up with Defy during the final year of his sentence. The gathering tonight in this upscale former warehouse space—bare concrete floors, an open-plan kitchen, high ceilings—is a chance for Hollis and other EITs (that is, entrepreneurs-in-training, Defy’s term for its clients) to pitch their businesses to panels of volunteer judges who themselves come from startups, to get pointers and to compete for seed money that ranges from a few hundred dollars to a few thousand.

Key to Defy’s efforts is a premise radical in its simplicity: that we squander an enormous amount of human potential behind bars and are doing too little to help people rejoin the economy once they leave prison. Incarceration rates have fallen in the U.S. in recent years. Credit that to historically low crime rates and state-level reforms that have eased sentencing for nonviolent drug offenders. But state and federal prisons in America still hold 1.5 million prisoners, and nationwide around 7 million Americans are either imprisoned, jailed or under state supervision (i.e., parole). That’s an enormous group of people who are either not working or who are likely to encounter huge hurdles to employment once they’ve done their time.

The sheer difficulty of getting a job is one that EITs keep facing, and why guys like Hollis have been so taken with Defy’s determination, exemplified by its dynamic CEO and founder, Catherine Hoke. “A lot of programs come to prison, and a lot of them don’t come through,” Hollis says. “Catherine Hoke, she lives her word to the fullest. She believes in second chances. That is real.”

***

If you can’t immediately find Hoke in a gathering like this, just wait a sec and she’ll appear. Tall, angular and free in her movement, she comes across as that rarest of emcees: the vulnerable dynamo. She congratulates the EITs and their accompanying family members for advancing through Defy’s program, and nudges the engineers and investment bankers and venture capitalists in the room to continue supporting Defy as donors or mentors. “We would love to keep you involved forever,” she tells people in rows of folding chairs. “Now we want all your money, all your friends, all your passions. If you can’t give me all of it, then if you can give some of it, that’s much appreciated.”

In running Defy, she navigates these two constituencies, the EITs and the established businesspeople with uncommon ease. She does it in part by reminding them of their overall similarities. This does not come across as schmaltzy, because she feels a kinship with both camps.

In 2004, at 26, Hoke was on what most people would think an enviable career track. She was working in venture capital in Palo Alto, California, and New York, making money and yet groping for a purpose in work and in life. Then a friend, a JP Morgan executive, invited her to visit a prison in Texas. It shook her deeply, in part because it forced her to confront feelings she had carried since age 12 when a friend of hers was murdered. “I cried for three days,” she says. “Not because I felt sorry for the men and women I met, but for the hardness of my own heart. That I could write people off not as human beings but as caged animals.”

 

“I’ve always been a fan of underdogs and a beneficiary of second chances myself.”

 

That shift got her thinking about the inner lives of prisoners, and about their past lives. Many, for instance, had run drug-dealing businesses, and by then anyone who watched Stringer Bell navigate his way through the middle seasons of The Wire might recognize the possibilities. What would happen if that hustle, those street smarts and that raw energy were put toward legal enterprises?

Related: 6 Success Lessons I Learned From the Streets

These Entrepreneurs Succeed Because They Have Nothing Left to Lose
COURTESY OF DEFY VENTURES

Hoke cashed in her 401(k) and set about building a nonprofit in Texas aimed at taking former prisoners legit, called Prison Entrepreneurship Program, that she was able to take statewide. Ex-prisoners were starting businesses and getting rearrested at low rates: a success story. But Hoke’s personal life was suffering; her marriage ended and then she hit a dark skid. The thumbnail version, as she tells it: “I made bad decisions. I had some relationships with people who had been released from the Texas prison system. It went down in the news. I tried to kill myself. I took a year off to get my [life] together and moved back to New York.

“I deeply, personally relate to the work,” she continues. “I’ve always been a fan of underdogs and a beneficiary of second chances myself. I told God, when I went through this, that I would devote my everything to second chances for other people.”

Working around former prisoners and hard-charging executives, Hoke notices similarities where others see differences. She sees macho cultures dominating both worlds. She sees groups that took risks, perhaps even transgressed, to improve their circumstances. She sees groups that have spent years competing for image and status and acceptance, and who as a result have developed charisma and become savvy at organizing and influencing other people. And then she brings them together over their shared passion: “We dangle the sexy carrot of entrepreneurship.”

When courting executives, investors or mentors to the program, Hoke likes to approach people who have a healthy appetite for risk. That means targeting people who founded companies more than people who simply run existing businesses. She tries appealing to the underdog sensibility of anyone who ever built a company that could fail. Hoke offers her own example as someone who was working in private equity in her mid-20s when she realized she, along with the partners above her, were leading lives of quiet desperation.

“I believe that hardwired in us is a need to serve,” she says. “For many executives, if you ask them to serve in a soup kitchen or plant a tree or hug a thug, that’s not really their thing. That might not capture their heart. What I offer them is ‘Come teach a man to fish.’ I’m saying, ‘Roll up your sleeves and help this man with his financial model.’ ”

***

Recruiting prisoners and ex-prisoners to the program is comparatively easy. They don’t have a great deal to lose. The big hurdle is earning the trust of people who have been through (and put others through) terrible times. What Defy offers is a way to channel their skills and best traits into a legal vision for doing business. They also offer training, coaching and opportunities to find mentors in the upper echelons of corporate America. The mantra is: You’re the CEO of your new life.

 

“This is the hungriest population. When you get to the bottom of yourself, you’re willing to try anything.”

 

Toward that end, Defy reframes felons’ pasts as prelude to futures they hadn’t considered. Part of that message is delivered in the very choice of educational materials. Among the instructors are professors from the likes of Harvard and Stanford business schools. They receive guidance from Emily Post etiquette experts who walk them through the basics of knotting a tie, shaking hands with someone and writing thank-you notes. Yet they also incorporate a class called Inspiration and Encouragement by none other than “Freeway” Rick Ross, who in the ’80s built a million-dollar crack cocaine empire in Los Angeles. “This is the hungriest population,” Hoke says. “When you get to the bottom of yourself, you’re willing to try anything.”

These Entrepreneurs Succeed Because They Have Nothing Left to Lose
COURTESY OF DEFY VENTURES

What they don’t get to do is bat around ideas and expect to get a co-producer credit on a screenplay or an app; indeed, most of Defy’s clients enter the program with a formal education that topped out somewhere in high school. The most successful small businesses that Defy has incubated to date tend to have a strong through line of service or a simple product that can be sold retail. Take for example Con Body, a prison-style fitness boot camp whose founder was making millions as a teenager selling coke in New York, and at 23 was charged as a kingpin. He got himself in shape exercising in tight confines and 10,000 people have been through his boot camp. A Defy client named Seth Sundberg launched Prison Bars, a snack bar that calls itself “wholesome and criminally delicious,” a recipe he developed while working in the kitchen of a federal prison. Both men are upfront in the branding for their companies and try to hire workers who were once incarcerated.

Related: If You Want to Win, Help Others Win First

Advancing inmates’ education is, in the estimation of Defy’s vice president of prison engagement Dave Long, the best programming he saw in his 27 years of working in corrections, most recently as warden in the California City Correctional Facility, home to about 2,200 prisoners. “For bang for the buck, there was never anything better than higher education,” Long says. “College changed more inmates than any program I’ve seen.” Whereas 67 percent of prisoners reoffend after release, he says, that figure drops to about 20 percent of those who get an associate’s degree, and 5.6 percent of those who finish their bachelor’s.

Long brought Defy into the prison in early 2016 and marveled at how quickly it changed the culture of the prison at large. Slots were limited, and good behavior was required to get in. Inmates in rival gangs started getting along for the sake of maybe having a future. “A lot of these guys were knuckleheads,” Long says. “The education changed them. They don’t have confidence that they can make it legitimately in the community. They haven’t been taught to do simple things like shake hands and balance a checkbook. That’s a game changer.” They ran the program full-speed: three hours of video curriculum a night, five nights a week. In the first cohort, 67 of 76 entrants graduated. In the second, 100 of 104 did.

When Long retired in late 2016, he had about a month off before Hoke hired him into the program. He’d been looking forward to working on his golf game. Instead he had time for only three rounds before coming out of retirement. “It’s very difficult to tell her no,” he explains.

***

Among those at the meeting in New York are people who have volunteered their time: Some are mentors, there to see their EITs’ projects through. Others, like Rob Steiner, are there to act as judges, those who could listen to the business plans put forth and determine who is most deserving of the seed money awarded. In essence, they arrive as Shark Tank-style inquisitors, with a notion toward assisting rather than grilling the presenters.

During Hoke’s presentation, Steiner, co-founder of Brooklyn-based startup Roboto.nyc, which specializes in fabricating 3D models and prototypes for businesses, sits with a fellow judge and marvels at the evening they’d had listening to EITs’ business plans, stories and hopes. “It’s very disarming,” Steiner says.

Experiences like this drive Defy’s donors and volunteers, including 3,500 executives so far, who support the programs that operate in 18 correctional facilities nationally. Hoke’s eventual goal for her own venture is to have it operate in every American prison and to see post-release programs nationwide. Incarceration and prison issues have long been among the most contentious political arenas in American cutting across an array of traditional ideological lines: victims’ advocates against judges, prosecutors against police, tough-on-crime state legislators against fiscal conservatives, as well as a spectrum of religious and philosophical backgrounds. They argue against the relative merits of long sentences, about the cost of holding a person in prison, about the depth of punishment a person ought to endure while inside—should the state, for instance, provide training programs and education to inmates?

Related: 4 Ways to Turn Obstacles Into Opportunities

But Defy organizes around some principles that are, to the majority of Americans, immutable. Chief among them is that once a person does his or her time, we would prefer they not continue to commit crimes. Getting people jobs is a great way to accomplish that. To illustrate Defy’s potential, Hoke points to California, where the annual per-prisoner cost of incarceration tops $70,000, and to national recidivism rates that find some 76 percent of former prisoners are rearrested within five years of their release. To put one inmate through Defy’s training costs $500 ($1,000 if they have already been released); so far, 1,700 have joined the program, and Defy hopes to enroll another 2,500 in 2017. The clients who have been released have shown a recidivism rate to date of about 3 percent.

When they get out, they have training, prospects, mentors and support. And in many cases, they’re on their way to being able to support themselves rather than braving the job market with a past conviction hanging over their résumés. Hoke says that since their release, 95 percent of the EITs are employed, in part because they’ve started 165 viable companies that among them count 350 employees. “Our guys,” Hoke says, “are going to end up in prison if they don’t have a viable legal alternative.”

***

In Chelsea, the big cash prize of the night—$15,000—goes to an EIT named Gregory Bonds. He, like many of the EITs present, also receives a certificate of business administration from Baylor University in Texas, a partner with Defy’s curriculum. “Are you kidding me? That means so much to me, because I had to drop out of college. Because of my… trouble. To come back to this and then earn that, I’m speechless.” For many EITs, the certificates they earn, and the bit of pomp and circumstance that attends it, are the first graduation-style ceremonies they’ve ever attended. Defy staffers note that when visiting EITs’ workplaces, they’ll see certificates of business readiness framed on the walls, diploma-style.

These Entrepreneurs Succeed Because They Have Nothing Left to Lose
COURTESY OF DEFY VENTURES

Bonds’ business is displays, the sort you see at trade shows. He makes banners, prints onto fabrics and builds tabletop displays. In the past 15 years, he says had worked for five different companies in this industry, and at four of them his bosses found ways around paying him the commissions he was due. Since that frustrating stage of his career, he surmises that having a record made him an easy mark. Perhaps no one thought he’d turn to the authorities if he felt he were being wronged, perhaps he wouldn’t be believed even if he did, and perhaps he’d be so afraid of losing his job he’d just go along. And maybe there was something to that. After all, he’d been on too many interviews where it seemed everything was going great until he had to admit near the end of the process that he had a record. At that point, Bonds says, he was used to never hearing from the interviewers again. “That will drive you into all kinds of [trouble].”

But Bonds did have experience and ability. At some point he read an article about Defy and reached out to see if the organization was for real. They told him he might be a good fit, especially with his prior experience. And then he spent two months trying to figure out whether it could really be as good as it sounded. “I just didn’t believe people cared that much about formerly incarcerated people,” he says. Once he paid attention, he kept noticing Hoke popping up everywhere. “Oh, here’s Catherine on CNN talking about Defy,” he says. “Oh, here she is on MSNBC. Everyone knows her but me. I told my wife, Wanda, ‘I think this is real.’ I went to San Francisco for the first meeting. I knew that I was someplace where, dog-gosh, they do care. Who the hell cares this much about formerly incarcerated people except that lady? She’s my hero.”

Camaraderie might come more easily among this group than others. But trust? Full-blown trust is difficult. Bonds developed it when he saw the follow-through at work. When he got in that video lesson with a Harvard University professor and realized he was in a place that was going to help him get to the next step. He dove into the curriculum, started building his own corporation and website at night, and in March 2016 hung out his shingle. Seeing his progress, Hoke invited him to speak at a Google conference for entrepreneurship, and to Bonds’ surprise, there he was, simulcasting to attendees in dozens of countries. A representative of Virgin Airlines founder Richard Branson reached out to say he loved what Bonds was up to. Now, Bonds trusts.

Steiner, the Roboto.nyc co-founder, leaves the Chelsea event with a different sense of purpose. He laughed later when he recalled how he’d come to be there in the first place. A friend and former boss signed him up to judge. When he arrived, he noticed the EITs and the new volunteers circulating only among their own. It reminded him of a wedding where the bride’s and groom’s side hadn’t yet co-mingled. Then Hoke started working the room, getting people to introduce themselves, to tell their stories and share hugs. “Her whole nuclear-fusion positive attitude caught me completely off-guard,” he says. “It broke down any corporate facade.”

Steiner’s not a company-first guy, per se. He joined the Navy as a teenager and took a lot of joy in getting to work on a prototype hydrofoil. He continued that interest when he left the service and went to work for Honda, where he helped to source parts for the prototype builds of the 1998 Accord. After a layoff, he recalls, he sat in his driveway wondering why nothing good ever happened to him, a moment he sounds embarrassed to relate after a night spent evaluating business plans of people trying to get to their feet following a prison stay. He wound up parlaying a 3D-printing hobby into a job with MakerBot and eventually to his own startup that works with companies to make 3D models and prototypes. When Steiner finished the evening, he sat down and took a hard look at how he was approaching his startup and his life. How do I interact with people? What do I do? Who am I as a businessperson and as a person?

He realized he might have something to offer the two EITs whose cleaning businesses he helped judge. So Steiner went next door to his office and found the CEO of a business called EcoLogic Solutions, which specializes in organic cleaning products, and asked if they’d be willing to chip in some cleaning supplies. He talked to the shipping guy, the packing guy and by the end of it, both of the EITs in California had a box of products headed their way and an EcoLogic Solutions account.

“If someone’s going to one of these Defy meetings, it’s certainly enlightening,” Steiner says. “But it’s also an opportunity for you to pick the thing you’re good at and that you enjoy doing. They had the courage to stand up there and say, ‘I was in prison for 20 years. For murder. Now I just want to clean. Give me a chance.’ What portion of that chance can I give them?”

Related: True Success Begins the Second You Start Giving Back

 

This article originally appeared in the May 2017 issue of SUCCESS magazine.

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