Ownership 101

Steve Mariotti gives low-income kids the entrepreneurial tools to bootstrap their way into new lives.

It would be easy to miss Steve Mariotti. He's short, with a receding hairline and a broad, honest face. He wears your average white guy's basic navy suit, and speaks quietly, with little accent. He's got middle written all over him: middle class, middle America, middle manager.

But that unremarkable appearance hides a man with a misson and a message. He's a three-time, radical career changer, and a fighter in one of America's most enduring battles: the struggle to raise people out of poverty. His message? Building your own business will set you free.

The nonprofit Mariotti founded twelve years ago, the National Foundation for Teaching Entrepreneurship (NFTE, pronounced "nifty"), has now taught 25,000 young, low-income people to start their own small businesses. And his book, The Young Entrepreneur's Guide to Starting and Running a Business (Times Business 1996), has become a classic for young people seeking to start their own companies.

Mariotti 's initial goal was not to launch an incubator for entrepreneurs. He was hoping to be the next Lee Iacocca. As a newly minted MBA in 1977, he started at Ford, buying and selling currency futures in the international finance department, and soon made a name for himself by making the company a lot of money.

He also earned a reputation as a hothead over Ford's business dealings with South Africa. "I thought that we shouldn't be doing business with the government there. I was immature and pushed hard on the politics," Mariotti admits.

Despite his rabble-rousing, he left Ford in 1980 on friendly terms, using the cash he'd amassed to open his own import-export business. Going solo was a jarring shift after Ford's entrenched hierarchy, and Mariotti struggled to be CEO, salesman, and marketer all in one. But he did meet businesspeople from around the world and brokered all kinds of deals, from selling Nigerian pistachio nuts one week, to ladies' shoes from India the next -- and had the time of his life doing it. Indeed, he might be doing it still if he hadn't gotten mugged.

In 1981, a group of kids waylaid him while he was out jogging. They wanted $10, and he didn't have it. The kids roughed him up a bit, but mostly he just felt humiliated. "Becoming an urban statistic was a traumatic experience," Mariotti writes in his book. He had constant flashbacks that became more painful than the experience itself. He sought help from therapists, and they sent him back to school to confront his fears of tough teens.

Dressed in his Brooks Brothers suit, Mariotti went to the New York School Board and asked to teach in schools others shunned. He meant to become a math teacher for a month or so, just until he got past the fear. He got his wish -- Boys and Girls High in Bedford Stuyvesant. Recent headlines reported students at the school had lit one teacher's hair on fire and beaten and dragged another down a flight of stairs. The man who hired him warned, "If I find out you're a New York Post reporter, I'll never forgive you."

There was no honeymoon for Mariotti in the classroom. On his first day, students called him Mr. Manicotti. They ignored him, stuck gum on his seat, played music during class, danced on his desk. The principal hauled Mariotti into his office. "This is the worst school in New York State," Mariotti remembers him saying, "maybe in the whole country. I've got to tell you something: You're the worst teacher here."

Mariotti was failing as a teacher, but he didn't want to stop. The kids tested his patience, but teaching added meaning to his life. "I felt like a hero; whereas in the import-export business, it was always about making money." His painful flashbacks disappeared and slowly he began to take control of his class.

Initially, he kicked out the students who made trouble, which cut the size of his classes by about two-thirds. Now and then, however, things would click. He'd catch a class's attention by trying to sell his watch or talking about his import-export business. As his comfort level rose, he met with a bunch of the students he'd kicked out of class, bought them pizza, and asked them why things went so wrong. His class was boring, they said; he made them feel stupid. Then, Mariotti asked if he'd ever taught them anything. The answer caught him off guard.

One of the kids, a 17-year-old bully, recounted a transaction from Mariotti's business. The kid remembered everything -- cost of goods sold, gross revenue, operating costs, net -- he could reconstruct an entire income statement that he'd heard once, five months earlier. Mariotti was astounded. He still calls that conversation "the most important five or ten minutes of my professional life."

Mariotti began teaching all his math classes business. He rewrote MBA textbooks at a sixth-grade reading level and taught them to his students. His classes perked up, and his teaching began to garner attention. Seven years and several schools later, Mariotti decided to take his teaching to a national classroom. In 1986, he incorporated NFTE, raised the seed money, and launched it by the following year. He had three employees and 200 students the first year, mostly in Newark, New Jersy and west Philadelphia, Pennsylvania. Now NFTE employs 42 people, has a budget of nearly $6 million, boasts a million-dollar endowment, and has offices across the country as well as franchises in the UK, Belgium, and Argentina.

Mariotti believes low-income kids are predisposed to entrepreneurship. "They become mentally strong," he says. "They develop chutzpah, mental strength, and an indifference to hierarchy. They're eager, hungry. That's the skill set of an entrepreneur." He believes that in teaching these teenagers to build their own businesses, he is also teaching them to rewrite the messages they get from their upbringing and from society. He's seen countless examples of how entrepreneurship can raise kids' self-esteem, from aggressive bullies who become successful salesmen, to a girl whose manicuring business led to better school attendance.

In the end, Mariotti says, it's about giving the kids something that's theirs. "It's about ownership -- how you teach people the craft of ownership, the craft of using markets to defend themselves, instead of having markets used against them." It's a long time since Steve Mariotti wanted to be the next Lee Iaccoca. He says that ambition seems a little silly to him now.

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