Wednesday, September 09, 2009

Nurturing Inner City Entrepreneurs: Jose Corona of Inner City Advisors

"One of the things that we make sure that everyone understands from the beginning is that we have a give back clause. The more successful you are, the more you have to give back." -- Jose Corona, Inner City Advisors

Jose Corona is the Executive Director of Inner City Advisors, a nonprofit that helps build sustainable and responsible inner city businesses that create quality jobs, reinvest in the community, and contribute to the local economy. Their clients include companies like Blue Bottle Coffee, Numi Organic Tea, Premier Organics, and Revolution Foods.

Prior to Inner City Advisors, Jose served as the development director for five years at the Mission Economic Development Agency (MEDA), a San Francisco-based nonprofit organization that provides microenterprise business technical assistance and neighborhood planning services to small businesses. He was recently named 2009 Young Professional of the Year by the Oakland Metropolitan Chamber of Commerce.

Jose sits on various economic development boards: the Oakland Workforce Investment Board, the Bay Area Business Advisory Board of Directors for the Consulate General of Mexico in San Francisco, and the OneCalifornia Bank Advisory Board. He is also a member of the Board of Directors of the YMCA of The East Bay, OBDC Small Business Finance, and People's Grocery.

Below is an edited transcript of my Big Vision Podcast interview with Jose in late August. To start, Jose talked about what Inner City Advisors is, and what makes them special. You can also listen to our conversation on iTunes.

Jose Corona: Inner City Advisors is an organization here in Oakland that was founded in 1996 by Professor Michael Porter at Harvard Business School. He created an initiative in 1996 called the Initiative for a Competitive Inner City. His whole premise was to see how you use the market and business to revitalize neighborhoods. What we do here in Oakland, and throughout the Bay Area, is we work with inner city companies that not only have a scalable model, but also have a social responsibility aspect built into their business model. We don't seek out socially responsible companies. We look at companies that are doing good.

How we define doing good is how they benefit the community where they operate: hiring people in the communities, paying above living wages. We feel that that is the strategy to drive economic development and community development in a neighborhood.

What makes us special, I think, is the caliber of consulting that we do. We have a talented group of entrepreneurs that we work with all the way from Numi Organic Tea to Blue Bottle Coffee, to Premier Organics, and many others in different sectors. They are socially responsible and environmentally responsible companies, but are in need of some additional assistance, mostly strategic advice, that helps them scale to the next level.

I think where we get our competitive advantage is that the caliber of our advisors is far and above any kind of advice that you find out there. And we do it for free. We are pretty selective on the companies that we work with, and because we offer it for free is we are pretty limited on our capacity.

Britt Bravo: So, if I came to you and said, "Hey, I have this business that I want to start. I'm going to be green. I'm going to be great here in Oakland. First of all, how would you choose me, or not choose me? If you did choose me, what do I get?"

We look for several things. The companies that we look at are companies that first of all, we believe in. We're all about building relationships, so we have to believe in the entrepreneur, or the team that comes to us. If you came to us with an exciting idea and we felt a connection to you, and felt that you were the right entrepreneur to take it to that level, that's how we start.

Then we look for, of course, location. It has to be an inner city community. We define that as a low to moderate income location, essentially. If you look at somewhere like Oakland, it's everywhere but the hills. Everything below 580 is inner city community.

We look at the potential to scale, not only financially, but more importantly, to create jobs. We don't work with start-ups. You have to have shown some track record of success, or at least have been in operation for a minimum of two years.

The due diligence that we do is pretty extensive. We look at financial statements. We look at business plans. We interview the teams. We go to your site. We try to get a good feel for what your company is like, and what their potential for growth is.

There is an application process. There is a due diligence process where a committee from the Board does more extensive due diligence on your company. Once that passes, and the Board approves you as a portfolio company, what you get is a team of advisors.

Each company that we work with gets between three and four experts based on your industry, or the area of need. For example, if you are a food company, you would get someone like Jim Harris who is a board member of ICA.

He is a former COO of Scharffen Berger Chocolate. He has a track record of success. He has grown companies. He has advised other companies on how to grow. He's been an entrepreneur himself. You're getting advice from someone who has been there and done that. It is not someone who just came out of business school who learned everything from the academic perspective, from the theory. We really try to give our advice from the practical side of it. It is someone who has that practical experience in running a business, or working with people and helping them grow a business.

You get ongoing support that is not on a limited time basis, but is on an ongoing basis. As long as you are growing, as long as you are creating jobs, we continue to help you. The advisors are working with you on a monthly basis, on a quarterly basis doing presentations to the Board, and we track your impact.

We make sure that you are growing both financially, that you are creating jobs, and that you are giving back to your community. That is very important to us, and we outline that from the beginning. We actually have an MOU, a term sheet, that we sign with each of our companies that outlines what you can expect from ICA, and what we expect from you.

One of the things that we make sure that everyone understands from the beginning is that we have a give back clause. The more successful you are, the more you have to give back. That's our expectation. If it's too onerous for the company, then that's good, because it is not the right company for us.

We are looking for the company that really wants to give back to the community, and give back to the community locally too. There are a lot of companies that give to international causes, which is great. We love it. We love people that look for fair trade for the farmers overseas, and supporting a bamboo village in China. That is all good and great. On top of that, we expect you to give to your community here.

If you're in Oakland, how are you benefiting the community of Oakland? That's our expectation. Are you hiring locally? Are you using local suppliers? How much do you pay? Do you provide health benefits? Do you support your local educational systems? All of those kinds of things at a local basis are really important to us.

We outline those from the beginning. Most of the companies that come to us are already there, so it is not a hard sell. It's just encouraging them in how to do it better, and how to do it strategically so that it fits within their business.

When I looked on your site I saw Extreme Pizza, which at least here, is kind of a biggish company, I mean, there is more than one store, and then there's Bluebottle Coffee, which is also big, and Numi Tea. Those are pretty established brands. Is there a particular size that you work with?

Our sweet spot is companies between one and three million. Most of the companies that come to us are at, or about a million. Numi has been in our portfolio for about four years. We've seen their growth. They are at a point where we consider them a partner company.

What that means to us is a company that has reached 15 million in revenues, has been profitable for four consecutive quarters, and has been cash positive for four consecutive quarters. That's why we do the tracking. To us, that's a successful company. At that point, they can afford services.

We'd rather invest our limited resources in smaller entrepreneurs that need assistance. Bigger companies that have grown and are of scale like Numi and Extreme Pizza are great examples of success for us, but at that point, they can afford services.

They're still part of the ICA family, and they are not totally moved out of the network, but they are at a different level. Again, it's how do we focus on the companies that can really benefit from the advice that we provide? Mostly, it is the smaller companies.

What are the benefits for a company to be in the inner city? You're working with companies that are already here, but do you ever do anything to convince people that they should be here in the first place?

We don't do a lot of attraction services. We don't get companies that are outside of the inner city to locate in the inner city. We really look at the companies that are already here. What we do, and why we focus on the inner city from the beginning is based on Michael Porter's philosophy that there is an inherent competitive advantage to being in the inner city.

Look at somewhere like the city of Oakland. Look at the BART system. The hub of it is Oakland. There is access to transportation. The proximity to the port is very important. There is the proximity to academic institutions in an inner city. There is an available workforce. The reality is that it is sometimes relatively cheaper real estate. There are a lot of advantages of a business locating in an inner city.

The other thing is that a lot of inner cities are part of empowerment zones or enterprise zones where companies that are at a certain scale and profitable can benefit from tax credits, both from the payroll side, if you hire from the inner city, but also if you locate in the enterprise zones. So, there are tax benefits.

Our whole strategy is how do you garnish the competitive advantages of being located in the inner city.

What are the challenges specific to having an enterprise in an inner city?

The biggest challenge that we face, and it's not specific to ICA's companies, is really the perception of what an inner city is. When you mention what an inner city is, a lot of people have a negative connotation. High crime. Dilapidated conditions. The public safety issue is huge. Companies don't want to locate in the inner city because they want safety for their employees.

Just like any other city that we work in, they all have their safety issues. They all have their challenges, but a lot of it is perception. I personally believe that it has a lot to do with the media. They capture the negative stories of the inner city. Why not tell stories about the great things that are happening there like the great companies that are creating a lot of jobs and thriving, and doing great things not only locally, but around the world.

It is those negative perceptions about the inner city that we have to deal with every day. You asked earlier about if we ever get companies that are interested in locating here. We do. That is one of the things that we have to address. How real is the perception that is out there about the crime?

It's real, but it is like any other city. It's like any other urban center that you go to. Every urban community is going to have it. The last thing I'll say about it is that we look at the inner city as an asset rather than as a deficit. The perception in the media is always about the negative perceptions. We look at what are the great things about the inner city. If you look at a business, how can you be a part of that, and revitalize that community?

What is the path that brought you to this work? How'd you get here?

That's a very long story. I came from an entrepreneur family. My dad was, still is, a farm owner. He came in the '70s when there was still the Bracero Program in Mexico. He came in during the summers to work in the strawberry fields in Salinas Valley in the Watsonville area, and then came back.

He is the example of the American dream. He came here, became legal, started buying land, and leveraged the little bit he had back then to create a very successful enterprise in the strawberry business in the Salinas Valley. He put all of my brothers through college.

I went to UC Davis with a biology and chemistry major. I thought that I wanted to be a doctor, so I went to dental school for a year. I hated it and dropped out; and then I got recruited to do some HR work at Macy's. I went through HR there, and eventually became the Bay Area Regional Director of Operations for 12 stores in the Bay Area.

I learned a lot, but I wanted to be connected to, "What's my impact as a person, what's the impact that I'm creating?" Macy's was great, and I think the corporate sector taught me a lot of great skills. But, I wanted to see my direct impact in the communities that I was serving.

A friend of mine was running an organization in San Francisco called the Mission Economic Development Agency. They worked mostly with Latino mom and pop shops in the Mission district. I was there for six years as the Director of Development. I did fundraising. Then I got recruited over here at Inner City Advisors.

I think what I love about this is that it really gets my entrepreneur spirit out there. I love working with entrepreneurs. I love their stories. I love their drive. I know that I can never be an entrepreneur. It is a whole different animal. You talk to the founders of these companies, and hear about how much they work. They live and breathe their business 24x7. We all do that in our own work, but an entrepreneur is relentless. I see that in my dad, and that's how I got attracted to that. I just love their drive.

The work that I am doing right now, for me, it's the perfect job that I want to be doing. What's better than seeing great entrepreneurs building thriving communities as a strategy for community and economic development. You start with one business, and you move to a community, and eventually the vision of ICA is how do we create thriving communities throughout the Bay Area, throughout the state, and throughout the US. How do we get to what we do, do it better, and do it on a much larger scale. That is our inherent challenge. How do we think big? What does big really mean for us?

How do you build strong entrepreneurs? You've talked a little bit about their inherent qualities - a lot of passion, a lot of drive. Kind of like artists, a lot of passion and drive can create great things, but they aren't necessarily sustainable over time. What does an entrepreneur need to build something that's strong and is going to last?

I'm a personal believer that you can't teach someone to be an entrepreneur. You can nurture them, and I think that's what we do. You can go to school and learn about how to run a business, but being a business owner is very different from being an entrepreneur, in my opinion.

I don't think you can teach someone to be an entrepreneur. Someone is born with it. Just like someone is born with a great skill to be an athlete, a world-class athlete, I think entrepreneurs are born that way. What we do is just nurture that, and provide and surround them with the right resources that are going to help them develop their entrepreneurial spirit.

When we look at an entrepreneur and are looking at whether they fit our profile, we have what we call the ICE factor, the Inner City Entrepreneur factor. It's really getting to know the person, the entrepreneur and saying, "Do they really want this? Do they really have that entrepreneurial spirit that's going to create change?" Or are they just a lifestyle kind of business? Are they going to be comfortable with just getting to a certain level, and then taking care of their families and themselves, which is great, but, we are looking for that entrepreneur that's going to want to scale and create change and be more than just that business.

A real entrepreneur has a larger vision. It's more about someone like Ahmed and Reem Rahim at Numi. It's more than just tea, and their business, Numi Organic Tea, it's a larger vision. How do you improve the world? How do you improve the planet? Tea, from the health perspective. They have a large vision. They're artists so they think big.

We want to capture that and we want to nurture that kind of spirit. We do it both through personal mentoring, but also with the right skill sets. A lot of them, like you said, have great passion, great drive. We just need to nurture that business savvy part of it.

So, how do you create a smarter entrepreneur? Not to say that they're not smart already, but just become smarter from the business perspective of it. It's a lot of nurturing that we do. We're not creating entrepreneurs. We're just nurturing them to be better.

What can a city, like Oakland or other cities like it, what can they do to help nurture and support entrepreneurs?

That's a good question. I think one of the things that is missing from cities are policies that support the creation of an environment for a company to thrive and to grow. Too often policy makers and governments make it more difficult for someone to do business in their city than easier.

I think that government really should facilitate an environment that nurtures business development, and then get out of the way. Businesses care about their communities and their cities. They want to do good. They want to improve their communities from the economic perspective, diversity, and social perspective.

So, for me, it's how do policy makers make it easier, make policies that support the growth of entrepreneurs - support them with the resources, with the right policies, with the right environment, and with capital?

How do you support that, and how do you combine that to create strong entrepreneurs? From the small mom and pop shops and taquerias to the larger businesses, and the corporations that are out here. I think there has to be a balance where you put your resources. Too often we give the resources to the communities that have the loudest voice. That's where I think we're missing the boat as stakeholders, and as policy makers.

The inherent problem with the business owners is that they're running their business. They don't have time to raise a stink and go to city hall meetings. That's why you have more homeowners going to these meetings. The business owners are running their business, and that's what they should be doing.

How do we make it easier as a city for them to run their business? It's a challenge, and I don't have the answer. It's something that ICA is starting to get more and more into. We're creating a business council from all of our portfolio CEOs who are coming together and thinking about what some of the policy changes are that can be addressed, and that they can tackle as a group and create that small business voice that's void right now in city halls and other governments outside of the cities. It's really creating that voice, and I think we can facilitate that. It's a big challenge.

You work with folks who are pretty well-established. What advice do you have for listeners or, when this is on the blog, readers, who are budding entrepreneurs in inner cities, wherever they might be, who are just getting started? What are the things, from your experience of working with folks who have become successful, that they need to do?

One thing that I've found that's really important in the smaller entrepreneurs is that there are a lot of resources out there. Really do your research on who can help you. The best advice you're going to get is from another entrepreneur. We don't really have a mentorship model, but how do you find someone who can be a sounding board to you? A lot of people have great ideas. How do you take ideas and put them into action?

I'm a firm believer that someone who has been there, done that, can tell you not only the best practice of how to grow your business, but also the lessons learned. You learn more about the mistakes that people have made. The earlier you find out about what those mistakes are, the better off you're going to be.

There's this saying, "It's all about who you know," I have a different angle to it. "It's really about who knows you." Surround yourself with the people that you know are going to help you grow your business. It can be a nonprofit. It can be other entrepreneurs. It can be the government. It can be other government programs. Explore everything that's out there, and then be really focused on what you want to do.

How do you take that passion that you have, if you're really an entrepreneur, and you want to build that passion? You really have to believe it. You really have to believe it, and you have to do it. Like I said earlier, I think an entrepreneur is born. If you want to be a business owner, you can be a business owner. If you want to be an entrepreneur, and create some great change and have a large vision, you can do that, but, you have to be focused, and you have to be disciplined, and you have to let go of your ego sometimes. You don't know everything.

For people who are listening, how can they support Inner City Advisors?

In many ways. We are always looking for great companies that have large visions and that want to make a lot of impact in their communities. We're Inner City Advisors so we're looking for companies in the inner city.

If there are companies out there that that you think might benefit from ICA's work, I want to encourage them to look at our website. It's going to be revamped soon. There is good information on there about the work that we do. Please refer companies to us.

Also, if there are entrepreneurs out there, or other people, who want to volunteer their time to be advisors and mentors to some of the younger entrepreneurs, we're always looking for high caliber consultants and advisors who want to give between 4-20 hours a month. We try to make it as easy as possible for people to volunteer with ICA.

If there are people out there who want to support a cause that's creating change and that's creating thriving communities, you can support us financially, either through connections through your own networks, through individuals, through foundations, or corporations. We're a nonprofit, so we rely on charitable support to continue our programs. Those are some ways that you can help.

Is there anything that you didn't get to talk about Inner City Advisors? Anything else that you would like to add?

We are a small organization with a large vision. We certainly can't do everything alone. If there are other organizations that work in similar areas, or other entrepreneurs who want to be part of this solution - be a part of the ICA family as well. Just like our entrepreneurs, we need as much help as we can get as an organization. In order to create a thriving community, and wealth and assets in the community, we need to collaborate with other organizations and businesses and individuals that can help us get to that larger vision. It's all about working together.

Full disclosure: My husband and Jose play on the same soccer team (:

Related Blogs & Blog Posts
Solutions for the Inner City
Growth Capital for Inner City Businesses on the JumpStart blog
Business Support for Inner City Areas on Nottingham City Council's blog
Inner City 100 Awards on Susan Labandibar - Activist CEO

Cross-posted from

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  1. Great interview! And great program,Jose. I think Jose is correct that entrepreneurs are born, not made. But I also think many entrepreneurs never discover who they are and why they are dissatisfied with other career paths. Every inner city, village, small town, and bypassed place in the world needs both a cheerleader and a solid advisory network for entrepreneurs. That's how we will create prosperity again.

  2. I'm so glad you enjoyed the interview, Nancy!

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