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Breaking Good: How Defy Ventures Creates Second Chances

By:  Darren Dahl Jun 30, 2014
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Defy

A recent Defy EIT class with Catherine Hoke (right) and famed venture capitalist Tim Draper (center).

Failure is one of life’s harshest teachers. But we hear time and time again, especially in the business world, that most – if not all – entrepreneurs credit their early missteps for helping them ultimately succeed. Some even wear their initial failures as a badge of honor. And yet, it seems like we don’t treat all mistakes the same.

According to the U.S. Department of Justice, that’s particularly true of the 92 million Americans among us who have a criminal record and have spent time in prison. Those folks, for a wide variety of reasons, made mistakes and paid dearly for them. But what happens to someone who leaves prison after having lost everything?

The deck is stacked against them. Landing a job is nearly impossible: few firms want to hire someone with a criminal record, especially for a felony involving drugs or worse. That helps explain why nearly 70 percent of formerly incarcerated people wind up breaking the law and going back to jail, something that’s known as recidivism. Not surprisingly, according to the U.S. Department of Labor, some 89 percent of those heading back to prison were unemployed when they were arrested. It’s a vicious cycle that crosses generations – 30 percent of young people under the age of 23 now have arrest records – and threatens the very fabric of our society.

Fortunately, there are forward-thinkers like Catherine Hoke (nee Rohr) who are working to give those with a criminal record not just a second chance but, in many cases, their first shot at a productive and legal career. “People with criminal histories represent America’s most overlooked talent pool,” she says.

Hoke is the founder of Defy Ventures in New York City, a non-profit organization that helps transform former inmates into entrepreneurs, and just as importantly, upstanding citizens through a business-101 style boot-camp. While Hoke has attracted world-class volunteer instructors like Seth Godin and Tim Draper to talk about how to succeed in the business world, she says half the program is spent helping students remap their values and examine their self-limiting beliefs.

“We don’t want to take a former drug dealer and teach him business skills and not provide character development,” says Hoke, who was recently named by Fast Company magazine as one of its 100 Most Creative People in Business. “We don’t want them to become better drug dealers. We want people who are committed to transforming their hustle. We want to partner with them in a way that allows them to live a life they never imagined was possible”

Since Hoke started Defy in 2011, her program has graduated 115 entrepreneurs-in-training, or EITs, 71 of whom have gone on to launch their own companies. Just as impressively, 87 percent of Defy graduates are now employed. But Defy isn’t just focused on launching new businesses; it’s about preparing its graduates to take the opportunity before them and thrive. That’s why Hoke, while proud of the economic impact her students are having (they reported a 94 percent increase in income since graduating), is even more thrilled with the fact that the recidivism rate of her students is less than 5 percent.

“I’ve learned the hard way that I’m not smart enough to persuade someone to stop acting criminally if that’s what he or she wants,” she says. “I am not trying to save them. But, if they are sick and tired of their old ways and are ready to take ownership of their pasts, but don’t know how to move forward in a legal way, then Defy is perfect for them.”

Hoke says that people are often dehumanized and treated roughly while incarcerated, and then are pitied – at best – upon release, all of which fails to build their dignity and esteem. That’s where Defy steps in, delivering equal parts tough and love, to push her students to grab the opportunities before them. “We set a high bar and watch them achieve it,” she says. “It’s not a babysitting club. We tell our EITs, ‘When – not if – you fail, we’ll be right here to pick you up and dust you off, so long as you’re committed to starting again.’”

Walking the Walk

Hoke is quick to admit that she’s made her own share of mistakes, a couple of which followed her former marriage and led to her ouster from her first venture, the Prison Entrepreneurship Program, or PEP, which she founded within the state of Texas’ prison system in 2004.

“I got to a point where I hated my own guts,” she told the audience at the 2013 Big Omaha entrepreneurial conference about that time in her life. “I was divorced, broke, and felt like God didn’t have anything left for me. But I was honest with myself and owned my mistakes.”

Hoke admits it took her some time, and the help of her friends, to get back on her feet and begin to rekindle her dreams of offering second chances not just to herself, but also to people like Robert Lilly, who enrolled in Hoke’s first class at Defy in 2011.

When Hoke first met Lilly, he introduced himself as a third-generation felon. Though he was the first member of his family to graduate from college, he was arrested for criminal possession of a loaded firearm, burglary, and possession of narcotics with intent to distribute. Like his father, he found himself in prison.

In 2011, about three years after he was released from prison, Lilly was working at a non-for-profit center that supported young fathers when he learned about the Defy program. Before landing at the center, Lilly struggled to land a job. “Most corporate environments frown upon people with a felony,” he says, noting that he majored in marketing had run his own part-time catering business while at school. “Once that box is checked, it’s like a permanent glaring mark against you. It becomes tremendously difficult to land a job.”

Lilly says he was intrigued by the description of the Defy program because it offered him the potential to tap his entrepreneurial passion and overcome the barriers he was encountering in getting a job.

Defy

Rob Lilly catering a Defy Ventures graduation event.

After he was accepted into the program, Lilly’s charisma was immediately apparent, says Hoke, which made him popular. But he also seemed to be holding something back, which rubbed some of his classmates the wrong way. “He was called out for being slippery,” she says, “like that he was running away from stuff.” Lilly was often defensive and prone to making excuses. He also seemed to be trying to push the limits with Hoke and the other instructors to see how far he could go before being held accountable – which resulted in at least one session where he had to spend four hours writing out the AP Stylebook by hand. Hoke knew Lilly had enormous potential, but she suffered through several sleepless nights deciding whether she should kick him out of the program. “Rob had a harder shell to crack than most,” says Hoke.

Lilly admits that it took him a while to trust Hoke and the other instructors in the program – to really believe that they were trying to help. “A lot of my classmates and I wondered what Cat was about and what her true motives were,” he says.

Eventually, he made the choice to change and embrace the program’s lessons – which he has since used to launch his own business, Powerhouse Events and Catering, (the website – www.nycpowerhouse.com - is currently under construction but you can find them on Facebook and Instagram: @eventsbypowerhouse), which employs 10 young fathers between the age of 18 and 22. When Hoke remarried in 2013, she even had Lilly cater the event for her.

“I really believe that the prison population is such an untapped source of skills and knowledge,” says Lilly. “A lot of these people are just natural-born hustlers. But it’s such a shame that there aren’t more redemption stories and platforms that provide second chances for people who really want to do something better for themselves and regain their confidence by being respected and rewarded for their hard work.”

The Best is Yet to Come

With success stories like Lilly’s to build on, and the retention rates of students soaring to nearly 80 percent, Hoke has begun pursuing her goal of scaling Defy, which now employs a full-time staff of nine, into a national organization.

Defy

Hoke and with Defy EIT Coss Marte after he received his $5,000 first place prize at Big Stakes, a Defy business plan competition.

As a part of that transformation, the program has already begun to introduce significant changes to how the curriculum is delivered, such as introducing, “blended learning,” where EITs learn in both online and in-person with instructors. Hoke says they have also begun charging students partial tuition to enroll in the program as a way for them to feel like they have more skin in the game when it comes to in investing in their future. “We’re breaking the welfare mentality.” By charging tuition, Hoke has also created a revenue stream that gives her non-profit organization a clear path to sustainability.

That said, Hoke has an open call for volunteers willing to serve as mentors to help students in everything from editing resumes to building business plans. “Our volunteers transform lives even just by giving meaningful feedback on a single document,” says Hoke.

One lesson that Hoke continues to teach her students is that once you have failed, it can actually free you from all of the things that have been holding you back. When someone has a straight-A record, for example, the idea of receiving a B, let alone an F, can be terrifying. But because she has already faced those fears, and beat them, Hoke says she is even more willing to take on calculated risks in the future.

“When I first started my program in Texas people referred to me as an angel,” says Hoke, adding that some 1,000 students have now graduated from the programs she started a decade ago. “And I was always thinking, ‘If you only knew who I really was.’ But now I feel loved and accepted for who I am. I don’t have to be someone I’m not. People know I have shortcomings. But they believe in me, which allows me to imperfectly lead into the future as we create a legacy of extending second chances not just all over America, but eventually the world.”