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Inside Prison ‘Shark Tank,’ the Program Where Inmates Become Entrepreneurs

A few dozen inmates have gathered in the gymnasium at Kern Valley State Prison to meet a group of business executives and venture capitalists who have taken the two-and-a-half hour bus ride from L.A. to hear them pitch. For the day, instead of “prisoners,” the inmates will be called Entrepreneurs in Training (or EITs), as part of a program sponsored by Defy Ventures, a nonprofit that teaches incarcerated men and women business skills. While Pharrell’s “Happy” plays from a speaker in the corner, the inmates introduce themselves, make small talk and shake hands with the execs (that — and fist bumping — are the only contact allowed), while armed guards look on from various vantage points throughout the room. There’s a sign on the wall above, in red letters, that reads, “WARNING, NO WARNING SHOTS.”

In a daylong Shark Tank-like competition, the inmates/EITs pitch business ideas to panels of volunteer judges. They’re all realistic businesses: pool cleaning, taco trucks, construction. A man named Rico with a forearm tattoo that says, “There are 2 sides to every story,” pitches a van service for visiting incarcerated family members. The volunteers are heavy-hitters themselves — e.g., a VC who just started an aviation company and a fitness magnate. They rate the ideas on scalability and potential for profit as well as the presentation itself. Whatever the score, they’re encouraged not to sugarcoat. After cuts, semi-finalists do another round of pitching, and face more cuts, to narrow it down to five finalists. (Rico and his van service end up winning the day. The prize is $500 upon release from prison, which, in Rico’s case, will be a few more years, if he is paroled as scheduled.)

Leading up today, the inmates have taken months of classes, with coaching sessions on interview skills and resume building, as well as instructional videos taught by various experts (including shoe mogul Steve Madden, who did time in prison himself for stock fraud) on topics ranging from how to scale a business, to basic etiquette and the importance of writing thank you notes. At the end of the course, there’s a graduation ceremony. For many, it’s the first time they’ve ever worn a cap and gown.

Defy works in 20 correctional facilities around the country and also offers post-release classes. The most successful business to come out of the program is ConBody, a “prison-style boot-camp workout” that Defy alum Coss Marte created while he was in solitary. After he got out of prison, he got funding to turn his idea into a Manhattan gym.

For the most part, though, pitch day is mainly ceremony. No one is going to sign a deal on the spot, and many EITs have decades before they’re even eligible for parole. Some are in for life. The pitching has more to do with developing confidence and community, Defy’s president, Andrew Glazier tells me. “When you give somebody something different to think about than who they are going to shank when they wake up, and instead, you’re thinking about customer service and growing an idea, it frees them up mentally to start thinking about what their contribution can be.”

The business ideas themselves are almost incidental. “You would think after a Defy event, going back to your cell and laying down in your bunk, your one-inch thick mattress, it would be such a downer,” says Ping Lieu, Defy’s National Program Operations Manager. “But it’s not. It gives you hope.”

He speaks from experience. Lieu is in his early 30s, compact and fit. He wears his black hair pulled back into a neat, low ponytail and carries a clipboard. Before working with Defy, he was an EIT himself, serving a 15-year sentence for conspiracy to commit robbery. He signed up for Defy’s program accidentally, meaning to take a guitar class. On the first day, he thought, This is bullshit. But what else do I have to do right now to kill time? He decided to stick with it.

“When you’re in prison, the way you’re treated, everything dehumanizes you,” he says. “It tells you you’re trash, you’re worthless, you’re meant to be in here. You’re conditioned to be invisible.” At a Defy event, Lieu connected with a volunteer who gave him feedback after a mock job interview. “This guy thought I was worth his time. The dots wouldn’t connect,” Lieu says. “Why would this incredibly successful person waste his time with a piece of shit like me?” It stuck with him for days after. “That was the turning point. Instantly. I’m gonna get out, I’m actually worth something, I have value.”

It changed how he did his time, too. He started tutoring others, and when he got out, he joined Defy’s staff, which had an added bonus: He didn’t have to worry about checking the job-application box that asks if you’ve ever been convicted of a felony. One of Defy’s primary tenets is “transform your hustle,” to help inmates identify business acumen they already possess. Many of the men I met in Kern Valley spoke freely about lucrative drug businesses they ran before getting arrested. “Risk management,” one shakes his head, flashing a gold-toothed smile, “One thing I didn’t think about.”

Marte, the owner of ConBody, markets his prison boot camp using many of the techniques he honed in his previous business of selling drugs. “I was one of those kids — I went to jail at 13, did a year at 15, did another year at 19,” he says. “Guards who’d see me in and out (said), ‘You’ll be back, see you next time.’ You tell yourself, ‘Fuck you, I ain’t coming back to this place.’ But shit is real, and things happen.”

He’d get out and go back to selling drugs, the business he’d been in since he was 13, sitting on milk crates on a street corner. “Guerilla marketing, all day, all night,” he smiles. At 17, he made business cards and wore suits so police wouldn’t stop him. He hung out in local nightclubs. “A-B-C. Always Be Closing,” he quotes the popular sales strategy. “I’d be like, ‘Hey, how’s it going? Partying tonight? Wanna smoke a blunt?’ I would give them a little bit of weed and then from there, ‘Hey, I got a cocaine operation, 24-hour delivery service, here’s my card.’” He employed a staff of neighborhood kids for deliveries and says at one point he was making $2 million a year — until he got arrested.

Today, his ConBody gym is on the same corner in the Lower East Side where he used to sell cocaine (though the all-body-weight workout, Marte says, can be done in any 9-foot by 6-foot space). He hires the formerly incarcerated, helps them get certified as trainers and sometimes lets them sleep at the gym or on his couch if they don’t yet have a home when they first get out. “These people are just people, give them a second chance,” he says. It’s why there aren’t locks on the lockers at Con Body. “Trust an ex-con with your shit. It’s gonna be okay. I get these bougie girls coming into the gym, and we humble them down and explain the mission, and they want to be involved. It breaks down a lot of barriers.”

The idea is right from the Defy playbook. On pitch day, there were breaks to chat informally and a meal brought in from Pizza Hut, which thrilled the inmates who describe regular prison food as inedible. During one bonding exercise, called Step to the Line, inmates stand on a line of duct tape on the gym floor, and volunteers stand on another parallel line, facing them. Everyone takes a step back, and a facilitator reads a series of prompts, telling participants to step to the line when a statement is true for them.

“My parents paid for my four-year college education.”

Almost every volunteer steps forward, not one inmate does.

“I grew up in poverty.”

Almost every inmate steps forward, not one volunteer.

“Step to the line if you’ve broken the law.”

Every inmate steps forward. Volunteers are reminded that getting into a car after having two drinks is against the law in some states. I’ve done that. I step to the line, along with a handful of volunteers. The exercise is strategic and it works. I’m now close enough to touch the man facing me, who’s stepped forward because he’s also broken the law. He looks me in the eye, and puts out his hand in offering. We shake.

“It’s a really important, humanizing exercise,” says Glazier. “It’s the most impactful part of the experience for many people.” For the inmates it emphasizes the importance of learning how to open up and connect. “That takes practice for people who have done nothing for the last 5, 10, 15, 30, 40 years of their life but keep it to themselves.”

For people who stay with the program, once they get out, Defy boasts a less than 5 percent recidivism rate over three years. The national average is exponentially higher: Within three years of release, 67.8 percent of released prisoners were rearrested, according to a study by the Bureau of Justice Statistics.

Catherine Hoke founded Defy Ventures in 2010. Before that, she ran a similar program in Texas, Prison Entrepreneurship Program (PEP), resigning abruptly in 2009 after admitting to having relationships with four former inmates who had gone through the program. She was subsequently banned from entering Texas prisons. Telling the story of her own fall from grace and belief in second chances, she “found God,” started Defy and courted big investors like Google, which donated money in addition to Chromebooks and Pixel phones to participants after release from prison.

Hoke declined multiple interview requests for this story and then unexpectedly resigned as CEO from Defy in mid-March, following accusations that she inflated the program’s success rates as well as allegations of sexual harassment and assault, which she denied in her resignation letter. (She wrote in her recent book, A Second Chance: For You, For Me And For the Rest of Us, that Defy has a 95 percent employment rate, which doesn’t sound plausible. The national unemployment rate hovers around 4 percent, and for African Americans, who comprise much of Defy’s clientele, it’s around 7 percent. Not to mention, the formerly incarcerated face even more employment challenges.)

While Defy’s board investigates allegations against Hoke, the organization is scrambling to move forward, hiring an outside PR firm for damage control and assuaging donors and participants. “We have a responsibility to focus on running our program,” says Glazier, who is also serving as interim CEO. “Because, for people who have been incarcerated, they have had a lifetime of broken promises. The name of the game here is, how do we give people skills, support their transformation and become productive and stable upon release?”

About a month after pitch day, I attend an event at a West Hollywood coffee house for men who’ve been recently released. They’ve dressed up for the occasion, wearing suits and new button-down shirts that barely cover their neck and arm tattoos. The volunteers are dressed casually in jeans. The evening starts off like a school dance with people on opposite sides of the room. One by one, they introduce themselves. Later, a few of them will tell me that they’re nervous. “I don’t want to go back,” says John, a 37-year-old who just served 20 years. It sounds more like a plea than a resolution. “I can’t go back,” he says again. Many feel the pull of their old lives selling drugs, and have cut off from friends and family, determined to stick with the program.

I think about something Lieu told me about when he got out. He was nervous to be around people in public, and he had difficulty making decisions. “In prison, everything is laid out for you,” he said at the time. “What you’re wearing, what you’re eating… The first day I was out, my sisters gave me some money and took me to the mall and said, ‘Buy whatever you need.’ I started with socks. I went into this store, and there’s a whole aisle of just socks. Light gray, medium gray, charcoal, black. I just stared at everything and had a panic attack. I had to run out of there.”

I’m curious why, after more than a decade in prison, Lieu has a job that involves going back all the time. He says he was excited to return to the prison he was paroled from, riding up on a fancy coach bus with volunteers for a Defy event. Until he wasn’t. “We pull up the driveway, and I had a flashback,” he says. “The last time I pulled up, I was in chains; my legs were shackled; my hands were chained to my waist, and I was on a 39-hour bus transfer from Mississippi. They had me in a cage, covered in plexiglass with little air holes. I thought I was suffocating. My feet were chained so tightly that they were swollen, I couldn’t walk for a while after.”

The Defy event was in the visiting room. “The same visiting room that my mom came to every single week for three years that I was at that prison. But to walk in the other doors and to be in that same exact space that I was in before — I can’t do this,“ he thought. A CO said he looked familiar, asked if they’d gone to high school together, or was it the same gym? Lieu told him he used to be an inmate.

Then he heard, “Hey, it’s Ping!”

“The room went crazy, and they all ran up. And you know the first rule they tell you in prison is you can’t hug the inmates. Guys just ran up and hugged me, and that was it. All that anxiety, all that tension, it just left me.” he says. “I was there with my guys. I felt like I was home.”