Russ: This is the BusinessMakers Show, heard here and seen online at theBusinessMakers.com. And it's guest time on the show, and I'm very pleased to have with me this morning Rafael Alvarez, founder and CEO of Genesys Works. Rafael, welcome to the BusinessMakers Show.

Rafael: Thank you for having me here, Russ.

Russ: You bet. Well, let's start by telling our audience about Genesys Works.

Rafael: Genesys Works is a social enterprise, a nonprofit corporation that trains and hires high school students that come from low-income backgrounds to do professional-style services during their senior year in high school for major corporations. So the way it works is students come in in the summer before their senior year in high school. We train them on what they need to know in order to be able t o provide a value to a corporation, technical services such as computer IT, engineering and drafting, accounting, whatnot. And we also train them on how to be a professional and how to succeed in the workplace.

Then we engage them to work in major corporations during their senior year in high school. And during that year, they come to discover that they can be a successful professional, that it's not rock science, and that they can live a much better life afterwards.

Russ: Cool, cool. So you're mainly targeting low-income, disadvantaged students, people that probably wouldn't even be thinking about a professional career. Is that right?

Rafael: That's right. And that's the beauty of our program. We open the minds of people who may live ten minutes away from downtown, and they may look at the skyline every day, but for them, it might as well just be a postcard because this is not their world they grow up thinking. And so once they get to experience that [laughs] it's not that hard, and, in fact, becoming a professional is a easy path in life compared to what their families have been used to for generations, it's that simple.

Russ: Okay. Okay, now real interesting, and I introduced you as founder. So what was it, Rafael, that triggered this idea to start Genesys Works and really try to expose a real bright future to people that normally don't see it at all?

Rafael: I was a strategist at Compaq Computer Corporation at the time, and my job was to find more ways for the company to make more money. And on my spare time, I was in the board of directors of a charter school.

Russ: A charter school. Okay.

Rafael: Yeah. And it was not a high-performing charter school, and all of their students were low-income, at-risk, and so high school graduation was in and of itself, an accomplishment. And I went to a graduation ceremony and I started talking to the students, and I said, "What are you gonna do now?" And one by one, they all said the same thing, and they said, "I'm just gonna continue my job." And I said, "Well, what do you do?" And they said, "Well, I work in McDonald's." "I work as a cashier." "I'm a hand packer." And I thought, "What happens next?"

So they're in these occupations. They leave their formal education three, four, five, years. How can they ever get into a profession that's gonna allow 'em to live in the American economic mainstream? And so in my business world, I knew that there were services that students could do. I knew how much the company was charging to do those services for major corporations. I knew there was a market for it. If we could only train these students to provide those services, be able to charge the corporations a cost-effective rate - the customer's got to get some value out of this - we'll join two and two together and it would work and we would come up with a self-sustainable model to be able to fund this nonprofit organization and be able to provide value to students.

Russ: Real cool, real cool. So you mentioned Compaq Computer, so that kinda dates this back a few years. When did Genesys Works actually start?

Rafael: The funny thing is that I had this idea the summer of 2001. And as I thought about doing this, there was a little problem. I had a pretty good job, a pretty good salary, pretty good life there. And I thought, "How can I leave this to start a nonprofit doing something that had never been done?" But then 9/11 happened. And 9/11 happened - a week after 9/11, the intended merger between HP and Compaq was announced. And I thought, "Okay. If there's any time to do something crazy like this, this is the time."

Russ: This is it.

Rafael: And so that's when I announced that I would be leaving, and it was beautiful. Compaq first, and then HP later, became our largest supporter immediately, and really allowed us to start.

Russ: Great. So in the beginning, and to this day, since it's a nonprofit, is it funded primarily from corporate contributors?

Rafael: Eighty percent of our total expenses get funded from the revenues that we actually charge companies for the services our students provide; 80 percent.

Russ: That's cool.

Rafael: So the other 20 percent is contributed income. Much of that comes from corporations, but their charitable contribution side, separate from the service money that we're getting from the services, right?

Russ: Right.

Rafael: Also, a lot comes from private foundations. And what we want to start developing is in order to be able to grow, we really want to be able to attract private investors and private funders.

Russ: Great, great. Now, I get the picture pretty much, Rafael, but it still seems to me that it's not easy even in a summer course to upgrade somebody to get them to be able to go into corporations and really provide a good services. So what is the curriculum and how long does this sort of summer session last?

Rafael: When I first started it, I thought it was all about training them in IT and getting them certified. And what we started to hear from our customers was that the most important thing was not the IT knowledge that the students had, because the companies can always teach 'em to do the specific technical thing. But it was attitude and professionalism and confidence.

So over the years, our training is now only about 60 percent is the technical training, and the other 40 we focus very, very heavily on a value system that we call achiever. And the achiever system teaches students about honesty and professionalism and corporate culture and honoring your commitments and team work and all those things that once you are able to educate these students on how to be a professional, and they come into these workplaces, our clients are surprised time and again about how well trained and how motivated they are, and how they want to just do a great job. And they end up being just very, very successful in the workplace with that.

Russ: That's real neat. Now the training that you're talking about takes place after they graduate or before? When does the training actually take place?

Rafael: We recruit students to come into the program the spring semester of their junior year. Then they invest their summer, eight weeks during the summer.

Russ: Between their junior and senior year?

Rafael: Between their junior and senior year, right?

Russ: Okay.

Rafael: And they come into our training facilities. We are located in central business district in the downtown of every city we're in, in beautiful corporate-looking facilities. We are sitting right now in the 39th floor of a corporate tower in downtown Houston. And when students ride the elevator to come up here from Day 1, they get to realize that this is their world. They can succeed here. And they dress well, and they get well groomed, and they start getting immersed into this culture of high expectations and success and professionalism.

And they develop around 'em a network of friends and positive adult relationships and great exposure and in just that summer, we're able to totally flip their attitude and their personality and where they wanna go in life. And when they go back to their schools during the fall, we hear from the schools talking about, again - they go, "What did you go?" And I remember, Russ, a school official once came to you our facility and he was touring. And he saw the students well dressed and well behaved and self-managed and doing everything that happens in every corporation in America every day. It's just a little unusual in education.

And he said, "Rafael, good try. But these are not my students." And I said, "They're not?" And he said, "No. My students don't dress like this. They don't talk like this." He goes, "Can I have a list of your students and social security numbers because I just wanna see who you have." I say, "Sure." And so here. So he comes back a couple weeks later and he says, "Rafael, do you know who you have?" And is said, "Listen, grades are not part of the criteria to join our program. Heart is, not grades." And so I really don't know who I have. And he says, "You have our C and D students. And how is it possible that in just one summer you are able to turn a C and D student that' a top performer that's work in the best corporations in the city, and 95 percent of 'em end up going to college. How is it possible?

And the answer t it gave is very simple. It's culture.

Russ: Cool. Talking with Rafael Alvarez, the founder and CEO of Genesys Works. And we'll be back with more with Rafael after this. You're listening to the BusinessMakers Show, heard here and seen online at theBusinessMakers.com.

[Commercial]

Russ: This is the BusinessMakers Show, heard here and seen online at theBusinessMakers.com, and continuing on with Rafael Alvarez, founder and CEO of Genesys Works. Now here we are up on the 39th floor of a skyscraper in Downtown Houston, but you mentioned other cities, too. So national expansion is actually happening, right?

Rafael: Yes, it is. In 2008, we reached a major milestone by opening our first expansion location, and that was in St. Paul, Minnesota. People ask me all the time, "Why St. Paul?" Actually, that was the outcome of a Rice University study that studied what made us successful here in Houston, and, therefore, where would we find those same characteristics. And so concluded that the Twin Cities were good. We started there in 2008. We've been very, very successful there. And then this year, we started in Chicago. And, of course, right now we have plans for a major, major expansion around the United States.

Russ: That's fantastic. So, but does Houston still get attention and is Houston still doing well?

Rafael: Houston is still doing well. It's our flagship. We continue to invent new things. We continue to push the envelope in terms of what we can achieve. And a lot of those pilots are happening in Houston. But, also, I want to tell you about a chat that I had with the mayor of St. Paul one time as he spoke for us in an event we had there in St. Paul. And he said, "What is it about Houston? We have Michael Feinberg from Kep, and Chris Barberic from Yes, and Michael Holehouse from _____. What is it about Houston?"

Russ: [Laughs]

Rafael: And I told him, "Well, Houston was created with an entrepreneurship mindset. That was the beginning of Houston, so it's very easy to understand how this is migrating from the for-profit entrepreneurship to social entrepreneurship movement, which is catching on around the country."

Russ: Great, fantastic. Well, like those other programs, I'm also aware that you've been getting some pretty high-level attention, including actually even from the White House, correct?

Rafael: Yeah. We did.

Russ: And you actually went up there and had a student go with you to a presentation on real progressive advancements in bringing lower, disadvantaged students up the food chain, correct?

Rafael: Yes. In fact, the administration recognizes social enterprise as a real movement that has a real potential for change, and that is bringing business principles into solving some of the toughest problems that we've had. And so the White House created what they called the White House Office of Social Innovation, and they went around looking for examples of good social innovation that they could highlight.

And we were very, very fortunate to have been selected by the White House, which is kinda funny because I'm sitting on my home Friday morning and I get a phone call from people that are connected to the White House. And they said, "We want you to join the President on Tuesday, and bring a student." And I was really surprised. But it was really, really great. It was a big honor that we received. We were side by side with Harlem Children's Zone, which is just wildly successful. And so to be able to be in that company is an honor for us.

Russ: Fantastic. Well, it seems like a key part of your formula, too, is to get and recruit corporate participation. How do you do that?

Rafael: We go to the corporations, large corporations normally, medium size to large, and we talk to the CIOs, the CFOs. And what we tell them is, "We have a solution for you. This is not charity in the traditional sense, right? We are going to provide to you trained, motivated, youthful students, and we're gonna do it cost-effectively. You're actually gonna save money, and at the same time, we're going to be guiding these students into a trajectory change in their life, which eventually they'll become your employees. They could become your employees."

So it's a win/win for corporations. So when we are able to talk to an executive of one of these companies time and again, they say, "Why would anybody say no? Saving me money, changing lives, and actually improving the morale in organization? Why not?" In Houston, most of the Fortune 500 companies are our clients, and they have been for a couple years now. In the Twin Cities, I just heard from an executive director over there, 100-percent of all Fortune 500 companies in the Twin Cities have committed to be our clients next year.

Russ: Fantastic. That's a great record. Well, give us kind of an example of like, say, in Houston now, how many people - students that have come through your program are placed each year.

Rafael: Students in our program spend about 14 months in the program, right, from beginning to end. So it covers about two years. This year in Houston alone, we served about 250 students, and that's counting the students who were in their positions the beginning of this year and are leaving, plus the students that joined. About 150 students joined our program this year for training. And according to our model is that not everybody makes it through their training. People literally choose to get into this path. So about 73 percent of those students actually succeeded through the training are now starting their corporate jobs.

Russ: Okay. Well, I'm curious now about how you actually recruit the students. You mentioned that you go there in the spring of their junior year. You don't have necessarily a grade performance level criteria, and you're trying to persuade 'em to join the program? Is that correct?

Rafael: Correct. We partner with school's who's principal really believes that we can have an impact on the very culture of their school by exposing more students to a different path in life, and then students, in turn, can influence other students around them. Schools have to serve - at least 80 percent of their students need to be what they call in free or reduced lunch plan, which means -

Russ: It means they're disadvantaged. Yeah.

Rafael: It's a major disadvantage, correct. And then we go into those schools. We identify a champion in school, which brings together about 30 to 40 students, and then we take our own students to go in and talk about their experience in the program. Students have to be legally able to work in this country, because at the end, we are the employer and we need to make sure that we obey the law. And they need to be able to work in the afternoon during their senior year. If they are pretty much caught up on their credits, they are able to work in their senior year. And with that, they fill out a simple Web-based application. They come in for an interview. We believe that they are willing to work hard and to follow our lead and work as a professional, then we admit them into our program.

Russ: Great. And just to be clear, too, on this - the way that you're funded and your characterized 80 percent, you're kind of creating your own revenue. So these students actually become employees of Genesys Works, and then Genesys Works outsources to the corporation, and you actually make money on that transaction each time, which continues your mission onward, correct?

Rafael: Absolutely, absolutely.

Russ: That simple.

Rafael: From our corporate clients' standpoint, we are no different than any other IT or technical service provider. We charge per hour for the time that the students are there. The key difference is that we are a social enterprise. We have a social mission for existing.

Russ: Right. So cool. Talking with Rafael Alvarez, founder and CEO of Genesys Works. And we'll be back with more with Rafael after this. You're listening to the BusinessMakers Show, heard here and seen online at theBusinessMakers.com.

[Commercial]

Russ: This is the BusinessMakers Show, heard here and seen online at theBusinessMakers.com, and continuing on with Rafael Alvarez, founder of Genesys Works. And, my goodness, this all sounds real cool. But it makes me wonder, at the end of the day, what are you actually trying to do impact?

Rafael: Russ, I talked about what makes Genesys Works different is the culture that we have, right, a culture of high expectations. As I tour different schools and I see the schools that are sending most of their kids to professional careers and college, and schools that are not, there's one difference, and that's the culture within the school, the conversation. In the one school, the conversation is, "What are you gonna do once you leave high school and what college are you gonna go to?" In the other school, the conversation is, "Why do I need to stay in school if I'm just gonna get a minimum-wage job," right?

Russ: Right.

Rafael: Those are the schools that are having a very high dropout rate, and schools administrators are really struggling. I contend that the real solution to that education problem is to change the conversation in the school to have a system that as a result of the school and the administrators and the reports and nonprofit organizations like us, we are able to institute an environment and a culture whereby the pursuit of a professional career becomes the given for all students. And when that happens, I contend that the students are going work hard. They're going to have a better attitude in the classroom. Teachers are gonna have a better environment to work in. And at the end, we are going to match what businesses needed in America with what our education system are producing.

Russ: That is so cool. Rafael, I really appreciate you sharing your story, and I really appreciate your mission.

Rafael: Thank you, Russ. I was happy to be here.

Russ: You bet. That's Rafael Alvarez, founder and CEO of Genesys Works. You're listening to the BusinessMakers Show, heard here and seen online at theBusinessMakers.com.