main questions to answer in this paper “must read the case study attached” 1. What was the perceived need and mission of Homeboy Industries when Father Boyle founded it? 2. Why did he choose a social enterprise model to develop the organization? 3. Wh

2018100314200920180909220257reading__home_boy_industries_case_study_choi_et_al_2007_entrepreneurship_theory_and_practice
 

main questions to answer in

this paper

“must read the case study attached”

1. What was the perceived need and mission of Homeboy Industries when Father Boyle

founded it?

2. Why did he choose a social enterprise model to develop the organization?

3. What were some of the biggest challenges Father Greg faced in the early days of

Homeboy?

4. How has Homeboy evolved in its mission and its organizational structure over time?

5. Is the organization more or less effective today in both its services to gang members and

the products and services that drive revenue opportunities? Why?

Readings: 

attached files and those links ***********only********** no outside resources

1. 

https://www.fastcompany.com/1679680/homeboy-indust…

2. ted talk 

additional notes:

For the Home Boy Industries case study, you must also submit a writtenanalysis of this specific

case as well as integrate the other readings / TED Talk. Your essay should combine the facts

presented as well as your analysis of the merits and challenges of Home Boy Industries as a

social enterprise addressing the specific needs of the community that it serves.

Your essay should be between 1,000 and 1,200

words.

Writing Guidelines and Expectations for Case Discussion Writeup on Home Boy Industries

 Writing level expectations–You are at graduate level writing. Use thoughtful and articulate

transitions from one thought or example to the next.

 This paper asks you to incorporate your own point of view as well as that of the “experts” for

this paper

 The essay should NOT be written as separate answers for individual questions as if they

were separate topics or thoughts. Please incorporate the points into a more cohesive

narrative, connecting the points you want to make into a well-structured analysis and

integrated response.

 The essay should have a clear structure, an introduction, a body and a conclusion. Any

essay of this length might also have headings ( and sub-headings) if necessary.

 The essay should substantiate ( i.e. provide evidence for) any general statements.

 Please avoid repetition and circular arguments.

 Please avoid sloppy, imprecise and incorrect us of words or unclear statements.

a. It is better to avoid beginning sentences/ paragraphs with “ I want to start off with”,

“From here.” “First, Second Third” as examples to list points. Use transitions and

introductory and connecting terms and concepts. You may use the word “I” to

express your point of view, but back it up with thoughtful analysis and evidence.

 The paper should be properly formatted and should be free of grammatical and spelling

Homeboy Industries:
An Incubator of Hope
and Businesses
David Y. Choi
Fred Kiesner

This case presents the story of Homeboy Industries, which was founded by Father Greg
Boyle, S.J. to offer employment opportunities to former gang members in East Los Angeles.
Homeboy Industries has successfully launched several businesses to hire and train
“homies” who otherwise may not have found jobs. Michael Baca, the new operations
director, is faced with the decision of whether to pursue expansion of the promising mer

–

chandising division. Complicating the decision is the need to balance both the social and
business objectives of Homeboy Industries while dealing with the organization’s extreme
shortage of managerial and financial resources. This depiction of an unusual entrepreneurial
environment also illustrates several organizational challenges and philosophical dilemmas
that are common among social ventures.

The cool, pleasant morning was rapidly turning into a typically steamy summer day
in Los Angeles. Michael Baca, a retired firefighter and since 2003 the operations director
for Homeboy Industries, drove along First Street toward the organization’s headquarters,
where a staff meeting would soon begin. He had pondered all morning what to do about
Homeboy Industry’s merchandising division, whether to make the investment of capital
and effort to expand the division’s business or to leave it the way it was. Several people
in the organization had become excited about the market potential of Homeboy Merchan-
dise over the years, and now in 2004 they were eager to take the next steps. They wanted
to propose an expansion plan for the division to Father Boyle, the founder and Executive
Director of Homeboy Industries, and they wanted Michael’s support. Others in the
organization thought that the merchandising division was a poor fit with Homeboy
Industries. Father Boyle and others worried that its merchandise might become gang
wear—the last thing that the organization wanted to have happen. Michael knew that all
the staff members wanted his opinion. As he pulled into Homeboy’s parking lot and
entered the building, he knew he had only a few minutes to make a decision one way or
the other.

Please send correspondence to: David Y. Choi, tel.: (310) 338-2344; e-mail: dchoi@lmu.edu.
The case was prepared solely to provide material for discussion and is not intended to illustrate either effective
or ineffective handling of managerial situation.

PTE &

1042-2587
© 2007 by
Baylor University

769September, 2007

mailto:dchoi@lmu.edu

Boyle Heights

To a middle-class visitor driving down First Street, the Boyle Heights neighborhood
of East Los Angeles felt like a different world, both familiar and strange. A local market
sold milk, and children were walking to school. A group of heavily tattooed young men in
baggy pants and Los Angeles Raiders football jerseys also walked along the street, their
eyes seeming to show both fear and anger. Beyond a police station, a building adorned
with graffiti came into view: Homeboy Industries. Across the street from the police
station, children milled around their school yard. Farther down the block, a pushcart
vendor sold fruit to two older women.

Boyle Heights, named in 1875 for Andrew Boyle of the Boyle-Workman family, was
notorious for having one of the worst gang problems in all of Los Angeles. Within its 16
square miles, 60 different gangs claimed 10,000 members—among an official population
of 90,000. Their presence ensured violence and plenty of action for the Los Angeles Police
Department (LAPD). The neighborhood’s intense gang activity had historical roots in the
rapid migration of illegal immigrants to Los Angeles, where the poorest of them concen-
trated in East Los Angeles. The center of Jewish and Japanese-American life in the early
twentieth century, Boyle Heights was now 94.95% Hispanic or Latino.1 Two large housing
projects, Pico Gardens and Aliso Village, made up much of the neighborhood; most kids
lived in one or the other.

Attempts to slow the growth of the gangs had proved futile. Community Resources
Against Street Hoodlums (CRASH), the LAPD’s special gang unit, constantly patrolled
Boyle Heights. Even so, gang violence continued to wreak havoc.2 Something else needed
to be done. Needless to say, Boyle Heights (like much of East Los Angeles) offered its
children few opportunities. Instead of jobs, kids found themselves looking for member-
ship in the local gangs. They saw their brothers and sisters, for some their only role
models, running with gangs. For some, gangs were all they knew and the only way to get
what they wanted in this neighborhood.

Homeboy Industries

Inside the Homeboy Industries building, there unfolded a study of contrasts and
juxtaposition. The fashionably decorated, air-conditioned lobby displayed a hub of PCs no
different from a customer service center at a larger corporation. The receptionist was a
polite young Latino, professional in dress and appearance. A closer look revealed multiple
tattoos on his fingers and face, all related to the gang life he formerly called his own.
Young men and one woman worked at the PCs, answering phones and working busily.
They wore baggy shorts and either black shirts bearing the Homeboy Industries logo or
Raiders jerseys. A tattooed “LA” showed through the stubble of one recently shaved head.
Another employee had horns tattooed on his forehead. The art displayed on the office
walls included pictorial collages of life in the rough housing projects of Boyle Heights.
They served as a reminder to Homeboy’s employees that they had good reasons to stay out
of the gang life.

1. U.S. Census 2000, U.S. Census Bureau, available at http://www.census.gov/.
2. See, for example, Earl Ofari Hutchinson (2002, Nov 24), “L.A. Has to Gang Up on Violence.” Los Angeles
Times. pg. M.5, which discusses how years of antigang campaigns have been unsuccessful over many years
in spite of the CRASH program.

770 ENTREPRENEURSHIP THEORY and PRACTICE

http://www.census.gov

Father Greg Boyle founded Jobs for a Future (JFF), a nonprofit employment referral
center, in 1988. He believed that to eliminate gang violence, it was necessary to root out its
cause—the lack of hope arising from a lack of opportunities. He was confident that gang
violence in Boyle Heights would disappear if its young people had the opportunity to “plan
their futures not their funerals.” JFF’s slogan expressed its objective: “Nothing stops a bullet
like a job.” Here, former gang members could receive counseling, job placement assistance,
and coaching in interview skills, all in an attempt to provide a new future.

Many of JFF’s clients had been ordered to receive individual or family counseling as
a condition of probation. JFF employed two professional therapists on-site to provide
these services to the probationers and to anyone in the community who needed the extra
support that counseling could not provide. Both JFF employees and volunteers acted as
“navigators” for JFF’s clients. Navigators helped juveniles released from detention facili-
ties to enroll in school, register for any required classes, check in with probation officers,
obtain driver’s licenses, and attend job interviews. One of the more interesting and
unusual services provided by JFF was free tattoo removal. “Ya ‘Stuvo3 Tattoo Removal”
offered gang members a way to erase a link to their past and start clean. The program was
available to anyone who wanted it done, although priority was given to facial tattoos.
Because of its popularity, there was a nine-month wait for this service.

JFF annually placed over 350 clients in jobs—an achievement that was only a small
fraction of the more than 1,000 gang members who passed through the office in a typical
month. Demand far exceeded supply! The organization desperately wanted to have a
greater impact. Many clients continued to struggle against obstacles to their employment,
such as felony records, visible gang tattoos, and lack of work experience.

It was for these most challenged individuals that Father Boyle created Homeboy
Industries in 1992, following the Los Angeles riots. Homeboy shared the building used by
JFF. Homeboy developed several business enterprises, each of which hired the “homies”
who attended JFF’s training programs. Homeboy Industries started with the purchase of
a bakery that became Homeboy Bakery. It grew to include Homeboy Silkscreen,
Homeboy Merchandise, and Homeboy Graffiti Removal and Maintenance. These busi-
nesses and the Homeboy headquarters employed over 70 homies at any one time. Employ-
ees learned to clock in on time, to build lasting work habits and skills, and to work side
by side with former members of enemy gangs.

A visitor to the Homeboy Industries office in 2004 would likely notice its playful mood.
The teenagers laughed and told stories. The receptionist spoke with evident pride about
everything Homeboy Industries had done to help him and the community. He pointed to the
Homeboy brochure, which quoted an employee: “Because Homeboy Industries decided to
believe in me, I decided to believe in myself. And the best way I can think of paying them
back, is by changing my life, and that’s exactly what I’ve decided to do.”

“Father G”
For over 20 years, Father Greg Boyle, who was known throughout the neighborhood

as “Father G,” just “G,” or even “G Dog,” had embraced the boys and girls others shunned.
(See Figure 1 for a picture of Father Boyle.) Visiting them in hospitals and prisons, he had
prodded hundreds of gang members to trade their lives of violent crime for honest work.
He had become a legendary figure in the barrio, where widespread stories told of Father
Boyle driving his car or riding his bike into the middle of a gunfight in an attempt to part

3. Translates into “That’s enough, I’m done with that.”

771September, 2007

feuding gangs. Father Boyle was known to be willing to give up his life to keep the kids
from killing each other. Even so, Father Boyle had been forced to bury over 120 young
people from the neighborhood, a somber reminder of the challenges that remained.

Father Boyle, who was a Los Angeles native and was ordained a priest in 1984,
became a pastor of the Dolores Mission church in Boyle Heights in 1986. From there he
saw firsthand one of the worst gang problems in the United States. Believing that someone
must help the young people escape from the horrible cycle that had engulfed them, Father
Boyle developed a vision: Get these kids jobs, get them off the street, give them market-
able skills, and remove them from the gangs that surround them. “Jobs not Jails” and
“Nothing stops a bullet like a job” became mottos that expressed his vision. As he put it,
“At Homeboy Industries what we try to do always is be a manufacturer of hope in a
community with a fatal lack of it.”

Father Boyle was regularly asked to speak at functions and tell stories about Homeboy
Industries. Those speeches both informed and inspired his audiences:

[The homies] think they’re the bad son. I keep telling them over and over, “You are the
son that any parents would be proud to claim as their own.” That’s the truth. That’s not
some fantasy. As soon as they know that they’re exactly what God had in mind when
God made them, then they become that. Then they like who they are. Once they can
do that—love themselves—they’re not inclined to shoot somebody or hurt somebody
or be out there gang-banging.4

4. Morrow, C. (1999, August). Jesuit Greg Boyle, Gang Priest, St. Anthony Messenger Magazine. Available
at http://www.americancatholic.org/Messenger/Aug1999/feature1.asp.

Figure 1

Picture of Father Greg Boyle

772 ENTREPRENEURSHIP THEORY and PRACTICE

http://www.americancatholic.org/Messenger/Aug1999/feature1.asp

Father Boyle may have seemed a legend to many in the neighborhood, but his
mortality was revealed in March 2003, when he was diagnosed with leukemia. He was
deluged with visits, calls, and letters from people ranging from the LAPD chief to homies
in prison. Homies he had not seen in a decade turned up, tears streaming down their faces,
to offer their organs and blood. Other admirers brought juices, vitamins, and offers of
Mexican healers and folk remedies. Actor Martin Sheen urged Father Boyle to take an
all-expense-paid trip to Lourdes, France, where healing miracles were said to occur.
“Death and life-threatening illnesses are not even on my top 10 list of things I dread,”
Father Boyle shrugged off the bad news. “How are we going to pay our bills on Friday?
That’s real-life dread.” Despite chemotherapy, Boyle looked fit and energetic. He claimed
that his cancer was in remission. No one at Homeboy Industries was sure about his true
health. When people asked him about his health, his typical response was “Sometimes I
run out of gas, but so do cars.”

The “Homies”
Each employee of Homeboy Industries had his own stories to tell, a story of violence

and an inspirational story of a life being transformed. These two are representative of
others as well.

Carlos Nieto’s résumé at age 24 included an armed robbery conviction, several stints
in state prison for parole violations, and a 12-year membership in the notorious Tooner-
ville street gang, where his moniker had been “Sneaky.” His job skills, which were
acquired in prison, included the abilities to make tattoo ink by melting down chess pieces
and to fashion a spear from a rolled newspaper and syrup. Tattoos of demonic horns
seemingly sprouted from both sides of his shaved head; murals of jailhouse ink ran the
lengths of his arms. But in 2 months at Homeboy Industries, Carlos had begun to acquire
skills that could far better serve him outside prison. He learned to show up daily at 9 a.m.,
clean, sober, and ready to work. Talking on the phone without using vernaculars was
another lesson, as was suppressing the urge to be belligerence to a coworker.

Carlos said he planned to use what he was learning at Homeboy Industries to launch
a new life that he hoped would include college and a career as a counselor to troubled
teens. A recent conversation with Father Boyle had convinced Carlos that he would stay
out of prison for good. “He looked at me the other day and said, ‘I want you to know that
I’m very proud of you,’ ” Nieto recalled. “He said, ‘Now I know that when my day comes
I can rest in peace knowing that my son is doing something with himself.’ ”

Felipe Antonio had also turned his life around, thanks to Homeboy Industries. A
young man with a gentle demeanor, he recalled his childhood: “I didn’t have parents. My
sister raised me from the time I was eight. Nobody was checking on me—I was free. I was
in a gang. We went to parties, got into fights. We did graffiti.” In 1997, as Felipe climbed
from his car one evening, he was shot in the spine. He was only 17. “I just passed away
a little bit,” he recounted, “and when I woke up I couldn’t feel my legs no more.” Now he
was in a wheelchair, paralyzed from the chest down. Nevertheless, Felipe was hopeful
about his future and planned to attend California State University-Los Angeles for a
degree in social services.

A Series of Commercial Enterprises

Since its founding in 1992, Homeboy Industries had launched a series of business
ventures. By 2004, Homeboy’s commercial ventures comprised four units.

773September, 2007

Homeboy Bakery—The First Venture
After the riots in 1992, Father Boyle raised enough money to buy an old bakery in

Boyle Heights. It was at “Homeboy Bakery” that Father Boyle saw his vision become a
reality. His homies turned the bakery into a fully operational, successful business. It put
troubled teens to work, giving them a hands-on job experience, and generated profits to
fund other Homeboy ventures—until a fire destroyed the bakery in 1999. Since then,
Father Boyle had been on a mission to start another bakery. In 2003, an opportunity
presented itself for Homeboy Industries to acquire a profitable bakery with a monthly
revenue of $700,000. Its impressive customer list included Trader Joe’s.5 The bakery’s 75
employees all could eventually be replaced by homies. Father Boyle thought that the
bakery could earn up to $800,000 annually, which would support all of Homeboy’s
operations without future fund-raising.

Father Boyle and the board of Homeboy Industries decided to go after the acquisition.
The business, including its land and building, was priced at $4.8 million. Father Boyle and
the board engaged in an aggressive capital campaign to purchase the bakery. They planned
to raise the purchase price plus enough for needed renovations and contingencies. With the
help of private foundations, the federal government, and private donors, Homeboy had
raised more than $3.6 million by early 2004.

Homeboy

Silkscreen

The idea for Homeboy Silkscreen came from Ruben Rodriguez, who believed that he

owed his changed life to Father Boyle. Struggling with drinking and holding down a job,
Ruben had looked to Father Boyle for direction. Just a few meetings with Father Boyle
changed Ruben’s life—forever. Father Boyle got him to stop drinking and helped him land
a steady job with the city.

Wanting to repay this kindness, Ruben saw an opportunity to utilize his wife’s
silkscreening skills. In Spring 1996, he presented Father Boyle with the idea of starting a
business to offer custom silkscreen and embroidery services for t-shirts, sweatshirts, hats,
bags, and several other products. Most important, it would hire some of the kids from the
neighborhood. Father Boyle loved the idea because it would provide even more jobs for
young people in Boyle Heights.

Ruben spent hours searching for great deals on used, high-quality silkscreen equip-
ment. When he showed Father Boyle his budget based on what he had found, Father Boyle
was concerned by the numbers. He told Ruben that he need not find the cheapest
equipment; in fact, he said, a new business should have all new, top-of-the-line machines.
Father Boyle did not want to cut costs at the outset for fear of dooming the venture from
the beginning. Although new equipment meant significantly higher investment, Father
Boyle thought that skimping on equipment could be extremely costly in the long run.
Ruben revised his figures to reflect the new equipment, and Father Boyle approved the
new budget.

Finding a location for Homeboy Silkscreen proved to be difficult. Landlords feared
that the ex-gang members would break into other tenants’ or customers’ cars. Another
challenge was that several of the possible sites lay inside the territory of one gang or

5. Trader Joe’s is a popular specialty retail grocery store with about 200 stores in Arizona, California,
Connecticut, Delaware, Illinois, Indiana, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey,
New Mexico, New York, Ohio, Oregon, Pennsylvania, Virginia, and Washington. It is widely know for its
unique grocery items and for having the highest revenue per square footage in the industry.

774 ENTREPRENEURSHIP THEORY and PRACTICE

another. Members or former members of rival gangs would risk their lives just to get to
work. Eventually, Ruben found the perfect place—outside the gang territories but still
close enough for the kids to get there.

Homeboy Silkscreen received a boost in its early months when Power 106 FM, a
favorite radio station of teenagers throughout Los Angeles, ordered 10,000 t-shirts for
$45,000 and began running free commercials for the business. Ruben remembered in 2004
that every time a commercial aired, 20 callers would ask Homeboy Silkscreen about its
services. Over the years, Power 106 had remained as one of Homeboy Silkscreen’s
biggest clients. Through the radio station’s connections, several record labels also became
silkscreening customers.

Ruben and his employees were proud of the quality of their work. Homeboy Silk-
screen employed 11–15 workers at any time and had employed a total of 350 homies over
the life of the business. Homeboy Silkscreen usually kept employees for 90 days to ensure
proper job training and adjustment to the working world until they were deemed ready for
other employment by Michael or Father Boyle and referred back to JFF.

Homeboy Graffiti Removal Services and Homeboy Maintenance Services

Homeboy Graffiti Removal Services removed graffiti in an effort to beautify Boyle
Heights and reduce the violence that gang graffiti provoked. The service, available to
anyone in the neighborhood, proved very popular. Homeboy received several requests a
day for its services.

Newer to Homeboy Industries was its maintenance program, a separate but related
business. Homeboy Maintenance acted as a general service to “keep the neighborhood
clean.” It collected and hauled refrigerators, furniture, and other large items to its recla-
mation center. Homeboy Maintenance also sponsored neighborhood clean-ups and trash
collection for the residents of Boyle Heights.

Both Graffiti Removal Services and Maintenance Services proved very powerful
because they not only put the teens to work, but also helped make the neighborhood a
better place to live. Both of the services were paid for by the city of Los Angeles.

Homeboy

Merchandise

Homeboy Merchandise started soon after Homeboy Silkscreen began production in

1996. No one was sure who should be credited for starting Homeboy Merchandise or who
created the initial design for the merchandise. Homeboy Industries had begun printing
t-shirts with the Homeboy logo that many employees wore proudly (see Figure 2). Even
Father Boyle often sported a denim shirt with the logo embroidered on the right pocket.
The uniforms proved to be popular; soon, friends of Homeboy were asking where they
could get a Homeboy t-shirt. In response, Homeboy Industries began printing a wide
range of Homeboy-themed products.

Homeboy’s new catalog contained all of its current merchandise. The catalog was
professionally done, with sharp pictures of merchandise surrounded by social messages in
the foreground. Its approximately 40 items included t-shirts with the Homeboy or Home-
girl logo, children’s and baby clothes, bags, mouse pads, wallets, hats, and coffee mugs.
Prices ranged from $15 for basic t-shirts to $25 for the Homeboy attaché bag. All of the
items came in a range of colors, some with different types of artwork on them. The t-shirts
displayed various catchy phrases associated with Homeboy Industries. Customers could
mail or fax orders and pay by credit card, check, or money order.

775September, 2007

Homeboy Merchandise was in charge of the design, marketing, and distribution, while
it outsourced the production of its clothing to Homeboy Silkscreen. In reality, most ideas
for new products appeared to come from the silkscreen operation. Some Homeboy
employees felt that the Homeboy logo and the design of the merchandise offered by
Homeboy Merchandise needed a “makeover.” Homeboy’s online catalog was a passive
website that did not make transactions.

Homeboy Merchandise struggled to find retail outlets to for its products. Its biggest
sales occurred at religious conferences where Father Boyle spoke. The Religious Educa-
tion Congress was Homeboy Industries’ biggest sales event each year. At one such event,
Homeboy would sell $6,000–7,000 worth of its merchandise. In fact, Father Boyle was the
company’s No.1 sales person.

Figure 2

Sample Homeboy Merchandise

776 ENTREPRENEURSHIP THEORY and PRACTICE

Michael Baca

Michael Baca, a good friend of Father Boyle, was similarly dedicated to the cause of
helping homies. Having grown up in the projects himself, he was very familiar with the
gangs and the devastation they caused to families. In fact, Michael’s three brothers had
been gang members, and one was still serving a 26-year prison sentence. Even as a child,
Michael was never interested in joining the gangs. Instead, he wanted to make a life for
himself and at the age of 20 became a firefighter and a certified emergency medical
technician. Unfortunately, 6 years later in 2000 his career ended abruptly when he fell
from a roof and injured his back.

Rather than feeling sorry for himself while hospitalized, Michael began giving back
to his community. He realized that the best opportunity to intervene in the life of a gang
member was when he was being received at the hospital for a gunshot wound, had just
been connected to an IV, and was crying “Don’t let me die!” So Michael started the first
hospital-based gang intervention program. It offered extensive counseling, GED planning,
tattoo removal, and job mentoring, many of the services that Father Boyle was offering.
Thus, when the operations director of Homeboy Industries resigned late in 2002, Father
Boyle asked Michael to accept the position. Although Michael was not an experienced
corporate manager, Father Boyle was confident that he had many talents critical to
Homeboy Industries.

Michael projected a vastly different personality than Father Boyle. He was less
philosophical and more serious, intense and hands-on. Although Michael shared Father
Boyle’s vision, he was more focused on day-to-day operation and achieving measurable
results. Michael mentioned to the case writer that most of the pressures and stress he felt
on the job were self-imposed. He felt a sense of urgency that the organization should be
doing even better and accomplishing more. The more successful Homeboy Industries was,
the more homies it could help.

The Homeboy Organization and Processes

While many observers were impressed with Homeboy Industries’ ability to create
new businesses, Father Boyle did not view Homeboy Industries as an incubator—at least
not in the same sense that most business people would. Homeboy Industries remained a
division of a 501 (c) (3), nonprofit organization, with community-based board of directors
overseeing the operation. Its stated mission was “to assist at-risk and former gang involved
youth to become contributing members of our community” and mentioned nothing about
businesses. Furthermore, Father Boyle did not consider himself to be an entrepreneur or
businessman.

Homeboy Industries’ standard for success was vastly different from those of most
business incubators. Actually, Father Boyle hesitated to speak in terms of success or
failure. “I feel called to be faithful, not successful,” he expressed in a Catholic family
magazine.4 “I feel called to be faithful to an approach and to a certain wisdom about who
these kids are. I believe that if they are given a chance, then they’ll thrive and they’ll begin
to imagine a future for themselves.”

Michael thought that one quantitative measure of success could be the number
of Homeboy Industries’ past and current clientele. But he agreed with Father Boyle that
there were other important standards of success. “We also measure success in terms
of how much an individual changes,” Michael explained. “Also, when two enemy gang
members all of a sudden get along, that is success.” However, Homeboy Industries as an

777September, 2007

organization was not systematically tracking the number of “successes” or “failures” of
any kind. Michael agreed that there were still a wide range of financial and operational
objectives that could be defined and measured. “We cannot depend on divine intervention
alone,” Michael explained. “We must do a much better job and be more effective opera-
tionally. To be more effective, we need to define our goals and measure our progress.”

Certainly, everyone at Homeboy Industries regarded it as a success when an ex-gang
member who learned good work habits and skills “graduated” from Homeboy and landed
a respectable job. Some of the homies were ready for the workforce in 90 days, while
others would take 6 months or even years to change their ways. About half dropped out of
Homeboy’s programs rather than graduate. While working for Homeboy Industries, most
homies were paid close to $9 an hour.

Father Boyle’s approach with respect to his ventures was quite different from that of
Brother James Holub of Milwaukee, Wisconsin, who borrowed the concept and started
Homeboy Enterprises, his own version of Homeboy Industries. Brother Holub’s
Homeboy Enterprises included Homeboy Printing and Homeboyz Graphics. Unlike
Father Boyle, Brother Holub saw himself as a businessman and focused on making his
ventures self-sufficient. Although Homeboy Enterprises’ main purpose remained getting
gang members off the streets, its businesses were believed to be profitable. On the
contrary, most of Father Boyle’s ventures were struggling (see Figure 3).

Homeboy Industries operated with an annual capital budget that was reviewed and
approved by its board of directors each year. The business operations were far from being
profitable and had to be supplemented through three major fundraising activities: a yearly
dinner, a direct mail campaign, and Father Boyle’s speaking engagements.

Homeboy Industries employed several professional staff members in the office who
headed up the programs or divisions within Homeboy Industries and JFF (see Figure 4).
Some business units did not have full-time general managers. Michael often found himself
rushing between businesses and projects, in effect continuing his career as a firefighter but
with figurative, business “fires” to put out. Turnover among the staff members and homies,
while not documented, was thought to be low compared to most businesses or nonprofit
organizations.

Father Boyle had not implemented formal structures or consistent processes for
making important decisions for Homeboy Industries. He queried and consulted with
Michael or the board of directors on some issues and, at other times, he made decisions
all by himself. Despite Father Boyle’s imperfections as a manager, the board was usually
sympathetic with him. Father Boyle was, after all, a beloved figure, and the directors did
not want to challenge what were certainly admirable methods and achievements. Never-
theless, there were talks among board members about setting up finance and human
resources committees that would create more formal structure and processes at Homeboy
Industries.

The Merchandising Opportunity

Many people at Homeboy Industries, including Michael, had often thought that
Homeboy Merchandise could be a much bigger business and raise the brand recognition
of the entire organization. Merchandising offered a chance to tell the “story” of Homeboy
Industries, which could have a broad commercial appeal.

In the past, Homeboy Industries had attempted to sell its merchandise to various
retailers in the Los Angeles area. This was a challenge from the beginning as many of the
homies who worked as sales reps reacted badly to rejections, taking them personally and

778 ENTREPRENEURSHIP THEORY and PRACTICE

reacting with anger or dejection. Michael Boca thought that selling was a difficult task for
most homies considering that they had faced rejection all their lives.

In the mid-1990s, Homeboy Industries placed its merchandise in a handful of stores
in shopping malls but was unable to maintain stable relationships with the merchants,
causing most of the arrangements to disintegrate. For a time, Homeboy Merchandise sold
its items via a kiosk in the Santa Monica Shopping Center, a hub for shoppers and tourists.
Unfortunately, it could not sell enough volume to pay for the lease and operation of the
kiosk and had to cancel the project, forfeiting all the investments that had been made.
Furthermore, there were rumors that other merchants complained that Homeboy’s pres-
ence detracted from the mall’s atmosphere.

Homeboy Merchandise had never attempted direct marketing. Unfortunately,
Homeboy Industries had not kept a good database of its past supporters or customers.
Nonetheless, a direct mail campaign for donations at the end of 2003 yielded a 12%
response and raised $180,000. To Michael the campaign’s success indicated the level of
support Homeboy Industries received from the community. He thought that direct mar-
keting by Homeboy Merchandise could garner a similar response.

Figure 3(A)

Homeboy Industries Statement of Activities 2003

PUBLIC SUPPORT Total

906,978$snoitubirtnoC
080,536stnarG noitadnuoF

Government Grants and Subcontracts 1,499,136

TOTAL PUBLIC SUPPORT 3,013,825

REVENUE

401,396selaS neercskliS
014,21emocnI esidnahcreM
963,6emocnI rehtO

TOTAL REVENUE 711,883

TOTAL PUBLIC SUPPORT
AND REVENUE 3,725,708

EXPENSES

123,102,3secivreS margorP
070,534lareneG dna tnemeganaM
319,432gnisiardnuF

TOTAL EXPENSES 3,871,304

CHANGE IN NET ASSETS (145,596)

NET ASSETS, BEGINNING OF YEAR 1,825,576

NET ASSETS, END OF YEAR $ 1,679,980

779September, 2007

Figure 3(B)

Homeboy Industries Schedule of Revenues and Expenditures 2003

REVENUE

Management and General $ 280,989

571,213gnisiardnuF

855,546retneC ffO porD

835,802yrekaB

137,264itiifarG

750,428Jobs for a Future

207,41esidnahcreM

074,596neercskliS

888,812margorP esaeleR

006,26NIW tcejorP

TOTAL REVENUES 3,725,708

EXPENSES

275,432,1segaW dna yralaS

786,011sexaT lloryaP

840,86ecnarusnI htlaeH

577,88noitasnepmoC s’rekroW

SUBTOTAL 1,502,082

136,02gnitnuoccA

031gnisitrevdA

067,21esnepxE tbeD daB

563,2segrahC knaB

896,001noitaicerpeD

765,3esnepxE tnempiuqE

768,531 gnisiardnuF

241,27ecnarusnI

935,52sriapeR & ecnanetniaM

831,71

suoenallecsiM

292,811esnepxE tnempoleveD weN

108,61gnihtolC egamI weN

628,02seilppuS eciffO

344,89seilppuS itiffarG dna tniaP

567,51sexaT/esneciL/stimreP

619,7yrevileD dna egatsoP

694,32noitcudorpeR dna gnitnirP

085,46seeF lanoisseforP

600,231seitivitcA margorP

878,984srehcuoV – seitivitcA margorP

865,64

sesaeL/slatneR

888ytiruceS

879,144

sdnepitS

436,1tenretnI/sranimeS/noitpircsbuS

801,87esnepxE enohpeleT

Travel, Meals, and Entertainment 38,853

627,31seitilitU

006,15sesnepxE elciheV

701,603dloS sdooG fo tsoC

698,1seilppuS enihcaM yrediorbmE

421,9seilppuS gnineercskliS

TOTAL EXPENSES $ 3,871,304

NET INCREASE $ (145,596)

780 ENTREPRENEURSHIP THEORY and PRACTICE

Homeboy’s financial statement showed that the merchandising business had sales of
about $14,000 in 2003 (Figure 3). However, the figures did not account for the free
merchandise that Father Boyle gave liberally to donors, visitors, and friends. There was a
storage room inside the office for merchandise, but until recently, no one had kept track of
the inventory.

Figure 3(C)

Homeboy Merchandise Schedule of Revenues and Expenditures 2003

TOTAL REVENUES 14,702

EXPENSES

926,31segaWdnayralaS

272,1sexaTlloryaP

-ecnarusnIhtlaeH

041,1noitasnepmoCs’rekroW

SUBTOTAL 16,041

-gnitnuoccA

-gnisitrevdA

-esnepxEtbeDdaB

-segrahCknaB

-noitaicerpeD

-esnepxEtnempiuqE

-gnisiardnuF

-ecnarusnI

-sriapeR&ecnanetniaM

–
–
suoenallecsiM

New Development Expense

–
–

gnihtolCegamIweN

814seilppuSeciffO

Paint and Graffiti Supplies

649sexaT/esneciL/stimreP

856yrevileDdnaegatsoP

Printing and Reproduction

–
–

seeFlanoisseforP

574seitivitcAmargorP

Program Activities – Vouchers

–
–
sesaeL/slatneR

-ytiruceS

–
–
sdnepitS

Subscription/Seminars/Internet

–
–

esnepxEenohpeleT

Travel, Meals, and Entertainment

-seitilitU

-sesnepxEelciheV

288,6dloSsdooGfotsoC

Embroidery Machine Supplies

–
–

seilppuSgnineercskliS

TOTAL EXPENSES 25,420

$

$

NET INCREASE (10,718)$

781September, 2007

Another reason for Michael’s optimism about the merchandising business was that
many celebrities had expressed over the years their interest in helping Homeboy Indus-
tries. The producer of ABC’s comedy “8 Simple Rules for Dating My Teenage Daughter,”
whom Father Boyle had taught in high school, placed a large merchandise order and was
interested in having his cast’s teenage girls wear Homegirl t-shirts. Actor Martin Sheen
was a longtime supporter and personal friend of Father Boyle. Angelica Huston was an
associate board member of Homeboy Industries, while Kirk Douglas had donated quite a
bit of money.

Nevertheless, Michael was perplexed about Homeboy’s target market. Speaking
broadly, the teen market was the largest target. However, he was aware that not all teens
would want to own Homeboy clothing. Homeboy Industry was seen as an “eastside”
organization, and teens elsewhere might not want merchandise tied to East Los Angeles.
On the other hand, he thought, the gang culture had become so popular that a “white boy”
from Pacific Palisades might want to buy Homeboy gear.

Michael could foresee targeting the “hip-hop” culture that had been so lucrative in the
past few years. Two related growth areas in the apparel market were the “urban youth” and
the “antiestablishment” segments. One leading urban youth brand was Phat Farm, which
was owned by record mogul Russell Simmons. Fubu was another firm that was popular
with the urban youth. Fubu (which stood for For Us, By Us) began as a clothing firm
targeting young African-Americans but successfully crossed over to other segments,
reaching annual revenues of $1 billion. The antiestablishment segment also appeared to
have exploded in high schools across the United States. The trend had been around for

Figure 4

Homeboy Industries Organization Chart

Father Gregory Boyle, SJ

Executive

Director

Michael Baca

Operations
Director

Felix Garcia

Finance Director

Allison Gustorf
Development

Director

JOBS FOR

A FUTURE

HOMEBOY
INDUSTRIES

Sarah Weiss

Case Mgmt,
Staff Dev

Mario Prietto

Release
Program

Counseling

Norma Gillette
Sr. Job

Developer

Maintenance
Ruben

Rodriguez

Silkscreen

Bakery
Jaime Saldana

Graffiti

Removal

Fabian Montez

Sr. Job
Developer

Gabby Guillen Johnny Green

Elizabeth Parra

Tattoo
Removal

Merchandise

782 ENTREPRENEURSHIP THEORY and PRACTICE

years and now retailers like Hot Topic were able to cash in on it. Hot Topic specialized in
punk fashion by selling t-shirts that featured bands, skulls and crossbones, and anarchist
symbols as well as chains and body piercings.

Homeboy Industries projected an image vastly different from the usual “hip-hop” or
“antiestablishment” brands. Its brand stood for positive messages such as “a second
chance” or “a place of hope.” Still, Michael suspected, some parents (mostly in middle-
class Los Angeles suburbs) could worry that their kids might be labeled as gang members
if they wore Homeboy clothing.

Michael also wondered about licensing, a lucrative business in recent years even for
organizations that were not part of the fashion industry. Examples included National
Geographic’s codeveloped outerwear for multiple climates, Mountain Dew’s branded
apparel, and the SNL brand that started Saturday Night Live’s fashion licensing. For these
organizations, success in licensed fashion had become a promotional catalyst for their
core businesses.

Michael, who devoted about 10–20% of his time to Homeboy Merchandise, was the
closest thing to a general manager for the division. He oversaw most of the business and
did most of the ordering from Homeboy Silkscreen. One of the homies, Juan Carlos, was
in charge of filling mail orders, which eased Michael’s burden.

The New Venturing Decision

Father Boyle, Michael, and the staff were constantly looking for new opportunities.
The more jobs Homeboy Industries’ businesses offered, the better the chance that
someone who walked into the office could find something he or she would pursue.
However, starting a new business inside Homeboy Industries was complicated and
depended on a wide range of financial and nonfinancial factors.

Pointing to the picture of a proposed “Homegirl Cleaners” on his office wall, Father
Boyle recalled how someone came in with the idea for that business. However, Father
Boyle turned down many business ideas. Some were rejected not because they were bad
ideas, but because Father Boyle questioned the intentions of the people proposing them.
Inevitably, there were people who seemed to be trying to take advantage of Father Boyle’s
generous nature. It was up to him, the staff, and the board of directors to sort out the
genuine ideas. Some business ventures did not fit well within Homeboy Industries, while
other ideas fit nicely but lacked the right personnel to run them. Homeboy Industries
already lacked a champion or manager for several of its existing businesses.

A few years ago, two brothers from the neighborhood had wanted to start a plumbing
business. Father Boyle welcomed the idea and bought a truck and equipment for them.
However, Homeboy’s board of directors consisting of attorneys, businessmen, and com-
munity leaders were concerned about the venture. They worried about its viability and the
costs involved, especially since the management of Homeboy Industries was already
spread thin. The board ordered it closed from the concern that it was a poor fit after only
a couple of months in operation.

Another new business idea was the Homeboy Café. Back in 2001, Homeboy Indus-
tries had bought an empty lot in downtown Los Angeles near Little Tokyo with the idea
of building a new bakery. Now in 2004, with the current pending acquisition of an existing
bakery, the land could be used for a café instead. However, Father Boyle and his staff were
so focused on planning for the new bakery that they had not given it much thought.

Few of Homeboy Industries’ staff worried about the start-up funding for the café or
other business ventures. They relied on Father Boyle, a prolific fund-raiser. While money

783September, 2007

was scarce, it appeared that whatever Homeboy Industries needed, Father Boyle would
generate somehow. As long as he had an idea and a plan, he found a way to raise the
necessary funds.

Father Boyle was at times successful in recruiting highly skilled volunteers to help
with Homeboy’s and JFF’s services and businesses. Dr. Luis Moreno of Ya’stuvo Tattoo
Removal Clinic had graduated from Harvard Medical School and was finishing his
residency at UCLA. He was making hospital rounds when Father Boyle walked in and
asked Luis to work for him. After 8 or 9 months, Homeboy Industries officially added Luis
to its staff. He came in twice a week while still working in the emergency rooms at three
hospitals.

When it came to Homeboy Merchandise, Father Boyle and Michael were not sure
whether they should try to turn it into a serious business or maintain it as sort of a “gift
shop” for visitors and donors of Homeboy Industries. Some of the volunteers had told
Father Boyle and Michael that the Homeboy brand was a gold mine. With the right mix
of design, sales, and support, Michael agreed, the business could be hugely successful.
Furthermore, Homeboy Merchandise’s success could enhance the Silkscreen business.
Michael imagined many positive messages and slogans that the merchandise could
display, such as “Be part of the story” or “Work for a better tomorrow.” Not all products
had to mention Homeboy Industries, he noted. The opportunity might even be larger if the
business could make items with positive social messages without any reference to
Homeboy.

Ever since Michael joined Homeboy, volunteers came up with ideas for expanding the
merchandising business. One idea was to sell to the Chicano stores and colleges in East
Los Angeles, so that the residents could have access to the positive messages. Another
interesting idea came from Jesuit-in-training Phil Cooke, a summer volunteer. He thought
that a great target market would be the 28 Jesuit colleges and universities in the United
States. These schools would be willing to do business with Homeboy Industries since
many of them would be aware of Father Boyle and Homeboy Industries. Jesuit universities
in the United States included Georgetown, Santa Clara University, Loyola University of
Chicago, and Loyola Marymount University. (See Figure 5 for a list of Jesuit institutions
in the United States.) Phil thought that this initial customer base, although small, could be
a great starting point while Homeboy Merchandise established its credibility and fine-
tuned its business operations. The next target could be additional hundreds of Catholic and
Christian colleges followed by other universities nationwide. Phil could imagine a section
of each college bookstore carrying Homeboy goods with a life-size image of Father Boyle
promoting the merchandise.

Phil also believed that Homeboy Industries could more aggressively pursue direct
mailing. The response rate that Homeboy experienced over Christmas was too impressive
to ignore. Phil believed that with some investment in mailing addresses and online
ordering capability, the business could grow substantially.

However, Michael was not sure whether merchandising was the right business for
Homeboy Industries. The venture appeared to be a misfit with the skills and temperaments
of the youths Homeboy served. The venture also required marketing and sales expertise
that Homeboy did not possess. Michael pondered: “It takes weeks to train our guys to
show up to work on time. They are so far away from developing marketing skills. Selling
is probably the worst type of job for our homies. What if our kids took those rejections
personally?” However, Michael also knew that some of the necessary resources and
expertise could be hired, and in some cases borrowed. For example, as a volunteer had
suggested, Homeboy Merchandise could engage one of the well-known fashion colleges
in Los Angeles to develop a new design concept.

784 ENTREPRENEURSHIP THEORY and PRACTICE

Figure 5

Jesuit Colleges and Universities in the United States

Institution Location Enrollment

Boston College Chestnut Hill, MA 14,528

Canisius College Buffalo, NY 5,095

College of the Holy Cross Worcester, MA 2,773

Creighton University Omaha, NE 6,226

Fairfield University Fairfield, CT 5,060

Fordham University Bronx, NY 15,814

Georgetown University Washington, DC 13,164

Gonzaga University Spokane, WA 6,100

John Carroll University Cleveland, OH 4,350

Le Moyne College Syracuse, NY 2.900

Loyola College in Maryland Baltimore, MD 6,111

Loyola Marymount University Los Angeles, CA 7,500

Loyola University Chicago Chicago, IL 12,605

Loyola University New Orleans New Orleans, LA 5,279

Marquette University Milwaukee, WI 10,892

Regis University Denver, CO 9,129

Rockhurst University Kansas City, MO 2,727

Saint Joseph’s University Philadelphia, PA 6,961

Saint Louis University St. Louis, MO 13,847

Saint Peter’s College Jersey City, NJ 3,282

Santa Clara University Santa Clara, CA 7,356

Seattle University Seattle, WA 5,852

Spring Hill College Mobile, AL 1,484

University of Detroit Mercy Detroit MI 6,023

University of San Francisco San Francisco, CA 7,917

University of Scranton Scranton, PA 4,615

Wheeling Jesuit University Wheeling, WV 1,515

Xavier University Cincinnati, OH 6,523

785September, 2007

The biggest concerns were expressed by Father Boyle and Ruben of Silkscreeen, who
were against promoting Homeboy gear. Ruben was concerned that if everything worked
out well, Homeboy clothing would be hip enough to become gang wear. “The last thing
I want to do,” said Ruben, “is to see some kid committing crime in the clothing we make.”
Both Father Boyle and Ruben wanted to make sure that the Homeboy name was used only
in a positive light. Michael understood Ruben’s concern. Not knowing for sure how big or
successful Homeboy Merchandise could become, it was difficult to muster a strong
argument for investment in the business. At times, Michael thought that it would just be
easier to keep the merchandising business at the current level.

Homeboy Café was another option that Michael could pursue immediately. The
location appeared to be viable. Although part of Boyle Heights, it was near Little Tokyo,
a much nicer part of town. Daytime foot traffic included professionals who worked nearby
in downtown Los Angeles. A Starbucks and similar shops were close by, and many
shopping malls, restaurants, and retail stores were within walking distance. The café could
train homies quickly and provide job opportunities for dozens of them. However, Michael
realized that the decision was much more complicated:

Everyone seems to love the Homeboy Café idea, but they don’t know the challenges
associated with running a coffee shop or restaurant day in and day out. Poor service
could destroy the business. The local professional clientele wouldn’t have any
patience with any kind of misbehavior, especially with all those other coffee shops
like Starbucks within a couple of blocks. And what if there is a drive-by-shooting?
The business would go under in a minute. Plus, does serving coffee really train our
kids for better jobs in the future? At least in Homeboy Merchandise, we could provide
training for skills that could be really useful for their future careers.

Michael was still pondering the options as he pushed open the door to the meeting
room. Several of the volunteers and employees of Homeboy Industries were already
inside, discussing the future strategies for Homeboy Merchandise. All heads turned to
Michael as he shut the door behind him. They were eager to hear what Michael had to say.

David Y. Choi is Assistant Professor of Management and Entrepreneurship and Associate Director of the
Hilton Center for Entrepreneurship at Loyola Marymount University.

Fred Kiesner is the Conrad N. Hilton Chair of Entrepreneurship at Loyola Marymount University.

786 ENTREPRENEURSHIP THEORY and PRACTICE