Bridging the Opportunity Divide

Chalk, Paper, Scissors: A Startup Aims to Help Teachers and Save Detroit

March 7, 2014
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Chalk, Paper, Scissors: A Startup Aims to Help Teachers and Save Detroit
Detroit schools receive a percentage of Chalkfly's profits. Chalkfly
In poor neighborhoods, parents can’t afford back-to-school needs for their kids. Meet the dreamers who want to fix that, and jump-start Motor City’s ailing economy.

Brothers Andrew and Ryan Landau, along with Aaron Wolff, aren’t household names. They don’t have the swagger and sass of a lot of Internet entrepreneurs. And when they decided to launch a startup, they deliberately picked a rather boring business: providing paper, pencils, rulers and other office and back-to-school needs. “We saw an opportunity to provide a great experience purchasing office and school supplies while also making a difference,” Andrew Landau says. Now there’s a manifesto for you.

But make no mistake. Andrew, 28, Ryan, 25, and Aaron, 26, are pioneers, working a rough and unforgiving terrain. What they are attempting is daring, hopeful and quite possibly a triumph of faith over reason. Through their year-and-a half-old company, Chalkfly, the Landau brothers and Wolff have already provided free school supplies to 1,000 teachers, doling them out to kids whose parents can’t afford the stuff. And they’re doing it in downtown Detroit, whose $18.5 billion debt, dismal police response time (fully 58 minutes; national average: 11) and darkened byways (40 percent of the streetlights don’t work) have made the city the enduring symbol of American urban blight.

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“People see empty buildings here. I see it as a place full of opportunity,” says Andrew Landau. It’s a statement that sounds a little like something John Winthrop, an early governor of Puritan New England, talking to the original American colonists, might say.

The Landaus and Wolff are part of a hardy group of grass-roots innovators who have taken up residence in a refurbished old movie theater, banding together to try to jump-start their troubled city. The scene at their headquarters in the Madison Building is encouraging — a hip, urban workspace with exposed brick walls, beanbag chairs and a pingpong table.  There’s an atmosphere of collaboration, not competition, among the 20-somethings swarming there.  “If I need help with an HTML issue, I can send out an e-mail and within 15 minutes, I have people responding,” Wolff says. Detroit entrepreneurs possess a “grittiness and determination to do whatever it takes to make things successful,” says Andrew Landau. As an entrepreneur in the city, he relishes the chance to be part of “something larger,” and witnessed the opening of the first Whole Foods in the city. He’s also enjoyed seeing yoga take shape on a wide scale, being offered in such places as Campus Martius Park and Ford Field, as well as on the roof of the Madison Building. “You can just see with everyone down here, everyone’s rooting for the city as a whole to do better. Everything is so new, exciting and fresh,” he says. Chalkfly is a part of the hubbub, sponsoring monthly cultural events, like a sushi class and coffee tastings.

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A graduate of the University of Michigan, Andrew Landau was working for Google in Chicago when he began brainstorming with his brother Ryan, an IBM employee in Washington, D.C. They decided they would update the drab office-supplies business — offering round-the-clock customer service and free overnight shipping on every order. They set out to become “the Zappos of office supplies.” But there was a twist. “What’s different about Chalkfly is our focus on doing social good, not just creating wealth,” Andrew says.

Wolff, who heard about their idea from Ryan while standing on a beach on North Carolina’s Outer Banks, helped flesh out that part of their mission. He was on spring break for Teach for America in Charlotte. He had personally spent thousands of dollars of his own money to cover the costs of pencils and paper for his classroom.

“Unfortunately, in most low-income districts, parents cannot afford the supplies,” Wolff says. “The burden then falls on the teachers. If they want their students to take notes, but the parents did not buy them pencils, someone has to buy them.”

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His experience is far too common: According to the National School Supply and Equipment Association, a trade group, public school teachers paid more than $1.3 billion out of pocket for supplies and instructional materials in the 2009-2010 school year. A survey, released by the school supply association in June 2013, found that the figure had climbed to $1.6 billion for the 2012-13 academic year. (The National Retail Foundation estimates that in 2014 families with children K-12 will spend an average of $634.78 — and a total of $26.7 billion — on back-to-school supplies.)

So Chalkfly’s founders decided they would donate 5 percent of every purchase to teachers, helping them get the supplies they needed for their classroom for free. The overwhelming majority of those donations have gone to support educators in Detroit.  “To me, it’s so obvious that focusing on education will dictate the future of a city,” Wolff says. “Even if it just means a couple extra students are able to take notes in math class, at least we’re impacting them positively.”

The more they make, the more they give. Chalkfly launched in June- July of 2012 with $750,000 in startup funding from venture partner companies and a business accelerator. In its first year, it is on pace to earn more than $2 million in revenue. Internet Retailer Second 500 ranked Chalkfly among the top 1,000 e-retailers in the country — the youngest company on the list.

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At first, their friends thought they were a little crazy to locate in Detroit. “The murder rate definitely came up,” Wolff says. But all three were raised in the city’s suburbs, and “we just really felt a draw to come back home and help in our community.” And being in a place that just declared bankruptcy can have its advantages. It’s easier to stand out from the crowd, for starters. “Whatever it is, you can be first to market. There’s no other place like that,” Wolff adds. There’s also a far lower barrier to entry. Rent for a spacious office is 20 percent to 30 percent less than it is in many other cities. Living costs are lower. Wolff pays a mere $450 a month to share an apartment in Southwest Detroit. When his current lease is up in the suburbs, Landau plans to head to the city as well.

It’s also possible that in a city infamous for “feral houses” — a place with so many abandoned neighborhoods that city officials talk not of growth, but of strategic shrinkage — there are simply fewer distractions from work. These guys certainly don’t get out much. The defiant souls who haven’t joined the urban flight might take solace at a Tigers game, or hang out in bars, drinking to better days ahead. But Wolff and Andrew Landau go late at the Madison Building. It is not uncommon for their workday to stretch from 7 a.m. to 11 p.m.

But then again, maybe that’s just their personalities. Andrew is the sort of person who sets weekly and monthly professional and personal goals for himself. For 2014, one of his personal goals is to volunteer weekly with an educational organization in Detroit, while a professional goal is to become the fastest growing e-commerce startup in the country. His motto is “lift hard,” meaning that as long as he’s in good health, he needs to “do something all the way, whether it’s work, school or volunteering.” He’s also earning his MBA through a part-time program at the University of Michigan and is on the board of several nonprofits. He says Chalkfly is “not just a job but part of who I am.” Wolff will work late, then take online classes in coding. Training for the Ironman Miami is his only diversion. “It doesn’t feel like work when it’s what you love doing,” he says.

The long hours are paying off, and the startup community is taking notice. Amy Gill of Bizdom, a business accelerator that provided support to Chalkfly, likes the fact that the company has no inventory; it can leverage existing office-supply distributors, eliminating overhead and allowing the business to scale faster. And the company’s social good mission is proving infectious. Chalkfly “has been a catalyst for getting involved in their community schools. It has led to book drives, tutoring programs and much more,” she says. “That’s very desirable for people these days — to believe in the mission of a company, especially one that gives back.”

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Alexa Kraft, 22, believes. She teaches Spanish to 240 students, grades K through 6, at Loving Elementary School on the North End of Detroit. Thanks to Chalkfly, she heads into class with an ample supply of white boards, clipboards and markers. “As a first-year teacher in a low-income community and an under-resourced school, the supplies I received are absolutely crucial,” she says. After graduating from college with significant student loan debt, she can’t afford to stock her classroom herself.  She says the children in Detroit, which she calls a broken but resilient city, are “smart, strong and fully capable of being tomorrow’s leaders and heroes.”

Kraft is optimistic, despite the hardships she witnesses. “This city is rising from the ashes. I see it every day in the smiles and perseverance of my kids. There is no city in need of more support right now.” She applauds Chalkfly for helping fill in those material gaps in the education system so that children can be raised to become the future of the city. “I am so thankful to them, and our kids are thankful. I do believe we’ll feel the impact of this service for generations.”

That’s music to Wolff’s ears. “We have financial goals. But the emphasis is on building an awesome company where people are passionate about working and that makes a difference,” he says.  He and Landau hope their entrepreneurial spirit will spread to other parts of the city. Wolff points to a recent decision by the advertising firm Lowe Campbell Ewald to bring 600 employees downtown, along with the opening of the retail store Moosejaw and the commitment to revitalizing downtown by the entrepreneur Dan Gilbert’s Bedrock Real Estate Services. “People are coming,” Wolff says. “Companies are starting every day. I only see this growing.”

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