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Talks | In less than 6 minutes

Jeff Smith: Lessons in business … from prison

Filmed Jun 2012 • Posted Dec 2012 • TED@New York

TED@New York

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B.J. was one of many fellow inmates who had big plans for the future. He had a vision. When he got out, he was going to leave the dope game for good and fly straight, and he was actually working on merging his two passions into one vision. He'd spent 10,000 dollars to buy a website that exclusively featured women having sex on top of or inside of luxury sports cars. (Laughter)

It was my first week in federal prison, and I was learning quickly that it wasn't what you see on TV. In fact, it was teeming with smart, ambitious men whose business instincts were in many cases as sharp as those of the CEOs who had wined and dined me six months earlier when I was a rising star in the Missouri Senate. Now, 95 percent of the guys that I was locked up with had been drug dealers on the outside, but when they talked about what they did, they talked about it in a different jargon, but the business concepts that they talked about weren't unlike those that you'd learn in a first year MBA class at Wharton: promotional incentives, you never charge a first-time user, focus-grouping new product launches, territorial expansion.

But they didn't spend a lot of time reliving the glory days. For the most part, everyone was just trying to survive. It's a lot harder than you might think. Contrary to what most people think, people don't pay, taxpayers don't pay, for your life when you're in prison. You've got to pay for your own life. You've got to pay for your soap, your deodorant, toothbrush, toothpaste, all of it. And it's hard for a couple of reasons. First, everything's marked up 30 to 50 percent from what you'd pay on the street, and second, you don't make a lot of money. I unloaded trucks. That was my full-time job, unloading trucks at a food warehouse, for $5.25, not an hour, but per month.

So how do you survive? Well, you learn to hustle, all kinds of hustles. There's legal hustles. You pay everything in stamps. Those are the currency. You charge another inmate to clean his cell. There's sort of illegal hustles, like you run a barbershop out of your cell. There's pretty illegal hustles: You run a tattoo parlor out of your own cell. And there's very illegal hustles, which you smuggle in, you get smuggled in, drugs, pornography, cell phones, and just as in the outer world, there's a risk-reward tradeoff, so the riskier the enterprise, the more profitable it can potentially be. You want a cigarette in prison? Three to five dollars. You want an old-fashioned cell phone that you flip open and is about as big as your head? Three hundred bucks. You want a dirty magazine? Well, it can be as much as 1,000 dollars.

So as you can probably tell, one of the defining aspects of prison life is ingenuity. Whether it was concocting delicious meals from stolen scraps from the warehouse, sculpting people's hair with toenail clippers, or constructing weights from boulders in laundry bags tied on to tree limbs, prisoners learn how to make do with less, and many of them want to take this ingenuity that they've learned to the outside and start restaurants, barber shops, personal training businesses.

But there's no training, nothing to prepare them for that, no rehabilitation at all in prison, no one to help them write a business plan, figure out a way to translate the business concepts they intuitively grasp into legal enterprises, no access to the Internet, even. And then, when they come out, most states don't even have a law prohibiting employers from discriminating against people with a background. So none of us should be surprised that two out of three ex-offenders re-offend within five years.

Look, I lied to the Feds. I lost a year of my life from it. But when I came out, I vowed that I was going to do whatever I could to make sure that guys like the ones I was locked up with didn't have to waste any more of their life than they already had.

So I hope that you'll think about helping in some way. The best thing we can do is figure out ways to nurture the entrepreneurial spirit and the tremendous untapped potential in our prisons, because if we don't, they're not going to learn any new skills that's going to help them, and they'll be right back. All they'll learn on the inside is new hustles. Thank you. (Applause)

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551,831 Views

Jeff Smith spent a year in prison. But what he discovered inside wasn’t what he expected -- he saw in his fellow inmates boundless ingenuity and business savvy. He asks: Why don't we tap this entrepreneurial potential to help ex-prisoners contribute to society once they're back outside? (From the TED Talent Search event TED@NewYork.)

Once an up-and-coming star in the Missouri State Senate, Jeff Smith went to prison for covering up an election law violation. Since his release, he's created a new space for himself as a professor, writer, political commentator and advocate for those he was locked up with. Full bio »

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