January 2000

This Internet Start-Up Looks To Conquer an Online Divide

By Timothy Hanrahan
THE WALL STREET JOURNAL INTERACTIVE EDITION

Elisabeth Stock is one of the few Internet entrepreneurs not trying to strike it rich.

You couldn't tell from the array of blue-chip partners Ms. Stock has lined up in the past year, which includes Microsoft Corp., Citigroup Inc. and iVillage.com Inc. Ms. Stock has a dot-com pedigree in the form of an engineering degree from Massachusetts Institute of Technology and has earned her stripes by setting up a complex supply system to refurbish and reprogram Pentium-class personal computers. She's taking aim at a vast market—black and Hispanic families—and has earned raves from her backers.

"Elisabeth had done a business plan you could've started a billion-dollar company with," says Chip Raymond, president of Citigroup Foundation.

So why isn't an initial public offering in the future for Ms. Stock? Because while dot-coms have made multimillionaires out of untold 25-year-olds, dot-orgs don't go public.

Given her resume, the 31-year-old Ms. Stock could probably command a boatload of venture-capital dollars and the attention of legions of marketers. But that isn't her goal—instead, as the executive director of the not-for-profit group Computers for Youth (www.cfy.org), she's trying to bring affordable Internet access to the homes of minority children who otherwise wouldn't have it, and back it up with relevant Web content and full-bore technical support.

"People think the digital divide is about access or technology, but it's about a lot more," she says. "There's all these other pieces—tech support, content and training."

Complicated Puzzle
Putting those pieces together isn't easy.

A warm Saturday morning in December finds Ms. Stock in the South Bronx, leading a small army of volunteers who have been enlisted to distribute PCs at KIPP Academy. Twenty kids, all with at least one parent or older sibling in tow, have come into school to take in a three-hour training session—and take home a personal computer. Many will have Internet access by sundown.

KIPP is made up entirely of black and Hispanic students, 95% of whom get free or subsidized lunches, a key statistic in measuring relative economic need. KIPP also happens to be one of the most-demanding public middle schools in the borough, while being relatively small. Those are two of the reasons its students were the first to receive computers from CFY.

By the end of the 1999-2000 school year, all 220 students at the school and 30 teachers will receive computers. But first come the training sessions—five weekend sessions from CFY have been held since late October.

This particular Saturday, Computers for Youth volunteers hand out user names and passwords to the students and set up 20 PCs—one per family—in two brightly painted classrooms across the hall from each other. Two volunteer trainers use overhead projections on chalkboards to walk students and their parents through Windows 98 menus and arcane Word functions. Nearby, other volunteers are helping debug problems that students from the previous training session haven't been able to solve. One student forgot his e-mail password and has popped by the school to get it; in just a week, he had more than 100 messages in his in-box.

Bridging the Divide
As volunteers swirl around classroom desks helping kids keep up with the instructors' sessions, Ms. Stock looks in control.

"You look so calm," says Morra Aarons, a public-relations manager for iVillage.

"I just look calm," Ms. Stock responds. After all, it's only the third training session she's done.

These training sessions are just the beginning. A crucial piece of bringing Internet access to the children is distributing used PCs to families, to be sure. But that's just the start: In Ms. Stock's view, such efforts to bridge the "digital divide" in the U.S. will fail if the children don't find online content tailored for them or are frustrated because they can't get the technical support they need.

The digital divide is the name given to the gap in Internet usage between rich and poor and between black and white. The Commerce Department's findings last July that Internet use was higher among wealthier families came as no surprise. What did grab headlines, however, was that regardless of household income, blacks and Hispanics use the Internet less than whites and Asians do.

If this remains true, the fear is, many families could be left out of the high-tech explosion that has changed the face of not only American business but also American culture. The Internet boom has created vast wealth for entrepreneurs bright enough or lucky enough to get in on the ground floor of successful start-ups, but it's also changing the lives of people in countless ways big and small. It's meant filing taxes electronically, sending e-mail or chat messages to distant friends and family members, or shopping for a better job or that Ricky Martin compact disk without leaving the home.

Going Online
These are the kind of things inner-city families have been missing—and that Ms. Stock hopes her program will give them. Audrey Greenidge, an eighth grader at KIPP who received her computer through Computers for Youth in late November, already sees a change in the way she does her homework.

"It helps to get a computer at home—you're able to get more done," she says. "At school, the computers were mostly used by other people."

Now that kids have computers at home, teachers are assigning homework that requires students to go on the Web —take a recent assignment to write a report on diamonds, quartz and coal. Teachers are also asking that homework be typed, not handwritten—and instead of notebooks, kids are starting to bring in computer diskettes.

Before getting the computer, Audrey "used to come home and go back out to the library," says Gail Greenidge, adding that now her daughter "can do her research here." Neither mother nor daughter has made an online purchase yet, but Ms. Greenidge says she's done some "browsing and window shopping."

Ms. Greenidge has two worries about Internet access: potentially inappropriate conversations in chat rooms (she's told her daughter to stay within her age group when chatting online) and the fact that the Internet ties up the family's phone line. Like she does with television-watching, Mr. Greenidge is considering putting a limit on how much time her daughter can spend online.

"It's not a problem yet, but I can foresee a problem—so I have to set a schedule," she says.

Computers for Youth's focus on the home is relatively unique. While President Clinton has pledged to bring Internet access to all Americans, his vision is of providing that access in schools and community centers. Ms. Stock, however, believes that providing PCs for family households goes most directly to the disparity in Internet access. "We figure if the problem is in the home, let's solve the problem in the home," she says.

Ms. Stock got the idea for her program during a stint as a White House fellow in the office of the Vice President, during which she developed a program, known as Computers for Learning, that allowed federal agencies to donate computers directly to schools.

At the time, though, she recalls thinking: "Hey, this is a good idea, but wouldn't it be better if we got computers from businesses, whose computers are newer—and put computers in the home."

Finding Resources
In December 1998, she met with Dan Dolgin, who had recently founded Computers for Youth, thinking he'd be a competitor. Instead, he offered her the top job with the group, which she accepted in February 1999. Mr. Dolgin, a corporate lawyer and investor, remains chairman.

After that came the tough business of raising funds, building partnerships and tracking down companies that were willing to donate PCs, software and services. Within a year, she had persuaded Microsoft to donate about $150,000 worth of software, New York City Internet provider Panix to offer low-cost Internet access, and iVillage to publish content on its site customized for Computers for Youth (www.ivillage.com/click/features/projectconnect/). Funding came from the likes of Home Box Office, Citigroup and the U.S. Department of Education.

Other partners include help-desk firm C3i, which will train high-school students to man help desks for Computers for Youth users with the help of software donated by International Business Machines Corp.'s Lotus Development unit; umbrella volunteer group New York Cares; and Solid Oak Software, which donated Cybersitter filtering software. A crucial piece of the puzzle was provided by the New York City Board of Education, which is allowing Computers for Youth to use warehouse space in Long Island City to store donated machines before they're distributed to students.

Mr. Raymond, who heads Citigroup's philanthropic arm, says giving $15,000 to Computers for Youth wasn't a tough call once he met Ms. Stock: "A person who's this enthusiastic, with her background, who's willing to start a not-for-profit when you could go off and make a lot of money? I'm very impressed."

Colleen Farell, Microsoft's community and media-relations manager for New York, cites "the thoroughness of the program . . . the whole infrastructure" that Ms. Stock had developed.

Ms. Stock's current challenge is to finish distributing the 250 computers at KIPP—she is about halfway done—and figure out which school should be next. She selected KIPP in part because of its strong academics and its dedicated students. Now, she wants to choose the next school, and ramp up the pace of PC rollouts.

"Once this thing purrs, we can expand it" quickly, she says. She is aiming to distribute another 500 computers by the end of the school year: about 200 to homes and 300 for use within schools as part of various projects.

Ms. Stock also faces the quickly changing economics of the Internet. Currently, Computers for Youth pays for families' first three months of Net access; after that, families must pay Panix (www.panix.com) a reduced monthly rate. Ms. Stock considered using a provider of free Internet access, but decided that free services were too new and unproven, and their banner ads too intrusive. Moreover, she says, Panix has a "track record of excellent service."

Computers for Youth will continue seeking ways to cut costs, Ms. Stock says, but adds that if the tumbling prices of new PCs fall far enough, refurbishing donated PCs may not make sense anymore. But no matter: If PCs get really cheap, she says, Computers for Youth will devote more of its efforts to training, content and support.

"The question [people ask] is 'How do we use this?' " she says. "That's why we feel that the training is so important. If you've never sent and received an e-mail, you don't know what the hype is all about."

Write to Timothy Hanrahan at tim.hanrahan@wsj.com