How Harvard Women Are Changing Fashion and Beauty Through Entrepreneurship
When people think of Harvard Business School, “fashion” probably wouldn’t make a word cloud. Outside business academia, few would associate it with entrepreneurship. When it comes to women, most would point to that infamous 2013 New York Times case study, highlighting the excesses and forgetting the progress.
But the combination of Harvard, fashion, and women has proven to be a winning trio in recent years. Think of Rent the Runway, a high end clothing rental for women, started by Jennifer Fleiss (‘09) and Jennifer Hyman (’09). Over the past seven years, it has generated over $126 million dollars in funding (including $60 million in 2014 alone). And that’s just the tip of the iceberg among Harvard startups. Birchbox, an online beauty product subscription service, has boosted the net worth of founders Katie Beauchamp (’10) and Hayley Barna (’10) to $1 billion dollars (each). And Katrina Lake (’11) has built Stitch Fix, an online styling and shopping service, to generate a projected $200 million dollars in 2015.
“There are so many awesome female-founded businesses that have come out of HBS,” Fleiss notes. “You get inspired, you see yourself in their place and can imagine the same success.”
Indeed, HBS has become a thriving farm system for talented female entrepreneurs according to a recent piece in Marie Claire. And this has further fanned women’s interest in entrepreneurship. Thomas Eisenmann, co-chair of HBS’ Rock Center for Entrepreneurship, observed that his entrepreneurship course this year was comprised of 53% women (compared to 41% of the student population overall). And this reflects a growing trend. For example, Boston.com reports that the percentage of startups with one or more female partners rose from 9.5% to 18% from 2009-2014. And the percentage is actually higher in venture capital-backed startups launched out of Harvard, where 25% were headed by women (compared to 10% nationally).
And fashion and beauty heads the list. According to Marie Claire, HBS graduates have launched 18 startups in the space since 2008, which have collectively raised roughly $600 million dollars. So what’s behind this boom in female entrepreneurship in the fashion and beauty sectors?
It starts with a supportive campus community, with Marie Claire citing recent reforms to help women better succeed at the school. They included a boost in coaching and female faculty, along with making existing faculty aware of subtle bias. “I think it’s a friendlier place,” says Marcela Sapone (’14), an entrepreneur herself. “Every day, professors get reports on their gender balance, if they’ve called on this many men versus this many women. [HBS] made a really big push for it.”
The school also boasts several female professors, such as Anita Elberse, Youngme Moon, and Frances Frei, who provide guidance and mentorship to students. And the school has busily developed cases that focus on the challenges faced by female entrepreneurs, including recent female-run startups like Gilt Groupe and Rent the Runway. Off campus, HBS has cultivated several deep-pocketed advocates like IMG’s Ari Emanuel who have invested in new ventures started by Harvard women.
When it comes to fashion, Harvard is just a four hour ride to New York City, the mecca of beauty and fashion. Here, aspiring female entrepreneurs can network with the Female Founders Club, a tight-knit and powerful cadre of potential investors that includes HBS alums like Lake, Beauchamp and Barna. “They all know each other,” Harvard’s Eisenmann adds. “And they all help each other. It’s a really powerful network.”
Of course, peer funding has almost become a necessity for women looking to start businesses in the fashion and beauty markets. Rent the Runway’s Hyman relays a story where a male partner in a Silicon Valley VC firm once stopped a presentation to ask what an accessory was. And she shares a more insidious nugget, where another man interrupted her VC pitch to remark, “You are just too cute. You get this big closet and get to play with all these dresses and can wear whatever you want. This must be so much fun!”
However, the proverbial clueless male holding the purse strings (along with outright sexism) aren’t the only barriers that these women face. According to Rent the Runway’s Fleiss, women tend to pitch smaller investments. “Venture capitalists are looking to invest in $1 billion companies, and I think how women function – whether it’s that they’re more realistic or more conservative – doesn’t result in their valuing their company so high,” Fleiss points out. “When female founders pitch what they’re calling a $100 million concept, that’s not conducive to the way typical VCs invest. However, there are more VCs popping up that are more interested in that middle range, which is opening up more opportunities.”
In reality, these women are creating their own luck with their business acumen and personal moxie. At the same time, the founders of Rent The Runway also tip their hats to the HBS faculty. “As Jenn and I continued to explore the concept behind Rent the Runway, we met with about 80 different professors – including many that didn’t teach any of our classes – who had vast experience in several components of the business,” Fleiss tells Boston.com. “Having access to genius professors who had run retail businesses or large logistics-intensive operations was invaluable.”