Is Business School Worth it?

NEW YORK, United States — Within a year after coming up with the idea for Pepper, a bra designed for small-chested women, Lia Winograd had quit her consulting job, raised $100,000 via a Kickstarter campaign and pre-orders, and began manufacturing. But to grow the business, she wanted guidance.

So Winograd enrolled in the MBA programme at NYU Stern School of Business.

“My intention was to really leverage the MBA network,” she said. “I had a lot of doubts, a lot of back-and-forth about [attending]. Some people were like, ‘You don’t need a degree to operate a business.’”

For aspiring creative entrepreneurs, business school offers rigorous training in how to run a business, and grants access to a critical network of mentors and investors. Winograd first met one of her angel investors because she was one of her professors at Stern.

But the benefits of a business school education aren’t free. At Stern, tuition is $71,676 for the 2018-2019 academic year, and that’s not including room and board, books, transportation and other fees. Altogether, the cost of attendance exceeds $110,000 without financial aid.

The case for business school

A business education can make all the difference for fashion or art school graduates who dream of starting their own lines. In today’s fast-changing retail climate, ready-to-wear designers in particular need business acumen to survive, including knowledge of how to negotiate with suppliers for quicker speed-to-market, or refinance debt to keep credit flowing.

"There's a massive shift in the fashion system right now where creative entrepreneurship requires someone to think left and right-brained," said Sara Kozwloski, the director of education and professional development at the Council of Fashion Designers of America.

Business schools also offer peer-to-peer education that encourages students to learn from and challenge each other in an open environment, making it the perfect place to develop a business idea.

It's this petri dish to test out your concept

"It's this petri dish to test out your concept," said Jenny Fleiss, who co-founded Rent the Runway with Harvard Business School classmate Jennifer Hyman after the two met in the programme. "In business school, the biggest thing is the mental space. You have three hours of class a day, a lecture, and then hours to think and socialise with your peers. They're great feedback resources because it's a highly thoughtful, intelligent group of students."

This was precisely how Winograd used her time at Stern, which offered summer fellowships to entrepreneurs to work on their company ideas.

“They gave me a living stipend and a lot of flexibility to work on my start-up… they took me on a trip to San Francisco where I got to meet angel investors that ended up investing in Pepper,” Winograd said. “We built out a business plan as a part of a competition, and that pushed me to get into the streets to talk to customers, which helped my co-founder and I to get to different insights.”

The supportive environment that an MBA programme provides is especially helpful for creative entrepreneurs who know they have ambitions to start their own companies, but haven’t fully hashed out an idea. At Stern, students also get the chance to work with real-life companies in problem-solving.

“Something hard to replicate online is experiential learning,” said Kim Corfman, the academic director of NYU Stern’s Fashion & Luxury MBA. “You can go out there and do it and read some excellent books, but having guidance while you’re going through the process, there’s really no substitute.”

The case against

Entrepreneurs who opted out of business school point to free online resources that could replace certain educational components of an MBA, or incubators and start-up competitions that provide alternative networking opportunities.

“If you’re just thinking about getting skills and knowledge on becoming a great entrepreneur, I don’t think an MBA is the quickest, most effective way,” said Tracey DiNunzio, the founder of resale site Tradesy. “I would Google things like, ‘how to negotiate an investment’ and ‘what is a term sheet?’”

DiNunzio needed three years to secure her first investors, one of whom encouraged her to apply to an incubator programme, the now-defunct Launchpad LA.

You can just be gritty and curious and get to the exact same place without going through the formal system

“Now I’ve raised $100 million and have over 100 employees,” she said. “You can just be gritty and curious and get to the exact same place without going through the formal system. I think increasingly that’s what’s happening.”

Twin brothers Adam and Ryan Goldston, founders of sneaker brand Athletic Propulsion Labs, were still in college at the University of Southern California when they conceived their idea for high-performance basketball shoes. They considered business school, but decided to put their full effort into starting their company instead.

“Our belief was that we’ll learn more by doing rather than going to school to learn, kind of like trial by fire,” said Goldston, who was an undergraduate business major at USC. “When you look at it, it’s not about what you’re learning in business school, it’s about your concept.”

Alternatives to an MBA

The CDFA’s Sara Kozwloski was once a fledgling designer, and launched a brand called Cake shortly after she graduated from the Parsons School of Design. But six years later she decided to seek an MBA, in part because her ambitions had shifted toward education and sustainability.

“I recognised that I didn’t receive any business education at Parsons," she said, “so now at CFDA, we have programmes that spotlight this.” The council’s Elaine Gold Launch Pad, a 23-week virtual residency for five emerging brands, picks five residents every year to build their business models as well as tech and sustainability-related components.

The programme is completely free, and graduates include menswear designer Emily Bode, who was among last year’s cohort.

“Launch Pad addresses the tactical parts of business, such as financial and operational strategy, but also creative aspects,” said Kozwloski. “We ask our designers to create… a kind of pitch deck, [which they can use] to pursue outside funding or collaborations or partners. We’d like to see that they were able to engage a finance-oriented audience.”

You don't need an MBA to start your own line, you need business experience

At Kozwloski’s alma mater, administrators are also looking to provide fashion designers with an alternative to business school. Later this year, Parsons will launch a 12-month fashion management programme called the MPS Fashion Management degree. The programme features two semesters of five-week courses, held on nights and weekends, and features a partnership with XLC Labs, a retail-oriented accelerator sponsored by the school.

“Years ago, I came out of Central St. Martins with very, very little business education, and I think it’s something that there’s still a big gap in the market for,” said Keanan Duffty, the director of Parsons’ fashion management master’s programme.

Parsons’ XRC Labs accelerator is geared toward tech-oriented retail start-ups, which the programme grants workspace, mentorship, operational support, networking opportunities and capital. Alums include sports bag brand Caraa and direct-to-consumer shaving product company Billie.

Meanwhile, the Fashion Institute of Technology offers a free "mini-MBA" programme called Design Entrepreneurs NYC, which was created in partnership between the college and the New York City Economic Development Corporation. In order to enter, brands must have been in operation for at least a year.

The curriculum is comprised of three weekends of “business bootcamp,” according to Jeanette Nostra, FIT Design Entrepreneurs' executive-in-residence and senior advisor, “where they’re given financial information and support.”

Brands who complete the bootcamp are assigned a mentor who works with them in developing a business plan, and 12 of the best plans are picked to be pitched to a panel of judges. The winning pitch receives $100,000 and the runner-up $50,000. Past winners include Becca McCharen of Chromat and Thistle & Spire’s Lily Chen and Maggie Bacon.

Consumer-driven tech start-ups can also look at category-neutral options such as Techstarts (which includes workout subscription service ClassPass as an alum) as well as accelerators connected to big conglomerates. The French luxury group Kering partnered with global innovation platform Plug and Play in 2017, and L'Oréal is working with UK-based accelerator Founders Factory. In 2017 Nordstrom launched its own incubator, The Lab, in order to support emerging designers. Eckhaus Latta was among its first participants.

“Incubator programmes are hard to get into but so are the nice MBA programmes,” said Tradesy’s DiNunzio. “I’d say an incubator is a much better idea. It’s faster, it gives you real-world connections to fund and support your business, it provides mentorship, advisers, and most incubators last four to six months rather than the two years it takes to get an MBA.”

The case for experience

Ultimately, the most important ingredient in entrepreneurship is experience, whether that comes from MBA courses or a full-time career.

“We always tell our grads to get a job,” said Steven Frumkin, dean of FIT’s Jay and Patty Baker School of Business and Technology. “You don’t need an MBA to start your own line, you need business experience.”

Angela Scott knew she wanted to launch her own brand when she was an intern at Ugg, but it took her several interim careers —real estate construction, asset management, PR for Neiman Marcus — before she took the plunge. In 2012, she quit her job and founded The Office of Angela Scott, a luxury footwear brand known for wingtip oxfords.

Entrepreneurs are people who can hustle and find the opportunity and go after it.

“If I would’ve made the decision to do it after my internship and college, I would’ve definitely gone to business school. You have to be well-rounded,” she said. “But it was the unconventional pathway in my business in the end that gave me the confidence.”

With or without professional mileage, challenges are inevitable.

“When you get scared about not knowing what you’re doing —that fear is being an entrepreneur,” said DiNunzio. “Nothing can really prepare you for it. You just start. Often times, the people I hear considering MBA, a lot of that is just anxiety.”

And even when they're armed with an MBA, fearlessness is the one true key to success, according to Fleiss, who is now the chief executive of Jetblack, a concierge service start-up within Walmart's start-up incubator, Store No. 8.

“Entrepreneurs are people who can hustle and find the opportunity and go after it,” she said. “If you’re meant to be an entrepreneur you should be able to find the opportunities and take advantage of them.”

Explore our full report on The Best Fashion Schools in the World 2019 here.

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