In September of last year, the New York Post published a story, titled "Harvard Goes High Fashion," that created more visible buzz than the average Harvard Business Review article. "Harvard Goes High Fashion and High Tech" might have been a more appropriate name. The piece highlighted the slew of online fashion start-ups that have been launched in the past several years by Harvard Business School grads.
As a current second-year student at HBS, I have a perspective on why so many of our graduates are choosing to pursue fashion-related entrepreneurial careers. But, in my opinion, the more relevant question at hand is: "What's the current obsession with fashion start-ups in general?"
Not a week goes by that I don't read about another fashion start-up that is looking to redefine the industry. Mainstream fashion magazines are even paying attention: ELLE Magazine published a list of its top five online fashion start-ups to watch just last week. Even established companies are looking to get into the game. Google launched Boutiques, its search engine for the fashion vertical, in November 2010; eBay has been doubling down in its fashion category.
The most plausible explanation is the recent string of successes in the space. Gilt Groupe -- a flash sales site founded in 2007 by HBS alumni Alexis Maybank and Alexandra Wilkis Wilson -- is rumored to be raising its next round of financing at a $1B valuation. Launched less than 2 years ago, Rent the Runway, a 'Netflix for designer dresses,' seems to be on a similar track. A darling in the venture capital and fashion communities, Rent the Runway raised $15M in 2010 to scale its business and is now entering the wedding space.
It's a completely logical argument, but I believe that further inspection reveals an industry that is fundamentally shifting. Fashion has historically been closed to the general public. Fashion shows, for example, used to be strictly for magazine editors and department store buyers. As a "normal" consumer (even an affluent one), you would not by privy to Donna Karan's new spring collection until the Saks salesperson put it out on the floor. Similarly, there was no Project Runway to give you a glimpse into the design and production process. You were simply a consumer.
Fast-forward to today's universe. By now, most luxury fashion houses have adopted the practice of live-streaming their fashion shows on the internet. For the last several years, bloggers have been actively invited to shows by the designers themselves; before the show ends, runway images from the next season's collection have tweeted out and are available online for any fashionista to see. And not only can fashionistas see the clothes, but they can comment as well. A designer now has the ability to hear what his target consumers think about his designs before they are even produced.
It is this "opening up" of the industry that I believe is at the crux of this fashion start-up movement. Fashion lovers, now having significantly more access to the industry and to each other, want to be an active part of the conversation, not just passive consumers. And so individuals -- including, but not limited to, HBS graduates -- realize that the traditional business models (e.g., department stores) are no longer adequate to give consumers everything they want. It's the reason we founded FashionStake, an online fashion site that allows our community to choose what designers and styles we sell. And it's the reason that I can't go a week without reading about another fashion start-up.
Here's to a new fashion democracy and lots of $1B valuations!
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