By Jessica Assaf, Co-Founder of RAW IS EVERYTHING.
One of the first things we are taught at Harvard Business School is that if you have a strong idea, a viable business plan, and a skilled, aligned team in an industry without many competitors and barriers to entry, there is a formula your company can follow to achieve success. This formula is a part of the business school’s DNA, taught to us in the form of cases that analyze thousands of companies in hundreds of industries over the course of the school’s 107-year history. The cases support an overarching theory and deepen our understanding of business frameworks that we can apply to our own ideas. In practice, they often function as compelling stories that highlight the complicated human elements of business and the inherent ambiguity of the “secret sauce” that makes one company more successful than another. But there are certainly “rules” of entrepreneurship, and these rules have very little room for interpretation.
Historically, women were not even granted admittance to HBS until 1962, and in 1963 only eight women registered for their MBA. Today, our Class of 2016 consists of 42% women, and there appears to be a fairly equal split between men and women in the classroom. Yet fewer large companies in the U.S. are run by women than by men named John, and women have had only 14% of the top corporate jobs and 17% of the board seats for the past ten years. “Ten years of no progress. Ten years of no progress is no progress,” Sheryl Sandberg, a graduate of HBS and the Chief Operating Officer of Facebook, writes in Lean In. According to Catalyst, women currently hold 4.6% of CEO positions at S&P 500 companies. Out of five hundred of the most powerful companies in the United States, twenty-three are run by women.
How can we make it easier for women to step up and run successful companies? I am starting an all-female company at Harvard Business School, and we believe the answer is simple..break the all the rules:
RULE #1: Limit co-founders to two
The first rule is that a company should not have more than two co-founders so that there is a clear hierarchy of power and chain of command. More than two co-founders is generally considered unattractive to investors.
Our company, RAW is Everything, has three female co-founders. We are all close friends who came together as a part of the FIELD method, a complement to the case method that involves “learning by doing” and requires first-year students to form a team and design and launch a real micro-business with seed funding from the school. Instead of thinking about FIELD as a school project like most groups, we decided to use the experience as an opportunity to start a real company. As a longtime activist advocating for safer skincare and cosmetic products, I wanted to launch a line of single-ingredient products that could serve every function in our skincare routine. I recruited a team of smart, energetic, global women and together we researched and sourced the highest quality and most powerful organic ingredients that have been global beauty secrets for centuries. We built a skincare brand, conducted a full beta test with hundreds of women who received free samples, and secured a retail partnership with Bluemercury in one semester. Now we are preparing for our official launch in the beginning of 2016.
RULE #2: Never ever have equal power
We are each equally invested in the fate of this company, so much so that Katie has delayed her move back home to London so we can all work full-time after graduation. This semester, we are registered for a 4-person, 3-credit Independent Study that allows us to work one-on-one with an accomplished female professor who embodies our target customer and provides constant feedback and opportunities for connections to other like-minded women.
The idea of smoothly running a company with three female founding members, each with an equal percentage of power, is unthinkable to most of the traditional entrepreneurship professors here. Yet we consider this our greatest asset.
RULE #3: Watch out for all-female teams
An all-female team is also considered “risky” business. According to a Babson Study, only 2.7% of venture capital-funded companies had a woman CEO. There is a declining number of women decision-makers in the venture capital community, which is problematic because venture capital firms with female partners are more than twice as likely to invest in companies with a woman on the executive team.
The biggest beauty companies, including L’Oreal, Estée Lauder, Revlon, MAC, Kiehl’s, Johnson and Johnson, Avon, Procter and Gamble, and Sephora, are run by businessmen. We want to change this by marketing our company as skincare for women by women. We have the empathy, insight, and emotional intelligence to know exactly what women want because we are a part of the audience we hope to attract.
RULE #4: Never ever work with your friends
“Never ever work with your friends,” we were told by one case protagonist after the business she had started with her best friend failed. For us, intimacy is a positive force. My team knows my strengths, weaknesses and patterns, and they want to help me develop. They tell me when I have written a bad email or how I can improve my pitch, explaining the reasoning behind their feedback and the clear steps I can take to perform better next time. I trust that they incentivize the best interest of the company, so I am eager to listen. Thus far, our collective desire to support the team has trumped all operational and logistical obstacles.
We are taught that an effective team consists of members with diverse yet complementary skillsets so no two members overlap and each person can enhance the company’s overall potential. If you looked at my team’s resumes, you would notice that two of us have identical experiences in marketing. None of us have any formal experience in operations, accounting, or design.
For us, this “concern” is an opportunity to spend our last year of business school developing new, unique skills that will prepare us for the chief governance roles we will grow into in the future. Last week during our Tuesday meeting, Atima proudly announced, “I learned Quickbooks!” Katie is learning Photoshop, I am learning supply chain management, and Enke has already learned how to interpret the stack of legal documents we needed to sign for registering our business with the IRS. We are developing into the leaders required to bring this company to life.
RULE #5: Full-time students can’t start a business at the same time
Most of the professors at HBS will tell you that it is impossible to start a company as a full-time student, and those who choose to pursue their ideas rarely do well in the academic environment. However, we have found that our classes and roles as full-time students directly support the development of our business. We receive free office space, storage, and private meeting rooms as a part of the Harvard Innovation Lab’s VIP Program. We were granted seed funding to prepare for the business plan competition, which awards the winning student-run company with a grand prize of $50,000 in the spring. As a part of our Digital Marketing class, we are running Google and Facebook ads with funding from the school. Through this class we met a female design student who has offered to help us with our product mock-ups and website design for free. We write required blog posts for class about the process of starting a business, which is really a chance to market RAW to our classmates. Next month, we will submit final projects and papers about the company and our personal development as leaders.
By breaking many of the traditional “rules” of entrepreneurship, we are no longer afraid of failure. There is no such thing as failure in our minds because we love what we have created. So we think ahead, accept delays, and embrace the uncertainties. The only way this will work is if we continue to believe in each other and if other female consumers believe in us. Maybe there are no rules at all, only opportunities to do things differently.
We hope that our story inspires a movement of women helping women lead change.