Columbia MBA and multimillion-dollar start-up co-founder: Here's what business school doesn't teach you
In addition to getting her MBA, entrepreneur Steph Korey got a different kind of education by working for two different start-ups, Warby Parker and Casper, and co-founding her own, the luggage company Away.
She calls it "start-up grad school," and it's been even more useful than getting her degree from Columbia Business School.
To be clear, "each one was helpful in different ways," Korey tells CNBC Make It. But "if I had to pick between the two, you always learn more from on-the-job experience."
When you're at a start-up, "you see things like, this is how we scale our operations, this is how we do marketing in a way that resonates, this is how we on-board people, this is how we create a cohesive vision for our team," says Korey. "Those types of things are theories you can learn in a formal education environment, but it doesn't compare to being able to learn on the job."
In early 2015, when Korey had recently graduated from Columbia Business School and was doing part-time consulting work for the online mattress start-up Casper, she got a call from her friend and former co-worker Jen Rubio.
"Jen had just been in Zurich and her suitcase broke and all the contents of it exploded everywhere," recalls Korey. "She was frustrated and asked me, 'Why isn't there a luggage and travel brand that makes super high quality products and that is affordable?'"
The entrepreneurs started doing surveys with focus groups, asking hundreds of people how they pack, how they travel, what they do at the airport and how they repack before coming home.
"We learned that we weren't the only ones who struggled to find great luggage that supported us in how we travel," says Korey. Their solution: Away, a direct-to-consumer luggage company that offers affordable and durable hard-shell suitcases.
The New York City-based start-up hit $12 million in sales in its first full year, 2016, and has raised $31 million in funding.
"One thing led to another and here we are, 300,000 suitcases later," says Korey.
Boston Beer CEO Jim Koch, who has an MBA from Harvard, agrees that business school doesn't teach you everything. In fact, the key skill that helped him build his $2 billion craft beer empire — how to sell — wasn't taught at his alma mater when he studied there.
Harvard "has dozens of courses on marketing, and no courses on selling," Koch said at the Iconic conference in 2016. "I think they look down their nose at it, intellectually. Nobody goes to school to be a salesman … but that's what I had to learn to do." Even the Harvard Business Review pointed out in 2016 that, "of the more than 170,000 students who earn MBAs annually, only a tiny fraction learn anything about sales." (Now HBS does offer a marketing and sales program.)
This isn't to say business school is never, or couldn't be part of, the right answer.
"There are a few paths where business school is really helpful," Korey tells CNBC Make It. Say you want to make a drastic career switch, from marketing to finance: "It's really difficult to make that swap if your whole background is in marketing, but if you go to business school and you study all the areas of finance that you missed out in work experience, that makes that career switch a lot more natural."
In general, "business school can be really helpful for career switchers," she says.
You just want to make sure you're going for the right reasons. Business school is a huge time and financial commitment. According to U.S. News, the average MBA tuition costs between $55,000 and $68,000 a year and the average debt for new grads at some of the top business schools can range from $59,000 to over $120,000.
Really think about what your're going to get out of the education, says Korey, who went to Columbia with the goal getting better at leading, managing and inspiring big teams. Today, she and Rubio direct a team of over 140 employees at Away.
"If you are in the right program and you have the right goals, you can justify the tuition," says Korey. But ultimately, "the pace and scale at which you learn how to build a business when you're on the ground in a start-up is just something you can't replicate anywhere else."
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