The newest 'Shark Tank' judge explains how a Harvard MBA fit into her decision to become an entrepreneur - and how she founded a personal styling company worth $1.9 billion

Stitch Fix

Katrina Lake.

• Katrina Lake is the founder of personalized clothing service Stitch Fix, which passed $1 billion in net revenue for fiscal year 2018. She will also be a judge on the new season of "Shark Tank."
• She attended Harvard Business School with an idea of the company she wanted to start and focused more on practical experience than the degree itself.
• BI correspondent Shana Lebowitz interviewed Lake about her mindset going into business school, and how well it served her.
• Click here for more BI Prime stories.

Katrina Lake knew she would spend more time pursuing her goals outside of class than in it. She applied to Harvard Business School anyway.

The idea, Lake told BI correspondent Shana Lebowitz, was making sure that she had a fallback plan just in case her big idea for a company didn't work. In this case, her plan B would be most people's unattainable plan As.

"I went to school thinking I can be a mediocre student and just get by in school, but bend as much as my free time as I can on getting this company off the ground," Lake said. "I wanted to get the company off the ground, and pay back my salary, pay down my student loans the day I graduate. And if I wasn't able to do that, then the risk profile of entrepreneurship wasn't going to be for me."

Lake went on to found Stitch Fix, a personalized clothing service that continues to grow exponentially. The company went public in 2017. The service passed the $1 billion in net revenue for fiscal year 2018, and based on their most recent quarterly report, they've raised their revenue expectations for fiscal year 2019. It sits at a $1.89 billion market cap as of this writing.

When Lake was considering business school, however, she didn't know that Stitch Fix would succeed as spectacularly as it did. Lake has previously said that she was "risk-averse" growing up, and even thought about applying to medical school. That perspective on risk should be interesting to watch, as Lake is going to be a guest judge on the newest season of Shark Tank.

Lake ultimately decided against medicine. She majored in economics at Stanford and got her MBA at Harvard.

The idea for a company in the retail space had already taken root by the time she applied to business school, but she didn't outright admit in her essays that she wanted to start a company.

"I think I said that I'm going to lead a company that is transforming apparel retail and I talked about the space and why I was interested in it, but even in my application essay I wasn't bold enough to say, I'm going to start a company," Lake said.

When she got to campus, though, she did everything around entrepreneurship that she could, in classes and clubs and everything in between.

"I was able to set goals and to have a plan where I could pursue entrepreneurship, but in a way that didn't feel like crazy, scary, disruptive to me in my life," Lake said.

The key, she explained, is understanding the potential of your idea when you have it, and then structuring a plan so that you navigate entrepreneurship in the best way for you. Lake's approach stands in contrast to the stereotype of the Silicon Valley dropout, and that's because she matched her path to the level of risk she would face along it.

"I guess I've never heard of anyone applying to HBS thinking, I'd like to start a company while I'm here, but if it doesn't work out then I have this degree," she said. "People do that all the time. But I just didn't know about it."