Jennifer Hyman on the Power of Relentless Optimism
The CEO and cofounder of Rent The Runway shares stories from the company’s inception to being one of 30 women who have taken a company public.
“In that meeting, I asked her, ‘Could you introduce me to a few of your friends? I’d love to meet with them and talk about this idea.’ Because every meeting has to get you to three other meetings. Never leave a meeting with someone without asking them for that introduction.”
In this View From The Top interview, Rent the Runway cofounder and CEO Jennifer Hyman shares stories from her first meeting with fashion-giant Diane Von Furstenberg and how she’s worked to foster and maintain relationships with more than 1,000 retail brands.
“If you’re an entrepreneur, effectively you are a salesperson. That’s your number one skill that you need to have,” Hyman says.
Interviewed by Cyerra Holmes, MBA ’23, Hyman talked about how growing up with a sibling with a disability helped her become relentlessly optimistic in the face of insurmountable odds. And, just twelve years after business school and those first meetings with fashion designers, Hyman took Rent The Runway public, becoming the 30th woman to complete an IPO in the history of U.S. markets.
Stanford GSB’s View From The Top is the dean’s premier speaker series. It launched in 1978 and is supported in part by the F. Kirk Brennan Speaker Series Fund.
During student-led interviews and before a live audience, leaders from around the world share insights on effective leadership, their personal core values, and lessons learned throughout their career.
Jennifer Hyman: And I started thinking about like the closet actually is dead. It’s this thing that’s an historical museum of who you were in the past. And the idea was, what if the closet were alive and it could actually change with you as your life changed and your size changed and your mood changed, and you had the freedom to actually express yourself based on how you felt today and who you wanted to be today.
And that was really the idea for the Closet in the Cloud and this idea of having access to whatever you wanted to wear without having to own it.
Cyerra Holmes: Welcome to View From The Top, the podcast. That was Jennifer Hyman, cofounder and CEO of Rent the Runway. Hyman visited Stanford Graduate School of Business as part of View From The Top, a speaker series where students, like me, sit down to interview business leaders from around the world.
I’m Cyerra Holmes, an MBA student of the class of 2023. I had the great pleasure of speaking with Jennifer about the moment she started to conceptualize Rent the Runway, how growing up with a sibling with a disability helped her to learn to become relentlessly optimistic in the face of insurmountable odds. She also shared her unique experience as one of 30 women who have taken a company public.
Cyerra Holmes: Jen, welcome to Stanford.
Jennifer Hyman: Hi. I’m so excited to be here. I spent the last day watching all of these View From The Tops. [Laughter]
Cyerra Holmes: Well, great. You’re ready. So you have a lot of fans here at the GSB. In fact, at our annual GSB Show that we had this past Friday, there were so many of my classmates wearing Rent the Runway that we decided to have an impromptu fashion show. Let me show you the video.
Jennifer Hyman: Oh my God.
Jennifer Hyman: Just one thing: I think as evidenced by this video, to all the men in the room, you are never going to meet a crop of women ever again in your life who are as awesome, beautiful, smart, ambitious as the women who are sitting here. [Cheering and applause]. So if that’s your preference, if you are into women, spend more of your time thinking about dating when you’re at school as one of the key elements of success of business school. [Laughter]
Cyerra Holmes: That’s a great piece of advice. I feel I can get in the interview here. [Laughter] I’m so excited to talk about the innovative business that you’ve built. But let’s rewind and start at the beginning of your story. You grew up in New Rochelle, New York, as one of four siblings. Tell me a bit about your upbringing and how it shaped you.
Jennifer Hyman: Yeah. So I grew up in a very close knit, super loving family, which I’m very fortunate for. I have a sister who is — who’s autistic, and she’s severely — she’s severely disabled. So she is now 38. She can’t live independently. She is very hard to understand her. And it’s been a 24-7 job for my family and my parents to care for her. And it’s been both a job in terms of the heart and the actual labor that it takes, but it’s also a financially kind of crippling situation to have someone in your life that you love that you are effectively supporting for their entire life.
And I really feel in many ways that my family dynamic and the team dynamic that I saw when I was a little kid actually has made my life really about building teams. So I very early kind of recognized that, number one, there’s a lot to do when you have someone in your family who has a severe disability. And your parents are humans, and they’re going to get tired. And there were oftentimes that other siblings had to just step up and lead and act like the mom or the dad would have acted, that we had to actually be flexible in like what is our role in the family.
And the second thing that I recognized is, when I was growing up in the ‘80s, if you had someone in your family that was disabled, most families would try to hide that person away. And a lot of people were being institutionalized, or at the worst and at the best, people were embarrassed, and they wouldn’t bring that family member to a restaurant with them or to a vacation with them. And my parents had this point of view that like we love [Sherri]; yeah, she does crazy things, but like it’s better to laugh than to cry. And like she’s going to come everywhere with us. We’re going to go to fancy hotels. We’re going to go to nice restaurants. We’re going to live our life, and like who cares what anyone thinks about us?
And that mentality of just like really turning things that could provoke anxiety into like, well, that was a crazy night, like that’s a crazy story, that was fun, like as opposed to thinking about the negative with it and also just having this point of view of like we are going to appreciate and enjoy who we are in our life. And so I think that when I really was reflecting back, that family dynamic really gave me the confidence to think about like building teams, that I love being around lots of people. Also the environment was so — one way to describe my house growing up is energetic, but another way is it’s just total chaos all the time, like four kids, an autistic sibling who’s kind of the equivalent of 15 kids.
Like my parents have an almost open-door policy on their lives, so there’re always friends and family kind of streaming out of the house. I actually love that environment. Like recognizing about myself, like that’s what brings me the greatest joy is to be constantly surrounded by other people that I love. And I wanted to almost create that environment for myself, not only in my job but create that environment in my social life, create that environment in my community, that almost like peak happiness for me is being surrounded by a community. And I think that that recognition is what’s really driven my career.
Cyerra Holmes: It also sounds like your upbringing made you quite an empathetic leader as well. So you leave New York and you graduate from Harvard as an undergrad, and you begin your career at Starwood Hotels, where you soon find yourself as a 22-year-old influencing hundreds of people in the organization. How did this come about, and what were some of your biggest lessons learned?
Jennifer Hyman: So I graduated college right after September 11th, and the travel industry was in shambles because people were scared to travel. And I actually thought that it would be pretty interesting to go work for a travel company at the time because I thought that they’re going to have to innovate or they’re going to die. And so it might be an interesting environment to be entrepreneurial. And I got there, and the company was run by an entrepreneurial founder. And about a year into working there, I kind of recognized that people were getting married later, people had different values. And as a result, like leisure travel had fundamentally changed.
And one of the aspects that I thought could be an opportunity was couples who now wanted to potentially register for their honeymoon, and have their friends and family kind of gift them room nights or scuba diving or massages instead of buying them pots and pans because if you’re getting married when you’re 30 years old, you probably have a frying pan already. And I went to the president of Starwood at the time and, at the time, I think Starwood had a few hundred thousand people that worked there. So like creating a meeting with the president is like a 22-year-old was kind of crazy, but I thought, you know, maybe he’ll give me ten minutes of his time.
And I pitched him on this idea of starting the first honeymoon registry in the world and kind of an associated wedding business around it that could kind of capture a leisure customer and create loyalty with that leisure customer. And he listened to me, and he was positive. And then after the meeting, my boss — I went downstairs and my boss was like, “How’d it go?” And I was like, “It was awesome. He said, ‘Go do it.’” He was like — and I just started to work on it. I basically like took this guy’s — he didn’t quite say yes, but he also didn’t say no. [Laughter] So I took that as like, yeah, he really likes this idea, like he wants me to pursue it.
So I started actually building out this wedding business within Starwood. And again, I was 22. No one reported to me. And I had to influence hundreds of people around the world in different divisions to help me build a new website, to help me build a new piece of technology, to help me build a new reservation system, like to tell me take totally different photographs of all of the hotels that emphasize the pool and the leisure assets as opposed to like the conference rooms. And you realized at that time — I realized that I was doing something that was entrepreneurial, right? I was starting something. I had to inspire all of these people who — Jen’s honeymoon business was certainly not in their OKRs. But I had to have them want to spend their time on building this for me.
And so the first aspect of this was like be likeable. Like no one is going to do anything for you if you’re not likeable. And number two is like inspire them with what we’re trying to create — what is the vision of this, and what is this new customer experience, and how is the world changing, and why is this relevant, and kind of getting people excited about it. And that was what was really amazing about this experience. I spent the next kind of three years building this. It became a 50-million-dollar-a-year profit center for the company. It was recognized on Oprah as one of her innovative ideas of the year.
And it was just an exercise for me in like you don’t need to have authority to actually be a leader. You can lead via influence. You probably see that in your own sections here at school, that there are people that kind of influence the climate and the culture of that environment. Like that kind of leadership, like influential leadership, especially when it’s positive influential leadership, is the most powerful thing you can do because within any company, like in most cases, you’re not going to have full authority. You’re going to have authority over some portion of the organization. But what you really need in order to kind of build something and get an idea from idea to actually execution is you need influence. And so that’s what I really picked up there.
Cyerra Holmes: You learned to influence people as a 22-year-old. And I also love that story because it highlights that you’ve always had your pulse on predicting societal shifts and trends, whether that be the experience economy or the sharing economy. And in 2008, you go back to Harvard for business school, and that’s when your idea for a Closet in the Cloud was born. This idea was also revolutionary at the time. Just to give a bit of context, the first iPhone had only been invented a year prior, and it would be years before the likes of sharing economies like Airbnb and Uber took off. Jen, how did you come up with such an innovative idea?
Jennifer Hyman: I think that all great ideas come out of sometimes personal experiences, which is what this [did]. The first inception of was my sis — I was home for Thanksgiving break in New York City. My sister had just bought a really expensive dress at a department store called Bergdorf that put her into credit card debt. I’m her older sister. I’m staring at a closet that’s filled with designer dresses. And I’m like, “Becky, return the f’ing dress.” [Laughter] “Like wear something you already have.” And she said, “I can’t. My closet’s dead to me. I’ve been photographed. The photos are up on Facebook. I need to wear something new.” [Laughter]
And that was really a light bulb that, number one, what she cared about was the experience of walking into the room and feeling awesome. She didn’t actually care about this physical asset of the dress. And number two, she thought this closet that was probably her biggest investment at that time was all dead. And I started thinking about like the closet actually is dead. It’s this thing that’s an historical museum of who you were in the past. And the idea was, what if the closet were alive and it could actually change with you as your life changed and your size changed and your mood changed, and you had the freedom to actually express yourself based on how you felt today and who you wanted to be today.
And that was really the idea for the Closet in the Cloud and this idea of having access to whatever you wanted to wear without having to own it. But then I started to think about, okay, well, this is — could be a good idea; it could not. Does this already exist, because often, even disruptive ideas, like they already exist. It just takes a change in how you’re thinking about the situation to understand, does this exist. And I started thinking about like, does this idea of renting clothes or not having clothes forever, does it exist? And I resolved not only does it exist, but this is like 85 percent of how we already shop. It’s called fast fashion.
Whenever you walk into a store and buy something knowing that you’re going to wear it once, twice, three times and then push it to the back of your closet, you’re renting it. We’ve actually all, over the last 40 years, kind of grown up on this idea that it’s okay to buy things that you’re not going to use forever, and you end up just discarding them at some point or pushing them, storing them at some point. That is a very new concept. Like no matter where you are from around the world, think about your own parents and how insane it would have been, regardless of their economic class, to have purchased 85 percent of the wardrobe that they have knowing that that stuff was actually going to disintegrate after they put it in a washing machine two or three times, which is what happens when you buy things at [GN] or Zara or H&M.
And so I thought we’re already primed to rent clothes, and now all I have to do is come up with a more tech-forward, personalized, easier, more luxurious way to do it, at the same price point as fast fashion, but give access to the real thing. So that was also what gave me confidence that like the market already exists, and we could just create a better kind of solution for how people are already accessing variety in their wardrobe.
Cyerra Holmes: You have this innovative idea, and you’ve mentioned that there are a lot of steps that you have to tackle in order to actually get it off the ground. And one of the biggest questions you have is how to get designer brands on board. I’m curious what steps you took in those early days to convince brands, especially given you had no previous background working in the fashion industry.
Jennifer Hyman: So I had this idea on a Saturday night. I got back to campus on Monday. I had lunch with my friend, and I always was sharing kind of my hair-brained ideas with her. She listened to this one, and she was like, “That sounds like fun. Who do you think we should ask whether this is a good idea?” And I said, “You know, I think that we should ask Diane Von Furstenberg.” And my cofounder was like, “Do you know Diane Von Furstenberg?” who is like —. “No, obviously I don’t, but like we could probably figure out how to get in touch with her.
And that afternoon, we wrote an email to a million different iterations of DVF at DVF.com, [Laughter] and we figured one of those email addresses would work. And someone in her office wrote back like, “I’ll see you tomorrow at five p.m.” And so Tuesday — I had the idea Saturday night — Tuesday at five p.m. I was with DVF introducing myself as the cofounder Rent the Runway. And I was kind of pitching her on this new idea where we would get her inventory current season, rent it out to customers, and what did she think about it. And she hated this idea. [Laughter] Hated the idea.
She thought that — she’s like, “Why would I ever do this? Like you’re going to cannibalize my entire business. Who would ever rent when they — who would ever buy when they could rent?” And as opposed to what most people do in that situation, which is someone who’s very powerful and very cool and very famous telling you like your idea sucks, and like why are you even here, most people would kind of be stopped in their tracks. Like I was like, okay, let me figure out all the reasons why she hates this idea, and then I can use that to actually modify the idea and change the business. I mean, the business was three days old, so it wasn’t really a business. [Laughter]
But like I learned from her that her number one challenge — and it was the challenge of all designers — was customer acquisition, that because of fast fashion, younger women and men were not trying designer brands in the same way they were before. Couple that with the fact that younger people were not entering physical retail stores in the same way they were before. So it was harder for her. And paid marketing costs were extremely high. So it was really hard for her to acquire new customers. And so by the end of what became — she wanted to end the meeting after five minutes. We ended up spending an hour and a half with her in her office.
At the end of this hour and a half, she was like lying down on a couch eating grapes, tussling her hair. I was like, is this a date, or is this a — [Laughter] I didn’t know what was happening, but it was amazing. And I also learned that if I could create a business that helped her reach and develop brand affinity with the next generation of consumers, like that we might have something that she would want to partner with us on. And that’s kind of what she said. She said, “Come back to me, and I will meet with you again and talk about that.”
Now also in that meeting, I asked her, “Hey, could you introduce me to a few of your friends, and I’d love to meet with them and talk about this idea,” because every meeting has to get you to like three other meetings. And so never leave a meeting with someone without asking them for that introduction. Now those other meetings led us to other people in the fashion industry, some of which were designers, some of which were publicists, but people that actually could give us real feedback on this idea and people that could see that like we were interested in listening. It was helping to build trust in an industry where we had no experience, where you go in and you actually allow someone else to give you feedback, like “How does that work?”
What ends up happening in a situation where I sit with you and I ask you questions and I ask you for your advice, you end up walking out of that conversation feeling awesome. You end up liking me in that conversation. Like whenever you make someone else into the expert, like that builds a relationship right away. And we needed desperately at the beginning of the business to build trust so that anyone would actually trust us to like take their currencies and inventory and not cannibalize their business.
So that was just a really incredible experience. DVF continues to be an amazing friend of mine and of the business today, a huge supporter is someone who like, while the initial reaction was like this is not going to work, like she was actually one of the first brands who signed on and has just been incredible along the way.
Cyerra Holmes: That’s a pretty amazing lesson on the power of listening and its ability to transform someone who once viewed you as a competitor into what sounds like a powerful teammate today. Now that you have brands on board, how did you go about transforming consumer behavior?
Jennifer Hyman: Well, getting brands on board took years — [Laughter] let me be clear. Like we launched this company with like 20 brands. Most of those brands were on the verge of bankruptcy, and that’s the only reason they wanted to meet with me — why they wanted to work with us because we wrote them a check with our [VC] dollars. And then it took me years to amass the closer to a thousand brands that we work with today. Now over this kind of period of time, I have a hundred percent retention of those brand relationships. So even though it might have taken me eight years in some cases or ten years in some cases to sign on a brand, once they start working with me, they see the value that we’re bringing to them as a partner.
And that’s really, really important. And that creates positive word of mouth, like positive net promoter score in your brand value proposition, in addition to net promoter score in your consumer value proposition. But I think that like if you’re an entrepreneur, effectively you are a salesperson. That’s your number one skill that you need to have. And when I was going to certain brands, they would be way harsher than what DVF said. The head of one of the biggest luxury brands in the world, in the U.S., told me, “Hell will burn over before I work with Rent the Runway.” He said this to me. He was sitting closer than you are to me. He was like screaming. His face was red. And my reaction was like,
“Thank you so much for the feedback. I’ll come back in three months and like update you on our progress.” [Laughter]
And by the way, he’s one of our biggest partners today. And he forgot that this happened [Laughter]. Like if you ask him about this story, he was like he thinks I’m making it up. I’m like, “No, there were eight other people in the room. Like you actually said this.” Another head of another luxury brand threw his cellphone at me. Like he was so angry with me that he threw his phone at me. He’s like, “We’re never going to do this.” I mean, so you have to just almost like also delight in like the craziness of the experience, that like most people are not going to love your idea initially. And like sometimes, like they’re not loving your idea for the right reasons. You can use what they object to as ways that you can actually innovate and modify. Don’t use their negative reaction as saying, well, they’re wrong.
Like had we not listened to DVF and actually modified what the value proposition was going to be for brands, like we never would have gotten the business off the ground.
Cyerra Holmes: Mm. Did your pitch to brands and all the lessons learned through that inform how you decided to pitch to customers and convince them to join the platform?
Jennifer Hyman: No. I don’t think that the brand value proposition in our business like was really related to the consumer value proposition. I think that we have always been focused on trying to create an incredible experience that women would feel comfortable sharing with their friends, or anyone who complimented them on their outfit, they would say, “Oh, thanks, I Rented the Runway,” as opposed to saying, “Oh, yeah, thanks, I’m wearing Tory Burch,” or, “Thank you, I’m wearing Phillip Lim.” Like imagine how impossible and expensive it would have been for me had someone only said, “I’m wearing Tory Burch,” or, “I’m wearing Phillip Lim.”
So I needed someone to be so enamored with the experience, having felt so great by this kind of Cinderella moment that Rent the Runway was offering them, that they wanted to share the experience. And to this day, 80 percent of our customers come to us via word of mouth. Our business is one that has never really had to rely on paid marketing. And my belief set is that the only way that you can grow a business over time is by improving the value that you deliver to the customer quarter over quarter. Like the customer has to feel that the experience is getting better and better and that you are investing in her.
Cyerra Holmes: Mm. In those early days, too, I can imagine that some customers were maybe hesitant to rent clothes that others had worn before. So how did you go about transforming consumer behavior to enable customers to not only accept but desire wearing clothes that others had worn?
Jennifer Hyman: Yeah. So in 2008, like — in 2009 when we actually launched, it was actually considered absolutely disgusting to wear clothes that other people had worn before. And so it was really only kind of a first adopter sort of community that would even give us a chance. And the fact that we had really aspirational brands that people couldn’t otherwise afford was something that like, even if they thought it was a little disgusting, they’re like, “But I’m getting this two-thousand-dollar dress for like a hundred-dollar rental. Like I’ll give it a try.” And so part of what enabled us to kind of get consumers on board was, one, remember the initial idea was for this Closet in the Cloud and having a wardrobe that was on rotation.
And I recognized early on that that idea was too big for where we were in 2008–2009, that if I pitch this idea of like renting clothes a hundred days of the year, which is kind of how the consumer uses the product today, like people would think that that was insane and the business would have failed. So we started with a consumer value proposition that was really easy for people to get their arms around, which is rent a dress for a special event. You know that you’re going to be asked to be a bridesmaid or to go to a black-tie party or to go to a wedding, and you’re going to buy something that you’re only going to wear once or twice. So it doesn’t make sense for you to buy that dress. So every woman understood that about the value proposition. And therefore, we were able to kind of get her on board.
Second was, make it a luxury experience so every aspect of the experience felt luxury, from the photography to the way that the site worked to the packaging to the customer service experience because the trick of the — what created so much brand love is like you were getting a luxury experience. You were getting thousands of dollars in value. But you were getting it at a fast fashion price point. So that was really the magic of the experience. So invest in every aspect of the end-to-end experience and make it feel luxurious.
And the third aspect was kind of hustle and utilize our own story as founders, kind of put ourselves front and center to try to get as much earned media as humanly possible around this concept to get people on board. And one of the craziest things that we did that really exemplifies Rent the Runway culture is we were like we need to be in “The New York Times” because they have a lot of traffic. And if people read “The New York Times,” then they’ll find out about Rent the Runway. And we literally had not launched the business. And I thought about, okay, how do we get into “The New York Times”? And I thought, okay, well, we’re two women, and we’re kind of starting a tech company. So they don’t — there’s really — at the time, there were no women starting tech companies. Like let’s try to find a technology reporter because we’re going to be interesting to them.
We then scoured like this whole list of email addresses that we had kind of created over the summer, trolling through people’s alumni databases. And we saw that there was someone who was like a 22-year-old tech reporter at “The New York Times.” She had an @NewYorkTimes email address. And I was like let’s get a meeting with her. Let’s like invite her to this office for coffee. And so we invited her. We kind of shared this whole vision of what we were doing. We were going to revolutionize the fashion industry, et cetera. She needed a story because she was 22; she wanted to write her own piece. We needed her. And she’s like, “Okay, I’m going to write an article.”
And then the second challenge was, okay, well, I didn’t want it to be buried in the technology section because then no one was going to read it. So I was like, “Can you come take photos of our warehouse? And do you want to take photos of us?” And she was like, “We’ll take photos of your warehouse but like, no, you don’t need to be in the picture.” I was like, “Oh, well, when’s the photographer going to show up?” And she told me when the photographer was going to show up. I told my cofounder. I was like, “Let’s put on our sexiest dresses right now. Let’s go to the warehouse. Let’s run there. Let’s stand on ladders. Let’s be in front of the warehouse.” And we did it, and we posed in these ridiculous dresses in this ridiculous fashion in front of like a row of dresses.
And that photo ended up on the front page of “The New York Times,” A1 section on NewYorkTimes.com. We had a hundred thousand people sign up day one of Rent the Runway. And we met our first-year sales productions in the first three weeks. And so like press begets press, number one. But number two is like create your own luck. Like this woman was effectively like, “No way, you’re not going to be in the photo.” And who knows if they’re even going to use the photo. I’m like, I’m going to create the story. And so that sort of like creating the story and hustling for it is, first of all, what makes entrepreneurship fun, but second, like something that I hope is still embedded in our culture 15 years later.
Cyerra Holmes: That’s amazing. I’m definitely hearing a theme in all of your experiences of your being scrappy and being the ultimate hustler, which I think is a good lesson for all the aspiring entrepreneurs out there. I want to pivot now and talk a bit about your experience raising money. So you’re obviously operating a very inventory-heavy business, which requires a lot of capital. Can you talk a bit about your journey raising money from a predominantly male VC industry, convincing them to invest in a business catering exclusively to women?
Jennifer Hyman: So raising money was something that I found to be very fun because I love painting the picture of what we were doing, how we were going to disrupt the industry, what the trends were that were kind of leading to this point where Rent the Runway could be a viable business. And it didn’t dawn on me until like many years into the business how bleak it was for female entrepreneurs to be able to raise money. So a lot of the early experiences that we had where people were kind of rejecting us, I just thought like they were rejecting us because the idea wasn’t right for them, or they just didn’t like the idea. I didn’t actually think that it had anything to do with gender.
Now if you look at the data, like there’s a lot that has to do with gender in that the metrics around dollars going to women have been around two percent for the past 25 years, and they’ve only gotten worse. And those metrics are even worse as it relates to people of color, women of color, anyone who comes from a different background. So I think that we had some interesting experiences at the beginning where I remember an early kind of [seed-round] pitch we did where we were pitching to two partners of a very kind of prestigious VC firm. And I know that I’m a great salesperson / pitcher. I’d gotten great feedback on this pitch from others.
And at the end of the presentation, like he took my hand in his — one of the partners — and he was like, “You’re going to have such a fun closet of dresses to dress up with. This is going to be so fun for you,” and like kind of treating me in this way of — that he thought that this was just like some cute girl and some cute idea. And I think that that really has like driven me to want to just prove people like that wrong and that the only recipe is just continuing to move forward. Like there’re going to be people like that. There’s nothing that I can do to change that guy. All I can do is like go pitch more, raise more money, build my business, try to make that business successful, and just continue to like put one foot in front of the other.
So I think we have — I think that there aren’t that many solutions to this problem except ensure that my business can be as successful as possible so that, when other women are trying to raise money, they have the pattern recognition of like, well, there are these other women who’ve been able to do it.
Cyerra Holmes: Mm, well, you did impressively raise over 400 million dollars in VC funding. And with that capital, you were able to grow the business. And in growing the business, you had the best months in Rent the Runway history in January and February of 2020, up until that point. And then obviously, COVID hits and women are no longer leaving the house. How did Rent the Runway change as a result of COVID, and how do you now think about navigating turbulent times?
Jennifer Hyman: So I had been building Rent the Runway for 13 years when COVID hit. And first of all, Rent the Runway is my first child, like the love of my life. I built this company because I actually do want to change the way that people feel about themselves every day. I love my team. And there’ve been thousands of people over time that have been contributing to this big vision and this big idea that we have and have put in their blood, sweat, and tears into taking this from like what was a very crazy, disruptive idea into really pioneering a category.
So we had had this incredible few months prior to the pandemic or many years prior to the pandemic. We had launched a Subscription to Fashion, which was growing like crazy. So your vision of the Closet in the Cloud was actually coming to fruition. People were using this to get dressed 80 to a hundred days of the year. They were Renting the Runway for their everyday life. And then on March 12th, 2020, we lost like 80 percent of our revenue overnight. And we — clearly, like there’s really not a use case for variety in your wardrobe, which is what Rent the Runway is about, if you are on your couch. Like there’s really nothing that you can do kind of drum up demand. And initially, I didn’t want to accept that. And I spent the first few weeks trying to like drum up marketing ideas with my team of like, how are we going to bring customers back, what are we going to do?
And there was a moment where like I was on Zoom, and my husband kind of came into the room after I had like signed off a Zoom call, and he was like, “Jen, you run this company, and you’ve been in the same pajamas for the last two months. No one is going to rent clothes right now.” [Laughter] “Like stop thinking about this and save the company.” And I think that the first lesson is like, when you’re in any kind crisis, you have to ground yourself in reality. And grounding yourself in reality is often a very difficult and harsh thing to do. And it’s especially a harsh thing to do when you’re leading a team of thousands of people.
And at the same time that I was trying to ground the team in the reality that like this is going to be really bad for us for a long period of time, I had to inspire the team with hope that there was a reason to still believe. There was a reason to still believe in our vision, that our vision actually was going to serve the post-COVID world even more, even better, and that we can use this period of time when, essentially, our revenue had kind of moved away to transform and innovate the business in ways that we may not have been able to when there were all of these orders kind of coming through the site, all of these orders coming through the warehouse, et cetera.
So it was an absolutely horrific period of time on one hand because I felt like the huge amount of emotional stress that I needed to save the company not just for myself, I needed to save the company for the thousands of people who had believed in me, who had dedicated their time over many years in helping to create this company, and it deserved to exist. And so we had to — I had to basically become the most decisive version of myself. And every single day, I would make dozens if not hundreds of decisions. It’s very clarifying to be in that situation in some senses because you realize like what is your core business, what do you think it’s going to be when you come out of COVID, and like what can you — you need to slice away a lot of the business right now.
We needed to let go of hundreds of people, which was incredibly difficult. We needed to let go of lots of different workstreams and divisions of the company. We had to simplify the business. And those times of crisis, in a sense, there was like deep clarity around what is the simplest version of what this product needs to be, and how do we actually get really laser focused on here’re the three things that we’re going to do over this period of time that are going to help the business transform so that, when we emerge from COVID, we can emerge as a fundamentally different and stronger business than we were before.
Cyerra Holmes: That’s amazing that you were able to keep the business afloat during that time. And you impressively go public in 2021. Fast-forward to today, nearly 15 years after your founding, after you’ve pioneered a new way to shop, the market is now not only full of other clothing rental platforms but also resale players. How do you think about differentiation, given the market?
Jennifer Hyman: So first of all, I’m really proud that there is a circular fashion market right now that we were a part of pioneering. And that circular fashion market is global, and it’s enormous, and it’s growing. And I see that the market — no one consumer is going to just have one modality for how they think about clothing, how they think about their wardrobes. If you think about most industries on earth, you’re offered a choice as a consumer for how you want to consume in that industry based on what your need or your use case is. So in the world of transportation, you can own a car. At the same time, if you’re going from point A to point B, you can decide you want to take an Uber. If you are going on a seven- or 14-day business trip, you can rent a car for that period of time. You can — there’re different options for you to get from point A to point B.
In fashion, before Rent the Runway, you had one option, which was buy something and own it forever. And so what I see Rent the Runway as doing is we’re really owning kind of that last mile in the same way that Uber is helping you get from point A to point B. Anything that you want to kind of utilize in your wardrobe for like three months or less, you should have it as part of your subscription. Like this dress, I might want to wear it a few times, and then I’ll send it back. I’ll get something new. That should be part of your rental rotation.
What is resale? Resale is a leasing model, okay? Like resale is if you want a new bag every year, you want to keep that bag for a year and then flip it out, like that makes sense to utilize resale because it’s a long-term leasing model. And then ownership should be something where you invest, and you have those things forever. They should be very high-utility items that you get a lot of use case on. So you should own an amazing black blazer. You should own amazing cashmere sweaters. Like the closet should exist with all of these options. And the consumer, when given a choice, I think now can like rethink how she spends her money and actually have the freedom to think about those items that like, with rental as an option, you have the freedom to express yourself in a way that like you didn’t really have before.
And you can kind of wear something that’s a new color or new trend and have fun with it without having that burden of knowing you have to own it forever. So I see resale as being incredibly complementary to what we do. I see the fact that there are other now real competitors that we have in the rental space, in the subscription space, as being amazing. It is unbelievably difficult to create an industry, explain how this whole thing works, get you to use it as a consumer, improve, continuously market this new industry. Like if there are competitors who are also marketing this idea of subscribe to fashion, all we have to be is the best. All we have to do is own who our market is and own who our consumer is.
And because I think that this is such an enormous market, fashion is a 300-billion-dollar market just in the U.S. It’s a two-and-a-half-trillion-dollar market globally. And I personally think that because 80 percent of the closet is worn three times or less that there is a huge amount of the closet in the future that can actually move to this idea of a Closet in the Cloud.
Cyerra Holmes: Mm. It also seems to me like in this crowded market, one of your main differentiators too is your reliance on data. I think many people may view Rent the Runway as solely a fashion company. But in reality, you area a massive tech and logistics operation that has figured out how to expertly use data to understand consumer behavior. Can you give us just a few examples of how you use data?
Jennifer Hyman: Yeah, but we kind of skipped over like a really crazy part of the story, which is like the business died, right? Like we had no revenue. And we were then innovating, and I had to raise like vulture capital to keep the business alive, which was an insane experience. And then a year and a half later, we IPO’d the business, and it was the most incredible experience that I have ever had in my life to IPO something and see thousands of alumni of Rent the Runway and employees of Rent the Runway come back to New York during COVID to celebrate this. And the number of people who were able at that point — when you’re kind of the boss or you’re a leader, like someone works for you, and when they leave Rent the Runway, you don’t really know or you don’t really hear like what impact Rent the Runway has had or not had on their life.
And the IPO was this unbelievable experience where like I heard from thousands of employees that like this experience working at Rent the Runway had transformed who they were and transformed their lives and had made them dream bigger for their own lives, and they had now become their own entrepreneurs, or they had met their own cofounders, or they had met their own cofounders, or they had taken big jobs somewhere else. And I think that like there are those moments in a business career that are harrowing like managing through crisis and managing through a pandemic, and then there are these moments that are so incredibly special where you realize that you’re making even a small impact on how people feel about themselves and on their lives, and you kind of have to treasure those incredible moments of celebration as the fuel to kind of keep you going and enable you to kind of keep on putting one foot in front of the other.
So I just wanted to go back to that IPO because it was like unbelievable that we were able to do that. And thank God we IPO’d when we did because a week later the market crashed, and we never would have been able to go public, and the business would have gone bankrupt at that point because we needed that capital that we raised in the IPO to bring the business to profitability. And so there was just a really miraculous period of time that I’m extremely grateful for, and the team that kind of stayed so committed to this vision.
It is the most special thing in life to not only have your own passion and your own vision and conviction for something; but when you see that other people take that on their own, and when other people act like real founders in your business and in your idea and that we’ve done this together, like that is the most special experience of my life, that it wasn’t about me taking the company public. Everyone who was there felt like they took the company public, that they built the company. And like that’s what I kind of wish for you, all of you in the room, that like you are able to build something and have a career where you feel like you’ve done something with a group, where like you’re part of a community that’s changed the world in some way because that feeling of doing something together is like the most incredible feeling in the world.
Cyerra Holmes: That’s amazing. And thank you so much for digging in deeper there.
Jennifer Hyman: But we can go back to data [laughs] —
Cyerra Holmes: [Laughs]
Jennifer Hyman: — if we want.
Cyerra Holmes: We can talk about that, but in the interest of time, I want to open it up to audience Q&A. There are so many other parts of your story that are interesting and that [I’d] want to talk about.
Jennifer Hyman: Wait, no, I want to talk about one other thing first.
Cyerra Holmes: Okay. [Laughter] You can also do that, too.
Jennifer Hyman: Okay. I want to talk about this concept of View From The Top and how challenged I was to kind of think about myself even giving this conversation today because by no means do I think that I’m at the top. And I don’t even use that as a parameter for how I want to think about my life. Like what does being at the top mean? Like I have achieved incredible career success, but I still think I’m at the very beginning of what I want to build and innovate and create for Rent the Runway. I want this business to be really sustainable.
I view that so much of my life and what is going to make me happy and what does make me happy has nothing to do with a successful career. It has to do with the fact that I have a wonderful marriage, and I have kids whom I love, and I have incredible friendships and I invest in those friendships. And sometimes I — now that I’ve watched like 12 of these talks over the past two days — [Laughter] — I have seen that there are a lot of like luminary people and they come here and they talk about like their career success and like give this notion that what we’re trying to achieve is being at the top.
But it’s like if we all think about our lives that way, of trying to get to some destination, you’re not going to be happy. Like the life is about the journey. The thing that I’m proud of about Rent the Runway is the everyday moments over the past 15 years where I’ve just had the time of my life. Like who really cares? Like what does being at the top mean? Does that mean an extra X million dollars in the bank? Like what is that really going to bring to me? What — so I think that we should just all think about like the goal is the journey and enjoying it. The goal is like what is optimized around making you happy.
And for some of you, that’s going to be very career related. But for many of you, it might not be. And that is totally okay. And part of what you should be doing here is figuring out like what fundamentally about you is going to make you happy. Like the realization for me, going back to my childhood, is that it’s community that makes me happy. And so like entrepreneurship is just my way to like pay people to be around me all day long, right? [Laughter] So I build my own community, and like that makes me really happy, and I’ve built other communities of my family and friends, et cetera.
But like I just don’t think that many of the people that I used to — when I was in business school and I looked up and I said, well, they’ve created a multi-billion-dollar company. They’re sitting here. They’re a billionaire. They’re successful. It’s like if you really talk to a lot of those people, like that’s not how they measure even themselves. Like there are so many aspects of your life that are — you can achieve all of this career success, and if you don’t have the other things in your life that you really care about, like it’s really not going to be that meaningful. So we have to focus on like the whole picture.
Cyerra Holmes: I appreciate your saying that because there are so many [MBA2s] in the audience here about to graduate. So thank you. [Applause]
Male Voice: Jen, thanks so much for being here and sharing your story. And I particularly love the elements of hustle that you shared throughout your story. A lot of the women in my life love Rent the Runway.
Jennifer Hyman: That’s awesome.
Male Voice: I was curious if Rent the Runway could work for men, and why or why not?
Jennifer Hyman: I think that there’s definitely more of a market for men today than when we founded the business. Men are becoming more and more interested in fashion. But I think that great businesses stay focused, and we can do so much more for our female customer that we have today. We’re just scratching the surface on the customer experience. And I think that it would actually be — detract an enormous amount from the experience to start to focus on an entirely different customer set right now who has different needs, who thinks about the product in a completely different way.
So even 15 years into the business, interestingly, like I think that we still have a massive, massive opportunity ahead of us, and the goal is like continue to stay focused on it.
Cyerra Holmes: It’s View From The Top tradition for us to end with a quick lightning round —
Jennifer Hyman: Okay.
Cyerra Holmes: — if that sounds okay to you.
Jennifer Hyman: Great.
Cyerra Holmes: Okay, great. Dream job when you were a kid.
Jennifer Hyman: Being a pop star.
Cyerra Holmes: Awesome. It’s not too late for that. [Laughter]
Jennifer Hyman: Oh, I’m working on it. [Laughter]
Cyerra Holmes: Advice you would tell your younger self.
Jennifer Hyman: A lot. This is a big one. Real advice is do not stress so much about getting married. You’ll get married. [Laughter] [Applause] You’ll find the love of your life. Like it’ll happen. Like don’t let it paralyze you. [Laughter]
Cyerra Holmes: That’s great. Most fun piece of clothing you’ve rented.
Jennifer Hyman: I rent clothes about 350 days of the year for the last 14 years. So there is a lot. Well, I’ll just tell you one last weekend. I dressed up with my daughter as we were both Harry Styles. I wore a silver sequined striped jumpsuit that looks exactly like Harry Styles. She had her own matching one. And we sang with the band in front of her birthday party. So that was just really fun about like using Rent the Runway to do something crazy and wear something that’s certainly a one-time thing. [Laughter]
Cyerra Holmes: And finally, an atypical View From The Top lightning-round question, but is there any discount you can give to your GSB fans out there? [Laughter]
Jennifer Hyman: I think we have something for all of you guys. [Cheering]
Cyerra Holmes: What is it? Well, hopefully a promo code. Oh, it is! [Laughter]
Jennifer Hyman: We have a promo code. We want everyone here to have a subscription. And we’re giving it to all the men, too. So give it to any woman in your life that you want. And thank you guys so much for having me here today.
Cyerra Holmes: Thank you so much, Jen.
You’ve been listening to View From The Top, the podcast, a production of Stanford Graduate School of Business. This interview was conducted by me, Cyerra Holmes, of the MBA Class of 2023. Lily Sloane composed our theme music and Michael Riley and Jenny Luna produced this episode. You can find more episodes of this podcast at our website gsb.stanford.edu or wherever you get your podcasts. Follow us on social media @stanfordgsb.
For media inquiries, visit the Newsroom.