If the start-up world had fairy tales, Jennifer (Jenny) Fleiss and Jennifer (Jenn) Hyman would be the main characters. Once upon a time, the Harvard Business School classmates—Fleiss from the finance world and Hyman from sales and marketing—met casually for lunch every week to brainstorm entrepreneurial ventures.
Rent The Runway co-founders Jennifer (Jenny) Fleiss and Jennifer (Jenn) Hyman
The idea that stuck came over Thanksgiving break, when Hyman’s sister, Becky, wanted something gorgeous to wear to an upcoming wedding, but didn’t want to drop an obscene amount of money on a dress she’d only wear once. From that moment on, Fleiss and Hyman had their concept: Rent the Runway, a “Netflix for dresses” that allowed women to rent designer gowns for a fraction of the retail price.
Now, just over three years later, Fleiss and Hyman oversee the rapidly growing, 125-person, multi-million dollar enterprise with a cultish following of customers who get their own Cinderella experience—a new, gorgeous dress for every special occasion.
We got to chat with the incredible duo to hear more about how they turned an “I have nothing to wear” dilemma into an opportunity that looks like it’s headed for happily ever after. Read on for the story of how they got started, and the advice they’d give to every aspiring entrepreneur.
Why was Rent the Runway the right idea—and what made you move forward with it?
Jennifer Hyman, Rent the Runway Co-Founder and CEO
JH: Actually, I never said, “oh this is a brilliant idea, this is going to be a billion dollar company, we have to do this.” My reaction was: I had an idea, I thought it was interesting, Jenny thought it was interesting, we thought it was fun, and we thought, let’s figure out if this is a great idea.
JF: When Jenn came to me with this idea, we decided to do it as a course credit. But we also decided to spend the rest of the year figuring out if this was something we could do full time, instead of getting a job. We gave ourselves a fixed deadline—by the time we graduated, we’d see if this would actually work. And if it didn’t, we had other jobs that we were going to accept.
You didn’t write a business plan—you just got started! Why?
Jennifer Fleiss, Rent the Runway Co-Founder and President
JH: I think people waste so much time strategizing about what they should do, rather than just going and doing something, making mistakes, and then pivoting. The goal of a start-up should be: Launch as many things as possible, fail as quickly as possible, and then figure out how to move forward from there.
JF: We started by purchasing dresses at retail in our own sizes—we figured if the concept didn’t work, at least we’d have a great wardrobe! We just went to different undergraduate campus and started renting dresses to women.
We went to Harvard on a weekend we knew they had an event. Then we went to Yale, and we rented the dresses, but didn’t let women try them on. For the third trial, we sent a PDF out to students that said “call us if you want to rent this dress.” So, each time we were iterating a little bit closer to what our actual concept was—an internet dress rental site—to prove that it was really going to work.
Obviously, it did work! After you saw that the customers loved it, what was the reaction you got from designers and investors?
JH: The designers were initially skeptical—this is something that’s never been done before. But honestly, I appreciated their skepticism, because it made us dig deeper and figure out what we really wanted our brand to be, and who we wanted to market to and target.
JF: It was tough to prove to the investors that this concept was really going to work. It’s really hard for the 60-year-old men we were pitching to understand the emotional connection that women have with fashion. So we would take them to the trials, or we would take videos, and we would show them the experience that women were having—and that was huge.
JH: They loved our approach of just learning by doing, and running different experiments and seeing what traction we got—could we send something through the mail? Would a girl ruin a dress if she wore it to a party? I think we were able to eliminate investor skepticism by actually going out and doing stuff.
Here's the Rent The Runway website homepage:
Click Image To Enlarge
The following video provides an excellent review of Rent A Runway's website, the services the company provides, designer brands, styles, sizes, colors, etc.
What’s been your biggest challenge along the way?
JF: One is technology—Jenn and I came to Rent the Runway with no technology background. The other is around the fashion industry. We started a fashion technology company with no fashion or technology experience!
What’s been most surprising about the experience of growing your company to what it is today?
JH: That we’ve been able to do it! We were two women without any experience in leading companies. I had led teams before, but nothing like this. I don’t even think I dreamed as big for myself as this company already is, in just the first few years. It’s surprising when you don’t put blockades in front of yourself, and you just allow yourself to run, how far you can go.
JF: Literally every day I walk in the office, and it’s amazing to see all of these people working towards the same mission and goal!
Also, the reception that consumers have had from the product. We get photos, and hand-written thank-you notes, and gifts sent to the office from people who say “thank you, you’ve changed my life!” People feel like they’re getting this awesome Cinderella experience. In a small way, we feel like we’re changing people’s lives in a great and really fun way.
What advice do you have for entrepreneurs who’d like to follow in your footsteps?
JF: I’d say—go for it! But I mean that in a couple of ways. One, do it—there are not as many risks as you feel like there are. People think it’s this scary thing that’s going to make or break your career, and it’s not. If it doesn’t work out, you’ll get another job, and you’ll definitely learn more than you ever would otherwise.
But also, go for it in the sense that you need to test the concept out, and you need to be brutally honest with yourself if it’s not working. Going for it means don’t just sit there with your ideas—figure out a way to see if it’s going to work.
JH: Number one is to figure out how you are going to assess whether you have a good idea or not. So, go do something, learn from it, and be able to have an unbiased view as to whether your idea works.
Also, be very aware of what your strengths and weaknesses are, not just what your skills are. How successful you’re going to be as an entrepreneur is really a story of how compelling a leader you are.
Finally—you know we had to ask. What’s your favorite Rent the Runway dress you’ve ever worn?
JF: You know, it’s not only the dress—it’s also the memory associated with the dress. I actually wore a really great Catherine Malandrino dress when I was about eight months pregnant, and it looked awesome! It’s not a maternity dress, but it just happened to work and fit and fall really well. So that’s a great example of something I needed to wear for one day, but wouldn’t necessarily want to buy.
JH: That is a ridiculously hard question! I think my favorite dress is this incredibly sophisticated Nina Ricci sheath that I wore to the most important presentation I’ve ever delivered in my life. I felt more confident wearing that dress than I’ve ever felt before, and I think that I nailed the presentation because of it—I give 100% credit to the dress!
COMMENTARY: Rent the Runway’s slogan might as well be: Friends don’t let friends wear H&M to the most important events in their lives. The company solves the perennial “closet full of clothes and yet nothing to wear” problem that most women face, by allowing them to rent designer clothes for a big event for about 10% of the price.
It’s clearly a problem women have. The question– like most rental businesses like Zipcar– is how many women want to rent clothes as the solution.
So far, there’s at least one million active users, spanning a wide demographic of women, from 15 years old to 45, says Jennifer Hyman, Rent the Runway CEO and cofounder. She says.
“That was a surprise. Initially we thought it would be only young women in their 20s.”
There’s a lot of heavy lifting behind the scenes in this business. A warehouse in New York dry cleans, repairs and re-rents thousands of designer pieces. An algorithm helps women pick age-appropriate, body-appropriate pieces. A social layer allows them get advice from a small circle of trusted friends and family.
The company had raised $16 million to date from Highland Capital and Bain Capital, bringing the total amount raised so far to more than $30 million. And, surprisingly given the costs to a business like this, the company was profitable before this round.
Hyman says the money will be used to build out its underlying technology, physical distribution hubs all over the country, a sophisticated inventory management system and the micro-social network aspect of the site. Kleiner’s Aileen Lee will join the board.
I like Rent The Runway's business concept very much, but my main concern as a renter would be renting something via the internet and making sure that the garment fits properly when I receive it. When you are renting or purchasing apparel online and on short notice, the worst thing that could happen is to receive the garment, but it doesn't fit well.
I do like that Rent The Runway is getting on the "celebrity bandwagon," by renting some of the designer dresses worn by celebrities at various events like the Academy Awards, Golden Globes, and so forth. When you are renting designer dresses to a market consisting predominantly of Millennials (18-34 year olds), connecting a particular designer dress with a celebrity is very important.
I reviewed Rent The Runway's pages on both Twitter and Facebook, and its my opinion that they need to do more in the social media area. Rent The Runway only has 25,730 followers, but only follows back 419. What the hell is that? They should be using Twitter more smartly by following back everybody, and using Twitter to get immediate feedback on events where designer dresses are worn. This could tip them off to which designers and dresses are "hot." They are doing a bit better job on Facebook where they have 88,000 fans, but if they should have ten times more fans and followers on both Facebook and Twitter.
Rent The Runway should seriously consider developing their own iPhone and Android app. Most Millennials are highly mobile and use their smartphones and tablets to log into their social networks and surf the Internet. An app will allow Rent The Runway to "glue" right into every fan or follower, and they could provide them with real-time posts of events, new designers, new dresses, promotions, polls, and so forth. App users should also be able to rent a garment right through the app, no matter where they are, 24/7, 365 days a year.
Rent The Runway claims to be profitable, but there is always the danger of copycats, especially from the designers themselves or major garmet makers eager to capitalize on a growing trend and new market opportunity. I can easily see this happening.
Courtesy of an article dated February 29, 2012 appearing in The Daily Muse and an article dated May 23, 2011 appearing in TechCrunch
Home owners sometime use this strategy as an incentive to get their home sold Do you have any experience with rent to own homes in your area
Posted by: Pet Cummins | 03/04/2013 at 12:25 PM
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Posted by: party dresses | 04/20/2012 at 05:25 AM