Stitch Fix's Katrina Lake At The HIBT Summit

Today we have another live episode from the How I Built This Summit, featuring Katrina Lake of Stitch Fix. Katrina sat down with Guy Raz in front of a live audience in San Francisco in October to discuss building culture at a billion-dollar company, and why it's important – even for the CEO – to "rehire" yourself every year. We have one more episode from the Summit coming up next Thursday; stay tuned for Guy's conversation with Lisa Price of Carol's Daughter. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Guy Raz?

  Hey, it's Guy here. And today, we've got another episode from the How I Built This Summit that we held in San Francisco this past October. And this week, we're featuring Katrina Lake, founder of Stitch Fix, a personal shopping service for women and men. My original interview with Katrina ran earlier this year, and if you haven't heard it, you might want to give it a listen, because Katrina's story is pretty amazing. She's built a billion-dollar business and is the youngest female CEO ever to take a company public. But she's also one of those founders who didn't really set out to be a founder. Katrina and I sat down together in front of a live audience at the Airbnb Center for the Arts in San Francisco.

• 0:47Guy Raz?

  All right. So let's just start with your self-perception as an entrepreneur. You didn't-- you know, one of the interesting things that we talked about briefly on the podcast, but we didn't go into too much detail on it, was you didn't think of yourself as somebody who was going to start a company and run a big organization and be a leader of all these people. Like, that wasn't how you saw yourself, and that wasn't your intention? I mean, obviously, you're doing it, but why? Why was that?

• 1:16Speaker 01

  Yeah, it is-- it's funny. I look back, and it is one of the things that I'm passionate about, of how can we make entrepreneurship something that feels more accessible and more real to more people? Because I think I look back, and in my childhood, like, nobody thought I would be an entrepreneur, and encouraged me to be an entrepreneur. Like, my mom is a-- or she just retired, actually, but she was a public school teacher. My dad is a doctor in the public university system. You know, I don't know that I was raised with that as even a possibility in my mind. And it's funny, because sometimes people ask me, like, "Oh, you went to Stanford. Did that make you realize you wanted to be an entrepreneur?" And in some strange ways, it actually had the opposite effect of, like, the people who were the entrepreneur types at Stanford were very different than kind of how I saw

• 2:01Speaker 01

  myself. And so it took a really long time, I think, for me to realize that entrepreneurship would be a good path for me. And I think there's a lot of other people-- Out there that would be pretty good at it that maybe haven't had that exposure or haven't had that push. And so, you know, it's definitely one of the things that I'm passionate about about, you know, making sure that this path is available to more people.

• 2:22Guy Raz?

  What did you think an entrepreneur was supposed to be? Like, what did you think it meant? Or what was that person like in your mind?

• 2:31Speaker 01

  Um, I mean, it's just, it really is, you know, who you have exposure to. It's like, you know, Mark Zuckerberg was around the Stanford campus when I was, um, when I was in school. Google was created around the time that I was in school. Um, and there's, you know, kind of largely this like coder code in your garage. Like where Adidas flip flops kind of like kind of personality that, um, that, you know, didn't feel all that accessible to me.

• 2:57Guy Raz?

  Yeah. As you, as you mentioned in the podcast in the early days, you had to raise a lot of money because you needed a lot of money to get this thing off the ground. There's, you had to buy inventory and you had to build all the technology around it. And you described Stitch Fix really as a tech company. You, you told me that male VCs and that you, they were mostly men that you were meeting with were not passionate about dressing women. How did you convince them or at least some of them otherwise?

• 3:25Speaker 01

  Yeah, I mean, we actually didn't raise that much money. We raised less than $50 million. The business is now over a billion dollars. And so, um, you know, I think our, the amount of capital that we raised was actually very modest relative to, um, you know, where, where we'd end up. But in the early days, yes, we did need money. And so we raised, I think, 500,000 in a seed round, and then we raised a couple million in an A round. But, you know, we weren't raising these huge, you know, crazy sized venture rounds. Um, and, you know, candidly, like I wasn't able to, like a fundraising was not the thing that I invest in the world at. I hated it because I was bad at it. I mean, we raised, I, you know, at some extent, you can say that building a billion dollar business on less than 50 million, that that's something to be proud of.

• 4:08Speaker 01

  Like it's, it's honestly the result that like fundraising is not my towering strength. It's just, it's not the thing that helped me to be a good entrepreneur. Um, you know, I probably wasn't very good at it then. I don't know that I'm terribly good at it now. You know, capital wasn't necessarily one of those things that helped us to be successful.

• 4:25Guy Raz?

  Yeah, we showed some survey results from a survey that we commissioned just earlier today. And it showed that women entrepreneurs who responded, some of them in this audience, you know, they've reported bias against them as they tried to grow their business. And I just want to, I want to ask you about this for a moment because, because of what you represent, the youngest female founder to take a company public and you created this billion dollar company. Do you like being seen that way? Is it irritating to you when people kind of say, oh, here's this great woman founder? Do you embrace it? How do you feel about it?

• 5:06Speaker 01

  I mean, I think I'm, you know, mostly positive, but it's sometimes mixed. Like, you know, I think there are times when, you know, it can be like, oh, she's a great female CEO. I'm like, I just want to be a great CEO. Like, I don't need the female part of it. I just want to be a great CEO.

• 5:21Guy Raz?

  Yeah.

• 5:27Speaker 01

  And, and so that part can irritate me because, you know, I think at this point, like, we have the credentials to back that up. The flip side, I feel immensely proud and really responsible to be able to show people like me this path. And so I, you know, I'm very proud that I am a woman. I'm very proud that I don't look like all of the other, you know, public company CEOs out there. And those are things that I think, you know, I feel like just by being on this stage, I can have an impact and I think is really, really important.

• 6:05Guy Raz?

  Yeah. Do you, I mean, do you feel like things are starting to change or turn a corner? Or do you think it's more of the same?

• 6:15Speaker 01

  I mean, I think there just has to be positive change. Like, you know, I don't know that we're turning a corner. But, you know, there are many more female CEOs out there. When I was writing my business school essay, like, I remember I was like, I had Google spreadsheets of like, women executives, and I was pathing, how did they get there? And, I mean, you know, there were very few women for me to choose from when I was writing those essays. And if I tried to write those essays now, I think, you know, 10 years later, there's many more options of people that I could look to as role models, you know, for that 10 years ago me. And so, you know, I feel optimistic that change is happening. You know, is it happening fast enough? That part, I think, is a real challenge.

• 6:58Guy Raz?

  I want to ask you about building culture at Stitch Fix. Because I wonder, even when you were just a tiny team, or maybe it was just a few people, did you even have the luxury of thinking of culture at that early stage? Or were you just trying to grind through?

• 7:15Speaker 01

  You know, I thought about culture really early on. And I do wonder if some of it, when I was thinking about starting this company, like, I was thinking about it in terms of like, well, I want to create like, the retail model of the future, but I also want to create the company of the future. And related to that is like, I'm going to work at this company for 10 years, 20 years, whatever. I'm now seven years in. Like, in this day and age, if you're going to work somewhere for seven years, like, it's a place you really love. And so, you know, I had this mindset when I was creating the company of like, what would be the company that I would want to join for seven years, 10 years, 20 years? You know, I think the culture that we have, I mean, people talk about diversity quite

• 7:59Speaker 01

  a bit, and I think for us, like, we have a very diverse team, we have a very diverse management team, but I think it's also this idea of diversity of thought that's super important. And one of the epiphanies with Stitch Fix was that to be able to have two people in a room that had very different perspectives on how to solve a problem, ended up with better outcomes than two people who thought the same way. For example, when we have data scientists sitting alongside stylists, like, they look at the world in a different way. They look at how do we serve clients better in a different way? And I think the two working together is so much greater than the sum of its parts.

• 8:34Guy Raz?

  I wonder how crucial you think that is. I mean, imagine, right, people in this, in this audience and listening, early-stage entrepreneurs. You know, they've got to think about everything from just getting their product out there and marketing and, you know, competitors and all the things that you worry about. I mean, could you argue that at the very early stages, thinking about culture is an indulgence? Or do you think it's absolutely critical and crucial that that's baked in from day one?

• 9:04Speaker 01

  I mean, I think if you're going to have the best outcome for your company, it has to be crucial. I mean, there's, and I think there's a couple of reasons for that. I think, one, you know, I think it is the, the team that you have, like, all of, I mean, Stitch Fix is such a great example because there was a point in time when, like, I was in the room when we packed out every fix and when we styled every fix. And obviously, now I can't do that anymore, and it's all in the hands of a team and a culture. And like, eventually, if you're successful, if you have more than 10 people who are, you know, working for you, like, you are, your company, the fate of your company rests in the, in your team. And what is going to keep a team motivated, it's not money, actually. It really is the culture. It's like, what are they getting out of their day-to-day?

• 9:47Speaker 01

  We all are lucky enough to have many choices in terms of where we work and where we spend our time, and they have to be choosing yours every day. And so, you know, I really believe that, like, if you aren't setting that up from day one, you aren't realizing your full potential as a company.

• 10:03Guy Raz?

  You do something really interesting. You think of your job as a different thing every year. I've read that you, you describe it as you rehire yourself every year. So what, what does that actually mean in practice?

• 10:14Speaker 01

  Yeah, so, um, you know, being a CEO is, um, it's funny, when in the very early days, I remember I had a friend from high school who, like, came to visit our tiny office at the time, and he was like, "I feel like your job is kind of like CEO slash janitor." And, and it really was in those early days. Like, some of the things were like, "I need to make sure the printer has toner. I need to make sure that when somebody's starting, that they would have a desk and a computer." And so, you know, I think the recognition that, like, Your job changes and you know to be able to have this you know I guess process or just like this reflection of like what is my new job today what does that mean in terms of how I spend my time and also like you know do I still like this job I think it's

• 10:59Speaker 01

  I think this is practical for me as CEO but I think it's also practical for anybody who's employed at a company that's growing where you know I think there are people who say like I love the early stages running out of toner and you know crazy running around like love that stage and don't love the stages later and the reality is like the job changes and if you're not recognizing the ways in which the job are changing or the ways in which you are changing then you can get stuck and nostalgic and so for me what I think is super important for me to feel really energized and excited about what I'm doing is really like recognizing that and saying like this year like now we're a publicly traded company like now some of the new challenges for me are working with

• 11:40Speaker 01

  public market investors are creating a longer term strategy around how people perceive the company from a financial perspective and really like those are interesting new challenges that I didn't have before and so I think you know for me being able to be excited about the next chapter and the new challenges that come with that and leaving some of the old ones behind has just been like a really important practice.

• 12:02Guy Raz?

  How how has your leadership style changed five years ago versus today?

• 12:06Speaker 01

  You know I I don't know that my style itself has changed I think you know I've developed in other ways but I think the I'm stealing this quote a little bit of just like I think this like idea of today's leaders need to be authentic and that's just like it's such a great currency of like how do you build trust and I think I've been forced to just be that from the beginning because there aren't a lot of other examples of people I can try to be like and so and so you know I think that's been really consistent and true throughout my tenure as CEO but you know I do feel just like I don't know I feel more experienced I feel a little bit more like I know what I'm doing maybe the thing that's evolved the most has actually less to do with the company's trajectory as much

• 12:51Speaker 01

  as it does for my family which is that like Having a toddler at home and expecting another baby just means like you have to ruthlessly prioritize.

• 12:59Guy Raz?

  Yes.

• 13:00Speaker 01

  And so, you know, there are things that I would get super excited about and spend all night doing, or just, you know, crazy things that I used to do that like I can't do anymore. And so I think that's probably been the biggest change.

• 13:10Guy Raz?

  In our remaining minute, if you were in this audience 10 years ago, and you were watching a version of Katrina Lake here, what do you wish you knew then that would have been helpful to you that you now know?

• 13:23Speaker 01

  Well firstly, I think it's awesome that you guys are in the audience.

• 13:26Guy Raz?

  Right.

• 13:27Speaker 01

  I don't think I did enough to really be part of the entrepreneurship community and really build that network in the early days. So I think that first and foremost, you guys are already doing better than I was. I mean, I think one of the things that I wish that I could have done better with is just having the ability to pull back and see, I don't know, how do I put this? Like, as an entrepreneur, I felt like my life was just this crazy up and down roller coaster, whereas like one day it was like, today's the best day ever, and then the next day it was, today's the worst day ever. And it just was this like crazy emotional roller coaster. And, you know, if I pull back the lens, I'm like, you know, it generally looked kind of up and to the right, and it like, things generally were better the day, you know, than one month later than they were the month before.

• 14:11Speaker 01

  And it was just really hard to get out of that day to day craziness back then. And so, whatever you can do, whatever, my advice to me would be like, whatever I could do to be able to get more of that perspective, so that I'm not on this emotional roller coaster all the time, I think would have been helpful.

• 14:28Guy Raz?

  Katrina Lake, founder of Stitch Fix. Katrina?

• 14:32Speaker 01

  Thank you.

• 14:35Guy Raz?

  I spoke with Katrina Lake in October at the How I Built This Summit in San Francisco. And we've got one more of these summit episodes for you coming up next Thursday. It's my conversation with Lisa Price, founder of Carol's Daughter. And thanks for listening to today's show. It was produced by Rachel Faulkner with music composed by Ramtin Arablouei. I'm Guy Raz, and you've been listening to How I Built This from NPR.

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