Rent The Runway: Jenn Hyman (2018)

Jenn Hyman got the idea for Rent the Runway in 2008, after she watched her sister overspend on a new dress rather than wear an old one to a party. Jenn and her business partner built a web site where women could rent designer dresses for a fraction of the retail price. As the company grew, they dealt with problems that many female entrepreneurs face, including patronizing investors and sexual harassment. Despite these challenges, Rent The Runway now rents dresses to nearly six million women and has a reported annual revenue of $100 million. PLUS in our postscript "How You Built That," we check back with Monica Mizrachi and her son Solomon who built EzPacking, a business that sells sets of clear squishy plastic packing cubes. (Original broadcast date: August 7, 2017.) 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.

• 0:00Guy Raz?

  Hey, it's Guy here. So you know, we're all pretty used to the idea of storing our stuff in the cloud, right? Like, our files and our photos and our music. It all lives up there somewhere. But when Jennifer Hyman launched Rent the Runway, she essentially wanted our clothing to live in the cloud, too. So she created a website with this huge inventory of women's clothing that you never had to own. You would just rent it and send it back. Jen calls it a closet in the cloud. Here's a story of how she and her partner built Rent the Runway. This episode first ran in August of last year.

• 0:37Speaker 01

  I said, you know, we should really call Diane von Furstenberg, the famous fashion designer. Fast forward a few weeks, and we're driving to the second meeting. And her assistant calls and says Diane no longer wants to see you. She's not interested in this idea. And I said, oh, yeah, we're just around the corner. Like, we'll just drop by for a second. And again, her assistant very firmly said, she doesn't want to see you. What do you not understand? And I said, oh, we're cutting off. We're cutting off. And I hung up. And then I sped down the West Side Highway, and we were at her office, and we just showed up.

• 1:21Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 1:33Guy Raz?

  I'm Guy Raz, and on today's show, how two women who wanted high fashion but couldn't afford the price tag decided to make it possible to rent the runway.

• 1:48Guy Raz?

  So Rent the Runway is now one of the hottest fashion companies in the US. It's growing like crazy. It's doing more than $100 million a year in revenue. And it has something like 1,200 employees. But given that its core product is designer dresses, you might be surprised to discover, as I was, that just 10 of its employees work in the fashion department. Most of the rest, well, they work for a technology company, because that's actually what Rent the Runway is. Now, the way it works is you go online or you go to the app and, well, you rent a dress, a dress that might cost thousands of dollars to buy.

• 2:29Guy Raz?

  Except you only pay a small fraction of that and you get to look fabulous for one night. And then in the morning, after you've recovered, you mail it back. It's kind of like Zipcar meets Netflix meets Sappho's, if that makes any sense. Anyway, the co-founders, Jen Hyman and Jennifer Fleiss, came up with the idea when they met in business school. And as you will hear, the path to building their company was fraught with all kinds of challenges, among them rampant sexism and even harassment. Jen Hyman has only recently been opening up about that. But her story begins just after she graduates college and gets a job working as a junior analyst for the hotel company Starwood.

• 3:16Speaker 01

  About a year into my time at Starwood, when I was 22, I had this thesis that we had entered the experience economy. And people were getting married later and starting to value experiences like travel over owning things. And so I had an idea at the time to launch the first honeymoon registry in the world, where couples could register for their honeymoons and their friends and family could contribute by, you know, paying for scuba diving or paying for a massage or a hotel night, as opposed to buying them pots and pans. So as a 22-year-old, I was really passionate about this idea.

• 3:59Speaker 01

  I emailed the president of Starwood and I pitched him on this idea to start a wedding business at Starwood, where the cornerstone of it would be with the first honeymoon registry.

• 4:11Guy Raz?

  Just a sec. First of all, you're 22. I mean, that's incredibly precocious. But was there anybody around you who was like, hey, stay in your lane? Or was there anybody who was trying to tell you to keep quiet?

• 4:24Speaker 01

  Oh, yeah. Several bosses of mine were telling me to keep quiet. And one of the experiences that really impacted me was...

• 4:35Speaker 01

  I had a female boss. And at the time, I think she was like 35 or 36. So kind of about my age right now. And I would often raise my hand in meetings and speak and make points. And I remember her grabbing me after a meeting one day. And she said, you know, Jen, I really want to give you some feedback. It's really important for your career. And I said, oh, you know, I'd love to hear. What's your feedback? And she said, you really need to shut up.

• 5:10Guy Raz?

  Wow.

• 5:12Speaker 01

  You're a girl. And it would be much more becoming if you acted sweet in conversations. Because, you know, you're too confident, you're too bold. And it's coming across the wrong way. And of course, I didn't really know how to take this. I mean, I don't even know how I would take this today, let alone as a 22 year old. I started hysterically crying. I was in the middle of like an open floor plan. And a more senior man saw me. I literally credit this guy for my entire career. He took me aside.

• 5:54Speaker 01

  And because I didn't even understand office politics at the time and like what I should and shouldn't say, I kind of just blurted out, oh, my God, like this woman just told me X, Y, and Z. And I repeated the entire conversation to him. And he said, you know, Jen, you keep doing what you're doing because that woman's going to be working for you one day.

• 6:14Guy Raz?

  Wow.

• 6:14Speaker 01

  And he, in a sense, gave me permission to just act like myself. And who I was as a 22 year old is the same person as who I am today. It's the person who had a creative idea about the experience economy and I wanted to share it.

• 6:34Guy Raz?

  So what did you end up doing with the idea? I mean, you pitched this to the president of Starwood.

• 6:40Speaker 01

  Yeah. I think he thought I was so a little bit crazy

• 6:44Guy Raz?

  Yeah.

• 6:45Speaker 01

  for going and pitching to him that his response was like, "Yeah, yeah, yeah, sure, whatever." And I took that as a yes.

• 6:52Guy Raz?

  Wait, he said, he didn't say yes. He just sort of said, "Yeah, that's interesting." And you went back to your desk and you started to map out how this could happen?

• 7:02Speaker 01

  I started to work on it. I spent the next three years working on it. And Starwood still participates in the honeymoon registry to this day

• 7:12Guy Raz?

  Wow.

• 7:12Speaker 01

  and has taken it to a whole other level since I left. But it was such a fun experience for me to, A, work on something that I loved and was passionate about, and B, be part of the process of creation.

• 7:26Guy Raz?

  So you were obviously on the fast track to, like, if you were still at Starwood today, you might be running the place. I mean, you were doing this at such a young age. Why did you decide to leave after a couple of years?

• 7:36Speaker 01

  Well, I always thought that I would go to business school.

• 7:40Guy Raz?

  Huh.

• 7:40Speaker 01

  Both of my parents had gone to business school. And so I thought that the track was you work for four years between college and then you go to business school. So when I was at Starwood for three-plus years, I applied to business school and I got into Harvard Business School.

• 7:56Guy Raz?

  So here's a question for you about, because we're going to get, I want to ask you about, of course, what happened at business school, which is key and critical to Rent the Runway. But the vast majority of the entrepreneurs that have been on this show did not go to business school. And you had all this incredible experience. And you were really ambitious. And you were entrepreneurial already. Why did you think you needed to go to business school?

• 8:21Speaker 01

  Well, first, I have always had big dreams for my career, but I didn't exactly know what those dreams were. You know, Sarah Blakely was a guest on your program. And she's someone who has always been an inspiration to me. I remember being a younger girl and seeing her on Oprah. And she had this amazing business, but she also seemed like a real person who cared about getting married and having kids and having friends and having a social life. And That was really important to me. I was still fearful that you had to make a choice between having an incredible career

• 9:06Speaker 01

  as a woman or having a family. And I've always wanted both.

• 9:11Guy Raz?

  So in a sense, going to business school was a chance for you to really think those things through?

• 9:16Speaker 01

  To think it through, to get that kind of extra, potentially, stamp of approval that I thought that I needed. I had lots of opportunities that I could go into different kinds of companies in different fields. But I really wanted the time to think about, like, where do I want to spend my time? Like, what am I most passionate about?

• 9:37Guy Raz?

  Yeah. You, while you were at Harvard Business School, you met the person who had become the co-founder of Rent the Runway, Jennifer Fleiss?

• 9:45Speaker 01

  Yes.

• 9:46Guy Raz?

  How did you, how did you guys meet?

• 9:49Speaker 01

  So it's a really funny story. My sister Becky, prior to me going to business school, put a Post-it note on my pillow one night with Jenny Fleiss's maiden name on it, which was Jenny Carter. And she said that you have to meet this girl when you go to business school because a friend of a friend of hers knew Jenny Carter. And my response to Becky at the time was, you know, I'll meet her if I meet her. Needless to say, Jenny was one of the first people I met at Harvard Business School because we were placed in the same section. Because her name had been on a Post-it note for me, I was like, oh, my god, you'll never believe this. Like, my sister told me we need to be friends.

• 10:33Guy Raz?

  Wow.

• 10:33Speaker 01

  And we became really fast friends. And, you know, the rest is history.

• 10:37Guy Raz?

  And at what point did you say, let's do a business together when we leave this place?

• 10:42Speaker 01

  So we were friends. We actually threw our birthdays together in September of that second year of business school. And in November of the second year of business school, I went home for Thanksgiving, and I was in Becky's apartment. And Becky had just gone to a store and bought a dress that was higher cost than her rent. And as her responsible older sister, I was remarking how she should probably wear one of the dresses in her closet again, as opposed to being in credit card debt. And her response to me was, you know, everything in my closet is dead to me. I've been photographed in it.

• 11:26Speaker 01

  The photographs are up on Facebook and I need something new. And, you know, Becky was a 25-year-old, like, normal girl who lived in New York. She wasn't a celebrity, but she was talking about being photographed and not being able to wear something again. And it was a lightbulb moment for me because I realized I was having a conversation with my sister about the experience of wearing an amazing dress, of walking into a party, feeling self-confident and feeling beautiful. And that's what she cared about. And she didn't care about the actual ownership of the items in her closet. The other thing she cared about was the photograph that would exist after the party

• 12:09Speaker 01

  that she could post on Facebook and kind of share with everyone she knew how awesome she felt and how confident she felt at that wedding. So anyway, this idea happened on a Saturday night. I go back to school on Monday. I happened to have lunch that day with Jenny. We were talking about our weekends. I was like, oh, I had this idea. Like, what if we rented dresses?

• 12:29Guy Raz?

  Yeah.

• 12:29Speaker 01

  And she responded, oh, this sounds fun. You know, let's like work on this idea together. Who do you think we should call to figure out if it's a good idea? And I said, you know, we should really call Diane von Furstenberg.

• 12:44Guy Raz?

  And... The, like...

• 12:46Speaker 01

  The famous fashion designer. Jenny said, do you know Diane von Furstenberg?

• 12:51Guy Raz?

  Yeah.

• 12:51Speaker 01

  And I said, obviously, I don't know Diane von Furstenberg, but we could probably figure out her email address. You could, at this point, figure out anyone's email address in the entire world.

• 13:01Guy Raz?

  Right.

• 13:02Speaker 01

  So Jenny and I wrote an email that afternoon to many different versions of Diane von Furstenberg's email address. And we basically said, hey, we're two women at Harvard Business School. We have an idea. We'd love to come in and talk to you about it. And this is where luck plays into the situation because she, or someone from her office, opened that email. She responded, I'll see you tomorrow at 5:00 PM.

• 13:30Guy Raz?

  Tomorrow at 5:00 PM?

• 13:31Speaker 01

  Yep. And we... Drove down to New York that next day, put on our DVF dresses and walked into her office and introduced ourselves as the co-founders of Rent the Runway.

• 13:45Guy Raz?

  You had the name at that point? You came up with a name?

• 13:48Speaker 01

  Yeah, we just, we did everything very quickly. Now, we didn't really have a structured idea. So, you know, we were kind of iterating the idea by pitching it. And the initial idea, actually, which, you know, we've never really told, the initial idea was, what if we could rent the dresses that she is selling on her website? So what if we powered Rental for Her on DVF.com?

• 14:15Guy Raz?

  Ah.

• 14:15Speaker 01

  And, you know, when we went to chat with her, she was not too thrilled about the idea of renting clothes in general and thought that it would cannibalize her retail sales and it would dilute her brand. And she was ready to end the meeting with us after a few minutes. And I started asking her questions about what she disliked about the idea, what was she scared about. And by the end of what was almost a, you know, hour and a half conversation, we learned that a lot of her customers were in their 50s and 60s. And that if we were to build a business

• 15:00Speaker 01

  that could make her relevant to put her products into the hands of women in their teens, 20s, 30s, and 40s, that that might be interesting to her and she might want to work with us.

• 15:13Guy Raz?

  So was, was she warm? Was she nice? Were you guys nervous? I mean, you're, you're still business school students. I mean, I can't imagine like what that would feel like to walk into that room and, and try to, you know, keep her attention and get her excited.

• 15:28Speaker 01

  Well, it's a funny story. So at that first meeting, I've always learned, you know, when you're in the first meeting, schedule the second meeting. So when we were in the first meeting, we scheduled a conversation for a few weeks later with her. Fast forward a few weeks and we're driving to the meeting. And we get a call while we're in the car from her assistant. And we're on the West Side Highway. We're about 40 blocks from her office. And her assistant calls and says Diane no longer wants to see you. And I said, oh, you know, well, we're on our way. We'll just come in and say hi. And her assistant's like, no, she really doesn't want to see you. Like, she's not interested in this idea.

• 16:13Speaker 01

  And I said, oh, yeah, we're just around the corner. Like, we'll just drop by for a second. And again, her assistant, very firmly, said, she doesn't want to see you. What do you not understand? And I said, oh, we're cutting off. We're cutting off. And I hung up. And then I sped down the West Side Highway, and we were at her office, and we just showed up.

• 16:36Guy Raz?

  Wait, most people in that situation would have just been, like, crushed, would have felt so dejected. Like, I know I would. And would have just said, well, forget it. Forget Diane. Let's just move on. How did you not feel that? How were you able to just say, we're going. We're just going to do this. We're going to walk in there.

• 16:56Speaker 01

  Well, Jenny initially was, actually started to cry and was a little bit upset about the situation.

• 17:01Guy Raz?

  Like, most people would.

• 17:03Speaker 01

  Yeah, which I think is the much more natural reaction. And I was like, we're just going to do this. What do we have to lose? Like, what's the worst thing in the world? We show up and she doesn't meet us?

• 17:13Guy Raz?

  What if you walked in there and they were like, security, please escort these women out?

• 17:17Speaker 01

  Great. Then we have a story that we could tell all of our friends.

• 17:22Guy Raz?

  When we come back, what actually happened when Jen and Jenny finally showed up at Diane von Furstenberg's office? I'm Guy Raz, and you're listening to How I Built This from NPR.

• 17:44Guy Raz?

  Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So before the break, Jen was talking about how she and her co-founder Jenny basically busted into Diane von Furstenberg's office to have a second meeting. And amazingly, Diane agreed to meet with them. And in fact, she wound up giving them some pretty good advice.

• 18:04Speaker 01

  Actually, that was the meeting where she told us, you know, I don't want you to do this on my website. You are going to have to sell this idea to other designers and get lots of people on board if I'm going to do this too. So in a sense, in that meeting, she gave us permission to make it a consumer-facing business and to approach the rest of the industry.

• 18:25Guy Raz?

  Wow. So, I mean, it sounds like she kind of rewrote your business plan right there.

• 18:30Speaker 01

  Yeah.

• 18:31Guy Raz?

  So, did you walk out of her office with like names or contacts? Or did you just walk out of her office saying, all right, cool. This is clarifying. We now know where to head next.

• 18:41Speaker 01

  Well, we did ask her for some introductions, and I think that she introduced us to one or two people in the industry. We then would meet with those people, and we'd ask them for introductions and so on and so forth. But we continued to just cold call people. So, one of the next people that I cold called was the president of Neiman Marcus, because he was both a HBS alum, so I had access to his email address. And I thought that, you know, if this whole Rent the Runway thing falls through, like, maybe I could work for Jim Gold at Neiman Marcus.

• 19:17Guy Raz?

  And what did he say?

• 19:18Speaker 01

  He said, yeah, this is a really good idea. Women have been renting the runway for my stores for decades. It's called buying something, keeping the tags on, and then returning it to the store.

• 19:29Guy Raz?

  Which probably cost them millions of dollars.

• 19:32Speaker 01

  Yeah, it's kind of the dirty secret of retail. The return rate, especially of dresses and special occasion attire, is extremely high.

• 19:42Guy Raz?

  Can I just pause for a second and ask this question, which is, so I'm wearing, the outfit I'm wearing today, like, I've worn this in the last few days. I have no shame about it. And obviously, there's different, society has different standards for men and women. But what is this about? Like, what's this thing where women feel like they can't wear the same dress at, you know, two different functions?

• 20:04Speaker 01

  I really think that there's a value that women place on self-expression and that clothes make you feel a certain way about yourself. You put on an amazing outfit in the morning and it makes you feel powerful, or beautiful, or sexy, or relaxed, or however you want to feel that day. There's just a general value in our society right now around individuality and self-expression. And so the way that you're going to achieve that with fashion is via variety. So I had seen at the time, and it's even more true today, that the way that women were accessing variety and individuality was through fast fashion

• 20:46Speaker 01

  and off-price. Because the only place that you could buy a quantity of items was at a place that was selling them for a very cheap price.

• 20:54Guy Raz?

  Like Forever 21 or H&M.

• 20:56Speaker 01

  Exactly. So I think that when you don't have to buy something, it allows you to try new things, to constantly be playful, to experiment, to try things that are in colors, or in trends, or, you know, different kinds of styles that you never would purchase because they're irrational. So with Rent the Runway, it's like a Willy Wonka-land of fashion. You could have whatever you want, whenever you want it. Let's say you have a job interview, you have a party, you have a wedding you're going to. You're saying, I want it to arrive at my home on September 15th, and I'm going to wear it and use it for a few days, and then I'm going to return it. And it's about 10% of the retail price.

• 21:37Guy Raz?

  So how did you know for sure that, you know, that women would be interested in, like, doing this? I mean, did you, did you guys do any research?

• 21:44Speaker 01

  No, we never did research in an academic sense. We did real-life research, which was, we went to Bloomingdale's, we bought about 100 dresses, all in our own sizes, so that if this whole experiment didn't work out, we would have an awesome new wardrobe. We spent a lot of our savings on this. And we hosted a pop-up at Harvard undergrad, and we invited different groups of Harvard undergrads to the pop-up. And the idea behind this was to learn, A, will women rent dresses? B, what do they rent? How much will they pay? What brands do they want? And most importantly, if they do rent,

• 22:27Speaker 01

  what happens to these garments after they rent?

• 22:30Guy Raz?

  Yeah.

• 22:31Speaker 01

  Do they get destroyed? Can you send them through the mail? How do you dry clean these items? And so on and so forth.

• 22:39Guy Raz?

  This is like still like, I mean, today, this seems like a no brainer. But this is what, 2008, 2009?

• 22:46Speaker 01

  This, our first pop up was in April 2009.

• 22:49Guy Raz?

  So, I mean, at that time, Netflix was like mailing DVDs through the mail. So that was going on. I guess Zappos, you could get shoes and you could mail them back. But it was still, it wasn't like what it is now. I mean, it was still new.

• 23:03Speaker 01

  It was, and it feels both so long ago and also yesterday.

• 23:09Guy Raz?

  So you got the sense right away that this, that this could work because these undergraduates, these women were like, yeah, I want to rent this.

• 23:18Speaker 01

  I got the sense that it would work because I saw the emotional effect. So in this pop up, I saw girls, you know, stripping down, trying on these amazing dresses and feeling beautiful.

• 23:33Guy Raz?

  Yeah.

• 23:34Speaker 01

  And you saw their facial expressions change. And they threw their shoulders back and they tousled their hair and they walked with a new sense of confidence. And, you know, I really thought, wow, this could be a business that isn't just about offering her a rational or smart choice, but it also can be a business that is delivering something emotional to her, making her feel beautiful every single day.

• 24:05Guy Raz?

  Jen, a lot of founders choose to do it on their own, like, you know, like Gary Erickson from Clif Bar or even Sara Blakely from Spanx. I mean, she owns 100% of her company. But you guys went for venture capital pretty quickly, pretty early on. Why?

• 24:23Speaker 01

  We had to raise money because we needed to invest hundreds of thousands of dollars in inventory to even launch a business or to assess whether it was a viable idea. And I don't come from a family that has hundreds of thousands of dollars of savings, especially savings that they're going to invest in their daughter's crazy idea.

• 24:49Guy Raz?

  And so when you were pitching venture capitalists, how much money were you looking to raise in that first round?

• 24:54Speaker 01

  We raised $1.75 million.

• 24:58Guy Raz?

  Wow. So with that money, what could you do? I guess, build a website, right?

• 25:03Speaker 01

  You could buy initial inventory in various size runs with some depth because we knew we needed many different designers. We needed a selection, right? You weren't going to come and start renting if there were only five units of inventory on the site. We could hire some people. We could launch a website. That was about it.

• 25:23Guy Raz?

  And take photos of the dresses and put them on the website?

• 25:25Speaker 01

  Yeah, that's another funny story. Until two weeks before the website launched, we didn't realize that we would have to take photos of the inventory. We thought, of course, in this industry, there's some centralized place that takes photos of this. How ridiculous is it that every retailer would have to photograph this inventory over and over again? Needless to say, we figure out, like, right before the website's meant to launch, that we have no photos. And we put together an impromptu photo shoot where we found a photographer on Craigslist who ended up working with Rent the Runway for six years.

• 26:02Guy Raz?

  Wow.

• 26:03Speaker 01

  And we bring our own shoes and our own accessories to this photo shoot and our initial team of five employees and many interns at the time kind of figure out how to do it.

• 26:18Guy Raz?

  So, once you launch, how do you get the word out? How do you get people to even know what this is?

• 26:23Speaker 01

  Hustling.

• 26:27Guy Raz?

  So what was the hustle?

• 26:28Speaker 01

  The hustle was, we wanted to build a list of as many women as possible. You know, the Sex and the City movie had come out that summer. And we would go to movie theaters with women who were attending that movie and we would get their email addresses. We would convince friends to send us email addresses of other friends of theirs. So like, we were really doing anything and everything. So one of the names that was on this list that we had built at Rent the Runway had a @newyorktimes.com. And I was like, oh, like, there's someone who works at the New York Times on this email address. And I looked her up and I saw that she was a 22-year-old technology reporter. I was like, oh, let's invite her in.

• 27:13Speaker 01

  Maybe she could write about Rent the Runway. So we met with her and we decided we were going to give her a story. And I thought that if Jenny and I were photographed for this article, potentially we could be on the front page of the business section.

• 27:28Guy Raz?

  If there was a photo of the two of you?

• 27:30Speaker 01

  Yes, because it was a technology reporter and no women are ever covered in the technology section.

• 27:37Guy Raz?

  Yeah.

• 27:38Speaker 01

  So I say to this reporter, oh, maybe, you know, you should take, maybe you could take a photograph of us at the quote-unquote warehouse, which was a dry cleaner at the time. So we put on like these crazy dresses and we showed up when the photographer showed up to the dry cleaner. And we stood on ladders and we told the photographer to take a photo of us on ladders in front of kind of the array of dresses that were on the kind of dry cleaning machine. And because the photo was so utterly absurd, it ended up on the front page of the business section and the headline A1 photo on nytimes.com.

• 28:21Speaker 01

  So we had 100,000 people sign up for Rent the Runway off of that story.

• 28:26Guy Raz?

  Wow.

• 28:28Guy Raz?

  So you had, did you all of a sudden have people making orders?

• 28:31Speaker 01

  Yes.

• 28:32Guy Raz?

  Did you have the inventory to handle all the orders?

• 28:35Speaker 01

  No.

• 28:36Guy Raz?

  So what'd you do?

• 28:37Speaker 01

  We raised more money. So because of hustling to get this story and the luck of ending up on the front page of the New York Times, we met our first year sales projections in three weeks. And we had a clamoring of venture capital investors who were kind of coming into our office pitching us on Series A. So we had gone from, you know, a very undesirable investment to like people showing up at the elevator in our building to meet with us unannounced.

• 29:13Guy Raz?

  Wow.

• 29:13Speaker 01

  Because they wanted to pounce on the deal.

• 29:18Guy Raz?

  Did you? I mean, both you and Jenny are, unfortunately, still rare in the startup world in that you're two women, leading a huge company. But at the time, when you were raising money, did you ever get the sense from venture capitalists, who presumably were mostly men, that, I don't know, they were like, a little bit dismissive, or condescending, or, you know, I don't know, treated you differently?

• 29:48Speaker 01

  Yeah, we had several different, very condescending conversations. One in which a partner at a very prestigious firm took my hand into his. And he said, you know, this is so adorable. You're going to get to wear such pretty dresses. This must be so fun for you.

• 30:07Guy Raz?

  How did you react?

• 30:08Speaker 01

  We both froze a little bit. We were very polite. And we walked out and we said, you know, thanks for the feedback. Now, of course, we never... Interacted with this firm or this investor. Again, we never pitched them on any subsequent round. We were like, kind of good riddance to these people. So there's an element of, you know, we had access to capital. We had choices because the business was growing. And that's a privilege.

• 30:42Guy Raz?

  I read in an article about you that one investor said to me like, oh, you know, let me talk to my wife about this idea.

• 30:49Speaker 01

  Well, that's something that we heard all the time. That wasn't one investor, that was most. Let me talk to my wife, my daughter, or my admin. Those were the three, you know, target customers that we would hear. And let me tell you why each is problematic. Number one, the wife of a venture capitalist is a billionaire. So the wife of a venture capitalist is not my target customer.

• 31:14Guy Raz?

  Right.

• 31:15Speaker 01

  The daughter of a venture capitalist, in most cases, is about 12. Because most venture capitalists are, when they're in the prime of their careers, they're kind of 45 to 50. So, you know, their daughter's not a great target either. And their admin, the admins who work in the venture capital industry, because it's such a prestigious job, are often women who are in their 50s and 60s. Again, not women who were in my target demo. So we would preempt that by showing videos and inviting these investors to some of our pop-ups. Show them who the customer was so that they really got a sense for who we were catering

• 32:00Speaker 01

  to.

• 32:01Guy Raz?

  There's been a lot of attention recently to the bro-ish culture of venture capital in Silicon Valley.

• 32:12Guy Raz?

  And how women are finally publicly being able to come out and talk more about their experiences. Did you experience some of that culture in this process?

• 32:23Speaker 01

  I, through the process of building Rent the Runway, was sexually harassed by one individual, and I'm happy to share that experience. However, I will say that I've had interactions with dozens and dozens of venture capitalists at dozens of firms, and this was just one individual. So the far, far, far majority of my interactions have been incredibly positive. But I was in a situation once where I was kind of propositioned, sent sexual text messages.

• 33:03Guy Raz?

  This is why you were trying to raise money for Rent the Runway?

• 33:07Speaker 01

  While I was building the company, yes, from someone in the investor community.

• 33:11Guy Raz?

  Sending you text messages like, "Let's go on a date," or whatever it was?

• 33:15Speaker 01

  That, and things that are more explicit than that.

• 33:19Guy Raz?

  Were you shocked to get those?

• 33:21Speaker 01

  I was. I thought that it was inappropriate and fairly bizarre, given that it was happening over text message, so there was evidence created. Now, there was also conversations that were happening in person that were also threatening and very bizarre.

• 33:44Guy Raz?

  Yeah. Did you just ignore it? Was there anything you could have? Did you feel like you couldn't really do anything about it, except just ignore it?

• 33:51Speaker 01

  So I initially ignored it, and that was the plan. I was planning on ignoring it and decided I was going to keep it silent. And then this person decided to call one of my board members up on the phone and say, "Jen never responds to me."

• 34:13Speaker 01

  And I think that this is a real problem. And she's a really unresponsive CEO. And she's probably, if she's doing this to me, she's probably doing this to other people. And he really challenged my behavior as a CEO.

• 34:27Guy Raz?

  Wow.

• 34:27Speaker 01

  And actually, that board member came into my office to give me feedback and say, I need to be more responsive, which was my instantaneous reaction was, oh, my God, I can't believe that this person, after being rejected by making these sexual advances, is now trying to ruin my career.

• 34:49Guy Raz?

  In just a minute, how Jen handled that very tricky situation. I'm Guy Raz, and you're listening to How I Built This from NPR.

• 35:12Guy Raz?

  Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So in those early days of Rent the Runway, Jen Hyman faced the situation where one of her investors was harassing her. And when she ignored his advances, he took it out on her. He actually complained about her to a member of her board. And so when that board member asked Jen about it, she decided to be totally transparent about what was going on.

• 35:38Speaker 01

  I showed this board member the text messages at that time and basically, you know, asked my board member how they'd like me to respond.

• 35:50Guy Raz?

  What did the board member say?

• 35:51Speaker 01

  I mean, the board member was shocked.

• 35:53Guy Raz?

  I bet.

• 35:54Speaker 01

  And I proceeded to tell everyone else on my board, as well as some key executives who were working with me at Rent the Runway at the time. And the board was unbelievably supportive. And we decided that we were not going to do business anymore with this individual or his firm.

• 36:15Guy Raz?

  Wow.

• 36:16Speaker 01

  So there's that form of sexual harassment, and I think that that's a lot of what's been getting recent media coverage. Yeah. And hopefully, by nature of a lot of very brave women speaking out right now, that sort of sexual harassment will be stamped out of the industry. And one way that I think over time that it needs to be stamped out is by diversifying the sources of capital, making sure that 50% of investors are women. But let's put that aside just for a second. The second form of sexual harassment slash gender discrimination is way more subtle,

• 37:01Speaker 01

  and it's way more difficult to prove. But for instance, overall, I have seen male founders receive, you know, sometimes more mentorship or more chances to be successful. They get more strikes against them before their investors kind of pull the plugs. And in a lot of cases, women are only given, you know, it's a one-striker, you're out, as the CEO and founder. There are situations where I've now come to understand that a lot of how deals get done and how companies, let's say, get acquired is someone is saying something like, oh, you should really meet this guy. He's a visionary. He's incredible. You should get to know him.

• 37:45Speaker 01

  And I think across the board, more of those comments are being made about male entrepreneurs than they are about female entrepreneurs. We, as a society, feel uncomfortable using the words visionary or brilliant to describe women. That's not always intentional. I think it's just ingrained in people. I would say in a lot of different instances... People have actually genuinely been trying to be helpful to me. Like, there was a time early in my career where an investment firm, you know, said to me, "Oh Jen, you know, you should really meet these other entrepreneurs. They're around your own age. They're brilliant.

• 38:29Speaker 01

  You could learn a lot from them. They're building incredible companies. They're going to change the world." Now, all of those entrepreneurs were men and they were kind of prefaced as being geniuses, brilliant, et cetera. And this same firm never introduced me in that same way to those same entrepreneurs, even though we were at similar tenure and similar stages in our company. The irony is, a lot of those guys, their businesses, you know, aren't around anymore.

• 38:57Guy Raz?

  Yeah.

• 38:58Speaker 01

  And, you know, I'm the one who's still chugging. Now, I don't think that they were trying to be intentionally sexist. It's just that there's a shade to which we all operate that puts women at a bit of a disadvantage.

• 39:13Guy Raz?

  Yeah. It's really amazing. I mean, you, it speaks to the, this like perception of power dynamics that's so prevalent in the venture world.

• 39:24Speaker 01

  I think that those power dynamics exist in so many different industries. And I don't think that it's just a Silicon Valley or technology problem. And that's why I think that the more egregious sending you a text message in the middle of the night, asking to sleep with you, sort of sexual harassment, hopefully can be stamped out via just being more vocal about it. I think, though, that the more subtle form of harassment slash discrimination, or just lack of opportunity, is actually the harder problem to solve. It's the more pernicious problem.

• 40:05Speaker 01

  It's the reason why only 4% of venture capital dollars are going towards women and, you know, very, very few investors are women. So, you know, we need to fundamentally diversify who has access to power, who has access to capital, in order to get a diversity of ideas and entrepreneurs out there.

• 40:25Guy Raz?

  Yeah. And you, obviously, you have had incredible success despite the challenges that you faced and that women in tech face.

• 40:35Guy Raz?

  And as you sort of began to develop as a leader, as a CEO, how did you, how did you sort of make that transition? How did you figure out how to, you know, manage lots of people?

• 40:46Speaker 01

  I think that it is a continuous work in progress. I had never managed people across the diversity of functions that we have at Rent the Runway. You know, Rent the Runway is primarily a technology and logistics company.

• 40:59Guy Raz?

  Yeah.

• 40:59Speaker 01

  We have 1,200 employees, 10 employees are in my fashion department. And, you know, hundreds are in my logistics department, hundreds are in my engineering department. And these are areas in which I had had no experience. And, you know, one thing that I've learned is that leadership evolves over time. First of all, being a leader of a 1,200 person company is different than being a leader of a 100 person company. And so I have to really evolve, even though I've had the same title for eight plus years. Like, there are so many things that, you know, I've done wrong along the way.

• 41:39Speaker 01

  And I think that the thing that has made me grow and develop is the recognition of failure and the desire to improve and the desire to get better.

• 41:56Guy Raz?

  I don't want people to have the impression that this was all, you know, you just fleeted from success to success and it was easy and there were no low points. Because there have been, like with any company. And, and in 2015, you got some, some tough press about some people who left the company. There were quotes in newspapers calling it a, a mean culture and, and, and things like that from, from some of these employees who left. Did that, were you hurt by reading that stuff? Some people were criticizing you and your, and your management style and leadership.

• 42:32Speaker 01

  It was the most difficult experience of my life, actually.

• 42:38Speaker 01

  It was such a difficult time because as a woman, there's two things they could really call you as a woman. They could call you the B word.

• 42:48Guy Raz?

  Right.

• 42:49Speaker 01

  Or they could say you're an idiot. And I've never really had a fear of someone calling me an idiot. But I do value myself for how I treat others. So to be called mean and to, you know, be quoted as having a mean girls' culture at the company was so unsettling and sad and horrible to me because it's the thing that's the most important to me. You know, what had been happening at the time was the company was going through a quite

• 43:28Speaker 01

  painful and difficult transition from being a, you know, one phase of a startup to trying to develop some sense of entering our teen years or our adolescent years. And I started to realize that I needed to make the tough calls and fire some people. That was very unsettling to people because we give men permission as leaders and as CEOs to make the tough choices.

• 43:59Guy Raz?

  Yeah.

• 44:00Speaker 01

  You know, with women, we don't give them as much permission to make those tough decisions. And we often, when we do make those decisions, we're often labeled as the B word or, you know, et cetera. So it certainly was a low point, but it led to the biggest outpourings of support I've ever had. It led to more courage around my own decision making because I led the company into the best place it's ever been.

• 44:32Guy Raz?

  Yeah.

• 44:33Speaker 01

  And in a sense, it makes the future less scary.

• 44:37Guy Raz?

  Yeah.

• 44:38Speaker 01

  Because that article or a version of it, it will come out again. And the next time it comes out, it's just not going to have the same impact on me.

• 44:50Guy Raz?

  You mentioned earlier in the interview how you always wanted to run a successful company or start a successful company, but also have a family and a kid. And you did that. You have a child and a partner. And how have you figured out how to do it in the way you wanted to do it?

• 45:09Speaker 01

  Well, first of all, let's backtrack to being 28 and having the idea for Rent the Runway. And I just want to tell the real story here because I think that a lot of women go through this and they don't talk about it. One of the major considerations that I had in starting Rent the Runway was, is this a smart idea for me? Because if Rent the Runway is successful, will I ever be able to get married? I was always confident that I would turn Rent the Runway into a consumer behavior that millions of people did and that I would build a, you know, I still believe we're going to build a multi-billion dollar company.

• 45:52Speaker 01

  But at the very, very beginning, when Rent the Runway launched, I had been dating someone from Harvard Business School who I was very much in love with. And the day that Rent the Runway came out and we were on the front page of the New York Times, he broke up with me shortly thereafter. And he told me that he realized that he didn't want to be with his equal.

• 46:19Guy Raz?

  Wow.

• 46:20Speaker 01

  So that was really sad and disheartening because I was very in love with this person. And that's what led into this fear. Now, it ended up that this fear was completely unfounded and I had no issues, you know, falling in love while building Rent the Runway. I just think that it paralyzed me.

• 46:43Guy Raz?

  Wow.

• 46:44Speaker 01

  Because the number one priority in my life has always been having a family and having kids. So the amount of happiness that I have now, having a daughter, I just got back from maternity leave last week. I'm engaged to the love of my life. I can't even describe to you the level of joy that it brings into my life on a daily basis to truly have all of my dreams have come true.

• 47:12Guy Raz?

  I guess last year you guys had, you became profitable, which I should point out is exceedingly rare so quickly. And I mean, your revenue is over $100 million, according to public reports. The valuation of the company is, I don't even know what it is. Do you know what it is?

• 47:32Speaker 01

  I do know what it is.

• 47:33Guy Raz?

  But you can't say what it is.

• 47:35Speaker 01

  Yes.

• 47:35Guy Raz?

  But it's probably higher than you ever imagined. Even though it may still be on paper, this thing that you built, that you and Jenny built, has made both of you rich. I mean, you are, even though it may just be on paper, you are rich. You're a rich person. You did not grow up that way.

• 47:53Speaker 01

  Well, being rich on paper is very different than being rich in reality. So let's talk in a few years. Because I didn't grow up saying, I want to found a company. I had this idea for Rent the Runway. I saw that it was mission driven. I saw that it was driving self-confidence and making women feel incredible about themselves. And I knew that I had to commit my life to that. And I'm really proud that we have had many different women leave Rent the Runway and then raise their own venture capital and start their own companies and go after their own dreams. And Jenny and I, two years ago, decided to start a foundation where we've raised millions

• 48:36Speaker 01

  of dollars to support other female entrepreneurs scaling their companies. And we've now helped thousands of women throughout the United States in scaling their organizations. So this mission of empowering women and making women feel confident is the actual thing that I care about. Now, if it happens to be that Rent the Runway brings me the ability to provide for my family and thank my parents, that would be wonderful. But honestly, if it amounts to nothing, it is the absolute best experience of my life, and I would do it over a million times.

• 49:19Guy Raz?

  Jen Hyman, founder of Rent the Runway. By the way, her co-founder Jennifer Fleiss recently left the company. It was amicable. Both Jen and Jennifer each own 13% of the company, and it's put them on Forbes' list of the richest self-made women to watch. Rent the Runway isn't just profitable, it's also become America's single largest dry cleaner, dresses from 500 different designers, including, though it took a while to convince her, Diane von Furstenberg.

• 49:50Guy Raz?

  And please do stick around, because in just a moment, we're going to hear from you about the things you're building.

• 49:58Guy Raz?

  Hey, thanks so much for sticking around, because it's time now for how you built that. And today, we're going to update a story we ran a while back with Monica Mizrachi in San Diego, California. And her story starts a few years ago, when her daughter Lea was packing to go overseas on a gap year program.

• 50:16Speaker 02

  She was going to be traveling to 14 different countries, which meant that she was going to be leaving out of a suitcase. So we needed to find a system where she would be very organized in her travels to be able to survive out of a suitcase, pretty much, for the year.

• 50:29Guy Raz?

  Okay, if this were me, or maybe even you, you know, we could just throw a bunch of clothes into a suitcase and forget about it. But Monica, she is incredibly organized.

• 50:40Speaker 02

  I was a mathematician in college, and I was always very into order. Like, in math, there's one solution.

• 50:47Guy Raz?

  But when it came to packing...

• 50:49Speaker 02

  I just couldn't find a system. We tried with Ziploc bags, we tried many other packing cubes, but you couldn't see your things. And I wanted to turn a suitcase into a set of drawers.

• 51:02Guy Raz?

  And what Monica came up with was a modular set of clear, squishy, plastic cubes that you could stack inside a suitcase and pull out by a handle.

• 51:12Speaker 02

  When you open your suitcase, you can see everything in your suitcase.

• 51:16Guy Raz?

  And eventually, Monica ran into a friend at a barbecue who happened to work with factories in China. So of course, she showed him her plans.

• 51:24Speaker 02

  Then he says, "This looks really interesting." And he took it to China, and he made a prototype for me. I told him I want it clear, I want the piping, I want it to have a handle. And he made the first prototype.

• 51:37Guy Raz?

  Soon after that, Monica scraped together some money and placed an order for 14,000 of these packing cubes. And a few months later, a truck driver pulled up in front of her house.

• 51:48Speaker 02

  I thought I was getting maybe 50 boxes or something. We had a 20-foot container full of boxes. And I'm like, oh, my God, what did we do?

• 51:59Guy Raz?

  And that was the precise moment when Monica realized she'd forgotten one very crucial detail. She had not gotten the word out about the packing cubes.

• 52:09Speaker 02

  No, I didn't have a single client. I hadn't sold a single cube.

• 52:13Guy Raz?

  Fortunately, her son Solomon had studied business and marketing in college. And so he stepped in and he said, Mom.

• 52:20Speaker 02

  He said, we are going to work really hard. We're going to put it online and we're going to sell it.

• 52:25Guy Raz?

  So Solomon started to email mommy bloggers about the cubes. And one of them posted it on Pinterest. And sure enough, he says.

• 52:32Speaker 03

  We just got, you know, six or seven orders. And like, that was a big deal at the time. That was like, wow, like, this is working, you know?

• 52:41Guy Raz?

  And he actually liked the idea so much that Solomon bought the company from his mom. And he called it Easy Packing. Now, she still helps out with the accounting and her husband does the legal work. And our other kids help out, too. But Solomon, he now does the bulk of the work.

• 52:56Speaker 02

  You know what? It's been an amazing honor to work with my son. I never thought I would work with my son. If it hadn't been for him, I would not have been able to do it.

• 53:06Guy Raz?

  That's Monica Mizrachi of Easy Packing. Today, her son Solomon and his fiance run the company full time, but Monica still helps out. And since we first ran this story, they've expanded to selling in Europe and have basically doubled their business, selling over 10,000 packing cubes in the past year alone. If you want to learn more about Easy Packing or hear previous episodes, head to our podcast page, howibuiltthis.npr.org. And of course, if you want to tell us your story, go to build.npr.org. Thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts and live. Why you're there, please do give us a review. You can also write us directly at [email protected].

• 53:50Guy Raz?

  And if you want to send a tweet, it's at How I Built This. Our show was produced this week by Rund Abdelfatah with music composed by Rantin Arablouei. Thanks also to Neva Grant, Sanaz Meshkempur, Lawrence Wu, and Jeff Rogers. Our intern is Mia Venkat. I'm Guy Raz, and you've been listening to How I Built This from NPR.