Jennifer Hyman: Rent The Runway's Journey to $1.7B IPO; Lessons from Beyoncé & Estée Lauder | E1031

1. 0:00 – 5:50

   The Aha Moment for Rent The Runway

   1. JHJennifer Hyman0:00

      The most important thing about building a business is forward momentum. It's just continuing to wake up in the morning and put one foot in front of the other, have positivity, and just keep going. I think that people give up way too soon. (instrumental music plays)

   2. HSHarry Stebbings0:16

      Jen, I am so excited for this. I heard so many good things, both from and from Jennifer Fleiss, so thank you so much for joining me today.

   3. JHJennifer Hyman0:24

      Thank you. I've been looking forward to this.

   4. HSHarry Stebbings0:27

      That is very kind of you. But I wanted to start, I love a good aha moment, so what was the aha moment for you with Rent the Runway and what was that idea inspiration?

   5. JHJennifer Hyman0:37

      Yeah. Aha moment was my sister going into credit card debt after buying a expensive dress that she knew she was only gonna wear once. And really this idea of why, in clothing, we have to buy things that we own forever was the only option, and couldn't there be an option for rental, couldn't there be an option for a closet in the cloud where the closet could actually change with you as your life evolved and changed?

   6. HSHarry Stebbings1:08

      Jen, can I ask, did people get it? Like when you first had the idea were people like, "Ah, that's a great idea, Jen. This is good," or were people like, "No, I don't see that"?

   7. JHJennifer Hyman1:16

      I think that the demographic we were going after really did get it. I mean, women in their 20s and 30s who were the primary segment we were targeting at the beginning of Rent the Runway understood that they were going out and buying dresses to be bridesmaids and to go to holiday parties and to celebrate events that they were wearing once or twice and then throwing away. I think that the rest of the universe, it took a little bit longer. But one of the things that I, you know, shared with investors and really shared as well with even designers who I had to convince that this was a good idea is that the concept of Rent the Runway is not a new idea. Renting clothes existed in another form already and it was the majority of the fashion industry. Fast fashion is clothing rental. Whenever you go into H&M or Zara and you buy a top that you... is cheap, that you know that you're gonna wear once or twice and then push the back of your closet, that is renting the runway. You're renting something, you're using something for a s- short period of time where it has utility in your life, and then you don't need it anymore. And what we were really doing with Rent the Runway is really taking fast fashion, making it way more financially sustainable, giving you the real aspirational brands, making it environmentally sustainable, and doing it in a personalized tech-forward way.

   8. HSHarry Stebbings2:48

      So, it's been an incredible now I think 15 years from my understanding. Before we dive in, I d-

   9. JHJennifer Hyman2:54

      Six years since I had the idea. 14 years since launching.

   10. HSHarry Stebbings2:57

       Okay, so 14 years since launching, 15 years since the idea. You (laughs) ... you've learned so much since then. What do you know now today, Jen, that you wish you'd known when you started 14 years ago?

   11. JHJennifer Hyman3:11

       That's a really hard question 'cause I knew nothing when I started 14 years ago. I was 27 years old, um, and I had to really figure out, I think, the main themes of how do you go from having a great idea to becoming a great leader, inspiring others, building a team, and, uh, you know, figuring out what are the investments that this company is going to make over time to create sustainable competitive advantages? I think an idea is a dime a dozen and, you know, the success of a company is really based on execution. Execution is based on where you choose to spend your human capital resources and really directing your human capital towards things that are gonna create sustainable competitive advantage in the market is really one of the most important lessons, to me, of entrepreneurship.

   12. HSHarry Stebbings4:05

       Can I ask, what were the most, like, as you said, that you started at 27-year-old, respectfully, not as like a, you know, serial entrepreneur and incredible business leader that you are today. What one or two moments really changed your mindset on how you lead companies?

   13. JHJennifer Hyman4:21

       Let's see. I mean, I, I think that COVID was a transformative moment for me as a leader where you really realize that even 10 or 12 years into a business, whatever it was at that time, you still have to lead a team of missionaries and not mercenaries, and the people that are gonna stay with you through COVID when you, when we lost an enormous amount of revenue overnight, are people that fundamentally are working here for more than just their job, are working here for more than just the interest of, uh, interesting problem. They're working here because they believe in the mission of what we're doing to change an industry which is about empowering women to feel their best every single day. So, really understanding the power of that missionary mentality, the pow- the power of having hired a team of people who ascribe to this core value of everyone's a founder of Rent the Runway. So, we've always had that value up on the wall. We look for people that even when the company gets big still can kind of act small and act scrappy at various points in time, and that's never been more important than we... when we were in COVID and when we had to figure out how to reinvent the company in many ways.

   14. HSHarry Stebbings5:48

       Can I ask, how do you hire for that?

2. 5:50 – 14:56

   How To Build The Best Team

   1. HSHarry Stebbings5:50

      I wish everyone felt like an owner of my businesses. But the truth is, Jen, none of them do. None of them. Only I act like an owner, and th- that may be unhealthy in many respects (laughs) , but like, how do you hire this ownership mentality? Because honestly, I don't see it today in 99%. And maybe I'm terrible at hiring, but what do you do to get those people and how does one do it?

   2. JHJennifer Hyman6:14

      I, so I feel the opposite of you. I think that the team here is, you know, 99% plus missionary, and that's actually been the greatest privilege of my experience leading Rent the Runway, that over the past 14 years, I've worked with people that really consider themselves to be founders of Rent the Runway, founders of a new chapter of our company, um, founders of a new business line. How do you interview for that? I actually think it's one of the easiest things to see. Um, you know, one of the, one of the things I say to someone when they come to Rent the Runway is, "Hey, I'm giving you this job today. The only promise that I'm gonna make to you is that you're gonna be doing something totally different six months from now, and that I have no assurance of what that is. If you're not comfortable with this idea of consistent and constant change, this is not gonna be the right environment for you." I want people who thrive in times of change, who love that, who love the idea of, you know, taking chaotic situations and making those chaotic situations, uh, periods of innovation, so finding that kind of resilience. Founders really fundamentally are just unbelievably resilient people. So what I'm interviewing for when I'm interviewing for a founder mentality is I'm interviewing for resilience, and that shows up in asking people about their lives. I think that people when they interview are focused way too much on someone's career experiences. You may have shown resilience in a career experience, but more often at the point when, you know, we- I'm interviewing someone, the resilience that has shown up in their lives has happened in their personal lives.

   3. HSHarry Stebbings8:08

      Great, Jen. What questions do you ask, then? I'm learning from you. I should take notes, and I might actually hire better.

   4. JHJennifer Hyman8:13

      And it's not actually that I have a set of brilliant questions. I just will spend however long it takes in an interview with someone getting to know them as a person. I'll say, "Tell me about yourself," and they might start at their first job, and I was like, "No. I don't... Uh, let's start at where you were born. Where are you from? Tell me about your family. Do you have s- siblings? Tell me about your parents." I wanna know who made them and what made them who they are, and you're getting a sense of, is this person the sort of person that is going to put, you know, the company before themselves? Is this person gonna be a missionary? Is this person, um, entrepreneurial? It- does this person have great values? And that shows up in how they talk about their life experiences.

   5. HSHarry Stebbings9:07

      We had this great schedule, but I'm just too enjoying this. Um, and the thing that I find tough is, like, people check out at 6:00 PM, like, you know, at 6:00 PM, bang. I'm like, I never check out, and I never want someone else to check out, like, 11:00 PM, why, why, why is the MP3 here? Why, what, what's happening with this deal? And people check out, and I'm like, I feel guilty in a way 'cause I know that they should have some balance.

   6. JHJennifer Hyman9:33

      Honestly, like, unless people are happy in their lives, they're never gonna be happy at work, and they're never gonna be able to give 110%. And if you're constantly pushing them to be, like, they don't have any time with their family. They don't have time to go out. They don't have time to see friends. Like, you're texting them at 7:00, 8:00, 9:00, 10:00, 11:00 PM. Like, how are they gonna live a life? Like, life is about more than just your career. I think that the people that are actually best in their careers have really full and rich and amazing lives. Like, I happen to have a great marriage, great kids. I have a ton of friends. I put a lot of emphasis on those friends. I feel that... Now, this is not to say that I don't send out emails at 9:00, 10:00, 11:00 PM. I do-

   7. HSHarry Stebbings10:16

      All, all, all of your team are going like, "I, I, I get emails late at night."

   8. JHJennifer Hyman10:20

      I put my kids to bed. I have some time where I can, like, look at my email. But I don't expect that someone's gonna get back to me when I send that email at 9:00, 10:00, 11:00 PM. I think that, like, if you want people to be ride-or-die intense for you at the company, which I do at Rent the Runway. Rent the Runway is an intense environment where I want people to give it their all. I don't think that anyone can give something their all unless they have a rich totality to their life, and that is something that I very much encourage here. I think that people who put in 24/7 just related to their job are just gonna burn out, and you might have them with intensity for a year or two, but then they're gonna be gone. And I really like when people are at Rent the Runway for many years, and can grow their careers here, and can transform even what they, uh, dream of for their own careers by nature of surprising themselves here, taking on completely new experiences and opportunities that they didn't even expect that they'd be able to do.

   9. HSHarry Stebbings11:37

      Can I ask you, when, when you think about hiring mistakes, you learn a lot over time. Have you made any hiring mistakes, and how did that shape how you think about-

   10. JHJennifer Hyman11:45

       Of course, of course. I mean, I've been doing this for 14 or 15 years.

   11. HSHarry Stebbings11:49

       (laughs)

   12. JHJennifer Hyman11:49

       Like, I've made a ton of hiring mistakes. As much as you can interview someone beforehand, and I do spend a lot of time in getting to know people, and my hit rate has gone up significantly over time, inevitably, until you start really spending time with someone, like, you're never really gonna know if it's the right fit or not. So, I think that giving yourself some grace to-... on both ends of the equation, both as the boss and the person who has just co- come to that company, that sometimes it's just not the right cultural fit. Sometimes it's just not the right relationship, not gonna work, and that's okay. And that doesn't mean that they're not great at their job. It doesn't mean that you're, you know, not running a great company. It just means that sometimes there's a mismatch, and just being open about that earlier on in someone's tenure at the company is so much easier than waiting for, you know, 12 to 24 months in when they're already kind of set into the vibe and the culture of the company. So just, like, those early conversations when you start and, and early, uh, you know, things when you start to notice, like, "I'm not sure that this is really working," like, have that two, three months in, not two years in.

   13. HSHarry Stebbings13:13

       Do you agree with the hire fast, fire fast kind of mentality? I know it's, uh, kind of easy to say, difficult to do, but do you agree with that?

   14. JHJennifer Hyman13:20

       Hire fast... Sorry, say it again.

   15. HSHarry Stebbings13:23

       Hire fast, fire fast.

   16. JHJennifer Hyman13:25

       I don't believe in hiring fast. I believe in, like, hiring medium.

   17. HSHarry Stebbings13:31

       (laughs)

   18. JHJennifer Hyman13:32

       Don't hire slow. Like, you know, you need to grow your company, so you need to bring people in. But, like, I wanna get to know you a little bit. I wanna see how... Uh, I wanna see demonstrations of how you're going to, you know, present in front of people, how you're going... How you present an idea before you get to the company. Now, this also matters a lot more as there's more seniority within the organization. If I'm hiring someone more senior, then I'm hiring slower. I think in hiring... In firing fast, I would say yes. That's the goal.

   19. HSHarry Stebbings14:13

       Now, uh-

   20. JHJennifer Hyman14:13

       That doesn't always happen because of, you know, people are best of intentions. You wanna give people more chances. You think that maybe you didn't explain something, uh, right. I think most of the time, like, our gut feelings are pretty on target and, and I've done a better job over time at just trusting my gut.

   21. HSHarry Stebbings14:31

       I think it's, the single biggest thing I see is, like, just not being fast enough to respond to, to it. And I... And it's super hard. Also, what you said about, um, founders and how they describe their siblings, I had Doug Leone on the show from Sequoia, and he always asks, "Tell me about your relationship with your siblings." And how they describe that relationship to him is one of the most meaningful kind of signals of who they are as a person, which-

   22. JHJennifer Hyman14:52

       I couldn't... I could not agree more.

   23. HSHarry Stebbings14:54

       Yeah, I thought it was a fascinating one. That

3. 14:56 – 24:00

   Why “I Wish I Ran My Startup Like a Public Company”

   1. HSHarry Stebbings14:56

      really stuck with me. Um, I do wanna discuss (laughs) kind of the company, and actually, you know, revert to schedule in some way. But you said, "I wish I had run my business as a private company now that I'm a public company CEO."

   2. JHJennifer Hyman15:08

      Right.

   3. HSHarry Stebbings15:09

      And I actually saw this, and I was like, "Ooh, that's a great one." Um, what did you mean by this, and why do you wish you ran your company as a private company?

   4. JHJennifer Hyman15:18

      Oh, so I wish that I had taken... I think that what I said is I wish I had taken... The way that I run the company today as a public company is how I wish I had run it more as a private company. That's what I said, and I'll tell you why. As a private company, the name of the game in terms of how you raise capital and how therefore you grow is by proving that you are different, by proving and saying, "I- I'm this special snowflake. I'm gonna disrupt the way that women wear clothes." Everything about Rent the Runway is different. We're not a fashion company. We are a technology, logistics, data company that happens to be in the fashion business. How you run a public company is by looking at all of the ways that you're the same as everyone else in your industry. And by nature of looking at the ways that you're the same, it's very clear to see and distinguish what are the aspects of your business model and your P&L that actually give you a competitive advantage, and what are the aspects where you're falling behind? And so, as a public company, because I was evaluated against a lot of other apparel companies, really for the first time... I had never been compared to apparel companies before I went public. And then I went public, and everyone's suddenly like, "You're in the apparel business, you're an apparel business." And I started looking at the P&Ls of all of these other apparel companies, and I realized, oh my God, my competitive advantage is the thing that as a private company I thought was a problem. So, the competitive advantage of Rent the Runway which seems so obvious right now is our product cost as a percentage of revenue, meaning the cost of our inventory. The cost of our inventory is about 30% of our revenue. And in most apparel businesses, apparel, uh, the inventory cost is 50 to 55% of revenue. Now, why is our inventory cost only 30% of revenue? It's because we make very high ROI on all of the garments that we have because of the special business model that we have of this subscription to fashion and of renting clothes. So, we have this kind of 20 to 25-point margin advantage versus other apparel retailers as it relates to this really unique aspect of ensuring that the clothing that we have remains in perfect condition, that we can rent it out to dozens of women, et cetera. Now, what it also does is it points out very, very clearly, well, where are your biggest opportunities to improve? So, when I lined up my P&L versus others in the apparel space, and I looked at everyone in the apparel space when they were around $300 million in revenue, which is what we were last year-So when Etsy had around $300 million in revenue, when ASOS, when Revolve, when everyone... And by the way, you can't call yourself a special snowflake anymore when you're looking at everyone in the apparel business, 'cause there's a lot of really special companies there as well. And the, the problem that I realized we had was our SG&A as a percentage of revenue was completely out of whack. Like, for the size of business that we were, we just had a much bigger expense base than we should have had. We took massive steps in correcting that via restructuring that we executed last year. But also really over the last two years have been executing a financial transformation of the business which has effectively doubled our gross margins since our IPO, and you know, improved our gross margins. Q4 of, uh, you know, '21, our gross margins were around 30%. Q4 of '22 our gross margins were 44%. So we're making really big improvements in, uh, you know, the margin profile of the business based on running this business kind of as a public company. So yeah, I wish I could go back and say, "Yeah, like, we're doing something that's really cool. It's really innovative. We're getting people to rent clothes and use our service 100 days of the year." But don't talk to yourself as a private company, as if everything you do is different. The, the harm in doing that is then you can make an excuse for all of your metrics.

   5. HSHarry Stebbings19:54

      So I'm gonna make an excuse for you, um, but it's like, could you have got to the revenue scale as fast as you did without having the expenses in terms of whatever the expenses were that you had to then cut back on? Like, were they necessary to achieve the scale?

   6. JHJennifer Hyman20:10

      So our expenses actually were necessary of building out the competitive moats of the business. It was really expensive for us. This is a CapEx heavy business. We have to have distribution facilities. We've pioneered just-in-time reverse logistics of clothing and accessories, meaning all these clothes are sent back to us from women who have worn them. We have to ingest them single SKU. We have to, uh, inspect them. We have to clean them. We have to repair them. We have to restore them. We have to then ship them out, quality control them. We have to then ship them out to new customers, often with a zero or one-day turnaround time. None of that technology existed off the shelf and none of those processes existed off the shelf, so we had to develop all of, you know, the, the infrastructure to be able to do this. At the time, you know, that we launched Rent the Runway, there was WMS systems that we could buy, but WMS systems, which is a warehouse management system, were for pick, pack, and ship operations. It was just for outbound logistics, which is only about like 15% of what happens in our facility. So we had to build the whole thing from scratch. So I would say that there were, you know, significant investments that we had to make into the technology, which has become a moat of ours, into the operational, uh, you know, prowess of the business, which is a massive moat of the business. And then of course we had to spend money on our inventory. And the thing about a rental model is you are making a lot of money off your inventory, as evidenced by the fact that it's only 30% of our revenue versus the 55% for other companies, but you're laying out that money before you make it back. So there's a working capital issue related to the cost of, of growth.

   7. HSHarry Stebbings22:05

      There's so many things for me to unpack here, it's like a kid in a sweet shop, but it's like 30% versus 55%. D- does, like what does that look like though post bluntly the lo- I mean, there's a lot of logistics to the business. It is not-

   8. JHJennifer Hyman22:19

      Yeah.

   9. HSHarry Stebbings22:19

      ... an easy business to run.

   10. JHJennifer Hyman22:21

       Yeah.

   11. HSHarry Stebbings22:21

       Like-

   12. JHJennifer Hyman22:21

       Mm-hmm.

   13. HSHarry Stebbings22:21

       Does that not make the margin profile very, very different post all this different-

   14. JHJennifer Hyman22:26

       No. So that's the amazing thing about Rent the Runway, that our gross margins, which include the cost of all of our inventory and all of our fulfillment, and by the way, our fulfillment has all the two-way shipping, all the dry cleaning, all the restoration of the goods, all the reverse logistics, et cetera, our gross margins are 44% in Q4. Stack that up against the gross margins of other apparel retailers, and we have a 15 to 20 point gross margin advantage versus those companies, which... And those companies, many of them are profitable today. So there's no reason why you shouldn't believe that Rent the Runway will be profitable, and in fact should be more profitable than those companies, because we already have a 15 to 20 point gross margin advantage. The thing that has kept us from being profitable and, and put us into the camp where we're losing a lot of money was the expense of our SG&A.

   15. HSHarry Stebbings23:28

       Which has now been changed.

   16. JHJennifer Hyman23:30

       Which has now been changed, which is why we're a stone's throw away from profitability right now, and why we shared kind of on our last earnings call that this was going to be a transformative year where it was gonna be obvious to, you know, even a layperson who spends 30 seconds on our financials, that like our cash burn was coming way down, and you can see that with a little bit more revenue scale, this business starts producing

4. 24:00 – 32:15

   What does Wall Street not get about Run The Runway?

   1. JHJennifer Hyman24:00

      a really nice amount of cash.

   2. HSHarry Stebbings24:01

      Yeah. Can... I'm sorry. I'm, I'm, I'm, I'm not diverting away from the hard questions today but I'm loving this. What does the street not get then? Like, I hear everything you say. It all makes total sense. What does the street not get then?

   3. JHJennifer Hyman24:13

      Yeah. Okay. So the first thing is that the street in general right now isn't looking at all, paying any attention to companies that are unprofitable.And until recently, Rent the Runway is a company that has burned a lot of cash and we've been unprofitable. So number one, like, I don't think anyone's really looking at us today. Then once you kind of deal with that issue, I think there's two major questions about Rent the Runway. Number one is, is this a market? Like, is there TAM? And number two is, can this business make money? And we've made significant progress on both of those in a very short period of time. I mean, the fact that on, you know, can we make money? The fact that we've improved the gross margin from 30% at the end of Q4 '21 to 44% at the end of Q2- Q4 '22, that's significant over a very short period of time. Is there a TAM? Well, we've shown that, um, you know, we've had some significant growth coming out of '22 with these investments we're making in customer experience. But what's really exciting to us is, as opposed to this being this closet in the cloud being a market that I invented in my head, uh, 14 years ago, um, now there's actual competitors to Rent the Runway. And some of those competitors released their information and they also have similar amounts of subscribers, which really proves, like, women are ready to do this. Like, this is a, something that is in the consideration set in a way that it wasn't really even three or four years ago. So that's exciting that the tailwinds around, uh, subscription to fashion, certainly the tailwinds around circular fashion, I think have never been stronger.

   4. HSHarry Stebbings26:07

      Can I ask for you as a leader, when you think about, you know, the short term demands of the street in terms of profitability, in terms of next quarter's earnings, it doesn't allow really bluntly for long term innovation research thinking around how a classic VC ... Forgive me for this example. How AI impacts, you know, future consumer shopping habits, uh, collaboration of shopping, whatever that is. Do you feel there is a misalignment between what the wall- what the street expects tomorrow and what you want to invest in over time?

   5. JHJennifer Hyman26:42

      I think that over time, you get the investors you deserve. And I'm here, as evidenced by the 15 years that I've already spent creating this market, building this company, I'm here for the long haul. I'm here to create a sustainable business that is around many, many decades to come. I believe that 50% plus of the closet in the future doesn't have to be filled with items that we own forever. And so, how we think about building this company is for the long term. Now, that has not shown up at all in our stock price to this point because we have not been able to amass those long-term investors because those long-term investors are looking for profitable companies. And by the way, it's not that we are trying to get to profitability because that's what the market favors. We're trying to get to profitability because I want to build a sustainable company that is around for, you know, 50 years from now. So we're focused on the right things here, and we've actually never been more excited about how big this market is, how much momentum there is in the market. I mean, just little things that we're seeing in terms of the diversity of the customer base, the diversity of who signs up for subscription. Like, she's more geographically diverse than she's ever been before. She's, uh, you know, coming in with more age diversity than she's ever had before. This just is now something that feels like it's in the water, in a way that, like, didn't really feel that way to me a few years ago. So coming back to, like, something that you said about AI, which I think is, um, really gonna divide companies in half. There are gonna be companies that are AI beneficiaries, and then there are gonna be companies and full industries that are just decimated by AI. I am of the mindset that AI is going to be the biggest change to how we operate businesses, you know, o- since, since the iPhone. And interestingly, fashion, which is a very physical business, I just talked about all of the CapEx, like, the good, the bad thing about my business is it's been very expensive to build. The good thing about my business is it's not being disrupted by AI. We are gonna be a massive AI beneficiary. It's really freaking annoying right now, be it on Amazon or on Rent the Runway or on Zara or on Nordstrom, to shop the endless aisle of products in fashion and figure out what you wanna wear. AI is gonna make the, uh, equation of discovery so much more efficient, so much more delightful, and we are starting to furiously run inside of Rent the Runway to use the data advantage that we have to really harness the power of AI. So I've never really been more excited about a technical, uh, you know, I don't even wanna call it innovation. I think it's, like, a new playing field that we're all on and the possibilities for how that impacts Rent the Runway.

   6. HSHarry Stebbings29:56

      I, I totally agree with you there. Does that not add another expense though? Like, if we look at, bluntly, AI engineers, if you look at machine learning engineers, if you look at any kind of research in this area, it takes a lot of cash. I mean, your SGNA is gonna go again. So it's a question of do you need-

   7. JHJennifer Hyman30:16

      We already have. I mean, we've been harnessing and using AI for a decade. We already have all those machine learning engineers within the company.Um, we already are using personalization, um, and algorithms from our machine learning team across every aspect of our not only consumer experience, but even within our operation of how we care for our inventory in order to maximize turns. So, I actually think that the expense has just come down because of products like ChatGPT. The interface that that enables with ChatGPT of being able to have almost a shopping companion that you could have with Rent the Runway that could answer all of your questions, and we have all of the data to deliver into that, I think it's- could be game changing. So-

   8. HSHarry Stebbings31:07

      Jen, do you- do- do you want to be a technology company or an apparel? Uh, going back to the question of, like, are you a technology company or an apparel company?

   9. JHJennifer Hyman31:14

      We're in the business, we're in the business of getting women dressed every day. So, in terms of how our customer experiences us, we're an apparel company. And we're not just apparels. We're apparel, we're accessories, we're handbags, we're the full kind of wardrobe for her. Now, is it a company that is certainly enabled by technology? 100%. The majority of my employees are tech. They're engineers, they're data scientists, they're product, they're UX, and that's always been the case at Rent the Runway, and that's one of the reasons that building this company has been expensive. But, uh, I definitely think that we're, we're a fashion company.

   10. HSHarry Stebbings31:55

       Can I ask you, you said about kind of the expense of building the company-

   11. JHJennifer Hyman31:57

       It's taken me 15 years to say that (laughs) by the way.

   12. HSHarry Stebbings32:00

       I- it- it's fantastic.

   13. JHJennifer Hyman32:01

       (laughs) I've never heard that before, but it's true. We're a fashion company and I'm proud of it, and we're disrupting an aspect of fashion, which is a $3 trillion global industry.

   14. HSHarry Stebbings32:13

       Do brands... Uh, sorry, I'm really just going

5. 32:15 – 37:14

   Do Brands Like You?

   1. HSHarry Stebbings32:15

      off piece here, but fuck it, I'm loving it. Um, do brands like you? Like, if you think about it, the- the-

   2. JHJennifer Hyman32:20

      Yeah.

   3. HSHarry Stebbings32:20

      ... big brands are like, "Well, the circular economy is not good for us." Like, "We like purchases. We like as many purchases as possible-"

   4. JHJennifer Hyman32:28

      Okay.

   5. HSHarry Stebbings32:28

      "...shorten the relationship that is fictitious," no?

   6. JHJennifer Hyman32:31

      Yeah, so brands used to be very confused by me, slash, hate Rent the Runway, because first, at first glance, you think, "Why on earth would anyone buy clothes if they had the option to rent or to s- subscribe?" Fast-forward now 15 years, who's my customer base? I have a customer base, number one, ave- my average subscriber spends about $2,000 with me per year. So this is a luxury customer that I have. This puts me on par with, you know, LVMH, or with top luxury beauty companies for how much people spend per year. Number two, my customer is between 25 and 45 years old. So I have a wealthy, young customer who is not currently the customer of these designer brands. I'm introducing these designer brands to my customer often for the first time. In fact, 98% of my customers say that they're renting brands on Rent the Runway that they have never owned before. "So this is my first experience wearing Ulla Johnson," or, "My first experience wearing Proenza Schouler." And then I am able as the customer to determine whether I wanna purchase that product. So brands at this point see me as one of their most powerful marketing engines because they've now have 15 years of data where they assess where do their top customers come from? And most of their top customers, they see, found out about the brand and started using the brand via Rent the Runway. Now then ask yourself, "Well, why is that? Why has Rent the Runway become so powerful as a marketing engine for the designer fashion industry?" And that's because younger women are busy. They're not entering physical retail stores in the way that they did 20 or 30 or 40 years ago. And what is Rent the Runway, really? It's a replacement to the retail store. You don't have to go into Saks and go into a dressing room and try things on anymore. You can get a Rent the Runway garment bag sent to your home. You have five designer items in it. You can wear them in your real life. You can try them on. The dressing room is now your bedroom. The dressing room is now the street. It's now your office, where you're showing up in this new Proenza top and you're getting compliments, you're figuring out if you love it. Like, that's what the department store dressing room used to be 50 years ago. So for brands, we are kind of innovating what they've always known to be true, which is when women put on the clothes, they have a 70% higher likelihood to wanna purchase the clothes.

   7. HSHarry Stebbings35:19

      I'm sorry, Jen. I love that. I was also sitting there going, "Oh, shit. I really need to update my knowledge of brands." (laughs) Um, but it- it sounded great. Is there ever a stage where brands are like, "Ooh, they're not converting." Like, 'cause there is a time where they expect the conversions to hit and the marketing-

   8. JHJennifer Hyman35:38

      Yeah, so we, we have 100% retention of all the brands who have ever worked with us. And this is in an industry where typically if you're a fashion brand, you change somewhere between 10 and 20% of your distribution partners annually. The fact that every single brand that has ever started working with Rent the Runway has decided they want to continue working with Rent the Runway is really a testament to the power of our platform in the industry, to how good of a partner we are, and the fact that we're a business that's focused on, yes, delivering this transformative customer experience, but we also are trying to, um, grow these designer businesses. Designers have been really, really hurt over the last few decades because of fast fashion. Right? Fast fashion has come in-... and copied their designs, put it out into the universe, into the global marketplace much quicker than the designers, at much cheaper price points, and that's where all the money has moved. Over 80% of what's purchased in this nearly $3 trillion global market is fast fashion now. So fast fashion is really everything from a Shein to, you know, an H&M or a Zara, but it's also, like, all of the kind of cheaper items that you might buy on an Amazon Fashion or in a Walmart. Like, all of that is just what the designers

6. 37:14 – 49:22

   Why Paid Marketing and Growth Hacking Ruined a Generation of Startups

   1. JHJennifer Hyman37:14

      are competing against.

   2. HSHarry Stebbings37:15

      Can I ask, that's on the supply side. On the demand side, you said something fascinating, which is paid marketing and growth hacking ruined a generation of startups. I was so intrigued by this statement. Why did paid marketing and growth hacking ruin a generation of startups, Jen?

   3. JHJennifer Hyman37:30

      This is, like, a new thing I've been thinking about a lot recently because obviously we're in this very hard and very bizarre time where a lot of startups are going bankrupt, a lot of companies are having trouble, and I was thinking about my own trajectory as a business. I'm al- always thinking about lessons learned. What could I do better? What, you know, (laughs) wh- what do I wish I would have done a few years ago? And when we were growing up ... So we first raised money in 2009, and that was really the beginning of an explosion in venture capital funding throughout the US. So I think that some of, like, the highest years of venture capital funding were, like, 2011, 2012, 2013. At this exact time, there was ... We were running parallel with the massive success of companies like Facebook, Google, and companies like Expedia and Bookings.com. And so when you raised money from a VC in 2009 or in 2011, the first thing they would say to you is, "You need a growth team. You need to start doing growth hacking." And why did they say that? Because there was a culture, and with a big personality attached to it, Chamath at Facebook, that had built this unbelievable growth machine, and it worked for Facebook. And what was growth hacking? Growth hacking was, like, looking at your PDP and saying, "Okay, I wanna change this button on the PDP from blue to green, and that's going to increase the conversion rate on this page. It's gonna get more people to be, to go further down the funnel." Now, at Facebook, that might have actually worked because they were dealing with such a big revenue base that moving the metric one one-hundredth of a point could actually add up to a hundred million dollars, is something significant. But for startups that were very small, changing the button color from blue to green might give you some small, you know, perception that you were changing your metrics, but all of that would be erased, you know, within a few months because what you were doing is you weren't delivering any incremental value to your customers. You weren't actually fundamentally changing their experience in any way whatsoever to make your brand stickier to them, to make your customer experience better. So what happened was all of these startups wasted an inevitable amount of time and money on building these growth departments that were just, like, pushing chess pieces around the board. Like, that ... All of the gains would be erased, you know, whether it was within six months or it was in 18 months, and nothing would fundamentally change in the customer experience. So VCs at the time were taking the lessons learned that were true lessons from mega companies and they were falsely thinking that those mega lessons could actually benefit small companies, which they did not. Then let's move to paid marketing. Okay, so you had these successful companies. You had Facebook, you had Google. They wanted you to spend money on ads. Those VCs also were investors in Facebook and in Google. They wanted you to spend money on those ads. And there was a mathematical equation at the time where, you know, people just thought, "Hey, we've outsmarted decades of marketing knowledge. What we can do here is we can buy an ad for a really cheap CAC. We can buy a search ad on Google, and if the LTV is higher than the CAC, we should do this all day long. Cha-ching. Let's just keep on doing this." What people couldn't foresee or couldn't think about is buying that search ad on Google, just like growth hacking is doing nothing to fundamentally improve your customer experience, buying the search ad on Google is doing nothing to fundamentally improve your brand. How do brands grow? Brands only grow based on the organic growth of a business. You've got to get people to love your brand. You've got to get people to talk about your brand. The best brands on Earth are brands that grow virally and organically, and the way that you do that is you invest in either delivering a much better customer experience or you invest in building a brand that is so emotionally resonant with the consumer that they want to come to you. So what was happening at the time was there was almost this arrogance within Silicon Valley of which, by the way, I- I'm viewing myself as being a part of that. I'm not saying, "Oh, they made me do this." I- I did this, made these mistakes as well. There was an arrogance where we thought that we were smarter...... than these old school companies who were spending their marketing dollars on things like retail stores and billboards and events and connecting with their customers and all of those things. And do you know what? We were completely wrong, because buying an ad on Facebook or buying an ad on Google might give you a quick hit, it might give you a quick conversion, but that is fundamentally doing nothing to breed brand loyalty, to improve your customer experience, to build virality, to build organic growth. And I think billions of dollars have been wasted there, where they should have been built on the real nuts and bolts of kind of building customer experience. So, a- a business that I think did this absolutely right, the- the one tech company that I can think of, well, there's two that have done it really, really well. One is obviously Amazon, where they have invested all of their time and effort on improving their customer experience. I mean, the evolution of Amazon is just like, "Let's give the customer more and more and more value so that it is actually ridiculous to think about not having a subscription to Amazon Prime in your life." Another company that I think has done this unbelievably well, and their change has really happened more over the last few years, is Airbnb, where Airbnb has said, "Let's forget everything about paid marketing. Let's take all of our dollars and invest it into the brand, into PR, into product innovation that's actually gonna breed loyalty." And I think now like over 90% of Airbnb's traffic is organic. Now, Rent the Runway, over 80% of our traffic and over, sorry, over 80% of our customers have always come to us organically. So we've never really fallen privy in the same way to paid marketing like many of our peers. Paid marketing has always been less than 10% of our revenue. But even that 10% of our revenue that I was spending on paid marketing, I wish that I can go back in time and say, "That was stupid. I should have spent that on more engineers to build better customer experiences for my users, or I should have spent that on more brand marketing that would have enhanced the value and the, you know, emotional, uh, connection between my customers and my brand."

   4. HSHarry Stebbings45:04

      Can I ask you, when you say about the paid marketing, I mean, I have to say, I dis- I- I- I disagree 'cause it's a form of discovery. Like, I totally get you in terms of brand loyalty, uh, champions, ambassadors. I love many products because I found them through paid marketing.

   5. JHJennifer Hyman45:21

      Yeah.

   6. HSHarry Stebbings45:21

      It is a great way to find new customers and that is what it's about. And so it does work. The VCs that-

   7. JHJennifer Hyman45:28

      Well-

   8. HSHarry Stebbings45:28

      ... encourage it, uh, there's like w- half a quarter of a quarter of a percent that were in Facebook or Google, sadly, Jenn. I would love it if there were more. But like, we're not like evil masterminds being like, "Invest in Facebook."

   9. JHJennifer Hyman45:40

      No, no one is. My, I- I just, I started off the call saying I spend, I talk to my VC investors still several times a week. They're my favorite people on the planet. Um, most of the time if you look at startups over the last 15 years, the funnel has been inverted, meaning that you would take marketing spend and less than 10% of that marketing spend was often spent on top of funnel or mid-funnel activities, and 90% was spent on bottom of funnel, bottom of funnel being direct response paid marketing. That's the problem. The funnel should have never got into a place where 90% of your marketing budget was spent on those kind of ads that make you feel good, it makes you feel like customers are coming in and converting, but are those customers really staying with you? Like, the only way that customers are gonna stay, the only way- way that you're gonna get high net promoter score, high net- high virality is if alongside you kind of getting them in the front door, you're improving that customer experience or you're improving your brand. And I think that we all had limited resources also over the last 10 to 15 years, or many of us did, and the allocation was off, where people were favoring just the paid marketing around growth as opposed to the continuous improvement of the customer experience. So it's really just about like, how do you allocate your resources? And I think way too many resources went to bottom of the funnel, number one, within the marketing budget, and then way too many resources in general went to marketing over things like fundamentally improving your product experience, improving your operational experience, the things that actually keep customers loyal.

   10. HSHarry Stebbings47:33

       Is that not growth? I, you know, I- I- I, we have 20 growth engineers in the world's biggest growth leaders. They all work on things like simplifying a home screen or, uh, removing, uh, a- annoying features or elements which cause churn. And so when you say like, do people stay? Do they retain? That is in cer- and this is why growth is difficult, because the definition is kind of blurred. Like, to some people, that's just product teams. And to some people that's growth.

   11. JHJennifer Hyman48:00

       So-

   12. HSHarry Stebbings48:00

       Do you see what I mean?

   13. JHJennifer Hyman48:01

       ... look, there's always, um, within a product team, there is always an element in any business of simplification.

   14. HSHarry Stebbings48:11

       Really?

   15. JHJennifer Hyman48:11

       Let's make this site easier to use. Let's take this like archaic screen away and reduce this, reduce this, the friction around the product funnel. Yeah, that- that's a part of the health of a product organization. But growth hacking is something that's fundamentally different. That is literally you are hacking the difference between, you know, changing your font color from this to that, like moving this line from here to there.... you're, you're t- you're running hundreds of experiments at one time that may show up mathematically in the metrics, but to the customer, like, does it really freaking matter? Like, does that change their fundamental relationship with Rent the Runway that you move the button from here to there? Like, the only thing that's gonna get customers to stay with Rent the Runway longer is if they wear more clothes from me, they get more utility out of those clothes, they feel awesome every single day wearing them, and the experience of receiving those clothes becomes easier and easier over time.

   16. HSHarry Stebbings49:16

       Mm-hmm. No. I, I totally agree with you. I think, I think the difference there is, like, growth and growth hacking. Do you know what I mean?

   17. JHJennifer Hyman49:21

       Yes.

   18. HSHarry Stebbings49:21

       And, and the definitions

7. 49:22 – 54:32

   What’s Missing in Consumer Subscription Businesses

   1. HSHarry Stebbings49:22

      are very different. So, I, I get you there. Can I ask, I had down, uh, the founder of ButcherBox on the show who said they're at 600 million in revenue. He was like, "We get to a billion, we'll be a three billion company." It's not a, it's not a venture bankable business, Harry, when you look at the scale. And I- I'm saying that as the founder of ButcherBox. And it just made me really pause and think. A- and he said, like, "Consumer subscription isn't." Do you think that's fair, actually? Or do you think it's missing something?

   2. JHJennifer Hyman49:52

      Well, I think that lumping all subscription businesses together is as wonky as when I used to say that we shouldn't be thought of as an apparel company. Right? So, when you look at... When you think about what gives Rent the Runway the right, and what will... What gives us the right to become a profitable company? The thing that gives us the right to become a profitable company is that we have this 44% gross margin that we've proven can only go up, that we have this competitive advantage in our product cost. We actually have built a highly efficient, um, fulfillment operation, as evidenced by the fact that our fulfillment expense, which has two-way shipping, which has restoration of garments, which has cleaning, which has repair, still is only 30% of revenue, which leads us to that 44% gross margin. And what then gives us the right to become profitable over time? It's that, in addition to that, we've built a machine of a customer experience and a brand that is extremely viral, that we have... That we get to spend less than 10% of our revenue on marketing, and we actually have room in there to actually build a quite profitable business. A lot of subscription companies have actually are... A lot of subscription companies are software businesses, right? They're software as a service. And those subscription companies may actually be spending 70% of their revenue on their sales organization, on their marketing organi- organization. Like, so looking at Rent the Runway versus a SaaS company doesn't really make sense, because the P&L is just completely different. So, I, I don't actually know what the P&L of ButcherBox is like. I, I know that, actually, that sounds like a very cool business. But sub- subscription is just a way as well, the way that I think about it is, what makes Rent the Runway different is most subscriptions, you're just getting more s- stuff every month or in a lot of subscriptions. Like, "Here's your box of m-" I'm making a guess on what ButcherBox is. "Here's your box of meat. Here's your box of meat this month. Here's another box of meat next month. Here's another box of meat the, the month after." Rent the Runway has taken a business that the fashion industry, which used to be about purchase and wastefulness, so the average American buys 70 new articles of apparel per year. So, what does this tell you? It tells you that the customer, across class, across interest in fashion, so even people that don't care about fashion are buying about 70 articles of apparel per year. It's crazy. So, the customer clearly cares about variety. So, Rent the Runway has taken the business and turned fashion into a replenishment business, similar to grocery. We've said, "Okay, your subscription is just your wardrobe o- wardrobe on constant rotation. You don't have to buy these things forever. You're gonna share these items with, you know, a- all of these other women who are also kind of subscribers to this closet in the cloud." But we've made the business something where 50% of your closet can be things that you own forever, and 50% of it can be a replenishment business. So, you wear them, you return them, you get new things. So, you're not accumulating more stuff that you don't need. You're serving this kind of use case, uh, this need that customers have for variety and for self-expression and doing it actually in a very efficient way. So, I think that just bunching everything together doesn't really make sense, and this business has huge right to win. I think we're in a market that is growing really quickly. The tailwinds are incredible. We've made tremendous financial transformation over the last two years, and the proof is gonna be in the pudding. Like, I know that from my angle, I've dedicated the last 15 years of my life to this. This is my first child. This is my passion, and I am going to bring this business to a place where it is producing a lot of cash, because this is the number one passion in my

8. 54:32 – 59:43

   Boards 101: Leading and Learning from Estée Lauder

   1. JHJennifer Hyman54:32

      life.

   2. HSHarry Stebbings54:33

      Jen, I, there's so many things there. A final thing I wanna just discuss before we do a quick-fire is actually board exposure. You're on the board of Estee Lauder. I'm like the biggest fanboy for Estee Lauder. I think it's the most incredible-

   3. JHJennifer Hyman54:44

      I am too.... fan girl.

   4. HSHarry Stebbings54:44

      ... unbelievable journey. Um, but you also manage a board too, which is fascinating hat switching between the two different exposures, like managing a board and then being on the board. How many-

   5. JHJennifer Hyman54:53

      I'm also on the board of Zalando, which is another amazing company in Europe.

   6. HSHarry Stebbings54:58

      That is an amazing company. Still, my heart belongs to Estee Lauder, sorry. Uh, but-

   7. JHJennifer Hyman55:02

      (laughs) Got it.

   8. HSHarry Stebbings55:02

      ... I agree, amazing business, totally. Uh, but, like, how do you think about what it takes to be a great board member and then what it takes to manage a board brilliantly as the founder or CEO?

   9. JHJennifer Hyman55:14

      I mean, the founder and the CEO is thinking about the vision and the strategy and, "How do you build the right team and how do you allocate the resources within the company to actually attain that strategy?" A board member's job is not to come up with the strategy of the company. A board member's job is to ask the right questions that might, you know, engage the CEO and the executive team in, you know, slightly different conversations. You know, I- I would say that as a CEO, I'm actually steering the ship, right? And as a board member, you might help to, like, tilt it one way or another by nature of how you challenge the leadership team, how you ask questions, how you maybe direct them to think about areas that they haven't been thinking about, or bringing in kind of your experience into the room. Now, sitting on the board of Estee Lauder is just one of the privileges of my life. I get to sit with, number one, one of the best CEOs in the world, Fabrizio Freda, and I get to learn from him. He's a genius. Number two, I get to sit with the Lauder family, and the Lauder family is really stewards of wanting a company to be around for hundreds of years. Leonard Lauder, who is, you know, in his 80s, I think, to me, feels like he's in his 20s. He's that much of a visionary. He's that much involved in the business, in, in understanding the details of his company. He cares about the business being around, the business doing the right thing, the business being long term in thinking, and that has been amazing to see, that he still loves this company with the passion that he's had for decades, and that's really what I aspire to be for Rent the Runway. Whether I'm, you know, working at Rent the Runway as the CEO or I'm sitting on the board, I want that level of passion and that level of curiosity throughout my career. My favorite thing about Leonard Lauder is that, like, as an 80-something-year-old, he... And maybe he's older, I- I don't even know because, to me, he feels like he's 25. But, uh, the curiosity he has to continuously learn, to continuously think about the world differently, to push. Like, think of all the changes that have happened over his career, across this business, and he's the first one to say, "Let's go for that. Let's try this new thing. Let's, like, push the envelope here." That's amazing. So, uh, the brilliance of Fabrizio and how he's built this unbelievable team around him, and then the unbelievable, you know, innovation, curiosity, and kind of loyalty of the Lauder family is just... It's amazing. It's a perfect-

   10. HSHarry Stebbings58:24

       Very final question for a quick fire, but has being on the Estee Lauder board changed how you run Renth- the w- Runway at all?

   11. JHJennifer Hyman58:31

       Definitely.

   12. HSHarry Stebbings58:32

       It has?

   13. JHJennifer Hyman58:33

       I think that I'm thinking a lot more long term in nature because of it.

   14. HSHarry Stebbings58:37

       Huh. That's fascinating. And that's because of Fabrizio and the exposure?

   15. JHJennifer Hyman58:42

       Yeah, it's because of Fabrizio and the Lauder family. I also... The other thing that I've learned from Fabrizio that I take into my leadership is strength-based leadership. So, Fabrizio is a huge proponent that you should spend almost no time thinking about someone's weaknesses and how to improve them, and you should identify, "What are the things that make someone great? What are their superpowers and how do you accelerate those strengths?" And I have 100% adopted that within my own leadership style. You know, let's focus on what makes someone amazing, let's give them even more runway for them to be even more amazing in this area, and let's build teams around those strengths. We don't even have to waste our time on the weaknesses, and, you know, some moderate improvement in weakness, like, who cares when we can 10X your strengths?

   16. HSHarry Stebbings59:40

       I suck at spreadsheets, so I would thoroughly enjoy

9. 59:43 – 1:04:51

   Quick-Fire Round

   1. HSHarry Stebbings59:43

      being under your leadership. What you just said made me very nervous. Um, but, uh, I would love to move into a quick fire round, Jenn. So I say a short statement and then you give me your immediate thoughts. Does that sound okay?

   2. JHJennifer Hyman59:52

      Okay, great.

   3. HSHarry Stebbings59:53

      I- I spoke to Jenny, um, before and she said, "How did you meet Beyonce and get her on the homepage of the site," was something I had to ask, and I was like, "Yeah, it is."

   4. JHJennifer Hyman1:00:03

      (laughs) Yeah. So we... In one of our f- in our first office, there was a designer who worked next to us named Brian Reyes, and Brian's boyfriend became... Brian and his boyfriend became good friends of ours, 'cause I was working long hours and then I would go over to Brian's design studio after work and have drinks and just hang out with him and Jim. And we just for, you know, the two years that we worked there became very close, and I never really asked Jim much about his career because we were just having fun together and I was talking to him, you know, in a personal way. And then a few years later, I got a phone call from Jim because Jim and Brian had broken up and, and I was like, "Jim, oh my God, I miss you so much. How are you? What's been going on?" And he was like, "Jen, I'm back to my old gig." And I was like, "Oh, like what's your old gig?" He's like-... "We never talked about this?" I was like, "No." He's like, "I'm Beyonce's manager." And I was like, "What?" L- I was in a state of shock. And he had seen the company grow up. He had seen the culture of what we were trying to do, how we were trying to transform, you know, how women felt about themselves through fashion, and enable women to feel empowered every day. And he thought this is like a perfect, you know, pairing for what Beyonce believes in. And so we met Beyonce. She wanted to do all these things for Rent the Runway where she was on our homepage. She also, we dressed the Beyhive at all of her concerts around the country and Rent the Runway that year. It was amazing.

   5. HSHarry Stebbings1:01:42

      Was it cool meeting her? Were you nervous?

   6. JHJennifer Hyman1:01:45

      With Beyonce?

   7. HSHarry Stebbings1:01:46

      Yeah.

   8. JHJennifer Hyman1:01:48

      Uh, no. I just thought it was the most fun experience of all time. It wasn't, it wasn't nerve-wracking. It was like you're around greatness, and you're just, w- we're trying to remember is the moment (laughs) when you're, when you know that something is gonna become, like, one of the coolest moments of life and you're trying to remember every single second of it, that was more the mode. We were-

   9. HSHarry Stebbings1:02:07

      Did that convert to sales? Like does seeing Beyonce on Rent the Runway, do people, like, buy more?

   10. JHJennifer Hyman1:02:14

       Um, it did. I mean, it brought a lot of traffic at the time, and-

   11. HSHarry Stebbings1:02:18

       Mm-hmm.

   12. JHJennifer Hyman1:02:19

       ... I, I do think we got a (laughs) nice bump from Beyonce. I mean, we're fools for not turning that into something much bigger. It's one of my biggest career regrets that I have.

   13. HSHarry Stebbings1:02:30

       It's the first time I've ever had, "We got a nice bump from Beyonce on 20BC." (laughs) So you gotta savor every moment of a, a first experience. Work/life balance, possible or a myth?

   14. JHJennifer Hyman1:02:40

       Totally possible.

   15. HSHarry Stebbings1:02:42

       What do you know to be true that others do not agree with?

   16. JHJennifer Hyman1:02:46

       That the most important thing about building a business is forward momentum. It's just continuing to wake up in the morning and put one foot in front of the other and have positivity and just keep going. I think that people give up way too soon.

   17. HSHarry Stebbings1:03:07

       I love that. That is, that is the boom, uh, clip. Fantastic. What have you changed your mind on in the last 12 months, Jen?

   18. JHJennifer Hyman1:03:15

       Um, I've changed my mind on AI. So I always thought AI was extremely important, and now I think it's like the, the next leapfrog moment for companies. I think it is, u- using the word important is, is too small of a word. I think that it is a game-changing, um, innovation in how we're all going to experience the world around us.

   19. HSHarry Stebbings1:03:40

       Penultimate one. Craziest thing we saw happen in 2020 to 2022?

   20. JHJennifer Hyman1:03:46

       All of our revenue kinda go away, and then it all come back. (laughs) Or us r- you know, us going from losing all of our revenue essentially overnight to IPOing the business 18 months later with our full team and, you know, all of our alumni kind of standing by and being part of it. It was just a remarkable, from the lowest of the lows to the highest of the highs.

   21. HSHarry Stebbings1:04:11

       Final one. Next five years for you and Rent the Runway. What does Rent the Runway look like in 2028?

   22. JHJennifer Hyman1:04:17

       Well, we're gonna be very profitable. We're gonna be much bigger. We're gonna have, you know, hopefully millions of subscribers. I think that what's cool about Rent the Runway is I think that there's just a much bigger market with the business that we're in today. I don't think it's, uh, gonna be about massive new changes to what we do. I think it's just about growing what we are already doing 'cause I think we're at the very beginning of a tidal wave shift in how people get dressed.

   23. HSHarry Stebbings1:04:47

       Jen, I've absolutely loved this. Thank you so much for putting up with my very wayward schedule.

Episode duration: 1:04:51