The Exchanges

Q Amazing. Um, and obviously there have been pivots throughout the time that you've been around. I mean, there were different models and different collaborations. Um, I mean, but, but essentially the, the core of the business remains the same, right? You, you basically can There are different tiers of subscriptions, and you can get a certain amount of clothing per month based on what your subscription is.

A Yeah, so the business started with a la carte rentals for special events. You can still very much do that, and that is a significant part of our business. And then we added subscription in 2016. Um, at the beginning was about giving people access to rotating closet, primarily for work and special occasions. Now it's really about casual everyday life. Including work and special occasions, but rental has become so much more normalized now that you would be shocked at the amount of customers who rent denim from us and who rent casual, you know, clothes to wear on the weekends. So I think we've reached a different point in the cycle from early adopters into more of a mainstream behavior.

AI assessment note: “the business started with a la carte rentals for special events... then we added subscription”

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

A No, we never did research in an academic sense. We did real life research, which was, we went to Bloomingdale's, we bought about a hundred 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, what happens to these garments after they rent? Do they get destroyed? Um, can you send them through the mail? How do you dry clean these items? And so on and so forth.

AI assessment note: “We did real life research, which was, we went to Bloomingdale's”

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

A No, we never did research in an academic sense. We did real life research, which was, we went to Bloomingdale's, we bought about a hundred 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, what happens to these garments after they rent? Do they get destroyed? Um, can you send them through the mail? How do you dry clean these items? And so on and so forth.

AI assessment note: “We did real life research, which was, we went to Bloomingdale's, we bought about a hundred dresses”

Q Yeah, I mean, if you already had this idea in your mind, you knew what the, what the thing was going to be, you had this vision, but you decide to take one small piece of it and start that way. How did you know when to start rolling out the other pieces of it?

A Number one is It was informed by when the customer was ready, and there were two aspects of that. Number one is when the world around us had changed enough where people would consider renting their everyday clothing, and we've been Able to grow, not only because of the success of Rent the Runway, but also because of the success of Airbnb, and Uber, and WeWork, and ClassPass, and the million of, you know, the many sharing economies that have impacted and transformed how we act in every aspect of our lives. But we also, at the point that we Opened up a subscription to fashion. We had millions of customers at that point who had rented the runway for a wedding or for a special occasion, had a great experience. The behavior was more normalized at that point in time, and they were ready to try the next step. And in fact, when we spoke to our customers, they were begging us to offer them the ability to rent to what they said was the most important occasion in their life. And that occasion is work. We kept hearing from our customers that the place where they want to feel the most self-confident, the most empowered, is when they walk into the office every single day. They want to feel like a boss. They want to dress for the job they want. And there is this pink tax that has existed forever on women, where there's an expectation that you're going to have variety in your professional ward…

AI assessment note: “It was informed by when the customer was ready, and there were two aspects”

Q Yes, indeed. Yes. So this, this leads me to an important point, which is, do you think, I mean, given that you created this very disruptive brand, do you think when, when your idea is radical, is truly radical, Like, like Rent the Runway is for the fashion industry, that it's better to phase that idea in slowly?

A So there's two approaches. There's the Rent the Runway approach, and there's the, you would say, the Uber approach. The Rent the Runway approach is, we're nine years in right now, and the industry considers us to be their most important partner. They want us to be successful. Then you have... A business like Uber, which of course is huge and unbelievably successful, but kind of barreled its way into cities and countries all over the world, and sometimes when you barrel your way in, you get a huge amount of government resistance and people deciding on the ballot whether or not you should be there, and you're, you're starting to face the repercussions of that down the line. So I would say that we started off In a weaker position with the industry, now we're in a very strong position with the industry, and it allows us to innovate very quickly, and as you've seen, we've gone so quickly from being a business that just rents special occasion clothing, to now renting everything that you might want to wear, and our average subscriber is using us a 120 days of the year.

AI assessment note: “There's the Rent the Runway approach, and there's the, you would say, the Uber approach.”

Q Yes, indeed. Yes. So this, this leads me to an important point, which is, do you think, I mean, given that you created this very disruptive brand, do you think when, when your idea is radical, is truly radical, Like, like Rent the Runway is for the fashion industry, that it's better to phase that idea in slowly?

A So there's two approaches. There's the Rent the Runway approach, and there's the, you would say, the Uber approach. The Rent the Runway approach is, we're nine years in right now, and the industry considers us to be their most important partner. They want us to be successful. Then you have... A business like Uber, which of course is huge and unbelievably successful, but kind of barreled its way into cities and countries all over the world, and sometimes when you barrel your way in, you get a huge amount of government resistance and people deciding on the ballot whether or not you should be there, and you're, you're starting to face the repercussions of that down the line. So I would say that we started off In a weaker position with the industry, now we're in a very strong position with the industry, and it allows us to innovate very quickly, and as you've seen, we've gone so quickly from being a business that just rents special occasion clothing, to now renting everything that you might want to wear, and our average subscriber is using us a 120 days of the year.

AI assessment note: “There's the Rent the Runway approach, and there's the, you would say, the Uber approach.”

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

A So we were friends. We actually threw our birthdays together, um, 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, uh, 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. 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 I like, it was a light bulb 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 that she could post on Facebook and kind of share with everyone she knew how awesome she felt and how confident she felt a…

AI assessment note: “I go back to school on Monday. I happened to have lunch that day with Jenny.”

Q How did you, uh, how'd you guys meet?

A So it's a really funny story. My sister Becky... Uh, 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. Wow. And we became really fast friends, and you know, the rest is history.

AI assessment note: “Jenny was one of the first people I met at Harvard Business School”

Q How did you, uh, how'd you guys meet?

A So it's a really funny story. My sister Becky... Uh, 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. Wow. And we became really fast friends, and you know, the rest is history.

AI assessment note: “Jenny was one of the first people I met at Harvard Business School”

Q Jen, I know, um, I mean, you have all these employees who depend on you, you don't want to let people down, and you have to make decisions that are probably gut-wrenching. Can you kind of walk me through sort of what you've had to do and how you have kind of dealt with that?

A Yeah, the decisions that we've had to make are certainly the most challenging of, of my career. You know, revenue has dropped pretty dramatically during this period of shelter at home, and so the first thing we did was we looked at all the non-people expenses throughout the company. And we decided to cut everything that we possibly could from capital expenditures to inventory, to marketing budgets, to technology budgets. And we actually were very effective in financially restructuring the whole business. And then I, another two weeks went by and we saw that what we thought was going to be potentially a short term shelter at home. Was likely going to be many months. We realized that we would have to make very difficult people decisions. So we had to execute a small layoff, but a much larger furlough of our employee base across every single division of the company. And it's gut wrenching.

AI assessment note: “we had to execute a small layoff, but a much larger furlough”

Q Amazing. Um, and obviously there have been pivots throughout the time that you've been around. I mean, there were different models and different collaborations. Um, I mean, but, but essentially the, the core of the business remains the same, right? You, you basically can There are different tiers of subscriptions, and you can get a certain amount of clothing per month based on what your subscription is.

A Yeah, so the business started with a la carte rentals for special events. You can still very much do that, and that is a significant part of our business. And then we added subscription in 2016. Um, at the beginning was about giving people access to rotating closet, primarily for work and special occasions. Now it's really about casual everyday life. Including work and special occasions, but rental has become so much more normalized now that you would be shocked at the amount of customers who rent denim from us and who rent casual, you know, clothes to wear on the weekends. So I think we've reached a different point in the cycle from early adopters into more of a mainstream behavior.

AI assessment note: “the business started with a la carte rentals... And then we added subscription in 2016.”

Q So to that point, Jen, I mean, what, what is that going to look like? What, I mean, it's still early, right? Um, and I'm sure the gears are turning in your head, but, um, are you starting to see hints of what business might look like when you come out of it or how you may think about it in a different way?

A Well, I think that there's almost been 10 years of acceleration of trends that we were seeing in the larger economy that's all been compressed into this period of time. There's certainly a movement from offline sales into online sales. I don't think that we're going back into a world where the majority of what we buy is done offline. There's certainly a movement from waste to sustainability. We're literally sitting at home, looking at our closets every single day, staring at them, and realizing we can live with so much less. We don't need the wastefulness of buying dozens of things every single year that we don't need. So actually, coming out of this, I'm an even bigger believer in the circular economy, which we, you know, pioneered. And One of the things that we've been thinking about at Rent the Runway is how do we even become a larger player in the circular economy? We certainly have been a big player in the world of rental and in the world of subscription, but I think that the world of, you know, secondhand for sale can be a bigger piece of our vision and really owning the message of sustainability. The third change is one that's focused on value. You know, tens of millions of people are losing their jobs. Even if you have not been affected yourself, your friends and family members have been affected, and you're just going to think about how you spend your money in a differ…

AI assessment note: “I think that the world of, you know, secondhand for sale can be a bigger piece”

Q rom-coms, and you would Build your email list that way, and I mean, just all these kind of scrappy, nimble things that you, you did and could do as you and your co-founder just trying to start this company up. In a sense, are you finding yourself kind of back in that position again, that kind of scrappy and nimble position where, you know, any ideas are, are worth discussing?

A A hundred percent. I think that we've never experienced a world like this before, where we're all sheltered at home, our Our priorities and values are changing so quickly. So on one hand, you want to try all of these different ideas, but as an organization gets bigger, you also need to be more thoughtful to prioritize even fewer things and, and do them well. So we've tried to, where we have like opened it up to collective ideas is like, what is the world going to look like when we emerge? And personally, I think we're going to work differently. We're not necessarily going to be going into offices five days a week. We are going to value making smart choices and value and sustainability more. So we were thinking about what, what to prioritize from a business perspective to align with that new world.

AI assessment note: “A hundred percent. I think that we've never experienced a world like this before”

Q Scorpio from Facebook. Given all of the challenges and the difficult news that comes in and the hard choices that you have to make, how do you stay sort of positive and upbeat? I mean, do you have moments where you just kind of want to collapse in the bathroom floor and cry, you know, cry it out? I mean, how do you just stay kind of, you know, together?

A It's been really hard to stay together, and I've had a lot of moments where I am collapsing at the kitchen table or the bathroom floor with my kids and just hugging them, and I think that that's human. You know, one of the things that's been fascinating as an entrepreneur through this experience is that over the last decade, as I've been building Rent the Runway, I've had so many mentors, so many people to lean on. Whenever there's a really difficult situation, You kind of know who to pinpoint through your network, who to call, who to ask advice. What's been so lonely about this period of time is that there's really no one to call to ask advice because no one has the answers. Um, everyone's going through this for the first time. We're making decisions with incomplete information. Um, so what I've decided to do instead and what brings me hope and joy is that I have a network of, of peers, And I call them, um, not to ask advice and not to give advice, but just to be a friend and just to empathize, to listen to what they're going through, to have a voice, to share what we're going through. And I think that as a leader, like people are always telling you and asking you to show up as a leader. And I think that what this period has taught me is like, sometimes you just have to show up as a friend. And show up as a human. I've been doing these coffee chats with people, obviously over …

AI assessment note: “what brings me hope and joy is that I have a network of, of peers”

Q rom-coms, and you would Build your email list that way, and I mean, just all these kind of scrappy, nimble things that you, you did and could do as you and your co-founder just trying to start this company up. In a sense, are you finding yourself kind of back in that position again, that kind of scrappy and nimble position where, you know, any ideas are, are worth discussing?

A A hundred percent. I think that we've never experienced a world like this before, where we're all sheltered at home, our Our priorities and values are changing so quickly. So on one hand, you want to try all of these different ideas, but as an organization gets bigger, you also need to be more thoughtful to prioritize even fewer things and, and do them well. So we've tried to, where we have like opened it up to collective ideas is like, what is the world going to look like when we emerge? And personally, I think we're going to work differently. We're not necessarily going to be going into offices five days a week. We are going to value making smart choices and value and sustainability more. So we were thinking about what, what to prioritize from a business perspective to align with that new world.

AI assessment note: “A hundred percent. I think that we've never experienced a world like this before”

Q Scorpio from Facebook. Given all of the challenges and the difficult news that comes in and the hard choices that you have to make, how do you stay sort of positive and upbeat? I mean, do you have moments where you just kind of want to collapse in the bathroom floor and cry, you know, cry it out? I mean, how do you just stay kind of, you know, together?

A It's been really hard to stay together, and I've had a lot of moments where I am collapsing at the kitchen table or the bathroom floor with my kids and just hugging them, and I think that that's human. You know, one of the things that's been fascinating as an entrepreneur through this experience is that over the last decade, as I've been building Rent the Runway, I've had so many mentors, so many people to lean on. Whenever there's a really difficult situation, You kind of know who to pinpoint through your network, who to call, who to ask advice. What's been so lonely about this period of time is that there's really no one to call to ask advice because no one has the answers. Um, everyone's going through this for the first time. We're making decisions with incomplete information. Um, so what I've decided to do instead and what brings me hope and joy is that I have a network of, of peers, And I call them, um, not to ask advice and not to give advice, but just to be a friend and just to empathize, to listen to what they're going through, to have a voice, to share what we're going through. And I think that as a leader, like people are always telling you and asking you to show up as a leader. And I think that what this period has taught me is like, sometimes you just have to show up as a friend. And show up as a human. I've been doing these coffee chats with people, obviously over …

AI assessment note: “what brings me hope and joy is that I have a network of, of peers”

Q Did, did you have a plan B? Like, if this was going to fail, did you have a, something that you would pivot towards, or did you not even think about that?

A I never even thought of it because, honestly, I didn't even have a plan A. I, we started working on Rent the Runway because I had this idea and thought that this sounded really fun, and that this was something that would empower women to feel their best before the moments that mattered to them, and we started working on it, and it was really fun, and 10 years later, it's even more fun, and I never thought, oh, I want to be an entrepreneur. Let me brainstorm an idea. It was just that I saw what was happening in the world around me, and I saw that there was an opportunity, and that I had the confidence to say, you know what, I'm going to pursue this, but if it doesn't work, I can just get another job.

AI assessment note: “I never even thought of it because, honestly, I didn't even have a plan A.”

Q There are lots of early stage entrepreneurs in this audience. What do you, if you were sitting there and you were, you know, 10 years ago and you were watching a version of you up here, what, what do you wish you would have known then that you know now?

A I think that entrepreneurs are, and founders are human, and we're not all geniuses, and we don't always have the solutions, and that it's a very human thing to pursue a passion and to pursue a dream, and that really Anyone and everyone can be a fantastic entrepreneur and founder if, number one, you have this overwhelming passion and a knowledge that if your idea is successful, you're gonna be dedicating the next several decades to building it. This is not some, hey, five years later, like, on to the next thing. Number two is if you have the humility to learn. And to continuously transform yourself and make yourself into, into a leader that is growing with the business. Think of how quickly a startup scales. And before Rent the Runway, I had managed all of 10 people. And now my company has 1500 people and will likely have 3000 people by the end of next year. So every year I have to double my leadership capabilities. And you can only do that by being really humble, by listening to others, by accepting feedback, and by understanding that we are all in the process of self-transformation.

AI assessment note: “I think that entrepreneurs are, and founders are human, and we're not all geniuses”

Q Did, did you have a plan B? Like, if this was going to fail, did you have a, something that you would pivot towards, or did you not even think about that?

A I never even thought of it because, honestly, I didn't even have a plan A. I, we started working on Rent the Runway because I had this idea and thought that this sounded really fun, and that this was something that would empower women to feel their best before the moments that mattered to them, and we started working on it, and it was really fun, and 10 years later, it's even more fun, and I never thought, oh, I want to be an entrepreneur. Let me brainstorm an idea. It was just that I saw what was happening in the world around me, and I saw that there was an opportunity, and that I had the confidence to say, you know what, I'm going to pursue this, but if it doesn't work, I can just get another job.

AI assessment note: “I never even thought of it because, honestly, I didn't even have a plan A.”

Q There are lots of early stage entrepreneurs in this audience. What do you, if you were sitting there and you were, you know, 10 years ago and you were watching a version of you up here, what, what do you wish you would have known then that you know now?

A I think that entrepreneurs are, and founders are human, and we're not all geniuses, and we don't always have the solutions, and that it's a very human thing to pursue a passion and to pursue a dream, and that really Anyone and everyone can be a fantastic entrepreneur and founder if, number one, you have this overwhelming passion and a knowledge that if your idea is successful, you're gonna be dedicating the next several decades to building it. This is not some, hey, five years later, like, on to the next thing. Number two is if you have the humility to learn. And to continuously transform yourself and make yourself into, into a leader that is growing with the business. Think of how quickly a startup scales. And before Rent the Runway, I had managed all of 10 people. And now my company has 1500 people and will likely have 3000 people by the end of next year. So every year I have to double my leadership capabilities. And you can only do that by being really humble, by listening to others, by accepting feedback, and by understanding that we are all in the process of self-transformation.

AI assessment note: “founders are human, and we're not all geniuses, and we don't always have the solutions”

Q trivial right now. People are at home. They don't need to focus on brands and dressing nicely. Um, you guys have come under criticism as well, in addition to many other companies. First of all, can you, can you kind of address that idea? I mean, I think it's a, it's a valid question to ask, like, while we're at home, you know, why, why should we make the effort?

A There has been a bit of a social media mob that has singled out the fashion industry and challenged this incredible industry for being frivolous or being trivial, and I believe that anything that has the power to bring normalcy and joy into our lives right now is very important. Who are we to judge? What brings joy? Into someone's life. Like, we're not here to judge that. We're here to deliver it. I'm a very interesting person to have started Rent the Runway, because I actually didn't grow up reading Vogue magazine, or knowing the names of designers, or even caring that much about fashion in the traditional way that people think about it. What I realized about clothes was that clothes gave me the power to change my life. Like, I loved how Putting on a new outfit made me feel. And what I'm finding during this pandemic is that we still have so many customers who getting dressed to them right now is the one act of normalcy that they do every day. It's the one thing that makes them feel like they're taking a step forward. You know, the power to change your clothes to me is really about the power to change your life. And that's what the company has always been about. It's been about democratizing that ability. And giving everyone that power. So I think that during this period of time, we've seen that people are finding joy in so many diverse things, whether it's fashion or beauty or…

AI assessment note: “anything that has the power to bring normalcy and joy into our lives right now”

Q trivial right now. People are at home. They don't need to focus on brands and dressing nicely. Um, you guys have come under criticism as well, in addition to many other companies. First of all, can you, can you kind of address that idea? I mean, I think it's a, it's a valid question to ask, like, while we're at home, you know, why, why should we make the effort?

A There has been a bit of a social media mob that has singled out the fashion industry and challenged this incredible industry for being frivolous or being trivial, and I believe that anything that has the power to bring normalcy and joy into our lives right now is very important. Who are we to judge? What brings joy? Into someone's life. Like, we're not here to judge that. We're here to deliver it. I'm a very interesting person to have started Rent the Runway, because I actually didn't grow up reading Vogue magazine, or knowing the names of designers, or even caring that much about fashion in the traditional way that people think about it. What I realized about clothes was that clothes gave me the power to change my life. Like, I loved how Putting on a new outfit made me feel. And what I'm finding during this pandemic is that we still have so many customers who getting dressed to them right now is the one act of normalcy that they do every day. It's the one thing that makes them feel like they're taking a step forward. You know, the power to change your clothes to me is really about the power to change your life. And that's what the company has always been about. It's been about democratizing that ability. And giving everyone that power. So I think that during this period of time, we've seen that people are finding joy in so many diverse things, whether it's fashion or beauty or…

AI assessment note: “anything that has the power to bring normalcy and joy into our lives right now is very important.”

Q Yeah. Because I mean, I guess when you are looking at the company, it's like, you know, how do we make sure that we're going to survive this? And that ultimately is what is going to have to guide decisions that you make.

A Yeah, I've always thought about this period in terms of two distinct phases. There's a period of COVID. There's this distinct period of make it through shelter at home. Our lives throughout a shelter at home are, it's fairly random as to, you know, which businesses are thriving and or not thriving in a period that holds no resemblance to what our lives Have looked like before or what our lives will look like after, you know, we don't want to live in a world of isolation. And so we have to make it through this period of shelter at home, which is difficult for our business. And I think for most of the businesses in the fashion industry, and then there's this larger period of the recovery and we're recovering into a recessionary environment. We're recovering into an environment where people are going to have a different set of values. And we've spent a lot of time thinking about who do we want to be as a business through that recovery? And how are we going to ensure that we're positioning the business to recover even stronger than we were beforehand?

AI assessment note: “I've always thought about this period in terms of two distinct phases.”

Q 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.

A 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. And I said, oh yeah, um, we're just around the corner. Like, we'll, 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.

AI assessment note: “Well, it's a funny story. So at that first meeting, I've always learned”

Q 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.

A 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. And I said, oh yeah, um, we're just around the corner. Like, we'll, 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.

AI assessment note: “Well, it's a funny story. So at that first meeting”

Q Yeah. Because I mean, I guess when you are looking at the company, it's like, you know, how do we make sure that we're going to survive this? And that ultimately is what is going to have to guide decisions that you make.

A Yeah, I've always thought about this period in terms of two distinct phases. There's a period of COVID. There's this distinct period of make it through shelter at home. Our lives throughout a shelter at home are, it's fairly random as to, you know, which businesses are thriving and or not thriving in a period that holds no resemblance to what our lives Have looked like before or what our lives will look like after, you know, we don't want to live in a world of isolation. And so we have to make it through this period of shelter at home, which is difficult for our business. And I think for most of the businesses in the fashion industry, and then there's this larger period of the recovery and we're recovering into a recessionary environment. We're recovering into an environment where people are going to have a different set of values. And we've spent a lot of time thinking about who do we want to be as a business through that recovery? And how are we going to ensure that we're positioning the business to recover even stronger than we were beforehand?

AI assessment note: “I've always thought about this period in terms of two distinct phases.”

Q 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?

A 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, 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. 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.

AI assessment note: “Well, first of all, let's backtrack to being 28 and having the idea”

Q Yeah. I mean, fashion obviously changes, right? And, and trends change very quickly. So how do you kind of handle the, the, the shifts and the changes? I mean, is it, are you constantly, I don't know, almost a daily or weekly basis, just changing the, maybe not daily, but, but regularly changing the inventory that's available?

A We're constantly adding to the inventory that's available because inventory is what drives our customer acquisition and our customer loyalty. People come to us because we have this incredible value proposition of this limitless closet and what we've discovered and what's really unique about how the business model has changed over the past five years is that the customer is really Using Rent the Runway as a discovery channel to find new brands. It's really, therefore, marketing on behalf of our brand partners. And coming into 2025, the vast majority of the inventory that we have on our platform, we don't pay for anymore. And we don't pay up front. We just revenue share with our designer partners because they view Rent the Runway as a significant part of their marketing. It's very organic, right? And the brands have discovered that a significant portion of their new customer acquisition is actually driven via Rent the Runway.

AI assessment note: “We're constantly adding to the inventory that's available because inventory is what drives”

Q Yeah. I mean, fashion obviously changes, right? And, and trends change very quickly. So how do you kind of handle the, the, the shifts and the changes? I mean, is it, are you constantly, I don't know, almost a daily or weekly basis, just changing the, maybe not daily, but, but regularly changing the inventory that's available?

A We're constantly adding to the inventory that's available because inventory is what drives our customer acquisition and our customer loyalty. People come to us because we have this incredible value proposition of this limitless closet and what we've discovered and what's really unique about how the business model has changed over the past five years is that the customer is really Using Rent the Runway as a discovery channel to find new brands. It's really, therefore, marketing on behalf of our brand partners. And coming into 2025, the vast majority of the inventory that we have on our platform, we don't pay for anymore. And we don't pay up front. We just revenue share with our designer partners because they view Rent the Runway as a significant part of their marketing. It's very organic, right? And the brands have discovered that a significant portion of their new customer acquisition is actually driven via Rent the Runway.

AI assessment note: “We're constantly adding to the inventory that's available because inventory is what drives our customer”

Q Um, Jen, can you address, I mean, a lot of e-commerce companies continue to operate their fulfillment centers, their warehouses, they've been criticized, there, you know, been articles, you've been criticized for it too. Can you kind of just address this, like, what, what's the thinking behind keeping warehouses and fulfillment centers open, and how do you make sure that all the employees inside are safe and taken care of?

A Yeah, I think that first, you know, every warehouse across every single category right now, whether you're selling apparel or beauty or lawn care or home goods, like all warehouses are open. And the first question as a leader that you have to assess is whether or not you can operate safely and putting the welfare of your employees and the health of your employees first. And After you do that, you figure out how do you evolve how you operate in your facilities. Like, to us, if you close down your warehouse, you're essentially, rent the runway wouldn't survive. And the work that we've been doing over the last 11 years to build the company would just disappear. I, I think that most businesses are not in the position that they can operate for months on end With zero revenue coming in. So we've all just had to make a series of very difficult decisions of which there's really no No great answers. Inherently, operating anything right now is, holds some risk to it. And, and all you can do is do the very best in terms of safety and health for your employees.

AI assessment note: “if you close down your warehouse, you're essentially, rent the runway wouldn't survive.”