The Exchanges

Q what the business model was at that time. Because, just to clarify, Stitch Fix today, you sign up, you pay 20 bucks a month, you get five items sent to you every month depending on your subscription, and if you buy them all, you get a discount, and if you return them all, uh, that's fine, it's free, but it's 20 dollars a month essentially for a personal stylist. Right?

A Yeah, and it's 20 dollars, and to be very clear, like, you don't have to do it on a monthly basis, you could do it quarterly, you can do it a la carte, like, you don't, you know, you don't need to commit to any time frame, but it is, every time you get a fix, you pay a 20 dollar styling fee, The 20 dollars is credit towards anything that you choose to buy, but the heart of it was really this, like, we're going to buy inventory, we're going to get to know you, we're going to become experts on you, clients, and we're going to become experts on the products, and then we're going to generate really great recommendations at the intersection of those two things.

AI assessment note: “every time you get a fix, you pay a 20 dollar styling fee”

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

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

AI assessment note: “I don't know that we're turning a corner, but... there are many more female CEOs”

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

A I mean, I, I think if you're going to have the best outcome for your company, it has to be crucial. I mean, there's, and I think there's a couple of reasons for that. I think one, um, you know, I think it is the, the team that you have, like all of, I mean, Stitch Fix is such a great example because there was a point in time when, like, I was in the room when we packed out every fix, and when we styled every fix, and obviously now I can't do that anymore, and it's all in the hands of a team and a culture, and like eventually, if you're successful, if you have more than 10 people who are, you know, working for you, Like, you are, your company, the fate of your company rests in the, in your team. And what is going to keep a team motivated, it's not money, actually. It really is the culture. It's like, what are they getting out of their day to day? We all are lucky enough to have many choices in terms of where we work and where we spend our time, and they have to be choosing yours every day. And so, you know, I really believe that, like, if you aren't setting that up from day one, um, you aren't realizing your full potential as a company.

AI assessment note: “I think if you're going to have the best outcome for your company, it has to be crucial.”

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

A You know, I thought about culture really early on, and I, and I do wonder if some of it, you know, when I was thinking about starting this company, like, I was thinking about it in terms of, like, well, I want to create Like, the retail model of the future, but I also want to create the company of the future, and related to that is, like, I'm gonna work at this company for 10 years, 20 years, whatever. I'm now seven years in. Like, in this day and age, if you're gonna work somewhere for, for seven years, like, it's a place you really love. And so, you know, I had this mindset when I was creating the company of, like, what would be the company that I would want to join for seven years, 10 years, 20 years? You know, I think the culture that we have, I mean, people talk about diversity quite a bit, and I think for us, like, we have a very diverse team, we have a very diverse management team, but I think it's also this idea of diversity of thought that's super important, and one of the epiphanies with Stitch Fix was that to be able to have two people in a room that had very different perspectives on how to solve a problem ended up with better outcomes than two people who thought the same way. For example, when we have data scientists sitting alongside stylists, like, they look at the world in a different way. They look at how do we serve clients better in a different way, and I thi…

AI assessment note: “I thought about culture really early on”

Q Like, ideas in your head, or ideas that you actually told people about?

A Both. Yeah. Like, there's an example. We were working with a large retailer, and they actually said, like, that they wanted ideas of what's the Future gonna be like, and this was in 2006, and it was literally before the iPhone, and like, I had this idea where I was like, why, you know, in a store, why do you have to have every single size and skew on the floor? It seems silly that as a, a person has to walk in and like, find the size and skew, and then take it themselves to a fitting room, and like, I was like, how about this idea where you like have half of the store is a warehouse, a distribution center, and the other half is like a museum. You walk around, and you see all these beautifully merchandised things, and you log in when you come in, and you get a wand, and then you can just put the wand in front of the outfits that you think you like, and then you walk into the back, and it's like, hi, guy, like, here's your fitting room, and all the things that you wanded or whatever would be stacked up there, and then there would also be recommendations, and, you know, you could have one size up and one size down, and, you know, it could just be, like, a much better experience than, like, going and Weeding through racks to try to find your thing. And, like, people looked at me like I had seven heads. And so, like, you know, in retrospect, I'm like, that was crazy. Like, if I was …

AI assessment note: “Both. Yeah. Like, there's an example. We were working with a large retailer”

Q much do you think about competition, right? Because there, I mean, there are all kinds of potential competitors out there. The obvious one being Amazon, it just, it's massive, right? And they, they have their fingers in every pie. You know, um, what's the, the sort of the, like the killer app, or like the thing that you guys have that makes you sustainable and resistant to, to big challenges?

A Yeah, I mean, we, um, I would say that we pay attention to, but don't obsess over competition, and, um, I think when we think about what's special about Stitch Fix, it's the one-to-one human connections and the, and the recommendations at the heart of it, and so, you know, some of the things that are really hard in today's e-commerce are, like, if you want to find a pair of jeans that fit you, like, it's not a great user experience to have literally a million pairs of jeans to choose from and try to filter and sort through those, and You know, that's an example of a place where, like, the human element of, like, you know, these genes have stretched, or these genes don't have stretch, and these are great for people who are your height, and we know that with data. Like, all of those attributes, um, are hugely important in helping you find which one of those millions of pairs of genes are the right ones for you. And so, you know, there's the transacting part of e-commerce, but before the transaction, there's the discovery of, like, what is the thing that you're gonna love? And that is a really hard problem to solve in today's e-commerce, and one that I think we are uniquely good at solving.

AI assessment note: “we pay attention to, but don't obsess over competition”

Q Wow. What did you find from this group of 20 people? What did you discover?

A I discovered that, um, that you actually could learn a lot from somebody. I think there's just this thesis around, like, do I have to, like, be with you in person to understand your style and who you are, or can I do that through a survey? And, like, I felt pretty confident, like, you could do it through a survey. Um, there was a number of items thing. I started out with 10 items, and the reality was, like, people weren't going to try on 10 items. It's a lot. It's a lot of work. And you just look at something, and you're like, no, there's no way I'm going to like that, and you just don't try everything on. And so 10 was too many. Um, what else did I learn? Um, I think I learned the brand thing of, like, it didn't, you know, people were actually surprisingly very open to buying from brands that they weren't aware of, and in fact found some value in finding brands that they wouldn't have normally have found on their own.

AI assessment note: “I started out with 10 items, and the reality was... 10 was too many.”

Q But why, I mean, why wouldn't you just, um, you know, offer up a bunch of options and just let people kind of scroll through? I mean, I guess the, the, the beauty of online shopping certainly at that time was, uh, you know, just infinite choices, right? You could just scroll through and, and find the thing you like.

A Yeah, and, you know, I think for some customers, you know, that's a way that they want to shop, but, like, I'm five foot two, and so there's a whole world of apparel that's, like, literally not relevant to me, just simply because they're not going to fit me because I'm the wrong height, and there are things that, you know, if you're living in California, you can go on a homepage, and they're trying to sell you cashmere mittens, and it's like, that's totally irrelevant to me, so if you peel back, like, what Stitch Fix does, it's like, Yes, like, if you could, instead of going to a mall all day, or instead of spending, you know, your entire evening with 30 browser tabs open to try to compare and contrast different jeans you want to buy, if you could get a box sent to you that had Two pairs of jeans, or even better, one pair of jeans, and they fit you great. That is an infinitely better experience than the other alternatives out there.

AI assessment note: “instead of spending, you know, your entire evening with 30 browser tabs open”

Q What do you mean it wasn't a choice?

A I, I was, like, my risk profile, I was never gonna, like, quit my job and take all this risk and have a gap on my resume. Like, that was just, that was never a choice in my mind, and so I was, like, I can Take these two years. I can be a mediocre student. And, you know, my end goal by the end of the two years is if I can have a company funded, if I can be paying myself a salary, if I can be paying back my student loans the day I graduate, then the risk profile of entrepreneurship was tenable to me. And then my plan B would be, well, if I can't do that, I'll have this MBA from Harvard, and I'll be able to join a great company and a great founder and do something interesting.

AI assessment note: “my risk profile, I was never gonna, like, quit my job and take all this risk”

Q know, uh, probably this year you will appear on Forbes list of wealthiest self-made women. Um, as you became more and more prominent and The company became more profitable, and you started to get more attention. All of a sudden, you were sort of a successful woman in tech kind of symbol. Did that irritate you, or did you embrace it initially, or did, how did you feel about that?

A Um, you know, that's an interesting one where I think my mind has changed, um, maybe even in the last year or two years. Um, at first I was really resistant to it. Like, I really didn't like being a successful female CEO. Like, I was like, I just want to be a successful CEO. And, you know, I think what's changed about it now is that when I wrote my application essay to HBS, like, I Wrote about Meg Whitman, a female CEO, and like, there were so few people, like, I, I still very much admire her, and I did admire her then, but there were very few people for me to choose from, and saying, like, who I want to be like, and, um, now the, being able to be part of what Opens people's lens of possibility more, I think, is really powerful, and, um, so I think now, like, I'm, I don't know, kind of proud to be able to be part of that, and like, I'm very happy to wear that label, and I'm very, you know, I think it's good for people to be able to see more examples of what success can look like that maybe are different from what it's looked like in the past.

AI assessment note: “at first I was really resistant to it. Like, I really didn't like”

Q So, at, at what point did you just sort of become like a, like a data company, a data tech company, and not just a fashion company?

A Yeah, I mean, Honestly, from day zero, like, we were always a data company. Like, even, like, those return surveys that I described, like, even when we were physically shipping the fixes out of our office and we didn't even have a website, we were collecting the data about the product, the attributes of the product, and we were collecting physically with pen and paper your feedback about what you liked and what you didn't like and what you thought of the price and how it fit. And so, The data element was always super important, um, but, you know, I don't think we were employing true, you know, data science, I would say, um, Until, I mean, I don't know if that's fair, though, because Eric, who, Eric joined us in 2012.

AI assessment note: “Honestly, from day zero, like, we were always a data company.”

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

A Yeah, so, um, you know, being a CEO is, um, I, it's funny, in the very early days, I remember I had a friend from high school who, like, came to visit our tiny office at the time, and, He was like, I feel like your job is kind of like CEO slash janitor. And, and it really was in those early days, like some of the things were like, I need to make sure the printer has toner. I need to make sure that when somebody's starting that they would have a desk and a computer. And so, you know, I think the recognition that like your job changes And, you know, to be able to have this, you know, I guess, process or just, like, this reflection of, like, what is my new job today? What does that mean in terms of how I spend my time? And also, like, you know, do I still like this job? I think it's, I think this is practical for me as CEO, but I think it's also practical for anybody who's employed at a company that's growing, where, you know, I think there are people who say, like, I love the early stages, running out of toner and, you know, crazy running around, like, Love that stage and don't love the stages later, and the reality is, like, the job changes, and if you're not recognizing the ways in which the job are changing or the ways in which you are changing, Then you can get stuck and nostalgic, and so for me, what I think is super important for me to feel really energized and excited abou…

AI assessment note: “reflection of, like, what is my new job today? What does that mean”

Q I mean, we've heard these stories from, especially from professors there, particularly women, who've talked about how in the classroom the discussions tend to be, you know, the hands that go up are men, are the voices that you hear mostly are men. Did you find that, and was it a place where you felt comfortable raising your hand and talking?

A I did. I mean, I did. You know, I think that stereotype is probably, probably was true, um, but I did feel comfortable talking. I think You know, and I had a hard time disentangling, you know, is it gender? Is it being from California and saying, like, like, what were the things that created this to be true? But, like, I did feel a little bit underestimated, and I really tried to actively strip like out of my vocabulary. You know, people say that even, like, a southern accent makes people think a certain thing, and I felt sounding like I was from California also did the same thing, and so, you know, I didn't feel like I was The, I don't know, most likely to succeed in the classroom.

AI assessment note: “I think that stereotype is probably, probably was true, um, but I did feel comfortable talking.”

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

A You know, I, I don't know that my style itself has changed. I think, you know, I've developed in other ways, but I think the, I'm stealing this quote a little bit of just like, I think this like idea of Today's leaders need to be authentic, and that's just like, it's such a great currency of like, how do you build trust, and I think I've been forced to just be that from the beginning, because there aren't a lot of other examples of people I can try to be like, and so, um, and so, you know, I think that's been really consistent and true throughout my tenure as CEO, um, but, you know, I do feel just like, I don't know, I feel more experienced. I feel a little bit more like I know what I'm doing. Maybe the thing that's evolved the most has actually less to do with The company's trajectory as much as it does for my family, which is that, like, having a toddler at home and expecting another baby just means, like, you have to ruthlessly prioritize.

AI assessment note: “I don't know that my style itself has changed.”

Q Yeah. Tell me, um, how the idea for what would become Stitch Fix, which we'll talk about, obviously, but what's the early idea that came to you? How did it even begin? Were you given an assignment? Were you told to analyze a problem? Like, what's the beginning of this?

A So I had a bunch of, um, I kind of collected a bunch of theses and ideas in my head. If you look at industries and, you know, I had probably had like a little bit of an academic approach in how I looked at these things, but like the hunting and fishing industry, it's, I know, it's crazy. It's a huge industry. It's massive. People are super passionate about it. It's really fragmented, but also concentrated where it's like really mom and pops or else there's like Orvis and, um, Anyway, it's a super interesting industry because it's massive and there's elements of fashion, actually, where it's like, whether it's technology or actual fashion, things go out of style. And so I rented a car and I drove to, um, New Hampshire and, like, visited, like, two gun shops. And, like, the second, by the second one, I was like, I just, you know.

AI assessment note: “I kind of collected a bunch of theses and ideas in my head.”

Q Do you, do you think that, that people who start out businesses are better off doing it on their own?

A Um, no, I don't know. I mean, starting a company is such a team sport, and, you know, I look back, and I could not have done it without the many employees who believed in it, the many clients who believed in it, the, like, my friends who I didn't go to their wedding because I was, like, too poor and too busy at the time, and, like, you know, I mean, there's just, like, it's such a team sport, and you have to surround yourself with people who Help you to achieve those goals, and you know, does that mean you have to have a co-founder or not? Like, I don't know, but like, I couldn't imagine having done it without having a network of people who believe.

AI assessment note: “starting a company is such a team sport”