How I Built This with Guy Raz - How I Built Resilience: Live with Jenn Hyman

Episode Date: June 4, 2020

As Rent the Runway faces the economic challenges of the pandemic, co-founder Jenn Hyman is focused on recovery and empowering women's lives through clothing. These conversations are excerpts from our How I Built Resilience series, where Guy talks online with founders and entrepreneurs about how they're navigating these turbulent times.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. Hey, welcome to how I built this resilience edition. Twice a week, I've been sitting down for live video chats with different founders to find out how they're coping during this crisis. And on Thursdays and Saturdays, we're posting excerpts from those conversations right here. here. And on today's episode, we're going to hear from Jen Hyman, the co-founder of Rent the Runway. Rent the Runway is a company that allows you to rent clothing and accessories at a fraction of the

price you'd pay to buy. And last year, it was valued at more than a billion dollars. But since the global health and economic crisis, Rent the Runway has joined many fashion companies that are confronting furloughs, closing retail stores, and seeing drops in revenue. And a huge question facing Jen Hyman is how do you get customers interested in renting clothing at a time when few people are going out? Talk a little bit about the business. I know most of your business is based on the subscription model. You do have some physical stores that you close down. You had to lay off and furlough some employees. Tell me what's going on with rent the runway right now. Yeah, it has been a big challenge because so much of our business is based around people.

leaving their homes, whether you're going to work or you're hanging out with friends. You know, often the act of getting dressed is somewhat an external act where you're getting dressed for something. And we definitely find when people are sheltered at home, they are focusing a lot less on getting dressed and on clothing in general. That being said, the real challenge has not necessarily been about the business or about revenue dropping. I would say that it's about the acknowledgement that who we are today as a company is based on believing in a vision that there was a smarter way to get dressed and that women deserve more. And in a sense, we've all been pushing a boulder up a mountain together. And the fear that I have is that we can't let that

boulder drop. We owe it not only to the thousands of people who are part of this team today, but to everyone who has ever believed in this vision to keep the vision alive and to make sure that we continue to push the boulder up the mountain. And I think that that's the struggle that you're feeling this, you know, the collective passion of a whole group of people who have dedicated their hearts and souls to really trying to change the world. Jen, I know, 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? Yeah, the decisions that we've had to make are certainly the most challenging 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 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. 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 all ultimately is what is going to have to guide decisions that you make.

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. And we're recovering into a 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? So to that point, Jen, I mean, what is that going to look like? What, I mean, it's still early, right? And I'm sure the gears are turning in your head. But 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? 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's 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 different way. And I think that there's going to be a return to quality and a return to value. And I think that that is something that has always been part of our mission that, you know, people should have a smarter and more affordable way to get dressed and feel great. But I think that the offline changes are actually, they're interesting, but what's more interesting is how this period has changed how I think about leadership. You know, one of the core values of our company has always been everyone's a founder

of rent the runway. And when I think about that, what that means, you know, being a founder to me means taking risks, making decisions, feeling a sense of ownership, feeling passion for what you're doing. And I have spent a lot of time trying to think about how do we empower. everyone who's at the company right now to act like a founder and to make those really important quick decisions. We need everyone's collective brainpower more than ever before. And so we've changed a lot about how we lead throughout the company in terms of communication and transparency. You know, we've always been an organization that has been transparent about our numbers, has been, you know, has communicated openly with our employee base. But I would say that over time, as we have

thousands of employees and we certainly have employees of different levels, you know, there becomes kind of a cadence that potentially you share more with your senior leaders and less with your, you know, more junior employees. And we've kind of thrown that away over the last few months where we have weekly all-hands meetings. We're sharing all of the decisions that we make and the why is behind those decisions. We're sharing all of the data. We're trying to be as transparent as possible because we think that through transparency,

there's two things that happen. One, it empowers people with the data to make decisions quickly for themselves, which we need. But the second thing is that it breeds even deeper trust. You know, when you're going through a crisis, you need trust more than anything else. And the way that we've approached trust is through transparency. I'm going to take some questions.

I'm going to sort of collapse two questions from Betsy Suda from Facebook and also from Jordan 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 or not beat? 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? 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 is 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. Everyone's going through this for the first time. We're making decisions with incomplete information. So what I've decided to do instead and what brings me hope and joy is that I have a network of peers and I call them 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 Zoom, with employees from my team that I wouldn't traditionally have one-on-one meetings with. And I've been kind of dropping into their lives. And you know what? I've used these coffee chats on a weekly basis, not even to ask about what they're working on, but just to, you know, have their kids run into the frame and ask like what they're going through in their lives. And it's created this intimacy around our team that I've never felt so strongly before. It's so interesting. I'm such a social extroverted person. I was

certainly the person who loves all hands meetings and brainstorming meetings. And I would walk around the office and always talk to people. But this feels like I'm really getting to know my own team on a much deeper level. And I think that that is incredibly special. When we come back in just a moment, we're going to hear Jen's response to critics who say fashion and beauty just shouldn't be a priority for anyone right now. Stay with us. I'm Guy Raz. And you're listening to How I Built This from NPR. Hey, welcome back to How I Built This Resilience Edition.

So Jen Hyman has been leading Rent the Runway through an unexpected web of challenges. From furloughs to safe warehouse practices, Jen has been trying to confront these questions head on while asking her employees to think like a founder. Are you finding yourself in a way, I mean, when we interviewed you for How I Built This, we went through your story, and you know, you'd invite friends over, and you would take notes, and you would stand outside of movie theaters, outside of rom-coms, and you would build your email list that way. And I mean, just all these kind of scrappy, nimble things that 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 worth discussing? A hundred percent. I think that we've never experienced a world like this before where we're all sheltered at home, our priorities. 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 do them well. So we've tried to, where we have opened it up to collective ideas is 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 to prioritize from a business perspective to align with that new world. You know, there's been social media criticism. I've noticed about the fashion industry, particularly around the fashion industry, saying, look, you know, fashion is trivial right now. People are at home. They don't to focus on brands and dressing nicely. You guys have come under criticism as well, in addition to many other companies. First of all, can you kind of address that idea?

I mean, I think it's a valid question to ask. Like, while we're at home, you know, why should we make the effort? 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. 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 playing games, you know, listening to music, looking at art. And I think that all of those things are extremely important. And I'm very troubled by what I think is this anti-feminist crusade around one of the most important and largest industries on earth, fashion being considered trivial. Jen, can you address, I mean, a lot of e-commerce companies continue to operate their fulfillment centers, their warehouses, they've been criticized, they've 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 taking care of? 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 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 great answers. Inherently operating anything right now is hold some risk to it. And all you can do is do the very best in terms of safety and health for your employees. You mentioned earlier about sometimes, you know, as a leader, you have to show up as a friend, which I think is really great.

And I'm going to remember that. I'm sort of paraphrasing a question from Lee Razelan. As a leader, you know, what decisions have you had to make over the past several weeks that have actually made you a better leader? I think that as your business grows and you're inundated with data, you know, you rest on your laurels, you rest on data to help guide your decisions. And what's been really interesting about this period of time is that you're making so many decisions within complete information without knowing, you know, what's in front of you in so many respects. You don't even know how the

government is going to operate and how the government is going to support, you know, people who are unemployed. And so interestingly, what it's taught me is that the only guiding principle for leadership is that you have to make decisions based on your values. You have to be very clear with your team as to what those values are. That becomes the rationale for what decisions you make and how you make them. In five or ten years when we look back on this period, when you think about how you want your business to have become more resilient out of this, you know, what do you hope you'll be able to kind of reflect on this time period, look back on it and say, you know, we learned this and we became that as a result?

I mean, I think that when you look back on this period of time, none of the questions and none of the answers are going to be about business. They're all going to be about how do we create a life for ourselves that is fundamentally more focused on relationships and human connection than we've had in the past. I think that we've been too focused on work as a society over the last few decades. And being at home with my daughters, with my husband over the last few weeks has been one of the greatest gifts of my life. And it's not only been a gift for me, but it's been a gift I see for all of my team members who have been able to contribute to this great vision we have at Rent the runway, but also like be more present in their day-to-day lives. And I think that the learning 10 years from now

is going to be like, we didn't have to make all these sacrifices. I didn't have to sacrifice, you know, as much of motherhood as I have to be a CEO and to be a founder. I didn't have to sacrifice as much with my own friends. I think that we have been put into a situation by nature of having to show up at an office every single day at 8.30 in the morning and potentially not leaving until very late at night where you've had to make those very real physical sacrifices. And what this period of time has proven is like, actually I can be a fantastic team member and leader when I'm with my family, when I'm at home, when I am doing other things that I love. And so hopefully we'll look back on this as like one of those reset moments for all of our lives that like there are things that are just way more important than work.

It's true. I completely agree. I mean, that part of it has really forced me and I think a lot of people to reevaluate the time we spend at work and whether we have. have to be there from dust till dawn every day, from dawn till dusk, rather. And they certainly don't. You know, what is work mean? And what is even like finding talent from your company? What does that mean? If people can really live from wherever they want, they can live their lives and in different ways, you know, one of the biggest challenges for women has been that 50% of women

leave the workforce after they have kids. And some of those women leave because they want to be stay-at-home moms, and that's wonderful. And some of those women leave because it's just too complicated to be an employee and be a mom and take care of your responsibilities at home. And this actually may be the best thing to ever happen to women's empowerment. You know, the idea of more remote work and to trust that we can do it in a more livable, thoughtful way, this actually may be the thing that levels the playing field. I love it.

I love that idea. Jen Hyman, thank you so much for joining us. It's been so great to have you. You were at our summit in 2018. It was so fun having you there. And we'd love to have you back. So hopefully you'll join us. I'm so excited to hang out in person with you and everyone in my life.

I cannot meet. That's an excerpt for my conversation with Jen Hyman, the co-founder of Rent the Runway. our full interview, you can go to Facebook.com slash how I built this. And if you want to see all of our past live interviews, you can find them there or at YouTube.com slash NPR. You can also hear my original full-length interview with Jen Hyman from August of 2017. If you want to find out more about the How I Built This Resilience series or other virtual NPR events, you can go to nprpresents.org. And of course, you can check your feed every Monday for a brand new full-length episode of How I Built this? This episode was produced by Candice Lim, with help from John Isabella, Julia Carney, Gianna Cappadona,

Neva Grant, and Jeff Rogers. Thanks for listening. Stay safe and I'll see you in a few days. I'm Guy Raz and you've been listening to How I Built This from NPR.