In the early 2000s, Jennifer Hyman watched as two things happened. One was Facebook feeds filling with pictures of women showing off their wardrobes, and the other was her younger sister risking credit card debt to wear a new gown to a wedding (note: not her own wedding), according to a CNBC article.
Hyman came up with the theory of the “experience economy” in which people want to spend money on experiences rather than material items, but they still want to look good while they post about these experiences on social media, states the article, which recaps an interview that Hyman, 36, did for NPR’s “How I Built This” podcast.
She decided to create a service that let women rent a dress for an occasion and send it back when she was done with it. Along with Jennifer Fleiss, whom she met at Harvard Business School, Hyman launched Rent the Runway in 2009. Today it has 6 million customers, 1,200-plus employees and more than $100 million in revenue, becoming profitable last year, according to the article.
The company has launched same-day delivery in New York City, rolled out an unlimited subscription service and opened a brick-and-mortar store in the Big Apple. There have been downsides, though, Hyman said in the interview. For example, many male investors didn’t understand the company, and she had faced sexual harassment as a woman in technology. Additionally, her management style came into question after seven executives left within a year.
Rent the Runway continues to grow, though, and Hyman said she has learned three things about building a business. The first is to test the market. She and Fleiss, who left the company earlier this year, bought 100 dresses with their own money and opened a pop-up shop on Harvard’s campus to see whether women would rent them, what brands they looked for and how they’d go about recollecting, washing and redistributing the rentals, the article states. “The pop-up was a hit,” it adds.
Second lesson: It never hurts to ask. Hyman and Fleiss shot fashion design icon Diane von Furstenberg an email asking for advice. She responded, they met and von Furstenberg connected them with other contacts.
Lastly, Hyman said, don’t fear criticism, of which she’s had plenty. A 2015 Fortune magazine story cited former employees who compared the company’s culture to that of the “Mean Girls” movie, while a Vanity Fair story that year speculated that Rent the Runway inspired “The Knockoff,” a novel co-authored by a former employee, the CNBC piece states.
But the negative press coverage “led to the biggest outpouring of support I’ve ever had,” the articles quotes Hyman as saying on the podcast. “It led to more courage around my own decision making, because I led the company into the best place it's ever been.”