Any woman can now become a high-end fashionista at an affordable price, thanks to a breakthrough business called Rent the Runway. Co-founder and president Jennifer Fleiss shares how the concept came about and how it grew into the fashion gold mine it is today.
I had always known that I wanted to be an entrepreneur, and woke up each day filled with new business ideas. My Harvard Business School classmate and current Rent the Runway co-founder, Jenn Hyman, and I sat at lunch for our weekly discussion of new entrepreneurial opportunities. During a trip home for Thanksgiving, Jenn witnessed her sister Becky struggle with a “closet full of clothes and nothing to wear” moment. Becky had an upcoming wedding and wanted something gorgeous—an Hervé Léger maybe, or Proenza—but her modest salary meant that everything high-end was out of reach.
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Using my background in finance, I began to think that it was the perfect time to launch a dress rental company, as the impending recession left women more conscious of cost per wear of dresses and proud of getting a bargain. At the same time, designers were searching for new sales channels and ways of encouraging trial with their brands. I thought to myself: What if the Becky’s of this world could have access to their dream closet and a new dress for every occasion? What if designers were able to get their pieces into the hands of young, fashionable women and build a following for designer fashion?
Being business school students, we started working on building the business immediately. Jenn and I had a rule from the very beginning of Rent the Runway to never write a business plan, because we think that’s a waste of time — people waste so much time strategizing about what they should do, rather than just going and doing something and making mistakes. In our opinion, starting the business was going to be a series of iterative tests in the marketplace, with each test eliminating some of the risks of starting the business. We first decided to do it as a course credit, and we also chose to spend the rest of the year figuring out if this was something we could do full-time, instead of seeking employment. We set a milestone goal that if our business idea didn’t lift off by the time we graduated, we had other jobs that we would accept.
We began by purchasing dresses at retail in our own sizes, figuring that if the concept didn’t work, we’d have a great wardrobe at the very least! We then went to different undergraduate campuses and started renting dresses to women. We went to Harvard on a weekend we knew they had an event, and then went to Yale where we rented the dresses, but didn’t let women try them on. For the third trial, we sent a PDF out to students that asked them to call us if anyone wanted to rent a garment. Each trial brought us closer to what our actual concept is today.
As any entrepreneur would attest to, there was initially an overload of questions and hesitation. How do I start? Is there a market for this concept? Will I succeed or will I fail? These are some of the questions that Jenn and I experienced two years ago when we were first launching. Rent the Runway was a revolutionary concept, and we knew that we would meet skepticism at first when approaching designers and future investors. Their skepticism made us dig a little deeper and figure out what we really wanted our brand to be, as well as who we wanted to market to and target.
It was just as tough to prove to the investors that our idea would work. It was particularly difficult for the room of men we were pitching to understand the emotional connection that women have with fashion and certain pieces of clothing — the armor a women feels when she puts on an amazing dress, allowing her to feel like she can handle anything. However, we showed them videos and took them to the dress trials, eventually eliminating investors’ skepticism by actually going out and testing our idea.
After raising approximately $31 million in venture funding to date, it’s amazing that we were able to grow this company to what it is today. It’s further proof that if you allow yourself to just do it, you can go far. Just go for it — though there are risks, there aren’t as many as you think there are. It won’t make or break your career, and even if it doesn’t work out, you’ll have learned so much more than you would have otherwise.