By Thomas Skernivitz
The younger sister of Hyman, despite having an impressive wardrobe and not-so-impressive bank account, had just decided that she needed to buy a new $2,000 dress for a special occasion. Being the responsible sibling, Hyman told her sister, “You’re insane. How come you don’t wear something that’s in your closet?”
Because, her sister replied, “all of these dresses are dead to me. I’ve been photographed in all of them; the photographs are up on Facebook. I need to wear something new.”
That discussion, Hyman admitted Wednesday at the fourth-annual Female Entrepreneur Summit, is the moment when she and eventual business partner Fleiss realized that the world had changed.
“(My sister) actually didn’t care about owning the dress,” Hyman said. “She cared about three things.”
Those three inclinations have since dictated the business model of Rent the Runway, an online provider of special-occasion designer clothing. Founded by Hyman and Fleiss six years ago in New York, the company boasts 5 million customers while offering 350 designer brands.
For starters, Hyman and Fleiss believe that women, as was the case with Hyman’s sister in 2009, care about the self-confidence that comes with putting on something that is aspirational to them, such as a designer dress. Call it the “Cinderella Experience,” Fleiss said.
Second, social media — particularly when photographs are posted — create memories while shaping opinion. “So in a world where everyone has become their own brand on social media and are constantly broadcasting via Instagram or Facebook or Twitter, the asset of you wearing a designer dress becomes part of how you brand yourself to the world,” Hyman said.
Third, an emotional depreciation occurs after a woman rips the tags off and wears a dress for the first time (and then proves it on social media). It’s “never as exciting ever again,” Hyman said.
“We kept hearing from consumers (that) ‘Facebook kills outfits,’” Fleiss said. “In this age of social media, it dawned on us that there was a different level of social pressure than we had ever experienced before.”
Rent the Runway tries to alleviate that pressure, which, according to Hyman and Fleiss, comes with the “28 special occasions per year” that a typical woman experiences. In what was Rent the Runway’s original line of business, the company rents dresses and accessories, such as jewelry and handbags.
Hyman and Fleiss last year launched a second “subscribe to fashion” business, one in which customers pay a monthly subscription fee to receive three items at any desired time. “It’s very similar to the Netflix business model when they had physical DVDs,” Hyman says.
As service providers within this increasingly popular “sharing economy,” Hyman and Fleiss strive to be the next Uber. “All bets are off when it comes to serving the customer,” Fleiss said, summarizing the prevailing theme of her and Hyman’s 45-minute presentation.
Approximately 1,000 attendees filled Public Hall, which was simultaneously hosting the Female Entrepreneur Summit (presented by Cleveland Business Connects magazine and parent company Contempo Communications) and Small Business Conference (presented by the Council of Smaller Enterprises).
Hyman and Fleiss left those attendees with four take-home lessons that affect them, as female entrepreneurs, on a daily basis:
Stop. Listen. Learn. Pivot. — “We thought if every sector of the economy has incorporated rental in a normalized way, then your closet should have certain elements of it that not everything in your closet should be something that you have to own forever,” Hyman said. “And we realized that the only reason why rental didn’t exist in the fashion industry is that no one had really dealt with the logistics and technology to bring it to life.”
“No” doesn’t mean “no.” It just means “not right now.” — “When someone tells you, ‘No,’ it always gives you an opportunity to say, ‘Why don’t you like this idea? What scares you about this idea?’ as opposed to viewing something as being a stop sign, and (saying), ‘No, I don’t want to talk about it.’ This is actually a way to learn more about what your concept should be,” Hyman said. “So what could have been a five-minute meeting with (famous designer) Diane von Furstenberg, when she said, ‘Who do you guys think you are? You have no experience in the fashion industry. You’re going to cannibalize my brand. You’re going to dilute my retail sales …’ Instead of us walking out of her office in five minutes feeling deflated, we just kept asking her a lot of questions and through that process ended up learning what our business actually had to be.”
Confidence is king. Know more than you think you know. — “One of the key components of getting funded is being able to show that you are fearless,” Hyman said. “Because inevitably along the road to entrepreneurship, every day there is a roller-coaster ride of bumps in the road. And you have to be able to iterate your idea over time. You need to be able to deal with the million grenades that are thrown at you every day and fearlessly jump into the deep end of the pool and figure it out. In the beginning the fact that we didn’t have experience, and we were cold-calling the president of Neiman Marcus and all these famous designers and all of these famous stylists, we were like, ‘What’s the worst that could happen?’ The worst that could happen is that we walk into a meeting with Diane von Furstenberg, and she doesn’t like us, and she doesn’t like our idea. And to us, that didn’t really matter. I think sometimes people put these barriers in front of them and they over-analyze: How do I talk to this person; should I call them; should I not; should I email them? It’s, like, just do it.”
Constantly test directly with consumers — “What can be really important to analyze and be thoughtful about is the data once you launch,” Fleiss said. “Once we launched Rent the Runway after a series of bumps in the roads, one of the first teams we built was Customer Insights and the other was analytics. We wanted to make sure via Customer Insights, our customer service team, that we didn’t lose that touch with our customers that we had at the undergraduate trials. We want to continue to learn, continue to iterate on our business, and make sure every person in the company is seeped in those standards.”
For more information: renttherunway.com
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