Transcript

Advice Line with Jenn Hyman of Rent The Runway

0:01 Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges, and each week I'm joined by a legendary founder of former guests on the show who will help me try to help you. And so If you are building something and you need advice, Go ahead and give us a call, and you might just be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message with your name, a bit about your business, and the issues or questions that you'd like help with. Or

0:42 You can send us a voice memo at hibt at id.wondery.com. and make sure to tell us how to reach you. Also don't forget to sign up for my newsletter. It's filled with insights and ideas from the world's greatest entrepreneurs. You can sign up for free at gyros.com or on Substack, and we'll put all this info in the podcast description. Alright, let's go. Joining me this week is Jen Hyman. She's the co-founder and CEO of Rent the Runway, the Rental Subscription Service for Designer Clothing. Jen, it's great to have you back on the show. I love being on your show, guy. It's it's honestly my favorite piece of media, my favorite podcast I've

1:21 Ever done it's gonna be the thing that I'm the proudest of My kids listening to someday. Awesome. That's thank you for saying that. Um and by the way, if you guys haven't heard that that episode, we'll put a link in the dis uh in the episode description. Really, really fun and and worth listening to. Rent the runway. was basically, if you don't know about it, was started as a way for consumers to literally rent high fashion, get designer clothing that would uh otherwise cost thousands of dollars to buy and you guys went public in twenty twenty one. You are now a listed public company. You're the head of a a publicly traded company.

1:55 Yes. We were the first company in history. to go public with a female CEO, COO, and CFO. And It's amazing. Who would have thought? It's awesome. Um Jen, before we get to to to today's callers, I wanna ask you a couple questions and get some updates on Rent the Runway. I I think you're now your

2:14 Fifteenth yeah. 15 year anniversary this year. Amazing. Um and obviously uh uh there have been pivots throughout the the time that you've been around. I mean there were different models and different collaborations. Um I mean but but essentially the the core of the business remains the same, right? You you basically can There are different tiers of subscriptions and you can get a certain amount of clothing per month based on what your subscription is. Yeah, so the business started with a la carte rentals for special events. You can still very much do that, and that is a significant part of our business.

2:50 And then we added subscription in twenty. Sixteen Um, at the beginning was about giving people access to rotating closet. primarily for work and special occasions. Now it's really about casual everyday life, including work and special occasions, but rental has become so much more normalized now that you would be shocked at The amount of customers who rent denim from us and who rent

3:18 casual, you know, clothes to wear on the weekends. So I think we've reached a different point in the cycle from early adopters into more of a mainstream behavior. Yeah, I mean fashion obviously changes, right? And and trends change very quickly. So how do you kind of handle the the the shifts and the changes. I mean, is it are you constantly d on almost a daily or weekly basis just changing the Maybe not daily, but but regularly changing the inventory that's available. We're constantly adding to the inventory that's available because inventory is what drives our customer acquisition and our customer loyalty. People come to us because we have this incredible value proposition of this limitless closet.

4:03 And what we've discovered and what's really unique about how the business model has changed over the past five years. is that The customer is really Using Rent The Runway as a discovery channel to find new brands. It's really there for marketing on behalf of our brand partners.

4:24 And coming into twenty twenty five. The vast majority of the inventory that we have on our platform we don't pay for anymore. and we don't pay up front. We just revenue share with our designer partners because they view rent the runway as a significant part of their marketing. It's very organic, and the brands have discovered that a significant portion of their new customer acquisition is actually driven via Rent the Runway.

4:51 You know, I'm curious just from a leadership perspective, you know, fifteen years, right? I mean, we've there aren't that many founders we had on the show that run their business that long. Off oftentimes they leave, you know, after it's acquired or whatever. But I I'm I'm wondering just sort of If you can give us a sense of some of the leadership lessons that you've that you've kind of developed over the last year or so. I mean you guys went public

5:12 And you know, running a public company, it's all out there for everyone to see. And you know, you've got like many companies, your stock price goes up and down and up and down and people can see it. And so our stock price has only gone down. Gone down. Right. So there's scrutiny, there's question you mentioned our stock price, and I want to address that. Cause I do think it's unique that Here I am, it's 15 years later, actually our business is in better shape than it's ever been before, but because of the stock price, like people tend to not get into the details of how the business is actually performing. And most people

5:51 I think who are CEOs. Might have a tremendous ego hit. From continuing to run a business that is Valued very poorly externally.

6:04 Yeah. And one of the things that I've learned and recognized about myself. And this was actually a Bit of a surprise. Is that

6:14 I'm very low ego. Which is critical, by the way. It it it's super critical. Competitive and intense and passionate and I'm a believer, but like I don't need that validation that I think a lot of CEOs need, and I think that that is my competitive advantage. Cause I think that most people in my position. would have quit at this point in time.

6:37 Енбист овер фтін єс. is the person who stays in the game the longest wins. Yeah. It it's such critical uh a sort of a critical insight and and The best entrepreneurs that we've had on the show are the ones who have no ego because that frees you up and enables you to do all kinds of things that ultimately you'll need to do one of my

7:02 favorite books on this is is called Ego is the Enemy by Ryan Holiday, and it's so crystal clear. The the b biggest obstacle for many people is their ego. And that's what dooms them. Because it's actually a choice you can make. You can decide.

7:17 I am not gonna let this be it an obstacle. And I have enough happiness in my life and confidence in myself to not let Вот сам елс має ф. Affect how

7:30 I think about myself. It's a simple lesson that we try to teach every kid as they're growing up. All we want for our children is for them to have that level of confidence, no matter what someone is saying around you. And I think that Rent the Runway will have many chapters because I'm gonna keep on playing the game. That's awesome. Well, Jen, we've got um some founders and entrepreneurs r ready to um ask for

7:57 our advice. So um let's let's bring our first call. You ready? I am ready. All right, let's go caller. Hello, welcome to the advice line. You are on with me and Jen Hyman from Rent the Runway. Please tell us your name, uh, where you're calling from, and just a little bit about your business. Hi Guy, hi Jen. Thank you so much for having me on the show. My name is Sarah Bell. I am calling in from Situate, Massachusetts. I am the co-founder of Eski Right.

8:23 We are a female founded coastal inspired Brand that desighted and accessories using authentic marine rope. Cool. Thanks for calling in, Sarah. Um so situate Massachusetts on the coast, I know exactly where you are, sort of in that part on the way to Cape Cod. Right. And you sell jewellery, just to just be clear, made Primarily from marine straps, from like ropes that you would see on boats and stuff like that? Exactly. So marine rope you'd use for sailboats, for dock lines, things like that.

8:53 Right. And tell me about the jewellery. So these are um like Bracelets, necklaces. Right now we're do we have our entire collection is uh bracelets for men and women. And then we also have a line of cross body bag straps that you can attach to any existing Bag you may have. All made of marine rope.

9:11 That's awesome. How did you start? I mean, I'm assuming your A sailor or into sailing? So my co founder and I are Definitely both uh beach people we grew up spending our summers at the beach on boats. And we both live in a town, as you mentioned, on the coast that has a commercial fishing fleet, bustling harbor.

9:31 nine beaches so we're surrounded by rope every day And when we thought about business that we wanted to create. rope is the thing that kind of came to mind as uh the element that would thread everything together that we build. So actually our first product that we ever designed

9:47 It's actually a hoodie. that uh we use marine rope for the draw cords. Oh cool. Um Tell me a little bit about the business. Are you you're direct to consumer mainly or entirely? Entirely direct to consumer. Uh we do a little bit of wholesale, but that is a very small part of our business. Can you give me a sense of what you guys are doing right now in revenue? Are you doing more than um twenty five thousand? Have you Uh are you under fifty thousand dollars in sales a year? No, we're over fifty thousand dollars in sales. Okay. Between fifty and a hundred.

10:14 Okay, great. Um before we we bring in Jen, um Tell tell tell us what your question is for us. Sure. So an essential brand story is that our products are artisanally made locally, which has allowed us to boast Authenticity control the craftsman ship and have low MLQs. Uh however, because our collection is handcrafted, there's no economies of scale. Yeah. Uh and so the margins are unfavorable.

10:38 So we're trying to figure out how we strike a balance between scalability and profitability. while maintaining our core value of being artisanally made locally. And and does the consumer care about that? Got it. Okay, Jen, before we answer a question, you probably have some questions for Sarah as well, so please I'd love to C come on and enjoy the conversation. Well, hi Sarah, nice to meet you.

10:59 Hi. I would love to understand what data you have, both either qualitatively or quantitatively That makes you feel that the customer values that The product is locally made.

11:14 I'm not sure that we have that data. I I will say that we were featured recently on a a local Boston news station. made in mass and we had a huge surge in Not only traffic to our website, but orders from that. So in that way it it maybe made us feel like this is a storyline that resonates with the consumer.

11:34 w but we've also been very hyper local today and so we're really trying to scale and expand uh And so maybe that becomes less of a storyline for others that are outside of sort of that New England area. I think that using a PR head is Tricky because

11:51 You don't know whether people responded to that because you are founders that are based in Massachusetts, or whether the product itself was made and sourced locally. So I would figure out a way to to get that information in it could be as simple as like talk to a hundred of your customers. What do you value about our products? And if you hear from those customers that

12:17 I I just like this product aesthetically. Like I just wanna buy it because I think it's a cool bracelet. And you don't hear I'm buying it because the rope itself is from down the street. then you've got yourself an answer. I think sometimes people think that Data has to be big data.

12:36 In order to matter. And I found even at the size that we are that sometimes it's the small data, it's the conversations with, you know, eight women at dinner that give you better insight than the Surveys of millions. Yeah, it's interesting. I'm I'm I'm looking at your your website and the braces are really cool. And and you know, this is this is these are not inexpensive, but

12:59 These are all handmade, right? You're paying you've gotta pay artisanal folks to b uh you know, whatever they're charging to make these, right? Right. So that that is the bulk of our cost. I mean labor itself is roughly fifty percent of the at the cost of the product. And I mean is there a w uh a path where you could make these

13:20 um in a in a more scalable way where they they don't need to be made by hand. U uh not that we found. So the just the nature of Rope and splicing and whipping, it it can't be machine done. So it has to be done by hand. Could we source it elsewhere to have it done less expensively, probably. Um but again we're we're kind of trying to grapple with does that

13:45 Story matter? to the consumer and does it matter to us. And it allows us to control a lot of other things like lean production runs, which is important to us as a s solely self funded business to date. I I have a take on this and Jen, I I really I can't wait to hear your take'cause I have got

14:01 The answer to that that question is the data suggests that um American do not really care about made in America, but I have another completely different story on this, which I'll get back to in a sec. But but Jen, I mean to this to this question, I mean Do you think that's a that is enough of a value proposition to get people to Be excited about a product? No.

14:24 The product is king. A customer will speak about their value of sustainability or local But in reality, when they take out their wallet, what they care about is

14:38 They'll just like the way that product looks and they like the way they feel. Yeah. The like they they like the way they feel in that product and it's the right price point for them. So I wouldn't be as concerned. What I am very concerned about is that your labor costs alone are 50% of your revenue.

14:57 That's unsustainable in any бізнес. Because as you continue to scale, like you think about all of the other costs of your operation, there's gonna be no margin there. She's gotta bring her her costs down, that makes sense. But let me Offer up a counterintuitive perspective. And I think Jen, ultimately you're right here. We did a story on this show about a year ago uh about a brand called American Giant. They make hoodies and um athletic apparel, at leisure wear jeans. It's a national brand.

15:28 Um, run by a guy named Bayard Winthrop. It's an almost impossible thing. They make everything in the United States and they become a profitable business. And they actually just did a collaboration. With Walmart. It's a program they have specifically For products made in the United States. And Walmart is it's got an open RFP. Now this I'm not saying it's an easy process to go through.

15:53 But there but it would suggest that there is A market for High cost American made products because the perception is They're better.

16:06 So it's this is anecdotal, of course,'cause the data supports what you've said, Jen, for sure. I think consumers might be willing to pay a price premium. But regardless of whether they will You cannot make money if labor is fifty percent of the cost of your PL. So you have to figure out a solve for that. And potentially

16:28 It could be solved via Product. line extensions So If you used rope to create like cell phone holders

16:40 Із акшем хай маржен роп релити продукт. than bracelets. I think that's a huge market, by the way, because I mean here I am sitting here my cellphone, like I have this thing I paid a hundred dollars for. Yeah. My wife. To put on my cellphone just so that it doesn't fall and that I could carry it around. They're amazing. So you think about the mix of margin across your business, and are there like product lines that you could bring in. that are higher margin that would bring your overall cost of labor down.

17:14 I think that's the part that's the place that we're at right now. So we're trying to diversify in that way we the Cross body bag straps are certainly less labor than the bracelets, you're working with bigger rope, so it's easier to work with. With that exact Thought in mind. Do you have a recommendation in terms of threshold of like what the market will bear when you're looking at maybe

17:34 Increasing a price. Is it just talking to customers? to kind of get a sense of how much are you willing to spend. Uh what do you what do you require? Customers will never tell you that they're willing to spend more. Right. From a price standpoint, I think the way to do it is via an online A B test.

17:51 Where you can have have some pretty simple software on your website. That enables fifty percent of people to see one price and fifty percent to see another price and to understand the knockoff to conversion and whether that's margin accretive or margin negative for you. Yeah. Great suggestion. Um Jen, I I mean when it comes to the production costs, right? I mean inevitably th those will fall as their volume increases, right? And so where I think you have an opportunity, Sarah, is

18:18 people who are in interested in the sort of coastal sailing lifestyle. Like I think that if your stuff isn't on consignment and gift shops and places like Newport, Rhode Island, the Hamptons, Kiowa Island, Del Mar and San Diego, like the it should be. Like you should reach out and try and get in in those hotel Yeah.

18:39 The other thing I I keep going back to is There's low hanging fruit with certain kinds of social media, right? So There are uh YouTube channels and podcasts that don't have thousands or hundreds of thousands of viewers or listeners, but maybe have hundreds or

18:55 a few thousand that focus on sailing Women in sailing. coastal lifestyle living where you might be able to get you know, your product to them and and maybe pay them a small amount of money, under a thousand bucks. To promote it.

19:10 Because I think that that part of the the Downstream solution is volume, right? I mean is that does that make sense, Jen? It definitely makes sense that as scale goes up, your cost of production should go down. But Sarah had mentioned that it's such a difficult material to work with that it probably doesn't follow the exact same rules of like Yes. Increase scale by fifty percent and costs go down by twenty percent. I think that you bring up some really great marketing ideas of how to leverage

19:43 community to build your business, and there are passionate communities around sailing that exist in many different ways. Um they exist via actually sailing clubs. Like they exist via sports teams, they exist via country clubs. There are regatta's and that's been a success for us. That we we've targeted though we've targeted yacht clubs, sailing clubs, and they've actually asked us to do custom bracelets for them. A million percent. I was thinking about how can you personalize for that club so that it feels really exclusive and

20:17 So I do think that there's something really interesting in from a marketing perspective and diving into these kinds of communities. Um I Sarah Bell, the the brand is called East Key right. Um congrats. Good luck. Thanks for calling in. Thank you, J. Thank you, Guy. It was a pleasure ch chatting with you both.

20:37 Yeah, you know, it's we we've had um like founders on on the advice line who have like they're into motorcycles or they're into pickleball and and and they make things like this like accessories and jewelry. for those specific communities. And it's interesting because people do get they do like if you're really into sailing, like And even if you're not, these are

20:58 These are really nice. Products around interests have actually become status symbols. And so there's an awesome company based out of Austin called Recess. Which actually makes pickleball rackets. Yeah. In these really cool really cool patterns. There it's like it's brought fashion to pickleball and it's kind of now a status symbol to have one of their rackets. So

21:24 Yeah, I think that they have to lean into that sailing market. We're gonna take a quick break, but when we come back, another caller, another question, and another round of advice. I'm Guy Roz, and we're answering your questions right here on the advice line on how I build this lab. Hey, welcome back to the advice line on how I built this lab. I'm Guy Raz, and I'm sitting here with Jen Hyman, co-founder of Rent the Runway, and we are ready to take another call. Hello, caller, welcome to the advice line. You're on with uh Jen Hyman and me. Uh please tell us your name, where you're calling from, and just a little bit about your business. Sure, I'm Carrie Sporer. I'm calling from New York, New York, and I'm the co-founder of Swear. We make time saving hair care for people who work out. Formulated with clean ingredients. So our goal is for people to stop having to plan their workouts around their hair, which is a real pain point.

22:35 Carrie, thanks for calling in. Okay, let's dive in a a bit. Swear hair. Swear. Not swear like swear words, but S W A I R That's right. Comes from sweaty hair. Sw oh, sweet yeah. So when you talk about products for Active light, you're talking about w s what specifically do you make?

22:51 So our hero product is a showerless shampoo. It's a first in kind product that's basically an evolution of dry shampoo. Dry shampoo is a product that many women are familiar with, men too. They use it on their hair, but it doesn't work if your hair is very sweaty. Yeah. So this is like a spray? Exactly. So it's a wet spray that mixes with the dirt and the sweat in your hair. So when you towel dry it out, your hair is physically being cleaned. It's like the quick clean cycle on your dishwasher.

23:22 And it smells like shampoo, like you've just shampooed your hair. Exactly. Wow. To people know that dry shampoo doesn't actually clean your hair. When it's that sweaty. I think that people that have tried it probably have not had a great experience, but educating consumers about that is really.

23:42 Yeah, it's a mountain that we are trying to climb for sure. Yeah, so but right, because when you'cause dry shampoo is basically powder, right? And so most you y you would think that most people would assume that you are getting your hair clean, but you're not. Essentially. That's what you're saying. Yeah, so when the powder mixes with the water component of sweat, it's turning almost

24:02 like a slimy texture. I know you both have kids. I don't know if you've ever made that ooblek at home when you mix powder, baking soda with water. That's kind of the same thing with powder based dry shampoos and sweat. Get U Black hair. Tell where are you mainly where do you do you mainly sell direct to consumer through your website? Yeah, so we're mainly direct to consumer and we also have several gym partnerships where we're in locker rooms so that customers can discover us when they need us most, right after they've broken a sweat. And how how are you doing in sales right now?

24:35 Um, so we did around three hundred thousand last year. Last year. That's pretty good. And what and before I forget, what's your question for us? So my question is Swear, we really want to be the go-to brand for hair and body products for people that work out, like the Lululemon, but for your hair and body. So we're trying to fundraise to achieve that goal and develop more products.

24:58 But Every investor that we've spoken to is wants to see a million dollars in trailing revenue. And we just don't have that, and we don't know how to get there without more funding. So what are your best tips for boot shopping to a million dollars? Whew. How are you how are you acquiring customers? Like are you guys able to spend on

25:24 On ads, on advertised social media ads and things like that. So we were spending on social media ads and for a while it was very successful, but now we've kind of been turning them off, turning them on, scaling up and down, um, just to make sure that they're efficient. And what are you Do you have metrics on your

25:44 Loyalty rate. So once someone purchases from you, how many other purchases do you get in the next twelve months? So one thing as a first time beauty founder that I did not realize was that creating A bottle with great price value that lasts customers about a year is not necessarily great for your repeat customer rate. Um, so it is growing every year. I think we were about twenty percent last year.

26:14 But it's been a challenge because Yeah. Made our product pretty big. Yeah, one of the secrets of beauty is that

26:23 You make your money in the repeat. You don't actually make as much of your money in the first time trial. And so the big Three in beauty, L VM H L'Oreal and Estee Lauder win on creating products that have enough love and efficacy that people repeat with them for years and years,'cause cost of customer acquisition in beauty is is fairly high. So

26:48 You do have to adjust that repeat rate. Right away. And think about it could be the packaging, it could be Once a customer Has that first experience, do you upsell them into a once a quarter subscription or new bottle? Is there an email, is there a newsletter that goes out?

27:07 Yeah, we just Really started to get behind email marketing. Especially as paid ads were becoming less effective, trying to do more with the customers that we already had. So that's been something that we've really been focusing on and we are seeing really great

27:25 returns and we actually also just launched subscriptions, so I feel like we're moving in the right direction. Um, have you looked at partnerships? I mean you're talking about so uh now I'm looking at your website and I look at the about story, which Which is a great story and I I I'm trying to figure out a way for you to to to bring that more to the f to the fore here,'cause apparently I guess you were you and your co founder were r running the New York Marathon. And that's really when you kind of came across this idea, like, hey, there's nothing you have to go and shower now and it's gonna take so too much time and so Let's make something that's more convenient and we can just get into our work clothes and go to work after we run. Um that to me seems like a really interesting

28:03 story. I I think you mentioned that you guys are in some boutiques, but have you explored partnerships with some of the more let's say sweatier Work out like orange theory, places that people come out of just dripping with sweet. Yeah, I think it's something that we've dabbled in, but definitely something that we can probably focus more on and do a little bit better. And especially some of those. larger chains like an orange theory would definitely be a dream collaboration for us.

28:30 I just want to challenge what you said, Guy. I think that If someone goes to Orange Theory or they go to Barry's boot camp, They are a pool of sweat afterwards. Like that person cannot go and be around another human in any sort of social environment without having to take a shower. Well it depends on whether you want people to be around you in the future. So I think that I'm trying to gauge the following. Like

28:58 Barry's boot camp, you gotta shower afterwards or you gotta go home and be around your People who already love you. Like What is The use case for I actually need.

29:10 this product because I can't Take a shower. Like I need something that's better than dry shampoo. But not shower. So I need that in between.

29:22 When is that in my life? Like, are there enough use cases? to ensure product market fit here. And if there aren't Is there still a way to create an active beauty brand? You know, there's different kinds of skin care that you might need because you're producing more sweat and you wanna think about your pores in a different way. But I'm not sure

29:45 that the reason why people are buying you today is because of excessive sweat. I need to like I'd have to dig into that a little bit more. So the question is w I this is a really smart question. When'cause you're right, i people aren't gonna come out of the the boot camps and stuff. tripping with sweat and not shower. You're right. But when Carrie, do you find people wanting Like what are the scenarios that people would use this?

30:10 So we actually find that people are using the product when they are very sweaty and they're doing a body shower and then using our product. on their hair. Because for many people with longer hair, um, most of our customers are women. So they just don't yeah, they don't want the don't want to get their hair wet. So they're basically like they're doing the body shower and they're like, Okay, this is the solution for my hair so that I don't show up to work with sopping wet hair. Exactly. So they don't necessarily want to do the twenty five minute blow dry from completely wet hair.

30:43 And they want to quickly clean their hair so that they can move along more quickly. Yeah. Okay, so maybe you can go to Berry's Boot Camp in the orange theory. Yep. Yeah, we actually hot yoga studios are actually some of our most popular partnerships right now because it really is the only thing that works on hair that's that sweaty.

31:03 You know, Jen, th this point that you made about about customer retention versus acquisition. We uh uh it comes up all the time, and I know you are uh you have to be a master, you know, ninja master at this with what you do, because that's really where the value is. The cost of acquiring a new customer is so much higher than retaining an existing customer. Carrie has to really focus on that. And again and again and again.

31:28 And that's how you're gonna figure out what your next hero product is. You're gonna have a cohort of repeat users. who then are actually Demanding. That you create a

31:41 XYZ new product. You don't want to go to people that have kind of used you once and gone away to figure out like what the next thing in your assortment is gonna be. That makes a lot of sense. You have something here, okay? Three hundred thousand dollars in sales is significant.

31:57 You've got something. People like this product. You gotta get it out there more. the margins of The repeat business are so much better that even if you can get twenty five percent of your user base to repeat. You know, once a quarter, like you're in a completely different business. You've suddenly taken your business from three hundred to seven fifty.

32:19 So if you divide up the three hundred that you're at now, you getting to a million. You need seven hundred K additional dollars. I would go you at getting four hundred K of that from repeat. Revenue. And three hundred K from I think some scrappy community oriented partnerships with fitness studios and gyms. And I would keep it in New York. I mean there's enough of a

32:44 Demand here and enough of a culture of classes and gyms that You can kind of go door to door, meet the people, build the relationships, and just show up. And so just do whatever you need to do, be a hustler. At a certain and and the very best thing that beauty companies have done from the beginning is free samples. Yes. And what my co-founder and I would have done, and I would suggest you do as well. Just go to the class and leave your product behind. Don't ask permission. What are they gonna do? Like bring fifty samples in, go to the freaking three oh five dance class and the berry's boot camp class, and just leave it there.

33:20 And have some beautiful packaging and like people are gonna take it. We're new Yorkers, we like free stuff. Yeah, ask forgiveness, not permission. I love Don't ask permission. Why are you even bothering with the permission? Do you basically get your repeat customers to become four hundred K, then you're at seven hundred, and then you just the you know, the next three hundred? Yeah, so and you're at a million. You make it sound so easy, guy, but I am definitely gonna implement a lot of this advice. Thank you. Awesome. The brand is called Swear Hair Carrie Sport. Thanks so much for calling in.

33:50 Thank you both. This has been Such a dream to talk to you. Thank you, Carrie. Well now I now now I know that that I can never Like have lunch with you if I if I've gone to Barry's boot camp and I haven't showered.

34:06 Please shower. I I could I could r I could towel off really well and then use good deodorant, but yeah, I guess not. All right, we're gonna take another quick break, but we'll be right back with one more collar. Stay with us, I'm Guy Roz, and you're listening to the advice line right here on how I built this lab. Hey, welcome back to the advice line on how I built this lab. I'm Guy Raz. And today I'm taking calls with Jen Hyman from Rent the Runway. Alright, Jen, let's bring on our next caller. You are on the advice line, please tell us your name, uh where you're calling from, and a little bit about your business.

34:59 Hello guy, hi Jen. It's a pleasure to be here. Thanks for having me. My name is Chavela Gomez. I'm calling from New York City and I'm the founder of Chavela, a sustainable and fashion forward women's wear brand empowering women to simplify their closets and build a sustainable wardrobe they can feel good about. And it's all made here in New York City's Garment District. Welcome to the show. Thanks for calling. So tell me a little bit about uh the the apparel. Like what does it look like? What does it do? Yes, so it's primarily tailored button down shirts and dresses that are spill proof, made with one hundred percent cotton. And they have multi-wearable features such as removable sleeves and waist cinching details that you can basically tailor for day to night.

35:43 And my biggest inspiration were women in corporate. who I worked with for many years before founding the company. And it was always that I have to go to a dinner, I have to go to cocktails, and I have to go home and change or If you live in New York City you know that you're schlepping around a bunch of clothes and you don't want to do that. You want to just wear what you wore in the morning. And with our clothes is so easy to switch. So it's a shirt that can uh can serve as like seven or eight different kinds of shirts. You can take the sleeves off, I guess, right? Change it into like a dress or I got it. Okay, cool. And tell me a little bit about where you're selling this direct to consumer.

36:20 Yes, we are primarily direct to consumer. We have uh just acquired our first collaboration with a wholesaler at the Canvas and World Trade Center. Amazing. And um what w tum tell us what your question is for us today. So Jen, with you having had so much experience in capital funding And as you know, apparel is such a capital intensive business. What, in your opinion, do you think that Indoor investors are looking forward and they are

36:50 Considering investing in apparel companies like mine. I think the investor base for fashion and apparel specifically is completely different. Then An investor base around

37:06 what I do, which is like a tech enabled і комерс company so I'm interestingly less familiar Would the world of apparel

37:16 investment and I know that it's very difficult because I work with close to a thousand brands. Right. What it is is it's very much relationship based and there are a few folks who hold a lot of sway as to whether you as a designer are

37:34 the right designer, if the product is great, if they want to invest in you, and there are networks. Especially within New York, that you can be a part of, like even if you didn't go to Parsons or you didn't go to FIT, a lot of the top designers. in in New York have actually come out of those two ecosystems. So getting involved in what they do f and really networking to get in front of the Andrew Rosens of the world. So Andrew Rosen is a super famous fashion entrepreneur who founded you know, theory, but is the primary investor behind many, many businesses like Rag and Bone and Alice and Olivia, and he's one of those people that if he says I like you.

38:18 You're gonna get funding if not from him, from someone else. So I think that Networking to figure out Who those people are And To get in front of them is critical.

38:30 And what are the ways that you would say I did go to FIT, by the way, but I feel like At this juncture I haven't found sort of an entry point. Especially because Most investors

38:44 think of fashion as volatile as a business. And I have applied for grants actually and also have gone to pitch competitions. Do you have traction? Like how much have you sold of your line thus far because I think that it's not about volatility. People are looking for markers of of success. Right. We do under seventy five thousand s uh a year. And one of the things that we are most proud of is that we so far have a zero percent return rate.

39:17 Uh, we have never gotten one single item returned to us, and we have surveyed all of our customers and spoken to numerous people who are just extremely happy with the quality of the product. And so it speaks to the demand for it, except that of course We do not have the capital to scale.

39:36 If that's the case, have you thought about going to brands that traditionally target this workwear customer like M LaFleur or Argent. And Омос Лісень Your

39:52 design.'Cause it sounds like it's It's an innovation. Mm-hmm. From the way that you describe it. But licensing it to them so that they can produce You know, a line of shirting.

40:04 That utilizes your Fashion tech, basically. Right. I haven't thought about that. Obviously this is my baby. I feel like I want to see it grow and we already have full collections designed around it. But you gotta be scrappy, right? So like I'm not telling you to license it to Joe Schmo around the world. Right. I'm saying go to some really awesome reputable brands with founders who are in New York, with founders who get

40:32 design as well. And see if you can collab with them because they might have the capital You need working capital. In order to manufacture your product. Like maybe that working capital can come from someone else.

40:46 Right. And so if it's true that people actually love the product, you also need distribution beyond your own D to C because you can't afford marketing. So you need to leverage someone else's Hm. channel an ecosystem. Yes. That's a great idea. I love the idea of of M M LaFleur. Sarah LaFleur's been on the show before and I I think that's a really good um piece of advice. The other thing You gotta get on TikTok immediately.

41:09 Yes. Like right now any product can become a multi million dollar business overnight with the right kind of Content. And Just

41:20 Get out there. And just start talking about the product and show it on yourself and showing it on your friends like Don't wait for a miracle like create it. Right. Yes, and we have actually thought about starting and really amping up our content on YouTube as well because we notice that a lot of our customers go there for tutorials and it lends really well for what we do, which is all of the features and showcasing everything that the garments do. And even one of our our biggest wow moments is the fact that it's spill proof on top of it. And especially you both have children. I have a seven year old and I spill coffee and juice all over me all the time. But with this garment is something that women really relate to. Wow, I can wear white

42:03 to a a nice event and it my clothes are ruined. Get on TikTok and get on Reels today and wear a white Top and spill red wine on yourself. That's a great idea. Great advice. And put spaghetti sauce on yourself. And do all the things to show people like those extreme product you know, values that you're trying that you're talking about. Like it doesn't matter in words, you gotta show them in images and video. I agree. Thank you so much for that. That's awesome. The brand is called Chebella, Chebella Gomez. Thanks so much for calling in. No, thank you. This was a bucket list moment for me, guys. I have been wearing Rent The Roman way forever, so I love you guys.

42:39 Keep wearing us. I will. And hopefully one day you'll be on Rent The Runway. Who knows? Crossing fingers and toes. Thank you. Thank you both. Um, Jen, before I let you go, um, now that you have fifteen years under your belt, if you could go back to when you started this thing. What what do you think you would say to

42:59 You fifteen years ago, about Yeah. advice or Or m maybe a pep talk or something that would You know, that would make it a little easier.

43:09 I would say two things. Number one Don't focus as much on the future. You're doing something that's so fun. Don't have anxiety about what's gonna happen next quarter or next year. Enjoy today.

43:23 Number two. Get yourself a video camera. And start videoing this unbelievable period of time in your life because as much as you think you're gonna remember every single moment, you're not, and these are gonna be the best times of your whole life. I love it.

43:39 Jen Hyman Co founder and CEO of Rent The Runway. Thanks so much for coming back on the show. Guy, next time you're near you're in New York, we gotta get a meal. Uh we will. And I will be showered and ready to go. We'll go to a various class together. And by the way, if you haven't heard Jen's original How I Built This Episode, you've got to go back and check it out. You can find a link to it in the podcast description. And here is one of my favorite moments.

44:03 From that interview. I go back to school on Monday, I happen to have lunch that day with Jenny. I was like, Oh, I had this idea, like, what if we rented dresses? Yeah. And she responded, Oh, this sounds fun. You know, let's like work on this idea together. Who do you think we should call?

44:21 To figure out if it's a good idea. And I said, you know, we should really call Dan van Furstenberg. Now we didn't really have a structured idea. So You know, we were kind of iterating the idea.

44:34 By pitching it. Hey, thanks so much for listening to the show this week, and by the way, please make sure to check out my newsletter. You can sign up for it for free at gyros.com or on Substack. And of course, if you're working on a business and you'd like to be on this show, send us a one-minute message that tells us a little bit about your business and the questions or issues you are currently facing, because we would love to try and help you solve them. You can send us a voice memo at hibt at id.wondery.com or call us at 1800-433-1298. You can leave a message there and make sure to tell us how to reach you. And by the way, we'll put all of this in the podcast description as well. This episode was produced by JC Howard with music composed by Ramteen Arabui. It was edited by John Isabella. Our audio engineer was Cina Lafredo.

45:26 Our production team also includes Alex Chung, Casey Herman, Elaine Coates, Chris Massini, Catherine Seifer, Carrie Thompson, Sam Paulson, Iman Mani, and Eva Grant. I'm Guy Roz and you've been listening to the advice line on how I built this lab.