
What's Behind the Exodus from Rent the Runway? - prostoalex
http://fortune.com/2015/11/17/rent-the-runway-exodus/
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FussyZeus
"Rent the Runway has been valued at $500 million. It asked Fortune not to
publish this story because it could hurt the company’s ability to raise
money."

It's not the media's job to help you raise money, it's their job to report the
facts. And frankly if your executive churn is that freaking high and so many
prior employees have issues like they seem to, you probably shouldn't be
raising money.

Also, this might just be me, but does anyone else miss the good old days when
you'd start a business and your success was determined by how much money you
actually made, not how much money you got a bunch of investors to give you,
just to burn on fancy offices and expensive toys, then crash the company in a
few years and retire to write a book? This whole system seems incredibly
screwed.

~~~
forgingahead
_It 's not the media's job to help you raise money, it's their job to report
the facts._

Have you notified TechCrunch and the rest of the so-called tech "media"?

~~~
FussyZeus
Fair, but I said it's their job, I didn't say they all (or even most) did it
well.

~~~
smokeyj
I think their job is to be entertaining and sell advertisements.

~~~
eli
The sites that get my ad impressions tend to be the ones that do reporting and
not just cheerleading.

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ismail
“Given that Netflix is a $60 billion company—and we don’t have to watch TV or
movies every day, but we do all have to get dressed—the potential for Rent the
Runway was 10 times bigger than I ever thought,”

This sound like a terrible investment thesis?

It is ignoring all the differences between how you consume clothing vs media.
The fact that there is physical distribution required vs digital.

OR am I missing something key?

~~~
adventured
No, you're spot on. It's a wildly incorrect premise.

Example: Apple is a $670 billion company. We don't all have to own smart
phones. We all have to sleep at night, therefore Beds 'R Us must be worth ten
times what Apple is.

You'd be hard pressed to invent a more comical economic premise than the one
used to compare Rent the Runway to Netflix. It's in the same fantasy league as
proclaiming: if I can only capture 1% of the oil industry, my company will be
huge!

Or put another: why aren't lettuce farms worth 100 times what the NY Yankees
are?!? Surely lettuce is higher on the needs table than baseball much less one
MLB baseball team!

~~~
notahacker
I'm also sure people actually feel inclined to rent movies more often than
they need to rent clothes.

People _buy_ the clothing they need to wear every day.

~~~
harryh
People also tend to throw out a lot clothing because they're bored with it,
not because it gets worn out. There does appear to be a pretty big opportunity
there.

~~~
ismail
* Note: not a women, Do not fashion trends. This is purely based on my observations of the women around me (wife, sisters etc etc), and some cursory reading on Zara etc.*

1\. Things come and go into fashion, you have trends and 'mini-seasons' or
something like that.

2\. This is still driven by the major fashion labels

3\. A critical thing has changed though: quite a number of companies have
optimized their supply chain. I believe the term is called "Fast-fashion".

5\. Examples: Zara, H&M, Mr Price (South Africa).

6\. They are cost effective.

7\. This means they get can a new design in stores within 2-4 weeks.

7\. In other words, you could wear something that is 'in-fashion' at the same
time as other high-end labels, previously with the long lead times and
manufacturing in china you would get the item a season later. The followers
were always behind.

8\. This has resulted in changing behavior. Buying items from these stores.
Using them for a few weeks or 1-2 months. And then getting rid of the item.

In other words, i believe the value proposition for rental of 'every-day' wear
is quite weak.

~~~
harryh
It's interesting that you admit that this is a topic on which you are largely
ignorant and yet you speak with such confidence about your beliefs.

~~~
greatjones
It's interesting that you are unable/unwilling to address the points the
author made and instead chose to just attack the author.

------
sageabilly
Wow, the CEO sounds extremely out of touch with the company culture. If your
company has a Facebook group for ex-employees to come together and process
their terrible experience working for you, there's a problem regardless of if
you're able to admit it to yourself.

[Edit] Also, what happens if I rent a dress and hate it? Suddenly I'm two days
out from an event with a dress that looks terrible and that I've spent $150 on
with nothing to show for it. I'd rather take $150, go to Nordstrom, and _buy_
a dress that I know looks good on me because 1- I've tried it on and 2- I have
gotten it tailored. Off-the-rack dresses/formalwear rarely looks amazing on
anyone without a little tailoring.

~~~
vijayr
I still can't wrap my head around _renting_ dresses - some kind of specialized
costume I can understand (like spiderman or predator), but dress? They seem to
be doing some revenue so it does look like a workable idea.

What happens to RTR if the big name brands with multiple physical stores start
renting dresses too (I don't know if they already do it or not)?

~~~
Retric
Prom dress rental is already fairly common.

Another designer dress rental.
[http://frockshopchicago.com/](http://frockshopchicago.com/)

Though doing this online when you can't verify something fit's seems risky.
Unless, you have a very common body shape.

~~~
andzt
My wife has rented several dresses online and usually orders 1-2 dresses and
they offer free 'backup' sizes. Great for fancy events, themed parties,
weddings, etc. where you'll realistically spend several hundred dollars on a
nice dress that for some reason you can only wear once.

Heaven forbid your friends see you in the same designer dress twice...

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xacaxulu
"Three of them likened the atmosphere at Rent the Runway to the 2004 film Mean
Girls. Each one made that reference separately, without prodding."

"The former employee adds that there were “frequent screaming matches” in the
office between top executives."

“You don’t feel it’s an environment where women support each other,” an ex-
employee told the the magazine under condition of anonymity. “It felt like
high school, it was very clique-y.”

With an executive team that's over 75% female, it's a shame to see it getting
such bad press from former employees. In terms of gender representation, RTR
was a rarity the tech space.

~~~
FussyZeus
I can just see the genuine sexists using this just, forever, to justify their
biases about female leadership. It's very saddening.

Doesn't help on that front that it's a fashion oriented company either...

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sevensor
Things you shouldn't say to reporters:

> [Rent the Runway] asked Fortune not to publish this story because it could
> hurt the company’s ability to raise money.

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rdancer
"The startup has lost _seven_ top executives [...] _Five_ former senior
employees, all _female_ , spoke with Fortune on condition of _anonymity_
[...]" [emphasis mine]

Oh, Fortune!

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sbisker
We've seen a rash of these "bad news bears" articles lately. It's important to
note that this stuff has always existed in some startups, and it isn't
inherently bad - it's a natural consequence of taking so many risks on
inexperienced founders and managers. Some will train a new management elite,
some won't quite grow into their expectations and some will devolve into Lord
of the Flies.

It's just that as the tech market becomes softer, people stop deciding "my
stock will go up" is a good reason to put up with terrible management. The
hard part for people in startups is having the courage to walk away when
things are still growing without a care.

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natvod
Maybe I'm missing something but I always thought renting designer clothes has
a limited market.

People who attend many special events a year where they need a new outfit for
each one typically have the disposable income to outright buy their clothes or
have companies borrow them clothes for the publicity.

The average person who goes to a few special events a year? You can buy a nice
outfit for just a little more than what they're renting a designer dress for.
And you get the keep it forever and wear it some time later.

The only time I've rented a dress was for prom and that was because it didn't
make sense to buy a dress I was going to outgrow in a few years.

~~~
HiLo
This isn't actually true. A new Vegas dress for a lot of my friends would cost
as much as the rest of their whole trip to Vegas. Furthermore, women 18-30
have tons of weddings, bachelorette parties, work functions, holiday events,
birthday parties, brunches, and weekend bars to visit, but almost all of those
cost less per person than some of these new dresses.

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mjevans
When I saw the phrase 'Rent the Runway' I thought of airplanes and related
equipment.

Maybe the investors are similarly confused by this term, which was apparently
a company's name even though it sounds like an action statement.

