What's Behind the Exodus from Rent the Runway? • Hacker News Board

Re: What's Behind the Exodus from Rent the Runway?

#11

Post by dragonwriter » Thu, Nov 19, 2015, 5:34 PM UTC

FussyZeus wrote: post #3

"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…

> 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?

Selling equity to investors is as much making money as selling products to consumers. And, to the Nth investor, your ability to sell to the N+1th investor may be as important -- or more important -- an aspect of your ability to make money as your ability to sell to consumers.

Re: What's Behind the Exodus from Rent the Runway?

#12

Post by Retric » Thu, Nov 19, 2015, 5:39 PM UTC

vijayr wrote: post #10

sageabilly wrote: post #2

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 $15…

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)?

Prom dress rental is already fairly common.

Another designer dress rental. 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.

Re: What's Behind the Exodus from Rent the Runway?

#13

Post by creature » Thu, Nov 19, 2015, 5:40 PM UTC

ismail wrote: post #9

“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 somethin…

Don't forget the thousands of years humanity spent naked. Thankfully, startups are now here to solve that problem.

Re: What's Behind the Exodus from Rent the Runway?

#14

Post by adventured » Thu, Nov 19, 2015, 5:40 PM UTC

ismail wrote: post #9

“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 somethin…

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!

Re: What's Behind the Exodus from Rent the Runway?

#15

Post by smokeyj » Thu, Nov 19, 2015, 5:41 PM UTC

FussyZeus wrote: post #7

forgingahead wrote: post #6

Earlier quoted context omitted.

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"?

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

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

Re: What's Behind the Exodus from Rent the Runway?

#16

Post by ghurlman » Thu, Nov 19, 2015, 5:45 PM UTC

vijayr wrote: post #10

sageabilly wrote: post #2

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 $15…

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)?

It's not all that different from renting a tuxedo.

Re: What's Behind the Exodus from Rent the Runway?

#17

Post by eli » Thu, Nov 19, 2015, 6:03 PM UTC

smokeyj wrote: post #15

FussyZeus wrote: post #7

Earlier quoted context omitted.

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

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

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

Re: What's Behind the Exodus from Rent the Runway?

#18

Post by andzt » Thu, Nov 19, 2015, 6:04 PM UTC

Retric wrote: post #12

vijayr wrote: post #10

Earlier quoted context omitted.

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)?

Prom dress rental is already fairly common. Another designer dress rental. 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.

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...

Re: What's Behind the Exodus from Rent the Runway?

#19

Post by cballard » Thu, Nov 19, 2015, 6:09 PM UTC

ghurlman wrote: post #16

vijayr wrote: post #10

Earlier quoted context omitted.

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)?

It's not all that different from renting a tuxedo.

Those almost universally look bad, because you can't tailor them. That's fine for the sort of people that rent tuxedos, because they don't care - they need a tuxedo because a dress code calls for it, but they aren't into it.

On the other hand, people that like designer fashion are into it. So, they will want to get their pieces tailored for their body, because if they don't, it'll generally look meh. You can't do that if you rented it.

Re: What's Behind the Exodus from Rent the Runway?

#20

Post by HillRat » Thu, Nov 19, 2015, 6:13 PM UTC

dragonwriter wrote: post #11

FussyZeus wrote: post #3

"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…

> 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? Selling equity to investors is as much making money as selling products…

Revenue and no equity raise is a closely-held business. Equity raise and no revenue is a Ponzi scheme.