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What's Behind the Exodus from Rent the Runway?

fortune.com

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

#21

Post by notahacker »

adventured wrote: post #14
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% o…

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.

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

#22

Post by 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.

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

#23

Post by dragonwriter »

HillRat wrote: post #20
dragonwriter wrote: post #11

Earlier quoted context omitted.

> 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.

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

That doesn't stop both from being "making money".

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

#24

Post by harryh »

notahacker wrote: post #21
adventured wrote: post #14

Earlier quoted context omitted.

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% o…

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.

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.

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

#25

Post by peterjancelis »

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…

We all have to breath way more than we need TV, yet oxygen isn't a 60 billion market.

It's just a nonsensical statement.

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

#26

Post by peterjancelis »

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)?

The value proposition is that girls can show off a new dress for each (facebook picture of) event they attend.

So they're not renting dresses, they're renting the dream/perception of a huge designer dress collection.

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

#27

Post by rdancer »

harryh wrote: post #24
notahacker wrote: post #21

Earlier quoted context omitted.

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.

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.

It's called Goodwill. You may have heard of them. ;-)

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

#29

Post by akgerber »

harryh wrote: post #24
notahacker wrote: post #21

Earlier quoted context omitted.

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.

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.

And I buy a lot of that clothing from Buffalo Exchange and similar stores, but in spite of Buffalo Exchange being a national chain it's a modestly sized private company: http://www.buffaloexchange.com/about-us/

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

#30

Post by 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.

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