As sacred as her maternity leaves were, there was at least one professional event exciting enough to take Jennifer Hyman away from her second baby: a gathering of other women founders of “unicorns,” privately held companies valued at over $1 billion. But Jenn and her family—which includes husband Ben Stauffer and daughters, 3-year-old Aurora and infant Selene—were living at the beach for the summer, a long way from the Manhattan apartment of the event’s host. Rather than attempt to breast-pump while driving, Jenn took an hourslong bus ride to the city. When the time came, she did what any nursing mom would do: She pumped in the back seat. “I was like, ‘Oh, my god, if anyone took a photo of this, it would be on the front page of the New York Post.’ It was insanity.”
It wasn’t any more insane than the leap she and Rent the Runway co-founder and fellow Harvard Business School ’09 grad Jenny Fleiss took a little over a decade ago. As their oft-repeated origin story goes, they cold-emailed legendary fashion designer Diane Von Furstenberg. She invited them to her office to hear their pitch—which she initially hated. When DVF told them not to bother coming for a follow-up meeting, the young women showed up anyway. With some concept alterations—namely, that the company would rent out more than just DVF dresses—their billion-dollar brand was born.
The business, as anyone who has ever toted their signature black garment bag knows, started with women renting designer special-occasion dresses at affordable prices.
This way, discerning 20- and 30-somethings could avoid the social-media-induced embarrassment of being photographed twice in the same outfit without defaulting on their college loans. The company soon attracted high-profile devotees, from TV news anchors to Broadway performers to congresswomen.
In 2016, Rent the Runway branched into the burgeoning clothing-subscription category, officially launching Unlimited. For a monthly fee of $159, a subscriber can borrow four items at a time, worth up to over $10,000, and trade them for others whenever she’d like. There are also two lower-priced options: 2 Swaps, the brand-new $135 monthly subscription which allows for eight items per month, four items at a time, worth up to $5,000; and 1 Swap, which allows for four items per month from a more-limited selection of lesser value at $89 per month.
The concept had gained 100,000 subscribers by summer 2019, according to the Wall Street Journal, just before it ran into a snag in the fall. Jenn says their hyperscaling coincided with a warehouse tech bug that delayed about 5 percent of their shipments. As Jenn admits, a delay is a failure when customers are counting on your service to deliver the perfect outfit for their big day, whatever the occasion. So she made a fairly unprecedented decision: to cancel a weekend’s worth of orders because they didn’t know which renters wouldn’t get their items on time. Those affected received a full refund—on top of $200 straight into their PayPal accounts, so they could buy something to replace the rental that would never show.
When I sat down with Jenn in her office in the increasingly hip Hudson Square section of Manhattan, she told me that she stands by that decision; it reflects the open, honest relationship she thinks companies must have with consumers today. “So often customers are given a flowery story that everything is perfect,” Jenn says. She owed those women the truth about the problem because trust—that an outfit will arrive clean and in great shape—is a huge part of the rental business. “I can’t say we’re never going to fail again, but I can promise that we’re always going to be transparent and do the best thing for them.”
Perhaps it’s that authenticity that keeps droves of women renting—11 million over time, according to CNBC, including those who use Reserve, the classic one-time rental option. Both Reserve and the newer subscription service have had copycats, from the kinds of companies you hear about only in Facebook ads to major clothing brands and department stores. If this bothers Jenn, she doesn’t let on. The widened participation in the rental business further legitimizes it to customers, not that there’s any stigma around wearing borrowed clothing these days. And it might make Rent the Runway more attractive to the big-name partners with which it has recently joined forces.
With W Hotels, a guest can opt to have her room come with up to four clothing items from Rent the Runway. (That’s one way to eschew airlines’ ever-rising checked-baggage fees.) Nordstrom is entering the rental business by posting its wares for lease on Rent the Runway’s platform. That’s in addition to having Rent the Runway dropboxes at 27 Nordstrom locations, so monthly subscribers and one-time renters can return any of their borrowed items and immediately choose another.
Rent the Runway also has a dropbox partnership with WeWork, the coworking spaces that have popped up across the country. In fact, WeWork’s president, Artie Minson, sits on the Rent the Runway board of directors, despite the late 2019 controversy involving founder, Adam Neumann. That similarly disruptive CEO made headlines for establishing a hard-partying work culture in which discrimination and sexual harassment reportedly ran rampant. A director of culture, ironically, filed a lawsuit in 2018 alleging that she was assaulted at two company events and then fired in retaliation for complaining, among other multiple gender-related suits. Plus, Neumann massively inflated his company’s valuation before an IPO, and was forced out shortly after.
Jenn is, again, unfazed. “What’s powerful to me about the WeWork story is they just received a complete decimation by the press, and you still enter a WeWork, and it’s like 100 percent occupancy. People love it there. They created an experience and a way of working that has defined our generation,” she says. So does WeWork’s fumbling concern her, given the company’s link to hers? “I’m not privy to the governance decisions they’ve made or what their financials are around properties that are in growth mode versus profitability mode. But there’s a tendency by all of us as consumers of the media to paint something as all bad or all good. In the journey of building a business, it’s not that simple. There is a lot about WeWork that I have incredible reverence for.”
Not the sexual harassment, of course, something Jenn herself has experienced as a woman founder in tech. When she was raising capital, an investor propositioned her over text message. When she didn’t acknowledge him, he complained to the Rent the Runway board that Jenn was unresponsive. She showed her receipts, and he was booted. But she’s never revealed his name publicly. “This individual no longer works in investing or in venture capital, so he has no ability to do this to other women. If I felt that he was still in a position of power where he was doing this to other women, I might make a different decision.”
Like WeWork, Jenn is open about her hopes to take Rent the Runway public in this new decade. And it’s possible she’ll do it while pregnant. She said she wasn’t expecting during our interview, but she candidly shared her intention to have more children. “I come from a big family and think big families are fun.” Also, going from one to two kids has actually made her job easier. “There’s so much happiness in my life that even if I’ve had the most stressful day, I can go home and dance around the house with Aurora or hold Selene. Immediately my mood is lifted. You realize that you can fix whatever problem you’re dealing with at work, and the real important things are there [at home].”
Another hope for the 2020s: paid federal family leave. “I did a huge amount in 2019 related to parental leave in Congress. I have built relationships with representatives and senators, including Republicans. I’ve been explaining the financial case for leave, that this is not just a moral policy.”
Jenn doesn’t need to cite the substantial research proving this. She’s seen it with her own eyes at Rent the Runway. In 2018, her company equalized benefits given to salaried and hourly employees, including parental leave. It led to higher retention rates and productivity, and lower training costs for new hires. “Even if you were making this decision on dollars and cents alone, you would still opt to offer paid parental leave.”
That wasn’t her sole motivator, though. “We want to create a new way of doing business and how employees should be treated. The biggest shift was for our warehouse workers, especially our male warehouse workers, to not only understand intellectually that they’re being given 12 weeks of paid leave, but to know that this is something that we’re encouraging them to take as members of the Rent the Runway family.”
She has a message for the many companies that don’t offer the same packages for employees across functions. “Business leaders have a moral responsibility to positively impact the communities that they’re a part of and the people who have brought their companies to where they are.” And when they don’t? “You’re essentially saying your hourly employees are replaceable.
“Someone in my family needing care, being sick or passing away is not more important than any other person’s,” she continues. She believes that lower-wage workers need paid family leave and a paid bereavement policy more than executives. Without those, “I would still have the financial flexibility to take off unpaid time from work and care for a loved one, whereas someone in my warehouse or on my customer-service team would not have that same flexibility. That is just my recognition that everyone’s humanity is equal.”
Luckily, her board and the teams around her recognized her right to take time off when her children were born. Partly, it was important to Jenn to show staffers that it’s OK to use parental leave at Rent the Runway. “A lot of companies have these policies—congratulations—but for it to take effect, you have to see that the most senior people in the organization are taking advantage of it.” The other motivator, naturally, was her desire to be with her family during these critical times.
But if you want to check out endless photos of her (very cute) daughters, prepare to be disappointed. Jenn, who’s technically a millennial, turning 40 this summer, doesn’t want you to follow her on Instagram. “There’s been this insidious pressure that I believe female founders and CEOs feel that they not only have to be the CEO, but they have to have a personal brand associated with their business. I am proof positive that you can have a private life and run a public business. For me that means the normalcy of having friendships and family moments that aren’t always on display. My followers on Instagram are my real friends. I just think it’s too much pressure to be a celebrity and a public brand and a real CEO.”
Instead, she plans to spend her time putting down roots in her Brooklyn neighborhood, nurturing the seeds she’s planted over the past decade at Rent the Runway, and using her mighty microphone to advocate for paid leave and more. She hopes you’ll join her. “I want more women of all levels to speak up and realize they have more power than they think they have.”
Now, learn how to get hired at Rent the Runway.
What About Jenny?
Jenny Fleiss, now a mom of three, left Rent the Runway to co-found Jet black, a shopping service owned by Walmart, in 2017. And in 2019, she left. “It was her decision,” Jenn says emphatically (Walmart shut down the service in February 2020). “I talk to Jenny basically every day. Rent the Runway was the first child for both of us. We co-parented this organization together, and that’s a bond that will never break. She’s like a sister to me. She’s closely connected to me and my family, and vice versa.”
This story originally appeared in the April/May 2020 issue of Working Mother.