The silver lining of graduating from business school during a recession
A conversation with Rent the Runway and Jetblack co-founder Jenny Fleiss about starting a business in a recession, incubating businesses within a larger organization and why business school is the perfect opportunity to innovate.
Jenny Fleiss (HBS MBA ’09) knows what it’s like to see friends’ and classmates’ job offers getting rescinded in the run-up to graduation date and a wary job market awaiting those looking to step into traditional Harvard Business School career paths.
But despite all the doom and gloom of the last recession, it was also the moment in which Rent the Runway was born and as Fleiss notes in her recent blog post, the 2009 graduating class “set off a wave of entrepreneurship at Harvard Business School, with more students seeking to disrupt industries and pursue entrepreneurial dreams than ever before.”
Much has been written about her time at Rent the Runway and how Fleiss, her co-founder Jenn Hyman (MBA ’09), and her team have taken the idea from campus trunk sales to its unicorn status (over $1 billion in valuation). So, in our recent chat, I decided to focus our time on Fleiss’ journey beyond Rent the Runway and where she hopes to go next as well as any advice and tips she has for aspiring fashion-tech entrepreneurs.
“Rent the Runway was a dream opportunity and a perfect business-fit for me, but I had been there for eight-and-a-half years and was feeling ready for the next adventure,” Fleiss remarks regarding her decision to leave Rent the Runway in 2017 to join Walmart’s Store №8 incubator.
“There certainly remain several opportunities to scale and expand the existing Rent the Runway business, including within supply chain and logistics, as well as international expansion and category expansion. You can always use a builder and innovator skillset in an existing business, but I knew my interest and passion lay in starting over and building new things from scratch.”
So, when Marc Lore, who had previously founded baby products retailer Diapers.com as well as e-commerce platform Jet.com, which Walmart bought for $3 billion in August 2016, approached Fleiss with a novel idea, she jumped at the chance.
“I loved the idea of working with him and also the prospect of working within Walmart. Driving innovation within a huge retailer was a completely new challenge and I knew the impact it would have on Studio №8’s strategy for incubating subsequent businesses,” Fleiss says of her decision to build the Jetblack team alongside Lore.
In some ways, Jetblack, a $50-a-month subscription program, which combined human and artificial intelligence to offer product recommendations, was a template-project for future Studio №8 ventures. “We were very focused on what the Jetblack experience would mean for the template Walmart launched in the future and how start-ups could plug into the wider Walmart ecosystem,” Fleiss explains.
Starting a company within an incubator is a challenge very different from the scrappy Rent the Runway start-up story and Fleiss agrees that the parameters for defining success between the two start-ups were very different.
“Defining success for Jetblack was not only about revenue and profit but also about landing on a core strategy for scaling incubated start-ups,” Fleiss notes. “The Walmart team were always keen to adopt the key learnings from the Jetblack model into their future endeavours.”
Reflecting on the challenges and the differences between her time at Rent the Runway and Jetblack, Fleiss highlights the importance of keeping the broader corporation in mind as an ‘in-house’ entrepreneur.
“You have to integrate within the broader culture of the company as you need to be cognizant of what the organization requires to see in terms of progress and what that means for how you grow the business.”
Fleiss elaborates on the key challenges she faced at Jetblack, including the intentional speed of growth. “Sometimes things move slower because you have to validate and be able to show the path you intend to take to senior management. There are often more milestones and deliverables as tangible results are critical to taking the organization with you through each stage of business development.”
“It is vital to understand who you need to get buy-in from,” Fleiss adds. “You have to be able to consistently satisfy the larger organization’s definition of success.”
That said, there are also benefits that come from being funded by one of the biggest companies in the US and Fleiss admits that, even though the timing was a taxing constraint, the capital was not.
Jetblack was absorbed back into Walmart earlier this year and Walmart company spokesperson Ravi Jariwala informed CNBC that “58 of Jetblack’s 350 employees will be integrated into the retailer’s conversational commerce technology team”.
“The three-year journey at Jetblack added a lot more to my skillset in terms of data and machine-learning,” Fleiss reflects. “I loved the ‘new-ness’ of the challenge and still advise the team as they continue their integration into Walmart.”
Fleiss is strongly positive when I ask about her experience with two very different co-founders at Rent the Runway and Jetblack, respectively, and how she would compare them.
“Marc and Jenn are both really big strategic thinkers and can rally people around them in support of their vision,” Fleiss says. “I can execute and my strength lies in taking things from A to B, and so the skills I bring to the table are very complementary to theirs.”
“I learnt so much more from being around them and learning as a partner rather than as a boss — that is, the ‘learn by doing’ part, which has been very important to me,” Fleiss adds.
Fleiss wrote about how the “optimist and introvert in [her] has come to appreciate aspects of the Corona Craze” and “with the many things off-limits, life is simpler giving [her the] time to process and think about the bigger picture” in her blog post. I am very interested in finding out more about what she’s been exploring and we move on to discuss her plans going forward.
Firstly, Fleiss asserts that despite the move to Jetblack, she remains heavily involved with Rent the Runway as an advisor and admits that the business is “very much a part of [her] heart and soul”.
“I still want to take time off,” Fleiss says of her plans. “Business school was once that valuable white space where I was intellectually stimulated and had time to look into the things happening in the world, to then pursue the next thing with focused and directed awareness.”
In the meantime, Fleiss is supporting start-ups and focusing on giving back by advising both entrepreneurs and selected funds. “I want to leverage my experience and support the next wave of industry disruptors and entrepreneurs — there are more opportunities now than ever and I am excited to see how the retail market develops.”
I ask Fleiss for the advice she would like to share with aspiring entrepreneurs, especially as we are all stuck indoors with limited opportunities to interact with would-be consumers in person.
“There are still many different ways to test ideas,” Fleiss insists. “I am looking forward to seeing the transition that excellent entrepreneurs make in the wake of the COVID-19 crisis or existing businesses that can successfully pivot despite the challenges.”
As many other entrepreneurs I have had the privilege of interviewing have highlighted, Fleiss also emphasizes the importance of making the most of your time at business school.
“Business school is an opportunity to extend the time you spend with people. As a student, you have more white space than you otherwise would to connect with people, so take the moment to think about interesting concepts to debate and use the time and experience during quarantine to make it a more authentic and valuable experience.”
One thing we both agree on is that the crisis would certainly separate the entrepreneurial people from others. “There are more than enough problems out there to solve, it’s about being scrappy enough to test which ones are worth pursuing,” Fleiss agrees.
I, for one, am very excited to see what innovations emerge during and after the COVID-19 crisis and how we leverage our collective action going forward, and as Fleiss eloquently concludes in her blog post, “I am hopeful for this chapter in history and our generation of creative problem solvers who will be put to the test to trail blaze how to make lemons into lemon tea.”
This article first appeared in the May 2020 edition of the Harbus.