After close to 50 years of broadcast and digital programming, National Public Radio ventured out into large-scale events this week with its very first “How I Built This” summit in San Francisco — and fashion was not only in attendance, it showed up in a big way.
The talks followed the cue of the NPR podcast, featuring interviews with some of the world’s top executives. The programming, along with networking and mentorship opportunities, is practically a study for entrepreneurs and innovators on how to build a movement. And notably, two of the inaugural summit’s lineup of seven main stage speakers hailed from the fashion sector.
Previous podcast guests Jennifer Hyman from Rent the Runway and Katrina Lake from Stitch Fix joined host Guy Raz at the Yerba Buena Center for the Arts. Post-event, a NPR spokeswoman took stock of the final tally: The summit drew more than 600 attendees representing a range of business sectors, from food to pet services, and as much as 16 percent came from the fashion or beauty industry. Eighteen percent were involved in retail or wholesale.
The overlap of fashion and technology has become a focal point for both sectors. Newfangled data-driven models power an ever-growing range of services, product recommendations and categories, with success stories like Rent the Runway and Stitch Fix fundamentally transforming today’s shopping experience. That landscape has turned Hyman and Lake into conference rock stars in high demand on the speaker circuit.
“Rent the Runway and Stitch Fix [are] fashion brands on one level, but on a deeper level, they’re technology brands,” Raz told WWD. “And they’re two of the most innovative and groundbreaking tech companies, full-stop.” He knows their stories — they’ve both previously been on the podcast — and he considers them innovators who recognized a gap in the market.
“The fact that they are both women in tech and women entrepreneurs was very important to us,” he added. “I think, the most important thing about it is that they’re just visionaries.”
And in a week that saw legacy department store Sears go bankrupt, new ways of thinking and the success of modern tech-fueled approaches over traditional retail stand out all the more.
The Rental Rationale
Jennifer Hyman has turned her “closet in the cloud” premise into big business: Since Rent the Runway’s founding in 2009, the designer clothing rental business has soared, with nine million members, more than $400 million in funding and upward of $100 million in revenue.
While the service stirred some concerns among vendors when it launched, some brands now see it as a way to connect with younger consumers. And, Hyman added, when she shopped her concept around to department stores like Neiman Marcus, they admitted they’re already “renting,” with people buying clothes to wear once and returning them. But there’s no crackdown, because these customers buy accessories and other things to go with the outfits.
Hyman was surprised to learn that high-end department stores see that behavior more frequently than their counterparts at the lower end, at 75 percent versus some 35 percent. Her takeaway: “Rich people steal more than poor people,” she quipped.
All of that legwork, plus an openness to new ideas — like its recent partnership with WeWork to offer physical Rent the Runway dropboxes — have helped vault Rent the Runway from start-up to juggernaut.
Before she founded the company, Hyman had only managed 10-people teams. Today, her company employs 1,500 staffers, and she believes it will hit 3,000 by the end of next year.
Others, like Tulerie, are following Hyman’s lead and even going a step further, expanding the model from retail to crowd-sharing — sort of like Uber, but instead of renting rides in other people’s cars, customers rent clothes from other people’s wardrobes. Both Rent the Runway and Tulerie see rentals as the future of fashion.
“We started off in a weaker position with the industry, now we’re in a very strong position with the industry, [and] it allows us to innovate very quickly,” Hyman explained. “We’ve gone so quickly from being a business that just rents special-occasion clothing to now renting everything that you might want to wear.
“Our average subscriber is using us 120 days of the year,” she said. “The average American buys coffee 95 times a year. The fact that we’re more prolific than coffee is amazing.”
Styling and subscription apparel service Stitch Fix turned Katrina Lake from a struggling entrepreneur to, at 35, the youngest woman to take a company public. But that doesn’t mean the path to success was easy.
Lake, looking stunning in a loose-fitting maternity dress, easily admitted to Raz that she has no knack for fund-raising. The company may be worth $3 billion today, but early on, it only nabbed $500,000 in its seed round and $4.75 million in Series A funding — not the sort of gonzo investments often associated with Bay Area tech businesses.
But her story isn’t yesterday’s news or even necessarily unique. Some of the challenges go back to a high-profile issue that the tech community and Silicon Valley venture capitalists are grappling with: A biased culture slanted against women in technology.
The issue matters as much to the apparel industry as the tech community, particularly if it nips the next would-be Stitch Fix in the bud.
“I’ve had a VC who was superhonest with me, which I appreciated,” she said. He was impressed with her business and her team, but he passed up a board seat at her company anyway. “[He said,] ‘I get to pick one or two board seats a year to join, and I pick board seats where I feel really passionately about the business and feel I can add value as a board member.’ And he was like, ‘I don’t feel super passionately about women’s dresses, and I don’t feel like I can add a ton of value to you in retail.’”
The comment may have stung then — before Stitch Fix’s service expanded to include men and children — but today, Lake understands the reasoning. She sits on the board of companies like Grubhub and Glossier, and not for, say, casual gaming companies, because they line up with her personal interests.
“You can’t blame that individual for making that choice,” she said. “But when you zoom out, and you see at the time that 94 percent of venture investors were male…there’s going to be a lot of bias in terms of what companies get funded, which founders get funded, which cultures get created. So it was really hard, because the lack of diversity and the pool of who’s deciding who the future entrepreneurs are going to be is having a big effect.”
Women in Tech, and Its Impact on Fashion
NPR’s attention on fashion and technology shouldn’t be dismissed.
The nonprofit media organization has been exploring the major threads in society’s cultural, artistic and political fabric since 1971. That it dedicates a significant chunk of its inaugural summit to fashion innovators speaks volumes about their influence. And its interest and support for women-led start-up founders is itself an acknowledgement of the uphill battle for many of those start-up founders.
An NPR survey on entrepreneurship released this week revealed gender bias as the highest reported challenge. For Guy Raz, that scenario is revealing, not just as a business story, but as a human story. “More than half the [summit] tickets were purchased by women,” he said. “Sixty percent of our mentors and speakers at the breakout sessions were women. We really felt that it was important to represent a diverse range of voices, because that’s who our audience is.”
The VC community is having a rare moment of introspection, as it considers the diversity in its ranks and its impact on their investments. And more female-focused firms have been emerging over the last few years.
“We had very specific points of view as female consumers and around the opportunities that existed to address problems that we saw in our personal lives,” Anu Duggal, founding partner of Female Founders Fund, told WWD. The firm, which launched roughly five years ago, counts fashion and beauty businesses among its investments, including Rent the Runway.
“There is greater interest now than there had been in 2014 in investing in this space,” she added. “I think it’s due to examples like Katrina Lake and Stitch Fix going public, seeing that public company’s success and, I think, the ‘flattening’ of who could be a venture-backed founder.”
Such patterns are heartening, but there’s still a long way to go. According to Pitchbook data, male teams nabbed more investment money than female teams last year — by a huge margin. Of the total $85 billion invested by venture capitalists in 2017, all-male teams garnered nearly $66.9 billion, or about 79 percent. All-female groups eked out $1.9 billion, slightly topping 2 percent. The rest went to teams populated by both genders.
Even so, a groundswell of hopefuls appears to be stepping into the paths carved out by Hyman, Lake and others. And if the founders of the next Rent the Runway or Stitch Fix were in the audience, they surely understand one thing: Charting the course for the future of fashion and retail innovation might not be easy, but there are people in their corner rooting for them.