IN 2009, JENNIFER HYMAN and Jennifer Fleiss launched Rent the Runway, a website that allows customers to rent designer gowns and accessories at a fraction of the retail price.
The co-founders came up with the idea while students at Harvard Business School. The two had witnessed young women, including Hyman’s sister Becky, agonize over what to wear to weddings and other events, despite having a closet full of clothes. “We realized there was a real gap in rationality around fashion, where woman constantly want new things,” often when they have limited budgets, Fleiss says. “Wouldn’t there be a great opportunity—rather than buying a fast-fashion knock-off—to get the actual designer dress through a rental model, where you only keep it for a day or two?”
Hyman and Fleiss decided to see if the idea had merit. The two bought hundreds of dresses at Bloomingdale’s (mostly in their size, as they figured they’d at least have fantastic wardrobes if things didn’t work out). “We first tested out our idea by going to Harvard with a trunk full of dresses that we let girls try on and rent. Next, we went to Yale and rented out the dresses but didn’t let women try them on,” Fleiss says. “For the third trial, we sent out a PDF to students that said, ‘Call us if you want to rent this dress.’ Each time, we were getting closer and closer to what our actual concept was—an Internet dress-rental site—to prove that it was really going to work.”
Fleiss estimates that they talked to thousands of young women before launching. “A big mistake that many entrepreneurs make is being hesitant to share information about their concept with others,” Fleiss says. “Jenn and I did the exact opposite. We shared our idea with as many designers, women, and investors as we possibly could and utilized their feedback to tweak our original idea.”
Fleiss adds that it was particularly important to talk to potential customers, as renting designer gowns via the Internet (at that time) was a new, disruptive concept. “We knew we needed to test our idea on the ground to see if we could actually promote ‘renting’ as a new consumer behavior,” she says.
Getting outside perspectives paid off. Today, Rent the Runway has annual revenue of over $100 million. The company has raised more than $190 million in venture capital, and is opening brick-and-mortar locations in New York, Los Angeles, and other cities.