Rent the Runway: A Lesson In Scaling Company Culture
On October 27th, Rent the Runway went public raising $357 million and reaching a market cap of $1.7 billion.
RTR is also the first company to go public with a female founder/CEO, COO and CFO. A Cinderella moment like they create daily for their customers. And a “fairytale” for other female founders.
On the other hand, in recent years, the female founders of Away, Outdoor Voices, The Wing, Thinx, ThirdLove, Refinery29, Reformation, …. came under fire for toxic work cultures and were removed as CEOs of their companies. Traditional and social media coverage of, and reactions to these “takedowns”, raised concerns about double standards and whether these attacks were a deterrent to other female founders.
In 2015, RTR and its Founder/CEO, Jenn Hyman faced similar criticism for creating a “mean girls” culture, described further as “clique-y”, erratic, and unpredictable.
Nonetheless, RTR came out on top with Jenn Hyman at the helm. She, along with her team, are a success story for up-and-coming female founders.
So, I looked back at her response to the 2015 criticism and the years that followed to find the lesson for that level of success.
And I did. The lesson in her own words and my own take.
Growing Pains
In 2015, following the departure of more than five senior executives, one “fictional” book, and a handful of attacks on company culture, Hyman claimed it was just a case of growing pains, part of the natural order.
She explained that going from a handful of employees to hundreds, means making tough decisions, which may include firing some team members. Founders have to recognize and get comfortable with the fact that the team that gets you your first $1m, $5m or $10m in revenues, is not necessarily the one that you need to scale the business.
Naturally, some that are let go are unhappy (that is not a commentary on the merits of any claims of a crappy culture, just a fact!).
That new revamped team will include some people who have been there, done that. Note the use of the word “some”! Hyman has correctly pointed out that it’s about a balance. She wanted the right mix of people who have RTR in their blood and some that have C-suite experience.
Can Who You Fire Define Your Culture?
She further remarked in 2018, “I also think [employees] need to see who an organization hires and who an organization lets go of. You say more about your company by nature of who you enable to stay and thrive at your company.”
Your culture starts with who you chose to hire.
A founder I worked with once said, I think brilliantly, for everyone I hire, I think, ok, I will end up with ten more just like them. Does that excite me or scare me?
Hyman also admits that early on, pressured by her investors to de-risk and bring on some of those battle tested C-suite executives, she made some bad hires, realizing that there are few women on that list and developing other women into leaders was part of the culture she wanted to create.
Yet, your culture doesn’t end with who you hire. It’s also about who you fire Hyman shared a JPMorgan, Women on the Move event.
The company’s former COO, and a current board member, Beth Kaplan has suggested that the only mistake Hyman may have made was waiting too long to make staffing decisions.
That happens all the time. Founders are all too often quick to hire, slow to fire. That’s a costly mistake. I get it’s hard, whether it’s adding senior layers above early employees or letting go of some very loyal, early believers.
In Her Own Words
Don’t fear the criticism. In 2018 on How I Built This with Guy Raz, she shared that the negative press in 2015 “led to more courage around my own decision making because I led the company into the best place it’s ever been.” She has found that success again and again.
In 2019 facing operational issues and, most recently, fighting to save her business as COVID shutdown all events and the world worked from home in their best athleisure (or pjs!).
