Brainstorm Tech 2024: How to Innovate Without Losing Your Mind
Jennifer Fleiss, Partner, Initialized Capital; Co-founder, Rent the Runway, Jetblack Interviewer: Andy Dunn, Chief Executive Officer, Pie; Co-founder, Bonobos; Co-chair, Fortune Brainstorm Tech
Category
🤖
TechTranscript
00:00Thanks for having us.
00:01So Jenny and I were comparing notes.
00:03We met in Soho in 2009.
00:05That's right.
00:06And you were starting Rent the Runway.
00:07And I wanted to begin with what it's like
00:09when you come down from the entrepreneurial journey.
00:11So you spent nine years building Rent the Runway,
00:13at some point that went public,
00:15then three years during the go-go days
00:17of e-commerce transformation at Walmart.
00:19What was it like after all that excitement came to a close?
00:23A really big come down.
00:24So nine years, then jumped straight into the next role,
00:28starting and leading and growing a business
00:30to zero to about 300 employees
00:32within the business I ran at Walmart.
00:34All of a sudden came out of that,
00:35and it was COVID, and I had left Walmart,
00:39and I was like, who am I as a person?
00:41What do I want to do with my life?
00:43And in that process of that span of entrepreneurship,
00:46which was a complete blur,
00:48I had had three children, I had lost my mom,
00:51and there was a lot I think I just hadn't processed
00:53because it was one foot in front of the next,
00:55problem solving, taking care of the hundreds of employees
00:59that we had at various companies.
01:00And so this kind of question of like,
01:01what did I actually want in life?
01:03Where was I in life, like really suddenly hit me really hard
01:07along with time to kind of process that,
01:10which is in theory important,
01:12but it can also be a little bit rattling.
01:15Yeah, so one thing I like about you is that over the years,
01:17as we've gone through some ups and downs as friends
01:20and fellow entrepreneurs,
01:21we've talked about where do you get help
01:23from a mental health perspective.
01:25We've compared notes on executive coaches,
01:28and I think at some point shared one of those,
01:29compared notes on therapists.
01:31How do you decide as a founder
01:33when you're dealing with difficult things?
01:35And maybe even as a human,
01:37folks in the room who have this decision to face,
01:39when do you hire a coach?
01:41And when do you hire a mental health professional,
01:43therapist, psychiatrist, et cetera?
01:45Yeah, well, before I had a coach or a therapist,
01:49I had people like you, Andy, honestly, and my co-founder.
01:54But truly in New York, I mean,
01:56the ecosystem's a lot bigger now.
01:58But when we were starting Rent the Runway in Bonobos,
02:00there was like eight of us,
02:01and we all were helping each other,
02:03whether it was like, how much are you paying
02:04per square foot for office space?
02:06Like the silliest question,
02:08all the way to really hard stuff around fundraising
02:10or first person you were gonna fire.
02:12And the ability to like authentically form friendships
02:14and meet people and get advice from them
02:18was both kind of the most practical way.
02:19Like we didn't have any times,
02:20it was like a very practical way
02:21to like get things done and figure it out.
02:23But also it was like, it was really meaningful
02:26and it led you feel like you're not in this alone.
02:28And having a co-founder does that as well.
02:31And so I feel like very grateful
02:32that in these like dramatic highs
02:34and lows of entrepreneurship,
02:36I had someone not just to deal with the low moments,
02:40because those definitely happen in entrepreneurship,
02:42but it's way more fun to deal with the high moments.
02:44And like at the end of the day,
02:45that's what kind of gets you the muscling
02:47through the next low.
02:49And that idea that you're not in this alone
02:52because your co-founder implicitly like cares
02:54just as much as you do.
02:55Like your necks are both on the line,
02:57you both gotta make it work.
02:59That was something in the second business
03:01that I started for Walmart.
03:02Like I didn't have that in the same way.
03:04And I never actually took it for granted
03:07because like it literally came up so often.
03:09And I think that's what kept me really afloat
03:12in a very sane way amidst losing my mom
03:16and having three kids while being at Rent the Runway.
03:18Yeah, and we joined Walmart at roughly the same time.
03:20I can remember sitting down with Doug McMillan
03:22when we were doing the Bonobos deal with Walmart.
03:25And Doug just looked at me with those piercing blue eyes
03:28and he was like, Andy, why do you wanna do this?
03:31And I was nervous at that dinner.
03:32There was a $300 million deal on the line
03:34and I just thought about it.
03:36And I said, Doug, I need a job.
03:38And he was like, you have a job.
03:40And I was like, being a founder of a company is not a job.
03:43Always worrying about payroll and all these things.
03:46I'm curious, was your experience
03:47of managing your own mental health different
03:49when you were a founder versus when you were a,
03:52doing great things but effectively a corporate executive?
03:55Interesting.
03:56You know, I think the biggest difference
03:59was probably like there was more resources
04:02that you could put to work within the ecosystem of Walmart.
04:05One being coaches, for example.
04:07So Rent the Runway, there was easily seven years
04:10before we had coaches or we talked about having a coach
04:13for Jen and I within the company.
04:14I don't think it was as common back then.
04:16You know, we launched the business in 2009.
04:19But we also didn't necessarily have the capital,
04:20the resources, or really the time
04:22to be thoughtful about that.
04:23I mean, I wish we were more proactive about it.
04:26What we did do very well, Jen and I,
04:27was we forced ourselves to sit down every other week
04:31to gather the two of us,
04:32whether we thought we had something to talk about or not.
04:34And it was meant to be about our relationship
04:35and talking about us.
04:37And there was some hard stuff that came up.
04:38There was some funny stuff that came up.
04:40But definitely some hard, tense conversations that came up.
04:44And that advice had been given to us
04:46by one of our board members,
04:47who's still an observer to our board.
04:50But I think just having, for those seven years,
04:52having great board members, great advisors,
04:55great peers around the table, took that role.
04:58Within the Walmart ecosystem,
05:00they have a great set of existing coaches
05:03that they can pair you with.
05:04And I was able to see huge benefits
05:07in then leveraging that resource.
05:09And also just having this feeling,
05:12within that broader corporate, I wasn't also fundraising.
05:16There was this sense of there was some safety net connected
05:20and this broader, it wasn't entirely 100% on my shoulders.
05:23So I think that let me breathe a little bit more.
05:26But it was also a different sort of responsibility
05:29to live through.
05:30Totally.
05:31And I do wanna take questions in a moment.
05:32So please prepare your question.
05:35Let's talk about co-founders for a second.
05:37And I have to tell you something you don't know.
05:39Oh gosh.
05:39When we sat down for lunch in 2009,
05:41I was in the middle of a co-founder divorce
05:44with my business partner.
05:46And I remembered thinking,
05:47these two have no idea how hard it is
05:49to have two amazing leaders,
05:52both with business school pedigrees,
05:54right out of HBS, the two of you were.
05:57This isn't gonna work.
05:58Which was the most weird thought to have had.
06:01And then you have endured with your co-founder
06:03and the CEO of Rent the Runway, Jen Hyman.
06:05You were there for nine years.
06:07You had a thoughtful transition.
06:08You're still on the board.
06:10What is unique about your friendship
06:12and partnership with her that has enabled you to do,
06:15as friends and co-founders,
06:16something that we so rarely see,
06:17which is to endure as both?
06:19Yeah, well thank you.
06:20And you truly have seen the whole trajectory.
06:23It is probably, in the course of Rent the Runway,
06:26what I feel the most proud of,
06:27legitimately, is my relationship with Jen
06:29and the fact that it's still
06:31a very strong relationship today.
06:32We talk almost daily about pretty much everything.
06:35And I'm still on the board with her,
06:36so some of it is business related
06:37and some of it is friends and life related.
06:39But the reality is, we started our friendship
06:42and our relationship during this time
06:43where we went through so many moments together
06:46of blitzscaling and highs and lows and fundraising
06:49and go public and COVID at a time
06:51where people didn't need to get dressed
06:53and we could've never imagined
06:54that would've happened, right?
06:55And then the moment when I did decide to leave
06:57and the moment when we brought in
06:58a couple of senior executives for the first time,
07:01there was just so many hard and special moments
07:04that, kind of like a spouse,
07:05no one lives through that with you in the same way.
07:08But then I think knowing also, as a person,
07:10that she and I could both kind of weather storms as people,
07:14and keep that relationship with each other.
07:16And I'd say with our founding team
07:17and this really special place,
07:20that is the stuff that's meaningful in life
07:23and ultimately, I don't know,
07:26it really is what I'm most proud of
07:27when I think of my time there.
07:28Great.
07:29Anyone ready to jump in?
07:32Over here.
07:39Can you talk about the specific moment
07:42when you had the self-awareness
07:44to know you had to step away
07:46in order to keep the company growing?
07:50Yeah, so I've always loved
07:52the earliest stages of entrepreneurship.
07:55And at Rent the Runway,
07:56Jen and I were able to have really real conversations.
07:58And so at one point, I took on a role
08:00in starting the new parts of our business, actually.
08:02And so I started our omni-channel retail strategy.
08:05I started our subscription business,
08:06which is today about 90%,
08:08more than 90% of our company.
08:09I started a whole sponsorships business.
08:11We were finding these ways to use my best self
08:13that would also make me the happiest within the business.
08:16And at some point, there wasn't more stuff we should start.
08:20It was just about baking all of that.
08:21So that was a very clear thing.
08:22And we'd also hired an amazing senior team
08:25that felt really good,
08:27that I felt like I could leave if I wanted to.
08:29And coincidentally, I feel like Bright is Everything
08:32was feeling very settled and good in that way.
08:35Mark Lorre, who we both worked with at Walmart,
08:37reached out with the opportunity
08:38to go start a business on my own
08:41within this Walmart ecosystem.
08:43And he's like, pick your team.
08:46It's your company, your vision.
08:47And I had, for really all of my career,
08:50done things with Jen.
08:51And she'd always been the CEO,
08:53which I was always psyched about, and that was great.
08:57But it was a chance for me to be like,
08:58who am I as an individual leader and business person,
09:01and to try that on and have that experience
09:03in a really unique moment in time.
09:05I mean, this entrepreneurship at a moment
09:08where Walmart had just sunk $3.3 billion
09:10of through the elephant in the swimming pool,
09:12we actually care about digital,
09:14and we were led to take some really big swings.
09:16It was a really unique opportunity.
09:18And I think she also saw that
09:19and wanted that for me as well.
09:23And the whole board, the whole senior team,
09:25I think we were able,
09:26and we still have very healthy relationships
09:28and conversations, because I would never have left
09:31if it wasn't that I knew the business
09:33was in a really good, okay place.
09:35So back to Rent the Runway,
09:37the company went public.
09:39At one point, I remember it was valued
09:41at $800 million in the private markets
09:42and worth more than a billion.
09:44I looked this up last night, $66 million of market cap today.
09:48Tell us two things about that.
09:49What's that been like for you as co-founder,
09:52and what has that meant for showing up for Jen,
09:54and maybe some specifics on how you've had to show up,
09:57because it does become asymmetric at some point,
10:00being the person that's still in it and running it
10:01versus being the board member looking in on it.
10:04Yeah, no, absolutely.
10:05I mean, as much as there's highs and lows at a company,
10:08as much as there's empathy for your co-founder,
10:10it is quite different when I've diversified
10:13from my own career and from my role in investing now
10:16and the portfolio of founders that I work with
10:18versus being there day in and day out.
10:21That said, the actual valuation of the company,
10:24I think in some ways has never felt like something
10:28where like, wow, that's money in the bank.
10:30I mean, my shares have been, as far as I know,
10:33it's always been this thing where there's money
10:36that hopefully at some point will exist,
10:37but it was never as tangible.
10:39So the pieces that I cared the most about,
10:42and that I really saw Jen care the most about,
10:44were when our employees who were brought in
10:47with option valuations at a certain amount
10:49then saw those being underwater
10:51in a way that when you're a private company
10:52is never visible, and it was not at all connected
10:55to the actual performance of our company
10:56or what they were doing.
10:57It was connected to just what's out there publicly
10:59day to day, and you have to kind of manage through
11:03that emotional and kind of cultural tension
11:05and pain for your employees.
11:06That stuff was really hard and front of mind.
11:09Seeing Jen carry the weight of what,
11:11like I think for her too, it was more the weight
11:13of what that was to be a leader to employees then
11:16than it was what her personal portion was worth,
11:19and to try to be the partner for her,
11:21to support her in the moments where that was happening,
11:24and then you have to compound it with laying off employees
11:27at different points in time.
11:29Yeah, it was definitely really tricky.
11:32I think all this stuff though, it is what,
11:35in this next chapter now where I've landed.
11:37Tell us about that.
11:38Tell us about, now you're on the other side of the table,
11:40you're a venture capitalist.
11:42What's different about being a founder now
11:43from back then, and how do you show up
11:45for the founders that you partner with?
11:47Yeah, so it still feels, I don't know,
11:51I still feel like I'm both an operator and an investor,
11:53so I'd started doing investing while I was
11:55at Rent the Runway even, and then at Walmart,
11:58and I think one thing that's awesome about Initialized
12:00is all the partners are former operators and founders,
12:03and so I actually feel like I'm at home
12:05in this entrepreneurial ecosystem,
12:06and in the way that we work with founders.
12:08So that was for me my answer of how do I find my happy place
12:11in making this dramatic transition between being a builder,
12:14being an operator, growing teams,
12:16to being the one on the sidelines and guiding.
12:19But what I will say, I think all the learnings
12:21and the highs and lows have become these amazing learnings
12:24that I can now share.
12:25They weren't just for nothing,
12:26and it wasn't just these pains and scars and bruises.
12:29They were ways that I could now guide
12:31and share it with founders.
12:33And my favorite one, I actually shared this tip
12:35with a founder earlier today,
12:37is it's not just about sharing the scar stories,
12:39it's also create an email account
12:41that's memories at renttherunway.com or whatever it is,
12:44and when you have a fun moment, a funny email,
12:46a photo, just BCC that email,
12:49and then look back at it every five years,
12:51and celebrate and figure out,
12:53remember those special fun moments,
12:54because it all goes by really friggin' fast, right?
12:58I've got one more for you.
13:00Let's go back to the beginning.
13:01Let's say you had a founder who was exited
13:04and was at a similar low point.
13:06What would you say?
13:07What would be the one thing you would say
13:08to someone who was in those shoes
13:10that you were in just some years ago?
13:12Yeah, well, first off, I hope that I would be
13:13the type of investor that they would come to,
13:16because one reason why I went into investing
13:18is our first investor, Scott Friend from Bain Capital,
13:21he had been an operator, and the ability for him
13:23to empathize and to be that person that we called
13:25at like 8.30 in the morning or 10 p.m. at night,
13:29in those moments, is literally still there.
13:30That still happens.
13:32Find an investor with empathy.
13:33With the empathy that's gone through it,
13:34that you can trust, that you want to call,
13:36and you feel is gonna be there for you,
13:38and have real thoughtful advice.
13:40And I think what he, what other people told me,
13:42it's like, this journey in life is a lot longer
13:45than you think of it as when you're an entrepreneur.
13:48When you're an entrepreneur, it all runs by, and it's.
13:50I'm getting to this.
13:51You're getting to, okay.
13:52So let me just say, I so admire your journey,
13:54and thanks for being here to talk about this today.
13:55Yeah, thank you.
13:56Thanks, everyone.