Masters of Scale – Reid Hoffman: Rent the Runway’s Jenn Hyman
Behind every successful business is a hidden back-end business powering it behind the scenes.
No one knows this better than Jenn Hyman, CEO of Rent the Runway. RTR is known for creating a glamorous “closet in the cloud,” but it achieved ‘unicorn’ status by mastering the businesses behind their public-facing brand — including the world’s largest dry-cleaning operation and a data insights practice that’s changing the fashion industry.
Scaling a business
- To scale a business, it’s important to understand and invest in the behind-the-scenes operations that set it apart. By mastering these aspects, companies can achieve success and break out from the competition.
- Rent the Runway’s focus on technology and data analysis has allowed them to become the world’s largest dry cleaning operation while providing valuable product insights to partners.
Market fit the idea
Don’t just focus on the idea; understand how it fits into the market.
- Getting feedback and criticism from others can help improve your business idea.
- Approach competitors with your concept and invite others to poke holes in your ideas.
- Establishing partnerships with industry players can be critical for rental businesses to thrive.
- A long-term perspective and focus on controlling the end-to-end experience can also lead to success.
Optimize the processes
Providing equal benefits packages to hourly workers is crucial for business success.
Investing in internal operations and optimizing foundational processes can lead to valuable data and long-term success for businesses, as seen with Rent the Runway and Slack.
Don’t overlook these important aspects of your company.
Creating reliable systems
Analyzing this data also allows for better buying decisions and successful partnerships with designers.
Understanding customer data and creating reliable systems are crucial for success in consumer-facing businesses. Building and maintaining trust through consistency and transparency is key in regaining customer loyalty after disruptions.
The Business Behind the Big Top: Running a circus is hard
Kevin Venardos, founder of the Venardos Circus, teaches us that running a successful circus is more than just tightrope routines and acrobatics. He had to master the business behind the circus—location scouting, ticket sales, and venue permits, just to name a few.
Venardos hired a team of professionals to help run his business while he focused on the show. He also mastered the art of setting up a pole tent. Finding a good spot, getting the tent there, and driving stakes into the ground can take hours, but with Venardos’ efficient process, their tent can be set up in four hours.
The Power of Investing in the Business Behind the Business
Behind every successful business, there is another business fueling it behind the scenes. This back-end business often looks very different from its public-facing side, such as Amazon’s warehouse operations or the assembly line that builds an iPhone.
To scale a business, it’s essential to identify what part of the business behind it sets it apart and invest heavily in it. This could be the ability to import exotic wine or locally sourced, farm-to-table produce.
If you’re a best in class retailer and you’re selling apparel, maybe you’re getting data four times a year. After something is sold and it’s in a customer’s closet, it’s essentially a black box to you. You have no idea if that customer ever wore that sweater, how many times she wore it, did it really fit her?