Rent the Runway is one of fashion’s most talked-about startups, allowing women on a budget to rent special-occasion wear, and now stylish everyday essentials, online without a large investment or commitment. The New York-based company, one of Fast Company‘s Most Innovative Companies of 2015 in Style, has raised more than $100 million and saw a 126% increase in customers last year to more than 5 million members. The company’s success has as much to do with its proprietary technology focused on managing inventory, planning for demand, and customer interaction as it does with a good business idea. And Rent the Runway stands out for another reason: 74% of its director-level-and-above employees, and 75% of its executive team, including its cofounders and CTO, are women.
That may not seem surprising for a company focused on women’s fashion, but even that industry is highly male-dominated at the top levels; a 2012 study showed that only 1.7% of fashion retail companies had female CEOs, and management teams and boards in the fashion industry are predominantly male. For a tech startup, it’s also rare–a recent Dow Jones study showed that only 6.5% of ventured-backed companies are run by women.
There are obvious benefits to a leadership team having a lot in common with its customer base. “Although I’ve led many female-oriented businesses, there have been too many times when I was one of few women–or even the only woman–in a room, attempting to explain to a roomful of men the emotional reasons a product or idea would or would not resonate with women,” says Rent the Runway President and COO Beth Kaplan, who was previously an executive at GNC, Bath & Body Works, and Cover Girl, among other companies. But there’s ample evidence that diverse leadership is better for all businesses. Rent the Runway’s CEO and cofounder Jenn Hyman rejects the idea that qualified female candidates for any position are scarce, and has set about building a company that proves this.
“We have droves of unbelievably smart, inspiring, passionate women here who are in their twenties and have never even known a company without a majority female leadership team,” says Hyman. The company recently made three high-profile female hires—VP of strategic partnerships Britt Morgan-Saks from Spotify, chief creative officer Linda Honan from BBDO, and SVP of merchandising and planning Sarah Tam from Saks Fifth Avenue—and employs a total workforce that is 67% women. Even the company’s engineering team is 25% female; Hyman admits that’s “okay, but not great,” but emphasizes that the culture within that engineering team, led by CTO Camille Fournier, is focused on work-life balance and “not just being a bros and beer sort of culture.”
In the dominant corporate climate, maintaining a diverse workforce at all levels requires attention at many stages. HR practices are key, but so is mentoring, culture, and even the funding process. Fast Company spoke with several top female executives at Rent the Runway about where and how this focus has paid off throughout both the company’s and its employees’ trajectories.
“In venture-funded startups, there’s a philosophy I’ve heard called ‘pattern recognition,’ which means that investors want to start defraying their risk by helping you as the CEO put in executives who have ‘bulletproof’ resumes, who have been there, done that,” says Hyman. “If I go to the roster of, say, CTOs who have been there, done that, there are not very many women on that list.” If that philosophy is always followed, she says, “no women, no African Americans, no people of any diversity whatsoever will ever found and lead companies.”
As a first-time founder, Hyman says she made some initial hiring mistakes by deferring to those been-there-done-that suggestions. “My board has never forced me to do anything, but they did encourage me to hire some of these people, and I learned via that process that, for me, that wasn’t the sort of person that I wanted to hire,” she says. “I want to hire someone who is hungry, for whom Rent the Runway is going to be the defining career experience on their résumé.”
In other words, don’t find the person with the bulletproof résumé, make the person with the bulletproof résumé. Hyman and her cofounder and head of business development, Jennifer Fleiss, decided early on that the way to build a strong C-suite was to leave some of those offices empty–for now.
“Often, if someone doesn’t have that been-there-done-that experience, I will hire someone into a role that is initially more junior and then not hire anyone above them,” says Hyman. “I’m hiring them as a senior director or a VP without layering a C-level person on top of them, and basically saying to them, ‘My expectation right now is that you are going to fail and learn, and you need rope to grow. We’re going to heavily invest in you because we think you are incredible, smart, and have the right cultural fit, and we’re going to grow you into a C-level person.'”
One of those was CTO Camille Fournier, who was hired as a director of engineering and then promoted to VP of technology and SVP of engineering before her current executive role. Fournier came from Goldman Sachs, and went to Rent the Runway because she wanted the chance to lead a team. “It’s not that they didn’t have that (at Goldman Sachs),” she says, “but it was almost like there was a waiting list. If you wanted to actually manage a team, you had to be in a place where they had a team to manage, and I wasn’t really interested in the finance side of the business.”
Rent the Runway’s approach to team management, on the other hand, is often cross-functional, and not beholden to the rigid hierarchies of more traditional companies. “Startups afford women the ability to create and define their own roles to best suit their abilities and interests,” says Fleiss. “Within startups, there is opportunity to take ownership of and assume additional responsibilities outside of traditional promotion structures.”
This enables employees to be what Hyman calls “CEOs of mini-startups” within the company, helping them build those bulletproof résumés. One of those is Brooke Hartmann, Rent the Runway’s VP of product, who has been with the company for five years. She runs Unlimited, the company’s new subscription service for accessories and everyday pieces that, as she describes them, “take your outfit from a seven to a 10.” The service is still in beta with a planned full launch this fall, and is a major area of planned growth for the company, enabling a more continuous relationship with customers outside of the occasional need for a party dress. “Unlimited is a cross-functional team of 20 people,” says Hartmann, adding that many of those people have been developed across functions as well. “My deputy general manager is someone who used to lead PR here.”
Fournier, who built most of the systems the company still uses, says she recruits for race and gender diversity, but also looks for all ages and career stages to round out the company’s engineering culture.
“I like to hire people who are parents, and not just out of the same group of feeder schools,” says Fournier. “We tend to look at places where there are a lot of talented women. We actually recruit a lot from Hacker School (now called Recurse), which are programs in New York for people who know how to program but want to spend three months in a graduate school-type environment. It’s a very interesting, intellectually curious group of people, and extremely, extremely diverse.”
Fournier feels that a lot of the so-called pipeline problem for women in engineering is not that there are few ways into the pipeline, but that it’s too hard to see where it goes. “I don’t know if I could ever work for another company where the majority of the executive team was white men,” she says. “It makes such a difference, looking around at the most senior level and seeing women in positions of power. I think that one of the big challenges for so many women is that there are so few female role models, and it’s really hard to see what that path looks like. You are not necessarily going to follow the stereotypical male path to success.”
Hyman says that mentor networks are a cornerstone of her own growth as well as Rent the Runway’s. “One of the reasons I’m able to still grow and lead Rent the Runway is that I have built a network of mentors for myself of other CEOs, both those who are far more senior and experienced, and CEOs who are my own peers,” she says. “I felt that was such a huge leap in my own learning that I made a point to do that for everyone on my executive team.”
And while Hyman believes that mentorships between men and women can be as valuable as between women, there are social and cultural obstacles that can be a huge detriment to women if not acknowledged and addressed.
“Working at a startup takes a lot of time, so when are you going to be mentored—after work, at a dinner meeting, at drinks?” says Hyman. “One thing that happened to me, even since starting Rent the Runway, is that there were people I approached who were very senior men, who I thought could add a lot of value and teach me a huge amount. So I’d ask them to have dinner to help and mentor me. There was one very senior guy who had run one of the biggest fashion companies in the world for over 25 years, who told me that he couldn’t meet with me because he was married. I’m thinking to myself, this guy is 75 years old. Did he think I was propositioning him? And this happened after Rent the Runway had millions of customers. Imagine how many times this is happening to every young woman who wants to be mentored. I think it’s critically important for women to have male mentors as well as female mentors, but people have to view mentorship for what it is, which is that it’s a business conversation and you want to learn. Otherwise, it’s women who are not going to be invited to dinner or on the trip and all of those things where you actually do learn.”
A lot of discussion around encouraging a diverse workforce revolves around work-life policies such as paid family leave. This is critically important, but only one element making both men and women feel supported throughout their career and tenure with a company.
“My role as the first woman to have a baby while at Rent the Runway has also brought leadership opportunities,” says Fleiss. Rent the Runway gives eight weeks paid leave and four weeks at 50%, but actually allows women to take off up to a year on short-term disability as long as communication is maintained. “Knowing we would have many more women at the company go through this experience, we crafted a relaxed maternity leave policy. I have also made a point to bring my baby, now toddler, into the office on a regular basis, making the statement that Rent the Runway is a family environment that embraces children and the realistic demands of parenthood. I believe this has helped other parents in the office do the same, and has attracted more working mothers to our company.”
Of course, recognizing family needs is only one part of a balanced corporate culture. “At the beginning of Rent the Runway, my only role models of leadership had been men, so I was running the company in a way that was contradicting my personality, in a much more command-and-control way that I had been used to with every boss I’d ever had,” says Hyman. “I got a piece of advice from a board member and mentor, Dan Rosensweig, CEO at Chegg, who basically challenged me to just act like myself every day and see what happens to the culture of the company. Acting like myself meant that I was much more exuberant and enthusiastic in meetings, much more effusively warm. When I started acting like myself, it gave everyone at Rent the Runway the freedom to act like themselves too. Clearly I don’t have data to prove this, but I feel that a lot of times in a corporate environment, women do not feel free to act like themselves as much as men do.”
And a culture that frees people from feeling like they have to fit a type helps everyone. “By giving women the freedom to lead in a way that feels like themselves, it also helps men be more authentic,” says Hyman. I think sometimes at VC-funded tech companies, there’s also a type of guy that you feel like you need to be.”
“Even in places that are pretty good at hiring women, there is still a very aggressive engineering culture,” says Fournier. “‘Who’s the smartest person in the room? Who yells the loudest?’ I try to create an environment where everyone can be heard. You pay attention to who hasn’t spoken, and you solicit their opinion so that they know they’re a part of the group, and it’s not just about the loudest person in the room.”
Fournier says she was recently talking with a senior female engineer from another company, and the two agreed that in their experience, men often detect social and cultural problems in their workplaces, but are often reluctant to talk about them with other men. “But women are more willing to bring up those issues, and men are more likely to bring it up with women,” she says. “I have many men on my staff who are willing to come to me and be like, ‘Hey, you know what, that thing you did, that was kind of not cool, and we probably shouldn’t do that.’ I think that when you don’t have any women in positions of power, male or female voices saying those things often just aren’t heard, and a lot of times, people don’t even like to say anything. I think that you just lose the things that actually make people more collaborative and work better together. And you just lose so much talent. There is no way that men have the lion’s share of talent in this world. I don’t believe that for a second.”