Julie Wainwright Founder Of The Real Real On Recovering From Failure And Trusting Your Instincts
April 6, 2021
Julie Wainwright has always had a penchant for businesses that meet at the intersection of tech and commerce, but after the dot-com bust of her company Pets.com, she had a hard time moving forward and was repeatedly turned down for funding for her resale platform idea, The Real Real.

Fast forward ten years, her burgeoning company has gone public and she has spent the last year expanding, rather than contracting the business. Here, she shares why getting back into the office is so important, the pioneering tech advances her company is creating, and the women on her radar.

The Real Real has changed the landscape of resale and your company is the leader in the marketplace. How do you see the resale market evolving in the near future for The Real Real?

I think the cool thing is that people are open to both reselling things in their home beyond what's in their closet and other people are excited about buying those things. I think the general shift toward getting good at circulating is great for everyone's financial situations, but it’s particularly good for the planet. When you think of just fashion alone, a truckload goes into a landfill every second. The more we can get people to shop and then consign consciously, the better it is for our world. We're quantifying this now for some members in Congress and they're going to try and embrace the circular economy under Biden, because the fashion industry is--according to different sources, either the second or third largest polluter in the world. Now for The Real Real, we're just going to go from strength to strength. We're a little 10-year-old company, and we're really just getting started.

How has the pandemic changed your business strategy in a good way? Have you made changes to your personal management style during this time?

I have made changes to my personal management style in that I'm now communicating in a more structured manner. Before we had a lot of unstructured communication, you know, just walking around the office. Now there are more structured meetings with tighter agendas. Why is that? You miss a lot not being in the office, the subtleties can be missed, so the clarity of communication has to be even greater because it's harder for people to go back and say, “Oh, did you mean this or this?”

Roughly 80% of my customers are women, so I can relate to them. That was a huge advantage at the beginning. The disadvantage was also significant. Until I met Maha Ibrahim, a woman venture capitalist, men were like, “I don't get your business.”

I have traveled, taking all safety precautions, to see some of our new core stores, which brings up the first part of the question in that we've changed quite a bit and developed some new strategies during the pandemic. One is virtual consignment. Virtual consultations followed by pickups is incredibly useful. The second thing we've done is a little counterintuitive: We've opened more stores. I know that sounds a little crazy, but we've gone deeper into the neighborhood. We opened our flagship store in Chicago, because it was underway, but we have opened a store in Brooklyn, in Newport Beach, and one in Palo Alto - all neighborhood stores. It makes it convenient for people to drop off consignment, to pop in and ask questions, in a way that's safe during COVID. We’re calling the smaller neighborhood stores core stores, and we'll have ten new ones, including the ones I just mentioned, in six months. Here's the premise, we believe that people are going to be much more comfortable and will be for a while within their local radius.

How does your workforce differ from before in terms of size, work hours and location?

We have very few people are in the office. I'm trying to go back at least once a week, but we're almost all working remotely unless you're in the operation center. When the pandemic hit, we had about 2500 employees and we furloughed about 500 and laid off 500; it was an aggressive cut to our workforce. As restrictions eased, we started bringing people back. We ended the year in 2020 with 3000 employees. Now if there hadn't been a pandemic, we would have probably been at 3500 to 4000 staff.

Post pandemic, will you keep any work from home components?

Some of the engineers really want to stay working from home, and we're going to build in more flexibility there. But I can tell you that some of the magic gets lost. What I mean by that is our company thrives on strategically creative problem solving and creative ideas. In order to create that environment, it really helps if you're in the same room. When the management team gets together to solve problems - we started going into the office every other Wednesday - it's amazing the creative solutions we come up with and how quickly we get things done. It becomes this refreshing experience that transcends, because everyone participating in it feels incredibly positive.

Why do you think that doesn't come across in a Zoom meeting?

It’s just harder. You're working from your home. Even if someone has an airtight office, which most of us don’t, there are just so many distractions. And to be honest, you end up missing the non-video cues. There's an enthusiasm and an energy when two people get together. Years ago, they called it a third person, the idea being that when two people get together, a third one is born. That's pretty hard to do on a Zoom call.

How do you quantify productivity in a virtual world?

Well, we're not all virtual, we still have our centers so that's pretty easy. Honestly, it all comes down to unit economics with us. Other than that, it's progress against key initiatives--are we moving faster or not? Some areas have been more agile than others. For instance, we talked to the board in December about opening core stores and said, “We're going to get ten open by June,”. They said that would be impossible and that we shouldn't set unrealistic goals. I said, “Okay, fair enough. But that's our goal.” And we're killing it!

Even though the tech industry says they don't mind losers, it's not true, they hate losers.

Creating customer confidence in the resale market, which is something you've done, is hard. How did you do it and what were the important measures?

There are multiple ways we did it. With fine jewelry and watches we employ quite a few gemologists/watchmakers, and they tend to be aftermarket gemologists meaning they came from auction houses like Christie's or Philips, and understand the value of items. That team of experts is phenomenal. We also hired authenticators from again, well-known places, because other places like Christie’s were selling authentic handbags before us. And we've added a lot of technology. For example, we have a technology we developed with the University of Arizona, that allows us to measure the depth of a diamond in a setting. That's important because it allows you to get an accurate read on the carat weight, since you never want to remove a stone from a setting. No one has ever really done this before. We also invested in other machinery that allows us to understand the alloy content of all metal and the refraction of different items. That’s important because top luxury brands have very standardized alloy contents for their products. They may change over time, but that is a quick way to spot a counterfeit. And we have all that data of all the like Cartier love bracelet alloy content as it has changed through the years. The refraction work is really interesting for multiple reasons: in some cases, we can even tell the origin of stone through the refraction. We've also caught people conning us with that, meaning that they bought an expensive ring from us and then returned it with a lesser stone. These guys go to jail. It's pretty convincing evidence.

Favorite part of your job:

The people--the team I work with, the customers. I stopped in our new core store in Palo Alto recently and there were people there who had been with the company a long time. The customers were coming into the store and were so enthusiastic, like, “Wow, I can't believe this!” Plus, it's a fun business and I love working on it. And we are a mission driven company and I would say working in an industry that's kind to the planet--it feels good.

When is an advantage to be a woman in your business?

Early on, it was really a double-edged sword, meaning it was really hard to get funding because I was a woman. But from the outset I really understood the customer because I was the customer. Our unique approach and platform wouldn't be there without the female perspective of someone who loved a deal, understood good service, understood the value proposition and also loved and had a deep respect for the product. Roughly 80% of my customers are women, so I can relate to them. That was a huge advantage at the beginning. The disadvantage was also significant. Until I met Maha Ibrahim, a woman venture capitalist, men were like, “I don't get your business.”

What is a business mistake you made and what did you learn from it?

The biggest mistake, and I think it's hard for any leader, is when you hire someone no matter what stage you are in the business who isn't quite great, but isn't quite bad, and you don't move them out fast enough. You don't get them in a position where they can be great. You’re putting so much energy into trying to make someone who's mediocre be good, versus working with the great people and making them better.

A business culture priority for you now is….

Collaboration, transparency, and agility.

Was there ever a time you thought your career was at risk? How did you overcome it?

Oh, I would say I did. After Pets.com, probably everything went wrong. It was a really rough time. Even though the tech industry says they don't mind losers, it's not true, they hate losers. I definitely wallowed in it too long and at some point, I had to give myself a pep talk. I got back to what was important to me. I exercised more. I spent time around creative people because I found that to be nourishing. I would say success is the best way to get past a failure, but it was really hard. I also wasn't going to get opt out and do some other job because I love creating direct-to-consumer businesses with a tech underpinning. Now, when you really fast forward it doesn't hurt that everything Chewy is doing, with their huge market cap, I did 20 years before. As you get older you realize timing is everything. Timing and good lighting. Timing more than lighting, but lighting is more important as you get older!

What motivates you?

Doing good work and getting great results motivates me. Creating something from nothing motivates me.

Do you have a productivity hack?

For me it’s called exercise in the morning. Everything gets reset. If I miss a day, my productivity and my energy drops.

Women on your radar:

I've got quite a few at my own company. I'm not going to mention them, I don't want them stolen away! Over 60% of our team are women and we just added a few more women to the board, so that's been really fun. One is Emma Grede, the founder of Good American and Skim. She is so wonderful, I love her. And we're going to add Karen Katz who was the Neiman Marcus CEO for a long time. I'm very proud of Whitney Herd [founder of Bumble] making IPO history. Morgan Stanley connected us when she was getting her deal done. I just said, “I'm so proud of you. It's awesome.” That's a big deal. She had to go through a lot of heavy lifting to get there and she's got a lot more in front of her. So good for her.

What steps are you taking to usher in a new generation of younger women? The Real Real has its own scholarship foundation, but I've also set up my own giving programs since we went public. You're going to hear a theme here, it's all about education. I gave money to Black Girls Code, so once they get their scholarship foundation ready, I'll be doing that. The San Francisco Art Institute has a new program called Access 50, with the goal of getting more BIPOC students through the door, so I gave to them and said 50% of the scholarship money has to go to women, which they agreed to. Then at Purdue, my alma mater, I set up a scholarship program for women in STEM who study entrepreneurship. I also set up a scholarship program for Parsons, but I didn't put a gender as indicated. It’s to further sustainable fashion.

It’s so fulfilling for me but at first didn't tell people about my giving for multiple reasons. I grew up in the Midwest, so you tend not to talk about things like this. But then I read a New York Times article about women in philanthropy, and I thought, “You know what? I should be more open about it.” Now I am talking about this because women need examples. There haven't been that many women who have openly given back who aren't from some sort of the unattainable big family like the Walmart family. Most of the wealth women have had and still have, is all due to the family money and their great grandfather, right? So, I really think education is the answer. The more I can help educate young women, or make a requirement that my money goes to females who want to better themselves, the better. I feel really good about that.



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