← Money Rehab with Nicole Lapin
Money Rehab with Nicole Lapin
Julie Wainwright (Founder, The RealReal) on Facing the Competition and Taking Companies Public
01:10:49
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- [00:00]
Nicole Lapin
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- [02:46]
Tracy D'Annunzio
Hi, it's Tracy D'Annunzio. I'm an entrepreneur and investor and I'm also guest hosting Money Rehab this week while Nicole is on maternity leave. Sort of. Today I'm talking to Julie Wainwright, who's one of the most accomplished female tech founders of our generation. She's been on all the lists. Inc's female founders, 100 fast company's most creative people, Forbes 40 over 40. Her amazing career included stints at Clorox, Real.com and a roller coaster ride as the CEO of Pets.com during the. Com crash. After that, she started the RealReal, a luxury resale marketplace where you probably buy discounted Louis Vuitton and hopefully also sell things from your closet. And you're probably thinking, wow, that's an impressive resume. I'd hate to have to be the guy who goes up against her. And, well, I was that guy. My company, Tradesy, was in the exact same category and was a competitor to the RealRealist. So today, Julie and I have some real talk about what it was like competing in a high growth category. We give advice for entrepreneurs starting companies and building in a competitive space. Julie talks about the pros and cons of taking a company public and the future of fashion. And we get a very special guest appearance from Nicole at the very end, making sure that money rehubbers get all their questions answered. So you'll hear that at the end, but let's start at the beginning. Julie Wainwright, welcome to Money Rehab.
- [04:24]
Julie Wainwright
Oh, hi, Tracy. It's good to see you. It's fun being here.
- [04:27]
Tracy D'Annunzio
So, Julie, you've had an incredible career with many acts, and we're going to talk about all of them, including your latest business, Sahara Med. But I want to start by saying you're one of the most successful women in tech, full stop.
- [04:43]
Julie Wainwright
I don't know if that's true.
- [04:44]
Tracy D'Annunzio
I think so.
- [04:45]
Julie Wainwright
It depends on how you measure it. But yes, I've had success.
- [04:48]
Tracy D'Annunzio
You have had a lot of success. You've run multiple public companies. You've been a founder, not just a CEO, but a founder. What do you think makes a great entrepreneur great?
- [04:58]
Julie Wainwright
I could ask you the same thing, but I honestly think it's. First of all, you have to have propensity to take risks. You have to be able to operate in gray areas. You have to come in with a very strong point of view and execute and then right away iterate if it's not going to work. So you have to come in strong and hot and then say, okay, I was wrong. Moving over this way, I think you have to recognize what talent is in other people because no one does it by themselves. You have to have the ability to raise capital if you're in the venture capital world, and certainly that's the world I know, which means taking a lot of rejections and not taking it personally and learning from the interactions. Even if you learn, I never want to be that person who you just talked to. You have to have a lot of energy.
- [05:49]
Tracy D'Annunzio
Yes.
- [05:50]
Julie Wainwright
You also have to decide that's what you want to do. And what I mean by that is there is no work life balance when you're an entrepreneur. If you're doing it, you're doing it. You have to be in, you have to be committed and you have to see it through. And what I find fascinating because I'm just talking to entrepreneurs all the time. If they bring up I want to work life balance, I'm just like, why would I give you my money to make your life better? I want. I'm going to give you my money to make more money. So you also have to recognize if you take money, you have an obligation to the investors.
- [06:28]
Tracy D'Annunzio
Yeah, I think you're right. And as much as we would all love work life balance, I think we both know from experience, you start a company, you owe it to your employees, your investors and your customers to do everything in your power to make the company better all the time. So you don't really get balance during those years. What do you think it was about your life or your personality that made you feel like that kind of life without balance with, you know, without balance, what made you suited to it?
- [06:58]
Julie Wainwright
Sure. I think the first thing is I started my career, I'm going to go way back. So I started my career in brand management at Clorox and I was the second undergraduate they ever hired. And I was there three years. And I got promoted once, about ready to get promoted again. And when I looked above me, I didn't want to be those people.
- [07:18]
Tracy D'Annunzio
And what I meant you weren't after a big corporate job.
- [07:21]
Julie Wainwright
It wasn't even that. I don't think I was that savvy. I was young. I think it was more about. There were the. Every woman in the brand organization tended to go into HR when they left brands. So none of them were general managers. They just look like old grumpy men to me. Think of it, though, I'm like 25 years old. Not even 25 because I started early. Remember, I'm the second undergraduate they ever hired. I'm living in California. In the meantime, my former boss's wife at Former boss at Clorox, his wife calls me and says, join the. Why don't you join the tech world? I know this is the future. Because the guy in finance had smuggled in an Apple, too, and run Visicalc, the predecessor to all spreadsheets, and did what I was doing by hand. In seconds, I'm like, this is the world. This is where I should be. It was exciting. It was the future. And when I looked above me, I just saw men that were most likely going to, as I got promoted, put me in hr. And I'm like, that's great for people in hr. I didn't see myself in that. I saw myself creating something. And that comes from my childhood because my dad ran his own art and design studio. Both my parents were artists and they created products for other people. He did Flintstone vitamins bottles and packaging, promotional materials, Chevrolet ads, Kohler annual reports, Midwest type of big brand. But we made our own products. So we had this really bad wine called the JNS wine line because. And then my dad threw a tennis tournament every year, and it was called the Wainwright Invitational. And he printed up shirts before. It was hard when you had a silkscreen and it had a big brand, it had a family brand. So I just came from a place where you were creating. And then when I saw that I had an opportunity to create in the future, which for me was tech, I felt I have to go there. That's the future. And by the way, the people when I joined that company were sort of my age. So we were inexperienced. We didn't know what we didn't know. And we really wanted to be part of whatever was going to happen in the future with the personal computer. So I saw that early on. I know that was a lot, but I would say my nature is toward taking risks and creating and not being held back by someone else's idea of my success. Like, really important.
- [09:57]
Tracy D'Annunzio
Anyone else's pace. You have to go at whatever pace you feel.
- [10:00]
Julie Wainwright
Just think about this. You're starting a job, and every time you say, oh, I'm going to get promoted to that, but then they're going to want me to go here, but I'm really this person.
- [10:08]
Tracy D'Annunzio
Do you think it's changed since then?
- [10:10]
Julie Wainwright
No. Oh, I think Clorox is better because. But Do I think it's changed? Look, the numbers say it has. It's. Let's just talk about change. It's not linear. All right, it's not linear. But I would say that there is a positive arc. And I'm not at Clorox now, but I would say in general, change in corporations, change in our laws, big changes are not a linear thing. But there's more laws to protect women. There's more laws to protect women's wages. When I was there, there wasn't even a sexual harassment law yet. It was a long time ago and women were getting sexually harassed and we talked to each other about it and knew who to avoid. But if you went to hr, nothing was going to happen.
- [10:55]
Tracy D'Annunzio
So you had that experience of being sexually harassed at work early.
- [10:59]
Julie Wainwright
Well, not just me. Yes, everyone had that experience. But we knew who the problem people were and we knew how to stay away from them. And we also knew that HR wouldn't do anything. So if you just think about the world I entered into, has it changed? Yes, I think it has. Has it been linear? No, it has not.
- [11:21]
Tracy D'Annunzio
It stays the same and stagnates for a while and then there's a movement and goes backwards.
- [11:24]
Julie Wainwright
I would say two steps forward, one step backwards. When I think naively, I thought it would be linear. And when I started, I didn't really realize that women were second class citizens and it was new for us to be in the workforce because I thought, of course we can do it. We're smart, we're ambitious.
- [11:43]
Tracy D'Annunzio
So one of the big reasons that organizations form like this, where there's disproportionate power with the men and some unfairness and sexual harassment tendencies, is because historically the leadership has always been men. And that's usually because women don't raise as much capital to build.
- [12:00]
Julie Wainwright
Oh, now you're back in VC world. When you look at venture capital, the percent of money going to women has actually declined.
- [12:09]
Tracy D'Annunzio
Yes.
- [12:09]
Julie Wainwright
And I don't see that changing because there's now a wave that, where inclusion, or at least this semblance of inclusion, has gone the other way and perhaps it swung too far. Now the venture capital world is still very male. It's changed a little bit, but the big funds are still run by men. But you know, hope all you need is a couple women doing great things and then things do change. It's not impossible. I don't want to. Obviously. I raise money. You raise money. I think in my lifetime I've raised over a billion dollars. I added it out for fun.
- [12:44]
Tracy D'Annunzio
That's crazy.
- [12:45]
Julie Wainwright
It is if I can do it. Anyone? I went to Purdue. I didn't go to Stanford or Harvard.
- [12:49]
Tracy D'Annunzio
Yeah, same. I went to an art school.
- [12:52]
Julie Wainwright
So you are the outlier. That is not normal.
- [12:55]
Tracy D'Annunzio
Let's talk about. So you've raised over a billion dollars in your career. Let's zoom in a little bit on the phase of your career where our paths crossed. When you founded the RealReal can you tell the audience? I feel like everybody knows what the RealReal is. But for those who don't, can you tell Everybody what the RealReal is?
- [13:12]
Julie Wainwright
Simply stated, the RealReal is the place where you buy and sell luxury consignment on a more sophisticated level. The company was set up to provide a lot of service to people for getting their product into. It's not a self posting site. The RealReal consolidates product. There's at least three different op centers. At least it did when I was there. I left two years ago. And at those ops centers, things are inspected, they're authenticated. And the RealReal controls the pricing.
- [13:42]
Tracy D'Annunzio
Yes.
- [13:43]
Julie Wainwright
And it takes things like fine jewelry and watches. The largest group of gemologists I think in the world work at the real rail handbags, clothing, a little bit of art and home. And so for men and women, the fashion that concept was when I introduced it was completely new. No one had actually focused on the luxury into the market. No one had taken possession unless you were in a brick and mortar store. No one had leveraged technology to help set the right pricing and authentication was an ad hoc consideration.
- [14:19]
Tracy D'Annunzio
Yes. And I heard you say it was not a self listing site. For anybody who doesn't know, I had a website called Tradesy. It was a direct competitor to the RealReal. We were really, I think 2 of the 3 largest in the luxury resale space. And it was a self listing site. So on our site our sellers listed their item directly sort of like you would on ebay. And we virtually authenticated. So early on our companies were on a similar trajectory and then the Real Real pulled ahead.
- [14:52]
Julie Wainwright
Yes.
- [14:53]
Tracy D'Annunzio
Why do you think that was?
- [14:54]
Julie Wainwright
My vision was different than your vision to be honest. I had access to capital.
- [14:59]
Tracy D'Annunzio
Yes.
- [14:59]
Julie Wainwright
And I always focused on getting the product in and didn't worry about demand. So focused on getting all the supplies and I built up a big infrastructure and I do think the luxury customer and consigner wanted a level of service that your model couldn't deliver. I know that you think the stores supercharged us. They did and didn't. I have to say the stores were. When we first opened a store which.
- [15:30]
Tracy D'Annunzio
By the stores you mean? So the real, real.
- [15:31]
Julie Wainwright
The real hats, brick and mortar stores and we opened our first store in Soho I think in 2017 after a pop up. And the pop up in Manhattan did change perception. It did change people's perceptions. Oh it was in the data. So the data showed that we changed people's perception. And how do I know that people that had previously shopped only online and then went into the store, not only did their average order size go up, their propensity to consign and buy went up. So it had a halo effect. And then the Soho store after the pop up was next. Same thing, the LA store on Melrose, also Big Boone. So those were local things that happened.
- [16:21]
Tracy D'Annunzio
And I remember reading something at the time that said that for people who shopped online, if they were within a five mile radius of a store, their conversion rate went up. Was that true?
- [16:30]
Julie Wainwright
Also their average order size when average.
- [16:33]
Tracy D'Annunzio
Order value went up.
- [16:34]
Julie Wainwright
So I think the biggest problem the company was supply limited. It's always constantly about getting new product. But having said that their propensity to consign went up, it made it even easier. So we would come to your house but then you could also drop it off. So if you're looking at cities where.
- [16:53]
Tracy D'Annunzio
You have dense populations.
- [16:54]
Julie Wainwright
Exactly. It's just easy. It's easy.
- [16:57]
Tracy D'Annunzio
Makes sense.
- [16:58]
Julie Wainwright
So yes, it did change the economics but it also cost more money and it created. Here's the interesting thing, when you post a thing online, it's also in the store. So it created a technical challenge. Yes, it added another level of urgency. But the infrastructure to get those stores going was not trivial. The trade off wasn't clear when we first got started and the model had to evolve.
- [17:31]
Nicole Lapin
Hold onto your wallets. Money rehab will be right back. And now for some more money rehab.
- [17:44]
Tracy D'Annunzio
I think it's easy to look at a business like the RealReal or Tradesy and think oh they're doing E commerce. But it's not E Commerce, it's a two sided marketplace. It's a marketplace which is 10 times more complex. So a skew of one business is really hard to run.
- [18:00]
Julie Wainwright
Especially when you're taking possession. Yes, yes.
- [18:03]
Tracy D'Annunzio
Which we didn't do. And we had other challenges like when a seller shipped an item directly to a buyer. What if they didn't put the right item in the box?
- [18:11]
Julie Wainwright
Yeah. So that we were trying to solve for that not happening. Which doesn't mean we didn't miss ship things. But the goal was if you're paying $400 for something, or any money, really. That's a luxury good. And you expect to get the right thing at the right time. And to make sure it's authentic, the other thing we did, we got people to think about recirculating their goods. Because if you bought it on the real rail, you should be able to resell it when you're done with it.
- [18:41]
Tracy D'Annunzio
And in theory, you can have a free, like a net neutral cost wardrobe.
- [18:45]
Julie Wainwright
Very close. Depends how long you sit on it and how bad the usage is. But.
- [18:49]
Tracy D'Annunzio
Yes, yes. And also, I think the RealReal and Trade Zoo before we sold it can be very addictive because it's skew of one. You have that timer on the shopping cart, which I know you came up with early. Yes. And it's brilliant. It gives you a sense of, oh, I'm gonna lose this if I don't get it.
- [19:04]
Julie Wainwright
I want to know why we did that.
- [19:06]
Tracy D'Annunzio
Why?
- [19:06]
Julie Wainwright
Well, all right. Another skill for an entrepreneur, you're always solving the most important problems. And one of the things we wanted to see happen were sales. No kidding. And people were hoarding. So literally, they would put. Someone would get on the site early and they would put 60 or 80 things on their cart, and they would leave them in the cart for hours. And we're like. And then. And especially. So if it's still a problem, you still don't want that to happen, obviously. But in the beginning, we were running sales three times a week with only 60 or 70 products.
- [19:44]
Tracy D'Annunzio
I remember this. It was like you were like the first to do a drop. Now, that's the whole thing. But I remember when the real reel was by.
- [19:52]
Julie Wainwright
That was by necessity, not by design. Because we didn't have enough product. We wanted to aggregate the product under themes and make sure that we actually had enough product to execute on that theme. And so if people come to the site and there's no product to buy, everything's on hold. Then you don't have customers. So right away, literally within one day of doing. I'm like, we gotta put a timer on that cart. And it never.
- [20:18]
Tracy D'Annunzio
I would have written a script that just said, sweep everything into my cart and leave it there.
- [20:23]
Julie Wainwright
Something was going. People were doing that. Yeah. So we're like, we will never have a sale. And then they hoard everything. Then the customers were gone and they'd buy one thing. We're like, oh, this is not good.
- [20:34]
Tracy D'Annunzio
Okay. So I have a fun question for you. Considering that we spent the better part of a decade as leaders of organizations in the same category. And as competitors, how did you think about the competition when you're building your. I did.
- [20:46]
Julie Wainwright
Never worried about you guys at all. And there's so many reasons for it. Because everyone thought they were a competitor. No one was doing what we were doing. So no one was taking possession. No one. The company at one point, I don't know where they are now. Under me, we had 450 people in the field picking up products. No one had the capability to open stores because you didn't take up possession. No one was really doing the level. Fine jewelry and watches were a key component of the business. About 34, 35% of the sales. You cannot authenticate a piece of jewelry online. And nor can you understand the jewelry, nor can you really authenticate a watch. And if you think you can, you're probably selling fakes. So our product mix was different, our service level was different, our ability to market via our stores was different. And I always thought I was in competition with ourselves and it was a capital intensive business and how do I actually continue to raise capital, keep the business going?
- [21:51]
Tracy D'Annunzio
So was not thinking about the competition a way that you operated throughout your career?
- [21:55]
Julie Wainwright
No, not at all. This was a unique offering in a unique space. You have to be aware of the competition. But we had a moat around the business and it was, it was always ours to lose.
- [22:06]
Tracy D'Annunzio
How much money did you raise for.
- [22:08]
Julie Wainwright
The realreal, I'd have to add it up, but it was in the hundreds of millions.
- [22:12]
Tracy D'Annunzio
Very few women in tech raise hundreds of millions of dollars. And then you eventually had an ipo, you took the company public. That is also very rare.
- [22:21]
Julie Wainwright
I think when we did it, an executive at NASDAQ said, you're the 23rd woman founder to take a company public ever. Isn't that sad?
- [22:29]
Tracy D'Annunzio
I know a handful of women who've taken companies public, and the one thing they all have in common is that when you shut the door and you start to talk about what was it like raising enough capital and pushing a company through all those phases of growth, they have a lot of horror stories. So will you tell us some of your behind closed doors horror stories about fundraising and building your company? What are things that you haven't talked about publicly?
- [22:54]
Julie Wainwright
Oh, I think you're gonna have to wait for the book. The book's coming out in June. The book is coming out in June of next year. It's called Time to Get Real.
- [23:03]
Tracy D'Annunzio
Okay.
- [23:04]
Julie Wainwright
And it's right now. It's with a publisher in their legal department. And let me tell you, my focus was a little Different. In writing this, I wanted to walk people through how the realreal was built year on year. So it has this sense of urgency. And then I did have to weave in lessons but I wove in those lessons as I was learning them. Okay, so I walked through it and it's a fast paced read. My favorite book of all times for business is Shoe Dog and the reason I love Shoe Dog is I love it. I love it for multiple reasons. One is I thought I knew the story. I didn't. I don't know why I thought I did. And you felt the struggle of getting Nike to become Nike? Yes, and I felt like I was along the ride. I was in the car even.
- [23:56]
Tracy D'Annunzio
So that's what we can expect.
- [23:57]
Julie Wainwright
I hope so. And not until June of next year. It is coming out. There are a lot of stories. I can tell you a fun one because remember we were talking about doing drops. We were doing drops because we didn't have enough products. In the early days we were in a strip mall that was really a bad strip mall. But I needed to rent a warehouse and I got a railroad card style warehouse. So you walk in and this crunchy brown carpet that was really gross crunched when you walked on it into the area where we processed goods. And then the middle was the photography area. There were little storage alcoves off of that. But in order to take the right photos on the mannequin, the photographer had to open the one door to the bathroom and step into the bathroom to take pictures of the photos. The back area had a roll up door and was a proper warehouse with a loft. But the whole thing was maybe 3,000 square feet. And this is how we got started. I thought, well, we have to start somewhere. And I was floating the money and I'm like, okay, I'm going to do this. All right, so we get it going. No VC money yet. All right. Just friends and family. No, no VC money.
- [25:14]
Tracy D'Annunzio
Angel investor.
- [25:16]
Julie Wainwright
One who was amazing entrepreneur himself. So we're working in this and we realized I had this idea where I need to get to aggregators of products. Who aggregates products? Stylists. Because they know a lot of people and those people buy a lot from them. So I went down to LA and developed a stylist program, Promoted that. Went to New York, found stylists, pulled them together, promoted the program, tried some direct mail and I'm thinking this is great. We're going to get tons of product rolling in and of course nothing's happening. The program didn't seem to be effective. We Weren't getting calls we'd be checking in.
- [25:54]
Tracy D'Annunzio
What year Was this?
- [25:55]
Julie Wainwright
Around 2011. So no product. And then we're running the sales. It's going into the summer. And I'm like, we are so screwed. Because everyone we knew had given this product. I tried. We tried some direct card marketing that was percolating in through the post office. Literally a postcard. Oh, like explaining the service.
- [26:14]
Tracy D'Annunzio
Did you choose zip codes with like, ultra high?
- [26:16]
Julie Wainwright
Well, we did, but we didn't. If someone in la, we didn't have team down here yet. We had to fly someone down to get it and drive a U Haul back. All right. So we're really happy early days. And we get a call from stylist and I can't. I don't think I can mention the celebrity. But she said, julie, I don't think I can. Because she did not want the sale public when she did it. She subsequently did do public sales on the RealReal. But we get a call. X person wants to clean out her warehouses.
- [26:48]
Tracy D'Annunzio
Warehouses, yes. Was it Celine Dionysus?
- [26:51]
Julie Wainwright
I'm not. We're not going to go through.
- [26:53]
Tracy D'Annunzio
Did you see the documentary about Celine Dion where she has warehouses of costumes.
- [26:57]
Julie Wainwright
But turns out it's a thing in fashion. All right, not just celebrities. And can you literally got the call at 3:00 in the afternoon. Can you be there tomorrow morning? I'll text you the address.
- [27:10]
Tracy D'Annunzio
It has to be. Yes.
- [27:11]
Julie Wainwright
Employee number one, Rati Levesque. @ that time. She's now the president.
- [27:18]
Tracy D'Annunzio
Okay.
- [27:18]
Julie Wainwright
All right. So flew down and with it's an intern. All right. The next morning. So we had one intern, Georgia. All right. So Georgia and Raji fly down rent to U Haul, which I'm sure Ratti will be mad. I say this, but she's not the best driver. At least she wasn't at the time.
- [27:37]
Tracy D'Annunzio
I get that. Nicole always tells me I'm not the best driver.
- [27:39]
Julie Wainwright
So her car back in San Francisco was beating them up. I'm like, oh, I don't know about her driving this U Haul. Anyway, they go to this person's warehouse and I'm trying to, like, talk to them all day. They're like, yeah, there's a warehouse. This person then decided she wanted to try on everything one more time before consigning.
- [27:59]
Tracy D'Annunzio
Of course, you can't be sure you want to let go of it until you do a personal fashion show.
- [28:04]
Julie Wainwright
A pickup that probably would have taken eight hours was now extended to two and a half days.
- [28:10]
Tracy D'Annunzio
Wow.
- [28:12]
Julie Wainwright
Which meant I had to call the intern who was a high school girl's mom and say, do you mind if Georgia spends the night in school? She was a summer break, but she was underage, so I had to get him a hotel room, and I had to, like. And then all of a sudden that they go in, and then I said, do you want me to fly someone down there? Because I'm answering the phone, I'm skewing product. I'm doing everything. I can't leave. Someone's got to be at the office. And remember, this is very early days. And she's like, send someone down. So I sent my boyfriend down. He's driving it back. All right. It just wasn't that great. So they're clients. It was a total punk. She gets to open cu. Haul tons of boxes. Tons.
- [28:59]
Tracy D'Annunzio
But nothing good.
- [29:00]
Julie Wainwright
Everything was good. Oh, not a lot of habits, but everything was. No, she was totally punking me. But here's what happened. And this person's so little, it was like a double zero zero. Turns out a lot of people wear that size. It's got us through the summer. That stylist gave us more product from our clients. Another one did. Then we put someone in la. And there it started. Well, you said it's more complicated. Yes, because we were a marketplace. We couldn't just call up a vendor and say, I want more.
- [29:33]
Tracy D'Annunzio
No, you're constantly managing the supply and the demand, the sellers and the buyers. It's such a complicated business.
- [29:45]
Nicole Lapin
Hold onto your wallets. Money rehab will be right back. And now for some more money rehabilitation.
- [29:58]
Tracy D'Annunzio
It's so funny to hear you talking about these kind of scrappy early days, because after that phase, after you had a warehouse with a crusty carpet.
- [30:08]
Julie Wainwright
Oh, so bad. And the French guy stepping into the toilet to photograph things.
- [30:12]
Tracy D'Annunzio
Yeah. So after all of that, the business grew, like you said. You raised hundreds of millions of dollars. You took the company public. What did it feel like to ring the bell?
- [30:21]
Julie Wainwright
Oh, you know, there really isn't that thing. It's a simulation, so. That's too bad.
- [30:25]
Tracy D'Annunzio
I didn't know.
- [30:26]
Julie Wainwright
Yeah, I mean, you're. Look, we were with nasdaq. We weren't on the New York Stock Exchange. You hit a button, but it's already done. It's like you're doing it. It doesn't really. No. But I'll tell you what's fun. Confetti comes down, so it does make you feel good.
- [30:40]
Tracy D'Annunzio
That makes it hurt a little bit. Yeah.
- [30:42]
Julie Wainwright
And everyone in the company had stock. Anyone that had been with the company five years more were part of the IPO and were there with me, standing with me. And honestly, they said they have never seen an IPO like this.
- [30:57]
Tracy D'Annunzio
Really?
- [30:58]
Julie Wainwright
Why?
- [30:58]
Tracy D'Annunzio
In what way?
- [30:59]
Julie Wainwright
Well, first of all, it was inclusive. All right? So people had their kids there. People had been there for a long time, whether you were in the ops center working an hourly job or you were an executive. Also, I'm sure we were the most stylish.
- [31:16]
Tracy D'Annunzio
Never so much Gucci on the. On the NASDAQ stage.
- [31:19]
Julie Wainwright
No, there wasn't. And you know, when you walk in, you've been into nasdaq, Right. All right. So when you walk in, they have the fraternity of all the people that have actually ever done this, all shots of all the men. And I'm like, let's get my picture up there next time I walk in there. Because there were no women on the fraternity board.
- [31:40]
Tracy D'Annunzio
Really?
- [31:40]
Julie Wainwright
Okay.
- [31:41]
Tracy D'Annunzio
So that. So on that particular stock exchange, was that the one that had 23 women?
- [31:45]
Julie Wainwright
No, that was. Overall, it was both. It was anybody taking a company public.
- [31:49]
Tracy D'Annunzio
Wow.
- [31:50]
Julie Wainwright
But then there's been women since then, so that's good.
- [31:53]
Tracy D'Annunzio
Yeah. Yeah. It does seem like more women's companies are getting to ipo, even though, like.
- [31:57]
Julie Wainwright
You said, not lately. But you're right. Well, then we had, like, Bumble come out, I think, right after that. And that did well. Women led. But before me was Katrina. Katrina Lake with Stitch Fix.
- [32:08]
Tracy D'Annunzio
Yep. And then also my friends over at Figs had a great.
- [32:12]
Julie Wainwright
Figs is a great product that.
- [32:14]
Tracy D'Annunzio
Wonderful. So we're seeing it more and more.
- [32:17]
Julie Wainwright
A little bit.
- [32:17]
Tracy D'Annunzio
Yeah.
- [32:18]
Julie Wainwright
Yeah. A little bit. Little cracks. Little cracks, yeah.
- [32:20]
Tracy D'Annunzio
And so you took the company public. It is the greatest victory for a founder to do that, to be able to.
- [32:26]
Julie Wainwright
It's fabulous.
- [32:27]
Tracy D'Annunzio
From zero to I.
- [32:28]
Julie Wainwright
Well, all right, let's just take a step back. If you take money from people, which I took a lot of money, you have to have a vehicle for them to get it out.
- [32:37]
Tracy D'Annunzio
Totally.
- [32:38]
Julie Wainwright
It's as simple as that. Yes.
- [32:39]
Tracy D'Annunzio
You either have to sell the company or take it public.
- [32:42]
Julie Wainwright
That's it. You only have two paths. Or if you shut it down, you're sort of in hot water for a long time.
- [32:47]
Tracy D'Annunzio
That's not the pathway.
- [32:48]
Julie Wainwright
That's a bad end. So that I find founders not only they don't always understand that you are obligated to actually return money once you take it in. So no one was going to buy the real real. So our path was going public. And my goal was when the company got to at least $1 billion in top line sales, we should be ready because it was becoming highly predictable. And we were here, we had a 2019 with a billion in top line sales. It was predictable.
- [33:19]
Tracy D'Annunzio
Everything was totally normal after 2019. Right.
- [33:22]
Julie Wainwright
Covid hit. Yes.
- [33:23]
Tracy D'Annunzio
And so you were still running the company. Now it's a public company, which means that you have to report to the whole world how you're performing. Right. It's different than when you're a private company. Nobody knows your business except you still report.
- [33:36]
Julie Wainwright
You still have a board of directors who.
- [33:38]
Tracy D'Annunzio
But when you're public, you report publicly.
- [33:40]
Julie Wainwright
The mechanism, in my view, isn't that different. If you're running a company, you're still having board meetings, preparing financials, reporting. You better have checks and balances on those financials. And you're reporting into the board of directors.
- [33:54]
Tracy D'Annunzio
Yes.
- [33:55]
Julie Wainwright
Right.
- [33:55]
Tracy D'Annunzio
Yes. You just have fewer eyes on you if you have a bad quarter in your private. Your circle knows about it, but the whole world.
- [34:01]
Julie Wainwright
Yeah, Everyone talks though. But you're right, it's a different. I agree, I'm just being a little cantankerous, but I don't disagree. But look, the real real was growing 40% in January of 2020 versus year ago, same period, year ago February, same number, 40% versus year ago March. San Francisco and New York were early people to force shutdowns, I remember. And March went From first, I think 10. I think they shut it. In fact, I know they shut it down on March 12. First 10 days, growing 42%, which is.
- [34:37]
Tracy D'Annunzio
A good month for seasonality.
- [34:38]
Julie Wainwright
It's very good. Very good. People are in the mood to start thinking about spring and they're thinking again soon from that day. That month of March ended at minus 46% versus a year ago because your.
- [34:53]
Tracy D'Annunzio
Warehouse is shut down. Right. So you couldn't physically ship product.
- [34:56]
Julie Wainwright
We couldn't, no. Demand dried up. Demand came back in April, but it was bigger than that. We couldn't pick up product and we were allowed to operate in New Jersey.
- [35:10]
Tracy D'Annunzio
Which was your biggest.
- [35:11]
Julie Wainwright
Our op processing at the time was the biggest ops center, but we weren't in the Bay Area. We still had an ops center in the Bay Area and we weren't. We clearly, if people lived in New York, it was a terrible situation in New York. New York was the single largest market for the railroad and we couldn't pick up product. When you think about a marketplace, let's just talk about dynamics. When you have buyers and sellers, you're not a way station. You are a way station. You're not a warehouse. So if your product isn't selling, then Your sellers are unhappy, and then you may not have the right buyers, but if your products don't sell for your sellers, they aren't going to give you more product. So you need to have a rhythm. And the real world developed a very specific rhythm through optimal pricing, not best pricing, optimal pricing. Sellers could expect that within 90 days, 90% plus would sell through.
- [36:10]
Tracy D'Annunzio
And then Covid was like, Covid stopped them.
- [36:13]
Julie Wainwright
But it picked up again. And oddly enough, by the end of April, when it was two weeks, then we were, like, in it. We didn't know how long we'd be. By the end of April, people started buying handbags and shoes and then other things, but a lot of handbags and shoes and jewelry. All right, let's go back to the necessity to keep product flowing through. So 90% of the product flows through in a quarter, which means by the end of everything, April, May, June, the inventory is being depleted very quickly, but it's not being added back because we couldn't pick up products in California. Really. The only states that really acted like Covid didn't happen. Florida. Arizona. Florida was Arizona. Not a great big market for the company. Florida, good, but not of the caliber of the other states. And a little bit of Newport in California, which wasn't big enough. You had these little pockets where, like, you walk in and you're like, these.
- [37:10]
Tracy D'Annunzio
Are, by the way, all of your more politically conservative markets, areas where they didn't shut down. People didn't do Covid.
- [37:17]
Julie Wainwright
No. They didn't have the shutdown restrictions. So the company was in trouble.
- [37:22]
Tracy D'Annunzio
And how was your work life balanced during this phase?
- [37:25]
Julie Wainwright
Look, it was surreal because also, we had. Supposedly they were short sellers. So we have one operating op center that's in New Jersey. And at that time, we had a couple in New Jersey, one in Secaucus and one in Perth Amboy. We had the Bay Area, one that we needed to leave anyway. The Bay Area, because we'd grown out, but shut down. In fact, when we were just trying to move product to New Jersey so we could process it and give people their returns.
- [37:55]
Tracy D'Annunzio
Yeah, even that, right?
- [37:56]
Julie Wainwright
No. The sheriffs showed up and put it like, we're going to throw you guys in jail. I'm like, oh, come on. Anyway, we finally got the product.
- [38:04]
Tracy D'Annunzio
There would be no shoes and purses transported.
- [38:07]
Julie Wainwright
Oh, no. The whole thing was nuts. So it was a bit crazy. We had to open a new op center, which we got going in Phoenix. And then we had some odd calls coming into the Perth op center from people saying we were killing Our employees not following protocol, which wasn't true. I'm on the phone with the mayor. I'm on the phone with the head of police in New Jersey saying, walk through. We're following protocols. Are these calls coming on in state? Are they coming in or out of state? They were all out of state. So, you know, it was a short seller.
- [38:43]
Tracy D'Annunzio
That's wild. So a short seller, meaning somebody who had bet in the stock market against the company's success was now putting their hand on the scale and trying to influence whether we could process products.
- [38:55]
Julie Wainwright
Oh, it completely disrupted, but they were trying to make it even further worse.
- [39:00]
Tracy D'Annunzio
It's so stressful, and I think it's really helpful for a lot of our audience here. They're early stage founders or they're young women in business. And I think it's so helpful for them to hear that. Even when you get to the point that your business is a household name and it's big and it's a public company, you're still dealing with.
- [39:17]
Julie Wainwright
Oh, no. This was a nightmare because we couldn't. So we had to start buying product, which the quality of the product was good.
- [39:25]
Tracy D'Annunzio
Where were you buying product from?
- [39:27]
Julie Wainwright
Some directly from the brands. Because remember, they couldn't sell their product either.
- [39:31]
Tracy D'Annunzio
Totally.
- [39:32]
Julie Wainwright
Some directly from the brand, some from people that resell for the brands of product that couldn't move. So the caliber of the product was great because it never made it on the shelves. But the margin was horrific.
- [39:45]
Tracy D'Annunzio
We did the same exact thing during nightmare.
- [39:48]
Julie Wainwright
The whole thing was.
- [39:49]
Tracy D'Annunzio
It was tough. Resale was better than off price.
- [39:52]
Julie Wainwright
In the end, if it didn't sell once, it's not going to sell the second time. This is the beauty of resale. If someone bought it once people wanted, then people will buy it again.
- [40:01]
Tracy D'Annunzio
Absolutely.
- [40:02]
Julie Wainwright
Absolutely.
- [40:03]
Tracy D'Annunzio
You took the company through Covid through some of its toughest times, and then in 2022, you left the company.
- [40:10]
Julie Wainwright
I got fired by the board.
- [40:12]
Tracy D'Annunzio
Oh, okay. We're talking about it. Julie, tell us what happened.
- [40:15]
Julie Wainwright
There's a couple different things that happened in my world. The board of directors I grew up with were the venture capitalists. When I say grew up with the company, the venture capitalists and all early investors except one actually left and the board had to be. I had to rebuild the board and make recommendations to rebuild the board.
- [40:34]
Tracy D'Annunzio
After you went public, you got a whole new set of board members, except.
- [40:37]
Julie Wainwright
For one, and that one never sold.
- [40:40]
Tracy D'Annunzio
Oh. So they held onto their stock.
- [40:42]
Julie Wainwright
Most price had gone down. But I would say a couple different things. And this is really Good advice for anyone choosing to board. When you get money from people and let's say you only have one term sheet or two, the investors sit on the board. So you don't choose your board to choose your money source. Later on, you can make recommendations. And I always thought it would be great to have key areas of subject matter expertise on the board. It turns out that that's one criteria. But the overriding criteria should have been shared values. And it also should have been more entrepreneurial focused because the RealReal was still an entrepreneurial led company and was still a very baby company.
- [41:28]
Tracy D'Annunzio
So you were a public company, but you still had a lot of room to grow and it still needed to be run.
- [41:33]
Julie Wainwright
Like, I think shared values is actually more important than area of X. Yeah. For a board member. And I didn't go that way. And I would say that I had one disgruntled board member who didn't sell his stock, who in my opinion, believed he knew more than anybody else about how to run a company. I also had new members on the board and there was a huge disconnect. And I was busy running the company and they. And I would say lack of shared values. And yeah, they came after me and they fired me. And the rationale was I didn't hit my numbers during COVID It could have been also because I told one key board member who I believe was out to get me, who had a plan for the company to basically in the board, meaning to f off and he wasn't gonna ruin the company. And then one of the female board members, who they were almost all females and stood up and said, you're not a good leader. You can't talk to a board member that way. And I said, I can when that board member's lying. And it went downhill from that. So that's what happened. Now I have to say, it was sad. It was very sad. I think the key lesson is values matter.
- [42:46]
Tracy D'Annunzio
And what were the values that you felt like you were bringing to the table that your board didn't share?
- [42:51]
Julie Wainwright
And it's also a way of operating. So let's just talk about the difference between a corporate citizen who grew up in the corporate world versus an entrepreneur. Yeah, there are a lot of different. So corporate citizens tend to work on politics. If you're a woman, there tends to be room for one woman at a top. So they really aren't necessarily people that you would even want to have a drink with. Politics matter more than results. Let's just say you're working in a multibillion dollar company and it could be great training for you. Are you, what you do going to make the biggest difference in that company or who you know and maybe who you suck up to or whose team you get on going to make the biggest difference. It is very hard to turn. So politics matter. In a startup, it's much more of a meritocracy. You can't hide. Your results matter and hopefully the management recognizes it is a meritocracy. But at the end of the day, the data doesn't lie. And every person in a startup is so important and getting the right way to measure their performance is important and making sure that, that you get out any bias in the way they're paid, all of that's important. I'm not saying meritocracy doesn't exist in a corporation. It's much harder to find because it's much harder to measure. If you have people that grew up in a political world, meritocracy doesn't matter. If you have people that knew structure and they weren't big risk takers and they like things rolling along in a methodical way. That's not what a startup looks like. It's messy, it's meaty, it's risk taking. If you have people that grew up in a world where they wanted to be the smartest person in the room instead of a collaborative person, which my board was collaborative. Most successful venture capital businesses are collaborative. It's a hierarchical model. In the corporate world and a great startup, it's a collaborative world. Collaboration makes better ideas. So think about what I said at the beginning. I didn't want to be the people at Clorox. And all of a sudden I have people like them on my board who think they know and they're hierarchical and to the same thing. You can't talk to a board member like that because what they're saying is wrong and will hurt the company. And it was a lie.
- [45:16]
Tracy D'Annunzio
And.
- [45:16]
Julie Wainwright
But see, and I.
- [45:17]
Tracy D'Annunzio
Because you brought people on for their subject matter expertise. But it turned out that because they had spent so many years in a.
- [45:24]
Julie Wainwright
Huge disconnect and I would say there's two problems. One is it was all corporate except this one person. And I just think it's the wrong thing. I think that we need to look at choosing board members differently. And I think it's really critical. But if you're raising capital, you get that board member. And that board member may also be toxic. But I didn't have that experience prior. The board members, the original investors, except for one, were pretty Remarkable.
- [45:52]
Tracy D'Annunzio
So you had a great board that. Except the one.
- [45:55]
Julie Wainwright
And I think that person would have supported. He wouldn't have messed up and gotten off the board, and he blew it. Everybody answers to somebody, so I'm sure he messed up. He should have gotten his money out. He didn't.
- [46:06]
Tracy D'Annunzio
So you were fired from the company that you started?
- [46:10]
Julie Wainwright
I was. I was.
- [46:12]
Tracy D'Annunzio
I mean, what did that feel like? It was very dark when that happened. Were you able to speak publicly about how things went down and.
- [46:20]
Julie Wainwright
Well, it's your story, so you can always talk. I don't think it benefits me to talk that publicly about it. It's in the book, though. Of course.
- [46:28]
Tracy D'Annunzio
How do you think the company is doing now?
- [46:31]
Julie Wainwright
If you follow their financial results? They're not in a growth mode. Their customer base shrunk by over 9%. Their average order size went way up, which I know they're very proud of. I think it's dangerous, especially in a bad economy. I'm not there day to day. I would say I really can't comment beyond that. But the stories I know are the stories I know. I still. People call me and I will just go on record. Rati does not call me, but they've fired the cfo, who also was the new CFO in the company. And look, I'm not there, so I'm not going to say anything. Good. I hope it goes on. It was a labor of love, and honestly, it's a great service. We really changed the fashion world. We got people thinking about recirculating goods. We raised awareness of the issue of unused clothing or really poorly made clothing going to landfills, which is for microplastics, which goes right into your drinking water. And the fact that these clothes don't break down and they can be in landfills for over 100 years, just leaching really bad chemicals versus buying good things and recirculating them. And we democratize luxury, which you help do, too.
- [47:47]
Tracy D'Annunzio
Yes.
- [47:47]
Julie Wainwright
So all of those things are great. And honestly, and most of the time, it was so much fun. It was just fun.
- [47:57]
Tracy D'Annunzio
Yeah. I think that's also something that gets lost in the story of all the massive business success, is that there was a sustainability mission for these businesses. And the idea, particularly for those of us in luxury, was you don't have to buy cheap, fast fashion that's disposable. You can afford really beautiful clothing and then pass it on when you're done.
- [48:16]
Julie Wainwright
With it and recirculate it.
- [48:18]
Tracy D'Annunzio
Yes. And I think that we completely changed the game in terms of making Resale. Cool.
- [48:23]
Julie Wainwright
That was my goal. I knew when I first launched the RealReal that if I didn't make it really relevant and cool and make sure you look great and really have an image with it, it wasn't gonna work.
- [48:35]
Tracy D'Annunzio
Totally.
- [48:36]
Julie Wainwright
And so my goal was to change perception.
- [48:39]
Tracy D'Annunzio
Yes. And I think luxury customers at the time that we were getting started turned up their noses at used clothing. And now everyone's.
- [48:47]
Julie Wainwright
Well, everyone likes a deal, so they didn't. Didn't. And the other thing is, for the first time, people could actually, when they bought something, they had a way to monetize it afterwards in a way that they didn't have to go to a brick and mortar store and drop it off. And the value of the Internet, which, you know, you can have millions of customers look at it. The speed of sale is always faster, and the price is always the price the market will bear.
- [49:13]
Tracy D'Annunzio
Totally.
- [49:14]
Julie Wainwright
That's the marketplace, that value system.
- [49:21]
Nicole Lapin
Hold onto your wallets. Money rehab. We'll be right back. And now for some more Money Rehab.
- [49:34]
Tracy D'Annunzio
I'm glad that you shared the story of both how you started and how you departed the company. I think it's really helpful for people to know that even when they see big success stories from the outside, there are a lot of ups and downs. There are a lot of challenges right from the first day till the last day. Now you're building some position.
- [49:51]
Julie Wainwright
I am. So it's exciting. So one of my passions has always been nutrition. And I started a company with a medical doctor about two years ago called Ahara. It was pretty clear to me when we got in the market, we've been in the market about one year. That really what people kept asking us for was help with losing weight. And even we're selling into corporations. They would say, do you have a track on weight loss? We certainly did, but not the track they wanted. So we did, and we still do. We have a metabolic track to how to speed up your metabolism. Metabolism, foods that are best for you. But really what they wanted, incorporations. And what our customers was telling us. No, we want to understand what's going on in the weight loss drug world, and we want to know how to eat if we choose to go in that route. So, like an ozempic or a WeGovy. And so we launched Aharamed. So we spent. I spent a lot of time, along with some of the key people working with me, interviewing doctors, groups that are specialized in weight loss and can help someone, number one. Number two, we went to state licensed compounders because the drugs in the compounding are similar. The active ingredients are the same. So they use the same active ingredients, but they compound them differently. But the same active ingredients in a nozempic or wagon are compounded. Now let's talk about the advantage. You have a doctor's crew.
- [51:22]
Tracy D'Annunzio
What is compounding?
- [51:23]
Julie Wainwright
Compounding means they're made. They're actually made. Not in mass production with a big brand. They're a small batch.
- [51:31]
Tracy D'Annunzio
Small batch.
- [51:32]
Julie Wainwright
And there isn't a drug shortage. There is a delivery mechanism shortage. So the big brands use special pens. Not that obscure. The fact that you're putting a needle.
- [51:44]
Tracy D'Annunzio
In, you stamp yourself.
- [51:46]
Julie Wainwright
Well, you do. It doesn't maybe look like a needle, but what I decided after talking to my investors, that we should own the compounding pharmacies, we should have the relationships with the doctors. And really importantly, we should work with the insurance companies to make sure that we could get nutrition consulting through registered dieticians approved with the insurance companies. So we could be there hand in glove with the user and give people dietitian consulting when you start on the drug. So we offer dietitian consulting the compounded drugs, which are about 70 to 80% off the retail prices.
- [52:27]
Tracy D'Annunzio
How much does it cost per month?
- [52:29]
Julie Wainwright
So something like an ozempic equivalent is $200 a month.
- [52:34]
Tracy D'Annunzio
Wow. And that includes having a nutritionist who helps tell you.
- [52:37]
Julie Wainwright
That includes having a dietitian to help you. One month. We're doing free right now. Aetna and UnitedHealth have already said they're covering the expense and we're just waiting on Anthem and Blue Shield.
- [52:51]
Nicole Lapin
Wait.
- [52:51]
Tracy D'Annunzio
So for a lot of people, your insurance company will pay if you go.
- [52:55]
Julie Wainwright
To a haramed sign up for a dietitian. I'm calling it complimentary because it is. Your insurance will cover something like 89 million people are covered by those two insurance companies. So you can get dietitian consulting as you start on your weight loss journey. You have a great medical doctor who is really great in telehealth, who's focusing on weight loss and a compounded drug from a state licensed pharmacy. And you get started with $195. And it is absolutely imperative that people combine dietitian consulting with this. Because first of all, 40% of the US is considered obese. According to the latest stats from the NIH, 40.3% of those 10% are considered morbidly obese. All right, So a huge population and obese people tend to be malnourished. Also, when you get off the drugs, whether they're compounded or Branded people can gain the weight back because they didn't know how to eat in the best place.
- [54:05]
Tracy D'Annunzio
They didn't get the guidance.
- [54:06]
Julie Wainwright
So our goal is to help people along that line. And also there is muscle loss with this. Help them get the right protein amount. Check in on their weightlifting exercise so when they get off the drugs, they don't have a metabolic disorder. Maybe they can actually get rid of their type 2 diabetes if it was a weight induced. I know that it absolutely will go. Blood pressure will be good. It is awesome. I'm so excited to offer this.
- [54:35]
Tracy D'Annunzio
Yeah. I feel like everyone I know who's been on the GLP1s, they're like, I don't know what to eat. I'm not getting enough protein. So the idea that they could get a nutritionist for free to help them with that is amazing.
- [54:46]
Julie Wainwright
So let's say you're on it for six months and let's say you've lost £40. Highly possible. Or maybe it took you eight months, but £40, game changer. You wear different, you feel different, your blood pressure is probably better. It's just everything gets better. Except the probability of you gaining all that weight back without proper gut is very high.
- [55:08]
Tracy D'Annunzio
Oh, wow.
- [55:09]
Julie Wainwright
Unless you learn how to change your diet and eat for your health.
- [55:13]
Tracy D'Annunzio
People don't shrink their stomach while they're on the drug.
- [55:15]
Julie Wainwright
No.
- [55:16]
Tracy D'Annunzio
They tend to gain the weight back when they.
- [55:17]
Julie Wainwright
No, they're not as hungry. It is good to get good nutrition guidance. Micro and macro nutrients are really important and to get those habits set up while you're on the weight loss drug. So then you can continue when you leave.
- [55:31]
Tracy D'Annunzio
Julie, that sounds amazing. I have no doubt that Ahara Med is going to be another massive success for you. Before we go, will you play a game of never have I ever.
- [55:40]
Julie Wainwright
Oh, no. All right, ready?
- [55:42]
Tracy D'Annunzio
Never have I ever paid on the first date.
- [55:45]
Julie Wainwright
I've done it. Okay.
- [55:46]
Tracy D'Annunzio
How'd it go, by the way? How'd it work out with the guy that you paid on the first date?
- [55:50]
Julie Wainwright
Not great.
- [55:51]
Tracy D'Annunzio
Not great.
- [55:52]
Julie Wainwright
No. No. All right, so you know. Yeah. So don't do this. But yes, I've done it.
- [55:57]
Tracy D'Annunzio
Okay. Asked for a raise.
- [55:59]
Julie Wainwright
I've been my own boss for so long, I'm always asking for my own. So wait, that means this is.
- [56:04]
Tracy D'Annunzio
Yes, you put another finger.
- [56:05]
Julie Wainwright
Oh, I have to put it in?
- [56:06]
Tracy D'Annunzio
Yeah. Okay, explain really quickly. When you're the CEO, who do you ask for?
- [56:09]
Julie Wainwright
Oh, you have to go to a comp committee. But that's use data on the board. But you use data yes.
- [56:15]
Tracy D'Annunzio
Okay. Never have I ever.
- [56:17]
Julie Wainwright
I got to do this. Whatever this is. Okay.
- [56:19]
Tracy D'Annunzio
Bought a fake bag.
- [56:21]
Julie Wainwright
To my knowledge, I have never bought a fake bag.
- [56:23]
Tracy D'Annunzio
Never have I ever bought a Birkin.
- [56:26]
Julie Wainwright
Oh, I bought one.
- [56:27]
Tracy D'Annunzio
How many have you bought?
- [56:29]
Julie Wainwright
Is there more than one? But then I sold them because they're. I did sell them.
- [56:32]
Tracy D'Annunzio
Yeah, that. Were you not using them?
- [56:34]
Julie Wainwright
I wasn't. You know, my problem is handbags, to me, are utilitarian, and I like. Unless you're going out, like, someplace fancy. So I trash bags, and I don't like to change bags because then I always forget something. So I'm a bag and shoe trasher. So I felt like I would never trash a Birkin bag at too beautiful. And they're handmade. And I just sat there in my closet. It made me sad.
- [56:57]
Tracy D'Annunzio
I know. I did the same thing.
- [56:59]
Julie Wainwright
And then I bought another one.
- [57:00]
Tracy D'Annunzio
Carried it. It felt awkward.
- [57:02]
Julie Wainwright
Oh. Then I bought more. And then I'm like, what am I doing? And then I'm like, okay. I can't.
- [57:08]
Tracy D'Annunzio
Okay. Never have I ever signed a prenup.
- [57:12]
Julie Wainwright
Oh, you know what? I haven't. So what is the thumb go in or out? But should I have? Absolutely. So that was a mistake. Absolutely. And I wouldn't do it again without signing a prenup if I ever got married again. Yeah. What a mistake.
- [57:26]
Tracy D'Annunzio
For all of Julie's future potential suitors, just be warned, they're gonna have to sign a freenup.
- [57:31]
Julie Wainwright
Good business. Yeah, it's good business. It keeps everything clean.
- [57:35]
Tracy D'Annunzio
Never have I ever fought with a family member about money.
- [57:38]
Julie Wainwright
Oh, my God. So that's a yes. So I just thumb go in? I've. Yeah, that's a problem.
- [57:44]
Tracy D'Annunzio
Goes in.
- [57:44]
Julie Wainwright
Yeah.
- [57:45]
Tracy D'Annunzio
Okay. And never have I ever. This is the last one. Maxed out my credit cards.
- [57:50]
Julie Wainwright
Oh. When I was doing the RealReal, of course I did top in or out. Of course.
- [57:55]
Tracy D'Annunzio
Okay. But it turned out to be a good bet.
- [57:57]
Julie Wainwright
Not only did I max out my credit cards, I also took down my Iran 401k, remember? I'm telling. I didn't get VC funding for a while.
- [58:07]
Tracy D'Annunzio
You went all in.
- [58:08]
Julie Wainwright
Oh, that's it, babe. You gotta do it. And honestly, that turned out.
- [58:12]
Tracy D'Annunzio
That was an understatement. Of the show. That turned out. We'll go down in history. Okay, Julie, we end episodes of Money Rehab by asking guests for one tip that they can take straight to the bank. So it can be about personal finance, investing, anything money related. Your best tip for our audience, I.
- [58:31]
Julie Wainwright
Would say just, first of all, do not let balances go on your credit card, pay those off and wait. Two tips. If you are working in a company that has a 401k or an IRA, put that money in and then forget about it. Let me give you a story, and it's a good story because I told you I really did clean them out. Except I had in a small ira I. And I had. And by the way, you pay penalties for. It was grim doing it to start the real real. But in a small aira. I cleaned it all out and I only had three little stocks left. And I think when I this is started to begin the real real. And those three stocks were worth. So think 2011. They were worth $12,000. I'm like, okay, I can stop. I don't need that $12,000 today. I know it's coming $150,000. Because A, I didn't look at them, all right? I just left them there. And one of them was Facebook, one of them was Microsoft, and one of them was Netflix.
- [59:42]
Tracy D'Annunzio
Okay? So never take your money out of a 401k unless you're going to use it to start a business that eventually becomes a multibillion dollar company.
- [59:51]
Julie Wainwright
And just by the way, if you do take a company public, start actually selling your stock, you need diversity in your assets.
- [59:58]
Tracy D'Annunzio
Yes.
- [59:59]
Julie Wainwright
And I did that right away. So even though the stock has never been as high as when I was CEO, they've never brought it back to that level. Luckily, I had diversified enough that it feels very, very good. So that's more than one.
- [60:13]
Tracy D'Annunzio
Julie Wainwright, my former competitor and current dear friend. Thank you so much for coming to money rehab. I had so much fun.
- [60:20]
Julie Wainwright
Oh, I hope it's a good one. Thank you.
- [60:22]
Tracy D'Annunzio
I think it's a good one.
- [60:24]
Julie Wainwright
You know what? I'm glad we became friends. It's been delightful.
- [60:27]
Tracy D'Annunzio
Me too. Hi.
- [60:29]
Julie Wainwright
Hi.
- [60:30]
Tracy D'Annunzio
I have a question.
- [60:31]
Nicole Lapin
Can I see.
- [60:32]
Julie Wainwright
Can I ask you.
- [60:33]
Tracy D'Annunzio
Do you want me to get up?
- [60:34]
Nicole Lapin
No, I want to sit with you. I've been listening and you guys did great. The reason that you're co hosting is because of Baby. But Baby hasn't popped out yet. So as I was listening, I was just curious because while Julie didn't think about competition, when you guys were rivals, what did you think of Julie and the real real while you were in the midst of trades?
- [60:56]
Tracy D'Annunzio
Oh, I did think about competition. What did you do? I did. I thought. Julie, I thought about you a lot. I even bought a book you wrote a long time ago and I read it many years ago that I bought it and read It. It was my first company. I didn't have a lot of background in business or any background in business. And so once you guys pulled ahead and started growing faster than us, I wanted to know everything about what you were doing and how you were doing it, to learn and to catch up. I thought about your business model all the time. I thought about how you were operating as a CEO. I hired people who had worked for you, and I learned from them about how you operated the company. And I really, I had a combination of, like, fire to catch up and, you know, like win and win, the whole market, but also deep admiration and respect. Respect. Because more than anybody, I think I knew how difficult that job was, so.
- [61:50]
Julie Wainwright
Well, that's nice. That was a generous thing for her to say.
- [61:54]
Tracy D'Annunzio
All true.
- [61:55]
Nicole Lapin
And a million years ago, Julie, you were also the CEO of pets.com I was. Which is like the butt of jokes when you think about the dot com bubble. How do you feel about that?
- [62:03]
Julie Wainwright
How do I feel about that? Well, it was a little bigger for me. First of all, if. Let's just go forward. Chewy.com multi billion dollar company. Chewy.com is nothing but pets.com. they don't do anything that pets.com didn't do. We just did it 20 years. So I would say, how do I think about timing everything? So timing is really important. So it was a timing issue. But when I shut, and I did shut the company down and gave shareholders back their money, I didn't run it to bankruptcy. And sadly that that same day I was shutting down, my husband asked me for a divorce. So it's very emotionally charged for me, but it really is. Timing's everything. And I also think, you know, webvan was the precursor to Instacart. They went through a billion dollars worth of capital, a lot more than pets.com did. And you never heard about that, did you? Do you think there might have been a little bit of women bashing going on in there? I don't want to say that. I have been told that I have been told that from other press people that if I was a man, you know, I don't know, I'm not a man. I don't know what it would have happened. But look, pets.com was ahead of its time and it was not pretty. And I had reporters showing up my house, showing up at my door, you know, knocking to get. And I luckily, after my husband moved out, a good friend moved in and he would answer the door and say, she's not talking to you. And I can Call the police because you're on private property now.
- [63:37]
Tracy D'Annunzio
And how did you come back from that?
- [63:39]
Julie Wainwright
I gave myself two years to either start a company myself, not be. I didn't start pets.com I was brought in to run it to start a company myself and get. Make it successful or I was going to have to leave town and do something else. Put my house in the market, sell something. I don't know, go into real estate in Arizona. I didn't know what I was going to do. It was Arizona real estate or. Yeah, become a yoga instructor. And I wouldn't have been good at either of those things. That would have been a nightmare. So that was my plan B. And you know, when you get older and you start a business and you recognize that a lot of successful businesses started by mostly men that got funding Silicon Valley, they're no smarter than you are. There's nothing, there's nothing more that they're doing except they're doing it and taking the risk and they're persistent. And so, you know, and I figured, well, if I start a great business, I'll get the money. And that's why I waited also for a year. I was afraid before I took VC money, I was really convinced that with pets.com was still looming large in my past and no one was going to give me money unless I approved it. In the first year, we did $10 million in revenue for. For the real rail. So I knew, I knew I had to prove it and then I would. You know, it's pretty hard to deny a $10 million going toward 25 million the second year. And most companies don't do that, you know, ever. So. Yeah, so it had a. It was a massive milestone in my life. And you know, you're having. Is that first child. Second. All right. So also he asked me for a divorce And I was 41 and it was. We had sort of been trying to have kids, but hadn't really. And then. So then I had to go through and make that decision, like, am I going to be, you know, I'm going to be a single mom. Should I. What should I do? So it sort of hit at one of those critical Nazi men, don't think this way, but women have to. You really have to plan out if you really want kids. I had raised my brother in my head and in reality I did pretty much have to. My mom had Ms. When I was a kid, so I was the oldest. So I had a lot of responsibility and felt like in my 20s, I just wanted to have fun Because I didn't, you know, I had a lot of responsibility from the age of eight until I, you know, went out on my own. And so I didn't have this burning need like a lot of people, because I felt like I've raised my kids. But then when you're faced with that decision, like, oh, My God, I'm 41, I'm 42. Going to be 42 soon, not married. What am I going to do then? You're really up against it. Like, I've got, you know, I did check. I saw a few good eggs running around there. Check with the gynecologist. And I had to make a big decision. And I decided not to consciously be a single mother. And so I made that decision. I would say it was. That was harder than any decision probably ever to really know. And if I. If I'm really honest, has it made me sad? Sure, it's made me sad, but it hasn't made me depressed. It hasn't like, you know, it's sort of like it wasn't. It was a hard decision to make. It was the right one for me at the time, but it didn't come without consequences.
- [67:18]
Nicole Lapin
Regret?
- [67:19]
Julie Wainwright
No, not regret. I would just say, you know, you only don't live that long. And having children is one of those life experiences. And so it's not regret. It's just a little sad. But it's not like. Because I know I made the right decision at the right time, but it's a little sad. But, you know, you always have to. When you're twos in a road, you have to leave something behind. And I wouldn't have probably started the railroad. I wouldn't have done other things I've done in life if I would have had kids. And to be honest, it's hard having kids now. It's hard. It's hard. Close your ears, little baby. You may have a perfect child and have no problems, but you're going to have, you know, you've got. There are more challenges with social media. There's more. There's just more challenges now.
- [68:09]
Nicole Lapin
Yeah. Because when you hit the stride in your career as women, men don't think about this. It's also when you hit your biological.
- [68:15]
Julie Wainwright
Prime and which is without a doubt been researched. And you probably know this, that that's when women start losing on the financial curve. And it's. And there are so many reasons, because even though men have gotten much more involved as fathers, it still falls on the woman. And I don't care how old you are, it still falls on the woman like, or how young you are. No one's that progressive. And there's always the odd. There's always the exception. You know, where the man's doing or the man's really 50, 50. But that's the exception, not the rule. And so statistically, that's where women lose out. And I would say if you just talk about being an entrepreneur, that's why you really have to understand your trade offs and make choices that are aligned with where you are. Because you can have it all, but it's not in. It's a serial experience. It's an asynchronous experience.
- [69:15]
Nicole Lapin
What it means to find what that is.
- [69:19]
Julie Wainwright
Yeah, you just have to be comfortable with your choices. And then you have to really know yourself. And that's not easy. You know, it's not easy.
- [69:27]
Nicole Lapin
It's not. It's.
- [69:28]
Julie Wainwright
That's your life journey. That is your life journey to know yourself.
- [69:31]
Nicole Lapin
But you birthed another beautiful baby.
- [69:35]
Julie Wainwright
Yes, I'm very happy. And now amazing outcomes. And Ahara Med is really exciting. I mean, look, 40% of the US is considered obese. Type 2 diabetes, cardiovascular issues, metabolic disorder, neuropathy. Look, I honestly think my father died at 86 of complications from obesity. And it was a terrible death. And I actually think he mentally he was great. I think he would have had the last eight years of his life would have been really, really great if the drugs were there and he would have taken them because he had had a heart attack at the age of 72. And instead of taking care of yourself, he actually started gaining 100 pounds, you know, and I think it was a combination of depression, et cetera, et cetera. But I think he would have been had a longer, happier life, or maybe he would have died at 86, but it would have been a more active, fulfilling life.
- [70:36]
Nicole Lapin
And so now you're birthing a whole other business, baby.
- [70:39]
Julie Wainwright
You never die, Julie. They can't hold you back. Well, I mean, what am I gonna do with all this energy?
- [70:48]
Nicole Lapin
You're using it. Thank you guys for letting me cr.
- [70:50]
Tracy D'Annunzio
And thank you. She started kicking as soon as Julie started speaking.
- [71:00]
Nicole Lapin
Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin. Money Rehab's executive producer is Morgan Lavoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, Money Rehab at Money News Network to potentially have your questions answered on the show or even have a one on one intervention with me and follow us on Instagram @moneynews and tiktokoneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make. This episode is brought to you by Progressive Insurance. You chose to hit play on this podcast today. Smart Choice make another smart choice with Auto Quote Explorer to compare rates from multiple car insurance companies all at once. Try it@progressive.com Progressive Casualty Insurance Company and affiliates not available in all states or situations. Prices vary based on how you buy.