Podcast Summary: Money Rehab with Nicole Lapin Episode: Julie Wainwright (Founder, The RealReal) on Facing the Competition and Taking Companies Public
Release Date: December 5, 2024

1. Introduction

In this episode of Money Rehab with Nicole Lapin, hosted by Tracy D'Annunzio during Nicole’s maternity leave, Tracy welcomes Julie Wainwright, the accomplished founder of The RealReal. Julie is renowned for her impressive career spanning roles at Clorox, Real.com, Pets.com during the dot-com crash, and ultimately founding The RealReal, a leading luxury resale marketplace.

2. Julie Wainwright’s Career Journey

Julie delves into her early career, starting in brand management at Clorox as one of the company’s first undergraduates. Dissatisfied with the limited upward mobility and the tendency for women to be funneled into HR roles, she pivoted to the burgeoning tech industry. Influenced by her father’s artistic and entrepreneurial spirit, Julie embraced the tech world, recognizing its potential for innovation and creation.

Notable Quote:
“My nature is toward taking risks and creating and not being held back by someone else's idea of my success.”
[05:00]

3. Entrepreneurship Insights

Julie outlines the essential traits of successful entrepreneurs:

• Risk-Taking: Willingness to venture into uncertain territories.
• Adaptability: Ability to pivot strategies when necessary.
• Talent Recognition: Valuing and leveraging the strengths of team members.
• Capital Raising: Persistence in securing funding despite rejections.
• Commitment: Accepting the lack of work-life balance inherent in entrepreneurship.

Notable Quote:
“If you’re doing it, you’re doing it. You have to be committed and see it through.”
[05:50]

4. The RealReal vs. Tradesy: A Competitive Landscape

Tracy shares her experience as the founder of Tradesy, a direct competitor to The RealReal. The discussion highlights the differing business models:

• The RealReal: A service-oriented platform that authenticates and manages inventory, providing a high level of customer service.
• Tradesy: A self-listing site where sellers list items independently, with virtual authentication.

Julie attributes The RealReal’s success to its superior service, robust infrastructure, and access to substantial capital, which allowed for expansive operations and enhanced customer trust.

Notable Quote:
“The RealReal aggregates product and ensures authenticity, which set us apart from self-listing platforms like Tradesy.”
[14:00]

5. Raising Capital and Business Growth

Julie discusses her extensive experience in raising capital, having secured over a billion dollars throughout her career. She emphasizes the importance of a clear vision and the ability to scale operations efficiently. Her approach focused on acquiring high-quality inventory and building a comprehensive infrastructure to support The RealReal’s growth.

Notable Quote:
“I raised over a billion dollars to build up our infrastructure because we wanted to provide top-notch service to our luxury customers.”
[12:00]

6. Taking The RealReal Public

The conversation shifts to The RealReal’s journey to becoming a publicly traded company. Julie recounts the IPO experience, noting the inclusive and celebratory atmosphere among her diverse team. Despite the lack of traditional recognition like being listed among the influential men on NASDAQ boards, the IPO was a significant milestone for the company and its employees.

Notable Quote:
“Everyone in the company had stock. It was inclusive, and people brought their families to the IPO day. It felt amazing.”
[30:20]

7. Challenges During COVID-19

The onset of the COVID-19 pandemic presented unforeseen challenges for The RealReal. Julie explains how lockdowns in key markets disrupted product flow, leading to inventory shortages and operational hurdles. Additionally, short sellers exacerbated the situation by spreading misinformation, further destabilizing the company’s performance.

Notable Quote:
“COVID hit and we couldn’t pick up product in our major markets, which severely disrupted our operations.”
[34:00]

8. Boardroom Conflicts and Departure from The RealReal

Despite The RealReal’s success, internal conflicts with the board led to Julie’s departure. She critiques the board’s composition, highlighting a mismatch between corporate-centric members and the entrepreneurial spirit needed to steer a growing startup. The lack of shared values and support ultimately resulted in her being fired.

Notable Quote:
“Shared values are more important than subject matter expertise for board members. Our board lacked that alignment, leading to my departure.”
[41:32]

9. Transition to Ahara Med: Julie’s New Venture

Undeterred by her exit from The RealReal, Julie launched Ahara Med, a company focused on nutrition and weight loss. Ahara Med offers compounded weight loss drugs at a fraction of retail prices, paired with complimentary dietitian consultations covered by major insurance providers. This venture addresses the high obesity rates in the U.S. and aims to provide sustainable weight management solutions.

Notable Quote:
“Our goal is to help people maintain weight loss through personalized nutrition counseling, ensuring they don’t regain weight after stopping the drugs.”
[51:22]

10. Conclusion and Key Takeaways

The episode concludes with a playful game of "Never Have I Ever," showcasing the candid and personable dynamic between Tracy and Julie. Julie emphasizes financial prudence, advising listeners to avoid credit card debt and invest consistently in retirement accounts. Her experiences underscore the importance of resilience, strategic planning, and aligning personal values with business objectives.

Final Tip from Julie:
“Do not let balances go on your credit card; pay those off and wait. Also, invest in your 401k or IRA and let it grow.”
[58:30]

Key Quotes with Timestamps

• “If you’re doing it, you’re doing it. You have to be committed and see it through.” — Julie Wainwright
  [05:50]

• “The RealReal aggregates product and ensures authenticity, which set us apart from self-listing platforms like Tradesy.” — Julie Wainwright
  [14:00]

• “I raised over a billion dollars to build up our infrastructure because we wanted to provide top-notch service to our luxury customers.” — Julie Wainwright
  [12:00]

• “Everyone in the company had stock. It was inclusive, and people brought their families to the IPO day. It felt amazing.” — Julie Wainwright
  [30:20]

• “COVID hit and we couldn’t pick up product in our major markets, which severely disrupted our operations.” — Julie Wainwright
  [34:00]

• “Shared values are more important than subject matter expertise for board members. Our board lacked that alignment, leading to my departure.” — Julie Wainwright
  [41:32]

• “Our goal is to help people maintain weight loss through personalized nutrition counseling, ensuring they don’t regain weight after stopping the drugs.” — Julie Wainwright
  [51:22]

• “Do not let balances go on your credit card; pay those off and wait. Also, invest in your 401k or IRA and let it grow.” — Julie Wainwright
  [58:30]

Final Thoughts

Julie Wainwright’s journey from navigating the challenges of the dot-com crash to building and taking The RealReal public, and subsequently launching Ahara Med, offers invaluable insights into entrepreneurship, resilience, and strategic growth. Her candid discussions about competition, boardroom dynamics, and personal financial advice make this episode a must-listen for aspiring entrepreneurs and those interested in the intricacies of building a successful business.