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“Given that Netflix is a $60 billion company—and we don’t have to watch TV or movies every day, but we do all have to get dressed—the potential for Rent the Run

by ismail 11y ago

“Given that Netflix is a $60 billion company—and we don’t have to watch TV or movies every day, but we do all have to get dressed—the potential for Rent the Runway was 10 times bigger than I ever thought,” This sound like a terrible investment thesis? It is ignoring all the differences between how you consume clothing vs media. The fact that there is physical distribution required vs digital. OR am I missing something key?

creature 11y ago
Don't forget the thousands of years humanity spent naked. Thankfully, startups are now here to solve that problem.
adventured 11y ago
No, you're spot on. It's a wildly incorrect premise. Example: Apple is a $670 billion company. We don't all have to own smart phones. We all have to sleep at night, therefore Beds 'R Us must be worth ten times what Apple is. You'd be hard pressed to invent a more comical economic premise than the one used to compare Rent the Runway to Netflix. It's in the same fantasy league as proclaiming: if I can only capture 1% of the oil industry, my company will be huge! Or put another: why aren't lettuce farms worth 100 times what the NY Yankees are?!? Surely lettuce is higher on the needs table than baseball much less one MLB baseball team!
- notahacker 11y ago
  I'm also sure people actually feel inclined to rent movies more often than they need to rent clothes. People buy the clothing they need to wear every day.
  - harryh 11y ago
    People also tend to throw out a lot clothing because they're bored with it, not because it gets worn out. There does appear to be a pretty big opportunity there.
    - rdancer 11y ago
      It's called Goodwill. You may have heard of them. ;-)
    - akgerber 11y ago
      And I buy a lot of that clothing from Buffalo Exchange and similar stores, but in spite of Buffalo Exchange being a national chain it's a modestly sized private company: http://www.buffaloexchange.com/about-us/ http://www.buffaloexchange.com/about-us/
    - dragonwriter 11y ago
      > People also tend to throw out a lot clothing because they're bored with it, not because it gets worn out. "Bored" is probably not the right word; getting rid of clothes that aren't worn out is driven, AFAICT, largely by changes in fit (because people change over time) and changes in fashion; the former doesn't tend to be planned/anticipated except for children or people engaging in deliberate programs (like planned diets), the latter also entails significant depreciation in the clothing (which occurs even if the reason the particular person gets rid of clothing is the first.) There's obviously some opportunity for rental services (and several online rental services exist), but its not clear to me that its a "pretty big" opportunity, because for most people, the turn around times, even when they don't involve wear, are long enough that they involve significant depreciation.
      - harryh 11y ago
        The depreciation issue is offset by the fact that you could get more usage out of a single outfit before it goes out of fashion if it was shared. People aren't wearing the same thing every day. Clothes sit unused in closets for weeks at a time while they are still in fashion.
        dragonwriter 11y ago
        > The depreciation issue is offset by the fact that you could get more usage out of a single outfit before it goes out of fashion if it was shared. Remote sharing of clothes imposes latent constraints; being available "on demand" is a key part of the value. And the things for which not having the clothes immediately on-hand is most acceptable are the things for which personal tailoring/alterations are most likely to be desired.
peterjancelis 11y ago
We all have to breath way more than we need TV, yet oxygen isn't a 60 billion market. It's just a nonsensical statement.
- wdewind 11y ago
  Actually she's not that far off. It's a stupid way to phrase it, but the global apparel and global entertainment market sizes (as well as their corresponding USA measurements) are pretty similar (~500B/2T). http://www.statista.com/statistics/279735/global-apparel-market-size-by-region/ http://www.statista.com/statistics/279735/global-apparel-mar... http://www.statista.com/statistics/237749/value-of-the-global-entertainment-and-media-market/ http://www.statista.com/statistics/237749/value-of-the-globa...

by ismail 11y ago

creature 11y ago

Don't forget the thousands of years humanity spent naked. Thankfully, startups are now here to solve that problem.

adventured 11y ago

No, you're spot on. It's a wildly incorrect premise. Example: Apple is a $670 billion company. We don't all have to own smart phones. We all have to sleep at night, therefore Beds 'R Us must be worth ten times what Apple is. You'd be hard pressed to invent a more comical economic premise than the one used to compare Rent the Runway to Netflix. It's in the same fantasy league as proclaiming: if I can only capture 1% of the oil industry, my company will be huge! Or put another: why aren't lettuce farms worth 100 times what the NY Yankees are?!? Surely lettuce is higher on the needs table than baseball much less one MLB baseball team!

notahacker 11y ago
I'm also sure people actually feel inclined to rent movies more often than they need to rent clothes. People buy the clothing they need to wear every day.
- harryh 11y ago
  People also tend to throw out a lot clothing because they're bored with it, not because it gets worn out. There does appear to be a pretty big opportunity there.
  - rdancer 11y ago
    It's called Goodwill. You may have heard of them. ;-)
  - akgerber 11y ago
    And I buy a lot of that clothing from Buffalo Exchange and similar stores, but in spite of Buffalo Exchange being a national chain it's a modestly sized private company: http://www.buffaloexchange.com/about-us/ http://www.buffaloexchange.com/about-us/
  - dragonwriter 11y ago
    > People also tend to throw out a lot clothing because they're bored with it, not because it gets worn out. "Bored" is probably not the right word; getting rid of clothes that aren't worn out is driven, AFAICT, largely by changes in fit (because people change over time) and changes in fashion; the former doesn't tend to be planned/anticipated except for children or people engaging in deliberate programs (like planned diets), the latter also entails significant depreciation in the clothing (which occurs even if the reason the particular person gets rid of clothing is the first.) There's obviously some opportunity for rental services (and several online rental services exist), but its not clear to me that its a "pretty big" opportunity, because for most people, the turn around times, even when they don't involve wear, are long enough that they involve significant depreciation.
    - harryh 11y ago
      The depreciation issue is offset by the fact that you could get more usage out of a single outfit before it goes out of fashion if it was shared. People aren't wearing the same thing every day. Clothes sit unused in closets for weeks at a time while they are still in fashion.
      - dragonwriter 11y ago
        > The depreciation issue is offset by the fact that you could get more usage out of a single outfit before it goes out of fashion if it was shared. Remote sharing of clothes imposes latent constraints; being available "on demand" is a key part of the value. And the things for which not having the clothes immediately on-hand is most acceptable are the things for which personal tailoring/alterations are most likely to be desired.

peterjancelis 11y ago

We all have to breath way more than we need TV, yet oxygen isn't a 60 billion market. It's just a nonsensical statement.

wdewind 11y ago
Actually she's not that far off. It's a stupid way to phrase it, but the global apparel and global entertainment market sizes (as well as their corresponding USA measurements) are pretty similar (~500B/2T). http://www.statista.com/statistics/279735/global-apparel-market-size-by-region/ http://www.statista.com/statistics/279735/global-apparel-mar... http://www.statista.com/statistics/237749/value-of-the-global-entertainment-and-media-market/ http://www.statista.com/statistics/237749/value-of-the-globa...