Start Today

Last quarter, startup funding fell 23%, the largest decline in about a decade. On paper, this is bad news for any founder hoping to launch their big idea. Speaking from deep personal experience, I would actually argue that this is one of the single best things that could happen to a newly minted entrepreneur. Here are my two cents. 

Some of the best, completely game-changing ideas come out of times of uncertainty. When resources are scarce, we’re forced to rethink and reimagine how we operate. Rent the Runway is proof positive of this dynamic. RTR was founded during the last recession when we recognized a clear need to democratize this industry and give women a more value-conscious, sustainable way to get dressed at a time when designer fashion felt further out of reach than ever. 

We raised a modest seed round ($1.75M) that needed to cover everything from inventory to employee salaries to shipping and logistics to photoshoots to marketing. Because we had very limited capital, we prioritized hiring all-around athletes who could not only do their job function, but ten others. Everyone was assigned a day to do customer service. Everyone worked in the warehouse and had a designated day where they were in charge of cleaning the office. Because we couldn’t pay high salaries, we attracted early team members who believed deeply in our mission and were willing to do whatever it took to build, test and learn. And this early founding team stuck with the company for many years despite many challenges in creating a new market. Mission driven talent also solidified a mission driven culture built around core values that guide us as a company to this day. 

Because we could only spend $200k on inventory, we had to very precisely define and understand our target customer base because we knew we had to provide variety and selection to at least one type of customer to understand whether women would actually rent dresses. Being intentional around who our customer was made it easier to understand how we should market to her and what product features we should prioritize building. Sometimes being flush with capital gives an early team too many shots at goal and many bad or not well thought through ideas consume resources.

We also had to create a product experience that was so magical that customers would organically share RTR with their friends and drive word of mouth buzz so we could avoid costly marketing campaigns. My co-founder and I were constantly talking to the press, striking no-cost marketing partnerships to spread the word, finding pre-social media influencers, building an ambassador network and doing all the things that you do when paid marketing is too expensive for you. Investing in building a brand that women thought was cool and smart ended up being a long-standing competitive advantage as to this day, ~80% of our customers continue to come to RTR via word of mouth. 

Being cash poor kept us hungry, frugal and smart. And this scrappiness as a virtue was embedded into our DNA – informing how we operate at every turn, through both economic ups and downs. To say this has served us well over the years would be a massive understatement.

In a moment like this, with VC funding down and the economy teetering on the edge of a recession, it would be tempting – not to mention easier – to talk yourself out of pursuing your dream. To go for the safe, sure thing, whatever that is. But there is truly no better time to start than TODAY. Operating under massive constraints forces you to ruthlessly prioritize. It pressure tests your business in the most stringent circumstances. If your idea is good, it forces you to figure out how to be nimble from the start. If it isn’t, you will learn that your idea isn’t working quickly (both because investors won’t invest and customers won’t pay for it) with a lower personal opportunity cost. By contrast, during frothier periods of time, VCs deploy more capital and more ideas get funded – both good and bad. Along the way, that abundance of cash can create false positives that prevent founders from failing fast and moving on.

In the end, nothing about being a founder is easy, so you might as well start now.