CEO Series: Julie Wainwright, The RealReal

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Long before Trip.com was the multi-billion platform selling pet food that was Pets.com. That had a great rise and an even more epic fall in the dotcom bubble. And while that is the whole story for another day, who am focused on for today's Billion Dollar Moves, is the CEO behind what many would call an epic fail. 

After overseeing one of the biggest blow ups in internet history with Pets.com, Julie Wainwright was a Silicon Valley pariah.

While initially she thought she could get a job, afterwards, Julie faced numerous rejections in her job search. And so she eventually said, “Look, I had become unemployable. I had to built my own job.”

Julie:

Clearly I'm not going to be able to get my dream job from someone else and I'm going to have to create my own. That's exactly how that hit me.

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At 53, what most would deem ‘too late’, she founded The Real Real, showing that failure can bring the freedom to pursue a second act without fear. Her vision to create a trusted marketplace for authenticated luxury consignment transformed the industry and led the company to incredible heights, raising more than $300 million. Now, Julie left The RealReal in June 2022, marking its peak valuation of 1.3 billion.

And while we'll also talk about her departure from the reveal and the challenges reported today – it is unquestionable that her journey from absolute failure to growing and scaling is a testament to her resilience and innovation. 

This is why she's next in the Billion Dollar Moves CEO series.

Key Takeaway 1: Failure is just the cost of success— be one with it

Julie graduated from Purdue University starting off in corporate before becoming as an early tech entrepreneur and e-commerce pioneer. She headed up Reel.com, an online video site, in 1997 before taking over as chief executive of Pets.com as a hired gun in 1999.

Julie:

“ Look, I’ve had a I started my career in a really great place with Clorox, as the second … Actually, I think it’s the second undergraduate they ever hired in brand management. I’ve had a lot of training, that was great grounding in P&L management, and actually data analysis, even though we were working off dumb terminals off mainframes then.

That was awesome, and then I went into the tech world at a very young age, at around 25, at a company called Software Publishing, no longer in existence. At that time there was Microsoft, VisiCalc and Software Publishing. Subsequently Lotus, which ate VisiCalc. Anyway, so it was early on, and I would say one of the most formative things I did when I was at that company was, I raised my hand to do international for them. At the age of 27, I was setting up international distribution based out of London, and ended up, because the VP of International ended up getting fired, running that whole division of international, setting up partnerships all over the world.

Living in London, in France, in Paris, and Munich, at least twice a week, and then Milan and Barcelona twice a month for Paris and Munich, and then usually every month in Barcelona and Milan. Then also in Hong Kong, Singapore, Australia, New Zealand, Rio, Brazil, São Paulo. At least every four months. And Taiwan, I don’t want to forget about Taiwan where the first time I ever encountered that I had to go in the women’s only wing, which I don’t think they do anymore. I haven’t been back there in a long time. I had to go in the women’s only wing, and I could request a blind masseuse. I thought, well that’s something.

So it was a long time ago, and needless to say there weren’t a lot of women flying all over the world, and there weren’t a lot of women setting up their companies overseas. But that probably was one of the better experiences I had for preparing me to be an entrepreneur. Because it really was just, you’re out there on your own. You’re making hard decisions.

But having said that, I wasn’t developing product. I was an offshoot of the mothership there. But it was a lot of fun, and great responsibility, and really broaden your life. I did that about six years.

But you know, even with pets.com, which is the one everyone loves to talk about, I was brought in to run it. Another entrepreneur had started it, and the venture capital team had asked me to run it. It was probably about 400,000 in revenue when I took it over.

Well, when I was brought in. It was early stages. It was a guy shipping product out of his spare bedroom, really, what was happening. I mean, a lot’s been written about Pets. Most of it should be rewritten now that Chewy.com went public, and there’s nothing that Chewy does that Pets.com didn’t do. Which just shows, timing is everything. I’m just going to say, in life, timing is everything. It’s everything when you find a partner, or if you don’t find a partner. If you start a business, if you get funded, if you don’t get funded.”

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Now a symbolic case study of dotcom boom and bust. The site collapsed after going public in 2000, losing $300 million of capital investment. She had raised. Despite the media scrutiny and personal toll, Julie emerges stronger applying the lessons learned to her future ventures.

Julie:

The benefit and actually the beauty of having a public failure. At least for me, it took away any fear of failure. Because you fast forward ten years later and I'm stronger as a person. I've already failed publicly. I lived through it. It was horrible at the time and all that did was just allow me to move forward at a very fast pace and create an amazing company.

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After the dotcom bust, Julie took several years to regroup before launching The Real Real in 2011, a company that redefined the luxury resale market. Her experience with Pets.com actually informed her cautious yet bold approach to the real, real, focusing on profitability and market demand from the outset.

Now here are some actionable questions for you:

• What can I learn from my failures that will inform my future decisions?
• How can I build resilience in my team and myself?

Key Takeaway 2: Just because it’s never been done before, doesn’t mean it can’t be done

Identifying and capitalizing on untapped markets can lead to industry leadership. The vision for The RealReal was rooted in the belief that the luxury resale market was both underserved and ripe for disruption.

Inspired when she watched a friend spend “$5,000 in 20 minutes” in the consignment section of a store, Julie decided to establish an online e-commerce portal for pre-owned luxury and high-end designer goods that customers could trust completely.

To achieve this The RealReal has a strict and lengthy process to ensure fakes never make it onto the site. Wainwright realised that while eBay dominated the consignment market online, when it came to reselling luxury fashion goods, curation and authentication were key.

Julie:

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Her aim, she told USA today, was to take the top end of eBay and the bottom end of Sotheby's and Christie's in its first two years. The real, real short over 250,000 items, with between 60 to 70% of the profit going back to the original owner. At its peak, it reached a market cap of 2.39 billion the day of its IPO three years ago.

Now, Julie Sight has shifted attitudes among customers in the luxury shopping market who are willing to buy more now that they understand the true resale value of high end products. And the real, real core is consumer faith in the company, something that has previously been lacking from the online luxury consignment market.

Key Takeaway 3: Just get started. Do the damn thing, expand and stay focused.

Julie: [EXCERPT FROM KARA GOLDIN]

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And while it's easy to feel demotivated from the rise of competition along the way, Julie's advice stay focused. And listen to this insight on Petco trying to threaten Pets.com. That is some corporate thuggery.

Julie: [ON COMPETITION, FROM KARA GOLDIN]

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The most important thing, yet again, is to focus on your customer. Remember, if you keep looking around at what everyone is doing, you'll lose your ground. Which brings me to the next takeaway. Consumer first. Always.

Key Takeaway 4: “Your customers vote everyday with their purchases. Pay attention”. Customer-Centric Approach

Now Julie’s deep understanding of customer needs and behavior is what I believe has made her truly successful. In particular, the trust and quality assurance provided by The RealReal.

[EXCERPT FROM KARA GOLDIN]

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Indeed, the world moves on. Consumers vote every single day. The real, real success story was largely due to its focus on providing a seamless, trustworthy experience for both buyers and sellers. This customer centric approach included rigorous authentication processes, personalized services, and a strong commitment to sustainability, which resonated with a growing segment of socially conscious consumers. After the Real Wheels IPO in 2019, Julie continued to innovate within the company, exploring new markets and expanding the product offerings.

Her willingness to adapt to changing consumer behavior and market dynamics has kept the real, real at the forefront of the luxury resale market. 

Now, here are some actionable questions for you:

• How well do I understand my customer’s needs and pain points? How are they evolving?
• What can I do to exceed my customers' expectations?
• How can I create a loyal customer base that advocates for my brand?

And the final takeaway? This one might have been my favorite. 

Key Takeaway 5: “Your business is an opportunity for you to make an impact.” 

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Now, one of my favorite things to look out for is how an entrepreneur uses his or her platform to create an impact beyond simply chasing financial metrics, which of course, is important. Now, Julie's one of those leaders who made it a point to look around her and question the way things had been done and more importantly, push her company and others to become more sustainable.

Julie:

When we were about half a billion I started calling on different brands and talking to them, the brand groups and talking to them. Because by then I was really switched on about the eco-damage that fashion does. Now certainly it’s done more by fast fashion, because it’s sort of meant to be disposable. But every supply chain in the fashion world is sort of a mess, and it really wreaks damage in the environment.

I started talking about the importance of sustainability. I started talking about how when there is a resale value for an item in the primary market, it supports the primary market, it doesn’t compete with it. Knocking on the doors, and I got various levels of receptivity. I would say there was a curiosity factor, and a somewhat interest factor in just a female entrepreneur that was … Some people really did listen intently, and one of them was Stella McCartney.

Now, Stella McCartney has a brand and a reputation that transcends the size of the brand. I mean, she is a fashion forward thinker. Things she does or did three years ago, the industry is like, “Oh, maybe that’s a good idea. Maybe not killing animals for fur is a good idea.” Gucci came around to that, Stella’s been there from the day one. She never is harsh on her judgment. She’s like, “I think this is the right thing to do, I’m going to push the edge on coming up with faux leather. I’m going to push the edge with sustainable fabrics. I’m going to see how far I can push it.”

When we talked to her about the circular economy, well she’s a big … She loves resale. She really believes in the circular economy. Ellen MacArthur was the one that coined that phrase, as far as I know. Anyway, Ellen MacArthur out of the UK had been working on ways to get products that were possibly disposable out of the environment and then back into another use. Her number one thing she was talking about were the plastics, but you have a British woman, a famous British woman, Stella McCartney, who is also friends with Ellen MacArthur, who is also a famous British woman, who is changing the laws and the way people think, businesses operate in Europe and hence the world.

When we met with her, she goes, “I want to do this.” She said, “I absolutely want to do this, and let’s work together on a program.” It shook the industry to their core. Because again, smaller brand, not a big brand. But big voice, big impact.

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She also often talks candidly on what it means to be a role model and why women must continue to persist whatever their age. 

Julie:

Well, I mean, look. Women only get 2.5%. We slipped again. Remember, we went up to 2.7, and everyone’s like, “Oh, they’re gaining.” I’m like, really, we’re gaining? I think gaining would be 40%, going from 2 to 40. But we’re back down to 2.5, and the numbers don’t even break out women of color, but you know it’s almost nothing.

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Building a strong company culture and leading by example are essential for scaling a business. Wainwright's leadership style has been characterized by transparency, accountability, and a strong ethical compass.

At The RealReal, Wainwright cultivated a culture of transparency and collaboration. She emphasized the importance of ethics in business, particularly in the authentication process, which was central to the company’s value proposition. This culture attracted talent who were passionate about the company’s mission, driving its growth and success.

Here are some actionable questions for you:

• How can I lead by example to inspire my team?
• What values are non-negotiable for my business, and how are they reflected in our daily operations?

Now a post-note: Despite its early success, The RealReal more recently boasts only a market cap of just $374 million as of the time of this episode release in 2024 after reaching a market cap of $2.39 billion the day of its IPO four years ago.

Why? In a fascinating conversation with investor Ian Sigalow of Greycroft — the firm was also an early backer in The RealReal — he offered his theories about why.

Ian:

Though The RealReal was a “really good idea,” creating a far more vibrant second-hand luxury goods market, the “challenge with the model is that it is very capital intensive. The storage of the garments is expensive. The way that they procure in such a white-glove manner is expensive.” Wainwright “executed really well on the vision, but driving a profitable machine and taking the cost out of it is just very hard to deal with in that business because it’s all basically one-off unique pieces of fashion product, and they all have to be graded. It’s a complicated business to scale.

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The BOF writes further about the new CEO’s evolution in approach, to which Joh Karl the new CEO of The RealReal said, 

“The amount of hyper-growth that The RealReal went through, there were some mistakes along the way,” Koryl said. “Yes, we have to find new ways of monetisation ... yes we have to put more automation around authentication, but the core business model of what we’re doing has held up in crazy times since its founding.”

And that’s just the cycle of business folks!

It is unquestionable that Julie Wainwright’s journey from Pets.com to The RealReal and now Ahara is a testament to the power of resilience, innovation, and customer focus in building successful businesses.

And what is she up to today, you ask?

Today, Julie at 67 years old is leading another startup she founded, “Ahara” through its earliest days with physician-nutritionist cofounder Melina Jampolis. Having raised $10 million, Ahara describes itself as a personalized nutrition company that provides recommendations to its customers after they first fill out a health questionnaire that asks them about their diet and health history, and their age and location, after which they can take a variety of at-home tests for genetic, epigenetic and biomarkers.

Julie says reporters are the only ones asking her about her age and her motivation at this stage of her career.

Her answer?

“I have a lot of energy, and I'll probably work for the rest of my life because I love it," she says. "I could put energy into other things, but the payoff wouldn't be there."

Oh and her final words of wisdom to so many who say they’re burnt out by managing investors, board members, their company?

She advises: "Don't get so tired that you can't move forward."

Now if that isn’t a woman I want to be when I grow up!