Julie Wainwright (Founder, The RealReal) on Facing the Competition and Taking Companies Public

25:34And 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. Angel investors. 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.

26:12And 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. What year was this? 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. We tried some direct card marketing that was percolating in through the post office, literally a postcard. Oh, like explaining the service. Did you choose zip codes with like ultra high net worth people? Well, we did, but we didn't, if someone in LA, we didn't have a team down here yet.

26:51We had to fly someone down to get it and drive a U-Haul back. All right. So we're really, it's been scrappy early days. And we get a call from stylist. And I don't think I can mention the celebrity, but she said, 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 real rail, but we get a call. x person wants to clean out her warehouses warehouses yes was it celine dion i'm not we're not gonna go through the the documentary about celine dion where she has warehouses of costumes it turns out it's a thing in fashion all right not just celebrities and can you this literally got the call at three o 'clock in the afternoon can you be there tomorrow morning i'll text you the address.

27:39The answer is always yes. Always yes. It has to be yes. Employee number one, Rati Levesque. At that time, Rati's now the president. Okay. All right. So flew down and with an intern. All right. The next morning. So we had one intern in Georgia. All right. So Georgia and Rati fly down, ran to Utah, which I'm sure Rati will be mad I say this, but she's not the best driver. At least she wasn't at the time. Oh, I get that. Nicole always tells me I'm not the best driver. So her car back in San Francisco was beating 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.

28:22They're like, yeah, there's a warehouse. This person then decided she wanted to try on everything one more time before consigning. Of course. You can't be sure you want to let go of it until you do a personal fashion show a pickup that probably would have taken eight hours was now extended to two and a half days wow 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 outlay 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 they go in. And then I said, do you want me to fly someone down there?

29:04Because 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 calling. It was a total punk. She gets there, opens the U-Haul, tons of boxes. tons but nothing good everything was good oh not a lot of handbags but everything was no she was totally punking me but here's what happened and this 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 We said it's more complicated.

29:57Yes, because we were a marketplace. We couldn't just call up a vendor and say, I want more. No, you're constantly managing the supply and the demand, the sellers and the buyers. It's such a complicated business.

30:15Hold on to your wallets. Money Rehab will be right back. And now for some more Money Rehab.

30:28it'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 and the french guy stepping into the toilet to photograph 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 oh you know there really isn't that thing it's a simulation so that's too bad i didn't know oh yeah i mean you're at 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 that makes it hurt a little bit yeah and everyone in the company had stock anyone that had been with the company five or years more were part of the IPO and were there with me, standing with me.

31:22And honestly, they said they have never seen an IPO like this. Really? In what way? 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 stylists. There's no doubt in my mind we were the most stylists. There was never so much Gucci on the Nasdaq stage. 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.

32:02And 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 really okay so that so on that particular stock exchange was that the one that had 23 women no that was overall it was both it was anybody taking a company public wow but then there's been women since then so that's good yeah yeah it does seem like more women's companies are getting to ipo even though like 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.

32:38Yep. And then also my friends over at Figs had a great idea. Figs is a great product. Yeah, that's wonderful. So we're seeing it more and more. A little bit. Yeah. Yeah, a little bit, little cracks, little cracks. Yeah. And so you took the company public. It is the greatest victory for a founder to do that. It's fabulous. From zero to IP. 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. Totally. It's as simple as that. You either have to sell the company or take it public. That's it. You only have two paths.

33:14Or if you shut it down, you're sort of in hot water for a long time. Yeah, that's not the pathway. That's a bad end. So I find founders, 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 world. So our path was going public. And my goal was when the company got to at least a billion dollars in top line sales, we should be ready because it was becoming highly predictable. And we were. That year we had a billion, 2019, we had a billion in top line sales. It was predictable. Everything was totally normal after 2019, right?

33:52COVID hit. Yes. 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. You still have a board of directors. But when you're public, you report publicly. 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.

34:24Yes. You just have fewer eyes on you. If you have a bad quarter and you're private, your circle knows about it. but the whole world 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 percent in january of 2020 versus year ago same period year ago february same number 40 percent versus year ago march san francisco and new york were early people to force shutdowns i remember and And March went from first, I think, 10. I think they shut it. In fact, I know they shut it down on March 12th.

35:04First 10 days growing 42%. Which is a good month for seasonality. 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 year ago. Because your warehouse is shut down, right? So you couldn't physically ship product. 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. Which was your biggest area? We're processing at the time was the biggest op center. But we weren't in the Bay Area.

35:46We still had an op center in the Bay Area. And we weren't. Clearly, if people lived in New York, it was a terrible situation in New York. New York was the single largest market for the real real. 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, 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.

36:26And 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. And then COVID was like... COVID stopped that, but it picked up again. Okay. 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, if you think April, May, June, the inventory is being depleted very quickly, but it's not being added back because we couldn't pick up products.

37:18And 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, wow. These are, by the way, all of your more politically conservative markets, areas where people didn't do COVID. No, they didn't have the shutdown restrictions. So the company was in trouble. And how was your work-life balance during this phase?

37:55Oh, 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 yeah even that no the sheriff's showed up and put it like we're gonna throw you guys and you know I'm like oh come on anyway we finally got the product there There will be no shoes and purses transported.

38:37Oh, no, the whole thing was nuts. Yeah, it was a bit crazy. So we had to open a new op center, which we got going in Phoenix. And then we had some odd calls coming into the 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, walkthrough, 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. 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 COVID would disrupt your business.

39:25Oh, it completely disrupted, but they were trying to make it even further. Even worse. 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 oh no this was a nightmare because we could so we had to start buying product which the quality of the product was good where were you buying product from Some directly from the brands, because remember, they couldn't sell their product either.

40:01Totally. Some directly from the brands, some from people that resell for the brands, a product that couldn't move. So the caliber of the product was great because it never made it on the shelves. Yes. But the margin was horrific. We did the same exact thing during COVID. What a nightmare. And found the same exact thing. And the whole thing was... It was tough. It was really tough. Resale was better than off price 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, then people will buy it again. Absolutely. You took the company through COVID through some of its toughest times.

40:36And then in 2022, you left the company. I got fired by the board. Oh, okay. We're talking about it. Julie, tell us what happened. There's a couple of 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 capitalist and all early investors except one actually left and the board had to be i had to rebuild the board make recommendations to rebuild the board after you went public you got a whole new set of board except for one and that one never sold oh so they held on to their stock and most of my said gone down but i would say a couple different things and this is really good advice for anyone choosing a 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.

41:25So you don't choose your board, you 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 real world was still an entrepreneurial led company and was still a very baby company. So you were a public company, but you still had a lot of room to grow and it still needed to be run. Like I think shared values is actually more important than area of access.

42:07Yeah. 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 meeting, to F off and he wasn't going to ruin the company.

42:52And 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't 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. And what were the values that you felt like you were bringing to the table that your board didn't share? 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.

43:30Yeah, there are a lot. So corporate citizens tend to work on politics. If you're a woman, there tends to be room for one woman at the 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 multi-billion 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.

44:13You 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 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.

45:00It'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. In 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 it's the same thing.

45:39You 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. But see, and I, because I brought people on for their subject matter expertise, but it turned out that because they had spent so many years in the corporate world. It's a 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.

46:12And 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. So you had a great board that really supported you. And I think that person would have supported him. He wouldn't have messed up and gotten off the board. He blew it. Everybody answers to somebody. So I'm sure he messed up. He should have gotten his money out. He didn't. So you were fired from the company that you started, that you built. I was. I mean, what did that feel like? It was very dark. When that happened, were you able to speak publicly about how it went down?

46:50Well, it's your story, so you can always talk. I don't think it benefits me to talk to them publicly about it. It's in the book, though, of course. How do you think the company is doing now? 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.

47:34And 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 a hundred years, just leaching really bad chemicals versus buying good things and recirculating them. And we democratize luxury, which you help do too.

48:17So all of those things are great. And honestly, and most of the time it was so much fun. It was just fun. 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 with it. And recirculate it. Yes. And I think that we completely changed the game in terms of making resale cool. 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 going to work.

49:05And so my goal was to change perception. Yes. And I think luxury customers at the time that we were getting started turned up their noses at used clothing. And now everyone likes a deal. So they did and 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.

49:43Totally. That's the marketplace value system.

49:51Hold on to your wallets. Money Rehab will be right back. And now for some more Money Rehab.

50:04I'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 something new. 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.

50:40and 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 foods that are best for you but really what they wanted in corporations of what our customers was telling us no we want to understand what's going on 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 Wegove. And so we launched Ahara Med. So 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.

51:22Number 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 a Wegove are compounded. Now, let's talk about the advantage. You have a doctor's group. Can you explain to people what is compounding? Compounding means they're made, they're actually made not in mass production with a big brand. There's small batch. And there isn't a drug shortage. There is a delivery mechanism shortage. So the big brands use special pens that obscure the fact that you're putting a needle in you.

52:15Where you stamp yourself. 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 dietitians 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.

52:57How much does it cost per month? So something like an Ozempic equivalent is$200 a month. Wow. And that includes having a nutritionist who helps tell you that includes having a dietician to help you. One month we're doing free right now. Aetna and United Health have already said they're covering the expense and we're just waiting on Anthem and Blue Shield. Wait, so for a lot of people, your insurance company will pay if you go to a Haramed So you sign up for a dietician. I'm calling it complimentary because it is. Your insurance will cover something like 89 million people are covered by those two insurance companies.

53:38So you can get dietician consulting as you start 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 dietician 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 first place.

54:37So 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. Yeah, I feel like everyone I know who's been on the GLP-1s, 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.

55:16Let's say you're on it for six months and let's say you've lost 40 pounds, highly possible, or maybe it took you eight months, but 40 pounds, 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. Oh, wow. Unless you learn how to change your diet and eat for your health. Don't shrink their stomach while they're on the drug. No, they tend to gain the weight back when they're not as hungry. It is good to get good nutrition guidance. Micro and macro nutrients are really important.

55:55And to get those habits set up while you're on the weight loss drug. So then you can continue when you leave. 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 oh no all right ready never have i ever paid on the first date i've done it okay how'd it go by the way how did it work out with the guy that you paid on the first date not great not great no no all right so you know yeah so don't do this but yes i've done it okay ask for a raise i've been my own boss for so long i'm always asking for my own raise so wait that means this is yes put another finger oh i have to put it in yeah okay explain really quickly when you're the ceo who do you ask for oh you have to go to a comp committee but that's used data on the board but you use data yes okay never have i ever oh i gotta do this whatever this is okay bought a fake bag to my knowledge i have never bought a fake bag never have i ever bought a birkin oh i bought one.

56:57How many have you bought? More than one, but then I sold them because I did sell them. Yeah. Were you not using them? I wasn't. You know, my problem is handbags to me are utilitarian and 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. It's too beautiful and they're handmade. And I just sat there in my closet it made me sad i know i did the same thing and then i bought another one carried it it felt awkward oh then i bought more and then i'm like what am i doing and then i'm like okay i i can't okay never have i ever signed a prenup oh you know what i haven't so what is the thumb going around but would i 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 for all of julie's future potential so just be warned they're going to have a good business yeah it's good business it's it keeps everything clean never have i ever fought with a family member about money oh my god so that's a yes so i just thumb go in i've yeah that's a problem goes in yeah okay and never have i ever this is the last one maxed out my credit cards oh for when i was doing the real real of course i did you did around of course okay but it turned out to be a good bet i not only did i max out my credit cards i also took down my iron 401k remember i'm telling i didn't get vc funding for a while you went all in oh that's it babe you gotta do it and honestly that turned out that was an understatement of the show that turned out it will 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.

58:54So it can be about personal finance, investing, anything money related. Your best tip for our audience. I 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 a grim doing it to start the real real but in a small ira 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.

59:42And 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. 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 multi billion dollar company. Just by the way, if you do take a company public, start actually selling your stock, you need diversity in your assets. Yes. And I did that right away.

1:00:31So 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. Julie Wainwright, my former competitor and current dear friend. Thank you so much for coming to Money Rehab. I had so much fun. Oh, I hope it's a good one. Thank you, Tracy. I think it's a good one. Thank you, Julie. You know what? I'm glad we became friends. It's been delightful. Me too. Hi. I have a question. Can I say? Do you want me to get up? No, I want to sit with you. I've been listening, and you guys did great.

1:01:08The 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 training? Oh, I did think about competition. What did you? 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.

1:01:44And 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 because more than anybody, I think I knew how difficult that job was. So. Well, that's nice.

1:02:21That was a generous thing for her to say. All true. And, and a million years ago, Julie, you were also the CEO of pets.com, which is like the butt of jokes when you think about the dot-com bubble. How do you feel about that? How do I feel about that? Well, it was a little bigger for me. First of all, 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? It's everything. So timing's really important. So it was a timing issue. But when I shut and I did shut the company down, gave shareholders back their money.

1:03:04I didn't run it to bankruptcy. And sadly, 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. Time means 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've never heard of it. What? I have been told that from other press people that if I was a man, you know, I don't know.

1:03:41I'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 at my house, showing up at my door, knocking to get, and 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. And how did you come back from that? I gave myself two years to either start a company myself, I didn't start Pets.com, I was brought in to run it, to start a company myself and make it successful or I was going to have to leave town and do something else.

1:04:24Put 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 become a yoga instructor. And I wouldn't have been good at either of those things. It would have been a nightmare. So that was my plan B. And 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 in Silicon Valley, they're no smarter than you are. 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.

1:05:07And 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 proved it. In the first year, we did$10 million in revenue for the RealReal. So 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. 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 it first show 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 um 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 on my own.

1:06:40And 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?

1:07:28Sure. 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. Regret? No, not regret. I would just say, you know, you 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, you know, 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 choosing a road, you have to leave something behind.

1:08:12And I wouldn't have probably started the real real. 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 to, there are more challenges with social media. There's more, there's just more challenges now. 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 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.

1:08:54And 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 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 a serial experience.

1:09:43It's an asynchronous experience. Or what it means. You can have it all if you define what that is. Yeah, you just have to be comfortable with your choices. And then you have to really know yourself. And that's not easy. It's not easy. It's not. That's a life journey. That is your life journey to know yourself. But you birthed another beautiful baby. Yes, I'm very happy. You both had amazing outcomes. And Ahara Med is really exciting. I mean, look, 40 % of the U.S. 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.

1:10:30And 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 etc etc 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 and so now you're birthing a whole other i know baby like you never die, Julie.

1:11:11They can't hold you back. Well, I mean, what am I going to do with all this energy? You're using it. Thank you guys for letting me crash. Yeah, thank you for crashing. She started kicking as soon as Julie started speaking.

1:11:30Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. 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, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork 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.