Stitch Fix Founder Explains Why the Worst Piece of Advice She Ever Got Was to Raise A Lot of Money
Katrina Lake shares why having too much VC money can be a bad thing for the long term growth of your business.
Editor's Note: Entrepreneur's "20 Questions" series features both established and up-and-coming entrepreneurs and asks them a number of questions about what makes them tick, their everyday success strategies and advice for aspiring founders.
Katrina Lake wants to help her clients always look and feel their best -- and take some of the tension out of finding the perfect pair of jeans. Lake is the founder and CEO of Stitch Fix, a personal styling startup that she created to combine her interests in retail and technology.
Back in 2010, Lake tested the Stitch Fix concept for the first time in her apartment in Cambridge, Mass. while she was getting her business degree at Harvard Business School. The company officially launched in 2011, and six years later, the company -- which became profitable in 2014 -- now has over 5,700 employees and more than 3,400 stylists on staff, three offices, five warehouses and 10 remote styling hubs.
Every Stitch Fix clients fill out a quick questionnaire about their sense of style, and one of the company’s stylists, with help from the company’s algorithm, picks out five items of apparel and accessories to send to the user on a monthly, bi-monthly or quarterly basis. They try them on at home -- taking the awkward dressing room experience out of the equation -- and send back the items they don’t want. The shipping is free both ways and the user is charged a $20 styling fee for each Fix, which is then applied towards any clothing they decide to buy.
Even though Lake is now overseeing a growing national operation, she still takes time to style clients personally. “It’s such a amazing reminder for me of who our clients are and why we're doing this,” she says. “It's really re-energizing for me to be able dive down to the very granular level.”
We caught up with Lake to ask her 20 Questions to figure out what makes her tick.
(The interview was edited for clarity and brevity)
1. How do you start your day?
I have a 10-month-old so my day starts when his day starts. One of the things that has been an adjustment being a new mom is that the morning is some of the most valuable time I have with my son. It used to be that I would check email and Instagram first thing in bed, and now as soon as he’s up, I’m up. I’ve really appreciated the clarity and being able to start the day in a more organic way with my son.
Also, one of the tricks I have figured out in motherhood is that it’s really important for me to feel present when I’m at work, that I’m totally listening and paying attention and not worrying about what my son is doing. On the flip side, I try to bring that same level of being present at home. I want to feel totally present in everything I do.
2. How do you end your day?
I find it is a bad habit to look at social media before bed, so I try to read something on paper -- not on my phone -- before I go to bed.
3. What’s a book that changed your mind and why?
It's Not about the Coffee: Leadership Principles from a Life at Starbucks by Howard Behar. I read it before I started Stitch Fix. It had a really big impact on me and how I approached company culture. In Howard's book, he talks about how the company culture of Starbucks is one where he felt like he could be the same person at home and be the same person at work. And that the values were consistent in both worlds. That really resonated with me. I really wanted to create a workplace where people feel like they can be themselves, and they can be their best selves.
4. What’s a book you always recommend?
Six Seasons: A New Way with Vegetables by Joshua McFadden. I love cooking. It’s what clears my mind, since it's pretty hard to multitask when you're chopping vegetables. In San Francisco we are lucky to have access to so much great produce. This is a book that's about of vegetables that are in season. It's a fun book to experiment with, but it also has a very seasonal approach to cooking and pretty simple. I'm so obsessed with it right now, and I've been recommending that a lot.
5. What’s a strategy to keep focused?
Doing things where it's hard to be distracted like running and cooking -- and in some ways it's actually commuting. There's so many days when I take the bus to work, I feel like I can clear my mind. I love that time.
6. When you were a kid what did you want to be when you grew up?
I wanted to be a doctor. I was pre-med at school and I actually even took the MCAT. My ultimate decision was that I didn't love the work environment in a hospital. It just didn't feel like me, like this is where I want to spend the rest of my life.
7. What did you learn from the worst boss you ever had?
The main lesson for me was around communication. I was in this job and I loved the people and the work, but I was working a lot of hours and was stressed. And I just quit.
I look back on it now as an employer, and I can't believe I didn't share that with my concerns with my manager and didn't share how I was feeling before taking the most dramatic action.
At Stitch Fix, we encourage our managers to work closely with people and understand how they're feeling about their development and their work.
8. Who has influenced you most when it comes to how you approach your work?
Sukhinder Singh Cassidy. She's the founder of Joyus and was the CEO of Polyvore. She was somebody who really felt like she was embracing being a woman and a mom, but at the same time being a strong leader. You can be your authentic self, and you don't have to try to pretend to be anything else.
9. What’s a trip that changed you?
I went to China last year around the time of the Paris attacks. Everybody was kind of on edge, but I just [discovered] this sense of universal humanity from the women I met there. We're all just doing the same things [for our families and for our work] just in different places and in different languages.
10. What inspires you?
On my Japanese side, my grandmother. She grew up in Japan and she relocated here, learned English and lived independently in Minnesota. She saw this future for herself and against all odds made it happen.
On my American side, there was my great grandmother. Both she and her sister lost their husbands early in life. They were in this tough situation of both being single moms with multiple kids, and they combined their households and raised a bunch of great kids.
Those examples have always helped me have a wide lens of what's possible in life and to be able to believe in things that might be hard.
11. What was your first business idea and what did you do with it?
In business school one of the areas that interested me was hunting and fishing.
I thought it was kind of interesting and not a lot of technology has been applied to retailing in that category. I did a trip where I rented a car in Boston and drove to New Hampshire. We went to some hunting and fishing shops and one was a gun shop. I remember talking to the guy who ran it to understand his pain points. Hours into that trip, I realized I was not super passionate about the category. I can't imagine devoting my whole life to it. For me it was an epiphany that when you start a company, this is a lifelong thing.
12. What was an early job that taught you something important or useful?
I worked at Banana Republic during high school and holidays in college. A lot of the reasons why I really liked the job was that I liked the people that I was working with. I think it really just brought to life the humanness of what we do in apparel retail.
At Stitch Fix, we want to make sure that people feel like they're being challenged, that they're learning every day and that they enjoy the people they are spending time with. And I think it's such an important part.
I think for those couple of reasons that Banana Republic job ended up being pretty pretty useful to me.
13. What’s the best advice you ever took?
When I was first starting this company, the advice I got was that my life, as a founder, is going to be a roller coaster. There's going to be a day when everything is amazing and another day when everything is terrible. It's an emotional roller coaster when you're the founder, especially in those early days.
Also, being a founder can be a very lonely job. You can't tell your team everything. There was a time at Stitch Fix when we were eight weeks away from running out of cash. There were people on the management team who this, but if everybody knew, it could harm the team. It was important for me to look for a network outside of Stitch Fix, so there were other founders and CEOs I could talk to.
14. What's the worst piece of advice you ever got?
When you're in Silicon Valley, people tell you all the time to raise money when you can and raise as much money as possible. I just don't think it's great advice.
It was hard to raise money for this concept. We turned profitable in 2014, and we've been able to stand on our own two feet and invest in ourselves.
All of that is a function of the fact that we were forced to think about the economics of our business early. And I think there are companies out there that may have failed, because they had too much money and never had to think about the economics of their business.
15. What’s a productivity tip you swear by?
Stitch Fix. For me as a working woman who is really busy, figuring out how you can make the most of the limited time that you have is so important.
16. Is there an app or tool you use in a surprising way to get things done or stay on track?
If I want to look at my email, I have to pull it down to refresh my email. I also have nothing pushed on my phone. That helps me be purposeful with my time.
17. What does work-life balance mean to you?
When I feel like work and life are both going well, I feel like I can be fully present at both. I think the reminder to me is that both are super important, and I need to be able to feel like I can experience both in the way that makes me happiest. If I'm not happy in one or the other, it really affects the other side.
18. How do you prevent burnout?
We switched to an unlimited vacation policy a year or two ago. One of the benefits we saw when we went on an unlimited vacation is that more people were committing to taking time off for longer periods of time. One of my main tips we learned is to not just take vacation in little chunks, but to take a long enough time, you feel like you get a reset.
When I spend meaningful time with people outside of the industry or my job here, whether it’s talking about the economy or talking about something totally random, I find it to be enlightening and gives me great perspective.
19. When you’re faced with a creativity block, what’s your strategy to get innovating?
Any time I'm in a rut or needing new perspectives or something like that, styling is definitely one of my go-to's. I also ask myself, what is the problem that you're trying to solve? A lot of times as we think about creating solutions, we think about what do we have right now and how can we make it better? I think a better question is just wiping the slate clean and saying, how in an ideal world, if we could rewrite everything, what would we do?
We do an exercise here and we ask, how would Southwest Airlines do this or how would Starbucks do this? Thinking about other companies with totally different business models and how they might approach challenges.
20. What are you learning now?
I'm reading a super interesting book right now called The Evolution of Beauty: How Darwin's Forgotten Theory of Mate Choice Shapes the Animal World - and Us by Richard O. Prum.
It's talking about natural selection. We know about survival of the fittest and how the strongest animals win. But the reality is there are all these traits that evolve that don't really make sense from a natural selection standpoint. There's all these traits that have evolved because species find them to be beautiful. It was part of Darwin's original theory, but it was one that was kind of lost in history and so it kind of revisits that.
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