Founder’s Field Guide
Episode 32 Lessons in Process Power
Founder’s Field Guide

Episode 32: Lessons in Process Power

Lessons in Process Power

James Reinhart is the founder and CEO of thredUP an online thrift marketplace. We cover the competitive advantages of building processing plants from the ground up, how thredUP went from negative gross margins to strong unit economics, and the future of retail.

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[00:02:47] - [First question] - An overview of thredUP

[00:03:44] - Origination of the idea

[00:04:43] - Initial reactions to the concept

[00:05:22] - Early days trying to acquire the first customers

[00:07:32] - The evolution of their margins

[00:11:04] - Providing convenience to the customer

[00:13:01] - Lessons on working capital and inventory 

[00:14:27] - How consumers use the money they receive within the platform

[00:15:47] - The evolution of the operations of the business and scaling

[00:20:20] - When it’s time to shift from human capital to automation

[00:23:15] - Removing the hurdles for acquiring more buyers 

[00:27:19] - Convincing investors on this concept

[00:30:44] - The most difficult time for him psychologically in creating the business

[00:31:56] - How he thinks about capital allocation

[00:33:51] - Overview of the clothing landscape and what would surprise most people

[00:38:00] - Expanding their business from here 

[00:40:36] - Improving how the raw material is sourced for apparel

[00:42:45] - The nature of work 

[00:49:04] - What he’s most excited about for the future

[00:50:35] - Kindest thing anyone has done for him

Lessons in Process Power

Introduction

Patrick
My guest today is James Reinhart, founder and CEO of thredUP, an online thrift marketplace. ThredUP's online store is distinct in how the company touches every product, processing every piece of clothing at their own facilities instead of focusing solely on being a marketplace connecting buyers and sellers. We talk about the competitive advantages of building processing plants from the ground up, how James turned thredUP from having negative gross margins to very strong unit economics, and the future of retail more broadly. I hope you enjoy this great conversation with James Reinhart.

Origin Of thredUP

James, I think the best place to begin our conversation is for you to level set the audience by describing what thredUP does specifically. Just paint us a quick picture of the business because I think many won't be familiar.

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