Neil Blumenthal and Dave Gilboa, Co-Founders, Warby Parker
The Warby Parker Story
Inside the company’s mission to change the way we buy glasses—and bring better vision to the world.
Why are glasses so expensive?
Dave Gilboa could not stop asking himself that question. After leaving his $700 pair of eyeglasses on an airplane while returning from Southeast Asia, he could not wrap his head around why a technology that was so archaic could cost him more than his iPhone.
Within his first weeks as an MBA student at the Wharton School of Business, he repeatedly brought this question up among some of his new peers. Gilboa, along with fellow students Neil Blumenthal, Andrew Hunt, and Jeff Raider, had all shared in the pain of losing or breaking glasses and had all agreed: the high markup made no sense.
Inspired by Gilboa’s pricey misfortune, the four of them founded Warby Parker. Now led by co-CEOs Gilboa and Blumenthal, the billion-dollar empire with 2,000 employees is revolutionizing the prescription glasses industry by selling stylish eyewear online at affordable prices.
The New York City-based company is also on a mission to combat the global problem of impaired vision through its charitable Buy a Pair, Give a Pair program. Since the company’s start, the program has distributed over 5 million pairs of glasses to those in need by donating a pair of glasses for every one sold.
But long before they could build an ecommerce giant, the team would first have to learn how to even build a website.
A Moment of Clarity
Prior to going to Wharton, all four co-founders had already spent some considerable time in the workforce. This allowed for each of them to gain valuable real-world experience, and it helped guide them to understanding if they had an actual problem to solve and a business to move forward with.
However, it was Blumenthal’s experience while running the nonprofit VisionSpring that would become crucial to the early concept of Warby Parker. During his time with the company, they trained low-income women in the developing world to start their own businesses. Participants were to take their new skillsets back to their rural communities and administer vision screenings and sell glasses. But it was something else Blumenthal had witnessed that would have a lasting impression on him.
“I had been to the factories,” Blumenthal says. “Here I was producing glasses for people who were making less than four dollars a day, but 10 feet away were factories that were producing…the $700 pair of glasses Dave had. So we knew something was awry.”
A light bulb went off and the classmates soon pulled together $120,000 and went to work on developing Warby Parker in 2008. The problem they wanted to solve: How can we make glasses we want, but at a low cost?
Eager to launch, but more focused on preparation and planning, the founders began sketching out all the main aspects of the company. With limited funding, they knew they’d have to really refine and plan each facet of their business before revealing it to the public. Their first steps were to design glasses that they’d want to wear and then find a manufacturer who could produce them for less, starting with Blumenthal’s connections.
The next step would be trying to figure out how to sell their glasses directly to the consumer. The answer was simple.
“This magical thing called the internet,” Blumenthal says.
The founders all knew that ecommerce was an innovation they wanted to take advantage of for their direct-to-consumer brand. Had they come up with this idea 10 years prior, the company may not have gone any further than an idea. With a brick-and-mortar store requiring a lease, utilities, and other costs, they knew it would be hard to make their new dream a reality with limited capital.
“If we did , we would have one location that we might be able to attract some local customers, but with the power of the internet, we were able to all of a sudden, launch a store to the entire US,” Gilboa says.
But there was a small problem. None of them knew how to build an online store, nor did they understand the many other details that came with creating an online shopping experience.
“We started talking to friends on how you build a website,” Blumenthal says. “And then we started visiting a bunch of websites that we would normally already go to. But now with a critical eye, we were understanding, okay, what’s the shopping flow?”
Over the next year and a half, the four of them kept chipping away at all the details of Warby Parker. Nothing got overlooked. They spent countless hours going over the vision and mission of the company, and worked on all the brand architecture of what they wanted their company to be.
In addition, the group constantly sought out feedback from friends and professors. Could something like this work?
One glaring concern that kept surfacing was whether or not a person would actually buy a pair of glasses online. With fit being so important, it would be hard for a person to gauge on a computer screen if a pair of glasses would fit their face and feel comfortable.
This forced them to reconsider their business model, and ever the problem solvers, the home try-on program was born. Breaking new ground, Warby Parker would allow a customer to select five pairs of glasses from the website and then ship them free of charge, allowing five days to test out the frames.
This was a major ecommerce innovation that would get them past the biggest challenge facing the business’s core premise. But there was one other challenge that would prove nearly impossible to overcome—agreeing on a name.
Thank You, Jack
Prior to Warby Parker’s launch, brands had already started to emerge that were selling glasses online. Customers were able to purchase glasses from sites such as 39DollarGlasses.com and FramesDirect.com, but they were sacrificing other elements, such as quality and customer service, for their lower prices.
The founders wanted to take a different approach with their company. They wanted to launch a fashion brand that not only offered great quality, prices, and service, but also one that made the world a better place. The company vision was clear and ambitious. But they could not come up with a name.
“We wanted kind of a proper name and didn’t think Gilboa-Blumenthal, our last names, really rolled off the tongue,” Gilboa says.
They sought out inspiration and ideas from historical authors and artists. People who represented the brand ideals that they were trying to carry out. One author that stood out to them was Jack Kerouac, the novelist and poet who was a pioneer of the beat generation.
Coincidentally, the New York Public Library was holding an exhibit one afternoon with some of Kerouac’s private diaries and journals. Seeking inspiration, Gilboa made a visit to the exhibit and stumbled upon some of Kerouac’s unpublished works, finding some interesting character names.
Two jumped off the page: Warby Pepper and Zagg Parker.
“So I took those back and the four of us were discussing,” Gilboa says. “We all loved those names and were debating, do we pick one of those, and we decided to combine the two and make it our own. And the URL happened to be available for nine bucks.”
After six months of debating and with over 2,000 names rejected, Warby Parker came to life.
The challenge for any new brand is figuring out how to gain exposure. With a small marketing budget, the co-founders had to be strategic about finding a cost-effective way to maximize their exposure in such a competitive industry. Realizing glasses are an accessory and that the fashion industry was an insider’s game, the team hired a fashion publicist to help set up meetings with editors and writers at major publications.
In February of 2010, WarbyParker.com officially went live. Within days of launching the website, they were featured in GQ, where they were dubbed “the Netflix of eyewear.” Soon after, another profile appeared in Vogue. From there, things went viral.
“We ended up hitting our first year’s sales targets in three weeks,” Blumenthal says. “Sold out of our top 15 styles in four weeks and it was just complete mayhem.”
Soon, they found themselves sold out of all their inventory with a waitlist of over 20,000 new customers. Warby Parker was an overnight success, a year and a half in the making.
Onward & Upward
Today, Warby Parker is valued at over $1 billion and has cemented its place among the top glasses retailers in the world. Even after they made it to the big time, however, the team kept innovating.
In 2013, Gilboa and Blumenthal began to expand their brand with more storefronts, having now opened close to 100 stores in the US and Canada. And within some of those stores, they’ve begun to employ their own optometrists where states allow it.
On the technology side, they’ve found new ways to cater to the customer. Within the Warby Parker app, any customer with an iPhone X can now virtually try on any one of their frames. In addition, they’ve made a move into telemedicine by allowing eligible customers to take eye exams from their phones, allowing a licensed doctor to write them a prescription remotely.
But no matter how large the company becomes, the team’s underlying values remain the same: they do whatever it takes to make customers happy.
3 Tips for Standing Out From the Crowd
When Neil Blumenthal, Dave Gilboa, Andrew Hunt, and Jeff Raider founded Warby Parker in 2010, they knew it wouldn’t be easy. But with the right planning, execution, and maybe some good luck, they felt they could make the world a little better, one pair of glasses at a time. The founding team knew that in order to get any attention in the noisy fashion industry, they had to be different and they had to stand out.
Here are Blumenthal and Gilboa’s tips for helping your new startup gain exposure.
- Be Novel
From the beginning, the founders knew that it would be hard to get any immediate attention in the fashion industry without the help of insiders. They knew their service and product would be different from any other retailer before them, but if no one knew who they were, it wouldn’t matter.
So the team hired a fashion publicist to get them meetings with top fashion publications. By being able to tell their story directly to their target audience, and through a medium that their audience trusted, it was a giant step in the right direction. And since Warby Parker was so different from its competitors, once it got on the insider crowd’s radar, it wasn’t hard for them to draw media attention.
“There was a bunch of things that we were doing that were novel,” Blumenthal says. “Selling glasses online, in 2010, was pretty novel. Having this home try-on program was really novel. Providing a pair of glasses for every pair we sell, was really novel. Charging $95 instead of $500 was really novel. So they really wanted to write about us.”
In today’s startup world, it’s never been more crowded and harder to stand out. Be different with your concept and separate yourself from the fray.
- Don’t Get Distracted
Although WarbyParker.com went live in February of 2010, the four co-founders spent over a year and a half focusing on their company’s mission, product, and business model. And after they found success, staying focused became an even more important priority.
“We got some advice early on that if you’re walking down a path towards a giant pot of gold, you shouldn’t stop to get distracted by any shiny little coin that you see along the way,” Gilboa says.
It would have been easy for Warby Parker to launch dozens of different products or to expand into new markets for monetary gain. However, that would’ve brought about great distractions that could have pulled them from their main goal, which is to solve their customers’ problems by offering them quality products and experiences.
“We’ve just seen so many businesses that have failed due to lack of focus,” Gilboa says. “But it’s rare that you’ll see a business that fails for being too focused.”
Remember the problems your business is trying to solve and stay focused on it. By always learning and iterating, you’re working towards providing the best service possible for your customers.
- Above All Else, Make the Customer Happy
From the very beginning, the Warby Parker team knew they had to keep their customers happy. They understood that they had to not only provide a great product, but also provide superb customer service.
In the beginning, all four co-founders were directly in touch with their customers. They each replied to customer emails and even set up an 800 number that would be sent to their personal cell phones until someone picked up. They were willing to do anything to make sure the customer was always satisfied.
“Do whatever it takes to make customers happy and make them feel good,” Blumenthal says. “Smile, personal notes, whatever it takes.”
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Nick Allen
- How losing a pair of $700 glasses led Blumenthal and Gilboa, along with fellow MBA students Andrew Hunt and Jeff Raider, to identify a major business problem
- How Blumenthal’s experience of running a nonprofit informed the early stages of Warby Parker
- A look into the 1.5 year process of bringing the co-founders’ business idea to life
- Why the team decided to merge eyewear and ecommerce
- The process of familiarizing themselves with the world of online shopping and websites
- How the name Warby Parker came to be, and why it took brainstorming over 2,000 names to get there
- The team’s cost-effective approach to marketing and launching the website
- How powerful press placement led to a sold-out inventory and a waitlist of over 20,000 new customers within weeks
- What’s in store (literally) for the future of Warby Parker
- The single piece of advice Gilboa and Blumenthal received that helped them be successful, and how other entrepreneurs can apply it to their own business
Full Transcript of Podcast with GUEST’S NAME
Nathan: The first question I ask everyone that comes on and that we interview is, how’d you get your job? Yeah. Who wants to take this one?
Dave: Yeah, I feel lucky that we were able to, I guess, hire ourselves. We met when we were in-
Neil: Dave was begging me for a job.
Dave: We met when we were in the first week of business school. We were on campus at Wharton, and we each had that frustrating experience of losing a pair of glasses or breaking a pair of glasses. I’d just been backpacking through Southeast Asia, and I lost my only pair of glasses, left them on a plane. Started complaining to anyone that would listen that glasses were so expensive. It didn’t really make any sense to me. I’d just bought a new iPhone for $200 and realised that the glasses I’d lost would cost me $700. So I was going to be a full-time student a pair of glasses.
Fortunately met Neil. He had spent a few years in the glasses world, knew all about how glasses were manufactured, knew that there was really no reason for these egregious markups. So we got together along with our two other cofounders and started a company, and then, I guess, hired ourselves as co-CEOs.
Nathan: Crazy. So talk to me around… Everyone has these aspirations to start a company. It’s expensive. There’s some capital required. You guys have raised venture funding now. But talk to me about the early days. Take me back. How did you build the first version of the product, getting samples in? Did you work with ? Talk to me about that because this is not easy.
Neil: Yeah. I think there’s this myth that you come up with a business idea, and then the next day, you have a business. We worked on the business for a year and a half before we launched the website and started selling to customers. And, again, the best businesses solve real problems. Often, you have to live a little to experience some problems and then have enough experience to know that this might be a solution for it.
To Dave’s point, right, he lost a pair of glasses. They were super expensive. Prior to us going to graduate school to get our MBAs, I ran a nonprofit that trained low-income women in the developing world to start their own businesses actually giving vision screenings and selling glasses in their communities and where people living on less than $4 a day in rural Bangladesh, in rural Guatemala, and had been to the factories where here I was producing less for people living on less than $4 a day. But 10 feet away were factories where they were producing the $700 pair of glasses that Dave had.
So we knew something was awry. When we started talking, that’s when the light bulb went off. Then the question is, from that light bulb, how do you put it into practise? I think the first thing that we did was we started to just articulate, okay, what’s the problem? Glasses are too expensive. What’s the solution? Let’s design glasses that we want. Let’s work with those manufacturers, some of which I knew of, to produce them for less. How are we going to sell them direct to customers? Well, this magical thing called the internet. How do you build a website? None of us had built a website before.
We started talking to friends on how you build a website, and then we started visiting a bunch of websites that we would normally already go to, but now with a critical eye we were understanding, “Okay, what’s the shopping flow?” And then we would literally sketch out, because we didn’t know how to code, on a piece of paper, “Okay, this is how we want the website to work and function.” It was just little tactics like that, and just start chipping away, chipping away. We spent a lot of time articulating, what’s our vision for this company? We want it to change the world. We want to provide vision to the world. We want to do all these great things.
Okay. Well, what’s your vision statement? What’s your mission statement? How do you describe yourself? You need to do that. It’s effectively a brand architecture before you even come up with the name. It took us six months to come up with the name Warby Parker. We went through 2,000 different names. So, especially if you’re going to guild a brand-led company, you’ve got to spend the time and invest the time to articulate what you’re trying to accomplish and who you are and how you’re going to do it.
Nathan: I see. So when it came to the name, why Warby Parker?
Dave: We joke that the hardest part about starting the company was finding a name that we all liked. There were four of us founders that we each had opinions, and it took us about six months to come up with a name that we liked. We went over 2,000 potential options. We drove all of our friends and family members crazy. Any time we saw someone, we’d go, “Oh, what do you think about this name? What do you think about that name?”
At the time there, while less than 1% of glasses in the US were sold online, there were some sites that were already selling glasses online. They had names like $39 Glasses, and Frames Direct, and EyeBuyDirect. They’d really-
Neil: Very literal with no branding.
Dave: Right, and really focused on just offering low-cost glasses, but customers really sacrificing other elements of the brand in terms of quality, customer experience, having a brand that actually stood for something. We wanted to take a very different approach and wanted to launch a fashion brand that happened to offer great value and great customer service and having efforts that made the world better.
So we wanted a kind of proper name, and we didn’t think Gilboa-Blumenthal, our last names, really rolled off the tongue. So we spent a lot of time discussing different authors or artists that represented the brand ideals that we were trying to create and, in particular, had a number of conversations about the Beat Generation writers, Jack Kerouac and his peers. Coincidentally, after a six-month debate and discussion, the New York Public Library had an exhibit on Jack Kerouac’s private diaries.
So went up there to see if I could be inspired by some of his early writings, and he had these journals that never made it into published works where he’d written about characters with really interesting names. Two kind of jumped off the page. One was Warby Pepper and the other was Zagg Parker. So took those back, and the four of us were discussing. We all loved those names and were debating, do we pick one of those? And then decided to combine the two and make it our own. The URL happened to be available for nine bucks-
Nathan: Yeah. Wow.
Dave: … which was really helpful when we were kind of bootstrapping the business, working out of our apartments as full-time students.
Nathan: Yeah. No, it’s a really classy name. It’s really nice. So that’s awesome. Talk to me around what that first year and a half looked like. You said you guys were bootstrapping the business, working out of your apartments. Were you all in there together? How often was it sleepless nights? How’d you manage to study? And all that kind of things, because a lot of people… A common misconception, I believe, is they want to start a business but they always say they don’t have time.
Neil: Right. Yeah. We were fortunate in that we weren’t working full time because we were full-time students. So we had some additional time, not to mention that the courses that we were taking were all relevant to the business that we were building, whether it was around marketing or management, or we even took an elective course called The Legal Aspects of Entrepreneurship, which… It was actually taught by two attorneys, and they’d walk you through how do you deal with landlords? What does a lease look like? How do you deal with investors? What does a term sheet look like? How do you deal with employees? What does the employment contract look like? The lesson was everybody could screw you, so how do you protect yourself?
But in building this brand, we realised what were the three things that we needed to launch. We needed product. We needed a store, effectively a website, to sell it. And we needed to let people know that we existed. So we pooled together between the four of us $120,000. It was our entire life savings. Frankly, we thought that we were going to be able to start the business with only $100,000. We said, “Oh, we’ll each commit $25,000. If we need to, we’ll put in another $5,000 each.” Of course, we needed to.
Dave: And, being in business school, we’d each worked for about five years before school. So we had some savings, and then we poured 100% of those savings into launching this business.
Neil: So we used that money initially to design a collection, build a relationship with the factory, get prototypes, review them, then place our first purchase order of ophthalmic quality frames. Then we had to find a partner that could cut the lenses and insert them into the frames. Thankfully, that was going to be a variable cost. So once somebody placed an order, we would be able to grab one of our frames and then put in the prescription lenses and pay that partner to do that.
Then we had to build a website. We, again, did it by hand and then worked with my friend’s younger brother to sort of design it, and then hired a guy to code the site. What was funny… This is sort of lessons that every entrepreneur has. But we initially went out to three development shops to build our website, and we got bids back. One was half the price of the other two, so our thought was, “Oh. Of course, we’re going with these guys.” Sometimes you get what you pay for. We had to scrap all that work, lost that money, and ended up hiring another person to actually build the website.
Then the third thing about letting people know that we existed… We were building a fashion brand, right? Glasses that are a fashion accessory. There’s a whole fashion press, whether it’s Vogue, GQ, you name it. And it’s an insiders’ game. So who’s an insider? Well, a fashion publicist. We hired a fashion publicist to help set up a bunch of meetings for us.
Nathan: Oh, wow.
Neil: We would go. We’d bring our first collection, meet with the editors and the writers, and we were fortunate enough to get featured in Vogue and GQ. This was February 2010. And the rest is history.
Nathan: Yeah. Wow.
Dave: Being full-time students made it easier for us to take some risk. If you have a high-paying job and you have a certain cost base and expectations that you need that income to be able to continue to live your life, it can become really daunting to quit your job and take major risks to start a company. For us, it was, in a lot of ways, freeing that we had two years where we knew we were going to make zero income, and we had some extra time. And we were in business school where, really, our goal was to learn about business. We thought, what better way to learn about one than try to start one?
So yeah. I think just being in that academic environment just made it easier for us to think about starting a business than it would have if all four of us were working in normal day jobs.
Nathan: Yeah. I guess it’s kind of like, what’s the worst that can happen? You get a tonne of experience after it and you go again. Right?
Nathan: So talk to me. What happened next with the launch? You got your PR press, a few features, and at this point in time you guys did a couple of things that were quite different to the market. You’ve got the buy one, give one. Did you implement that model straight off the gate?
Neil: Straight from the beginning.
Nathan: Okay. I want to talk about that because a lot of people… This is a growing trend, the use of social entrepreneurship, the “buy one, give one” model. I’m interested to hear around kind of… You’ve got these incredible glasses, and it’s really high quality. You’re giving a portion to a developing country to give somebody else sight, so margins, physical products, difficult. And then did you guys do the try-at-home off the gate as well? So those were your two differentiators.
Neil: Yeah. So, for us, the business model innovation here was going direct to consumer, so designing our own frames, selling it direct to the customer, as opposed to what previous customers were doing is that they would design glasses, then sell it to an optical shop who would then mark it up another three to five times before it got to the customer. Cutting out the middleman, we’ve been able to effectively sell glasses at wholesale prices and still have great margins and still be able to build a company in the way that we want to do good in the world.
We want to be an example to other entrepreneurs and executives. We’ve always thought about, how do we build this thing so that way, every morning, we’re super excited to come to work? We’re not going to roll over and hit the snooze button. For us, it was about doing good, so being able to provide a pair for every pair that we sell, given that there’s over a billion people on the planet that need glasses and don’t have access.
Dave: E-commerce was really an innovation that we were able to take advantage of. If we had this insight 10 years earlier and said, “Okay. We want to launch a direct-to-consumer brand,” the way to do that would have been to open a store. And being full-time students with $120,000, we probably wouldn’t have been able to convince a landlord to let us sign a lease. If we did, we would have one location that we might be able to attract some local customers.
But with the power of the internet, we were able to all of a sudden launch a store to the entire US and be able to do so in a much more capital-efficient way. So that enabled us to build a brand right off the get-go and then leverage the power of the internet, the power of PR, to establish an online presence. Now, we started opening stores and we have around 100 stores around the US and Canada. But when we were just bootstrapping the business, we didn’t have the financial resources or the capabilities to be able to do that.
So thinking about for other entrepreneurs, thinking about what trends enable new business models is really critically important. We talked to a bunch of people from the industry when we had this idea and they said, “If this was such a great idea, someone would have done it before.” But our thought was that-
Neil: Which is the worst comment ever. Nobody should ever say that…
Dave: But the world before the internet and after the internet is dramatically different, and that’s enabled us and a lot of other businesses in many different categories to emerge that really wouldn’t have been possible before.
Neil: And even though people would say, “Well, if that was a good idea, someone would already do it,” we would discount that type of comment. But if somebody said to us, “I buy glasses. I don’t know if I would buy them online,” that’s a valid criticism and a valid question that we had to answer. So when we got that feedback… And we would ask all of our friends, all of our professors for feedback on the business model because you have to be willing to take some criticism but also be able to answer questions on why this will work. That kept coming up: “Oh, fit is so important. I don’t know by looking on a screen if I can tell whether they fit my face or not.”
During these journeys, there are moments where you feel super smart. You’re on top of the world. And there are moments where you’re in the doldrums. Getting a lot of that feedback made us question, “Hey, is this thing really going to work?” It forced us to reconsider our business model and come up with this idea of a home try-on programme where you go to our website. You select five frames. We ship it to you free of cost. You have five days to try it on at home. And then, if there’s a pair that you want, we go ahead and make the glasses and ship it to you. And it’s all for free.
That gave us the confidence to continue to push forward because then we figured we solved this customer issue, because now when somebody says, “I don’t know if, being on a screen, if I can try them on or not,” we have the home try-on programme that solves that. When we launched, it was February 2010. We were featured in Vogue and GQ. Again, we wanted to be in the best fashion magazines out there. And there was a bunch of things that we were doing that was novel. Selling glasses online in 2010 was pretty novel. Having this home try-on programme was really novel. Providing a pair of glasses for every pair that we sell was really novel. Charging $95 instead of $500 was really novel.
So they wanted to write about us, and February 15th, those articles went out. We turned the website on, and we were inundated with orders, which is not common for most start-ups. But we ended up hitting our first-year sales targets in three weeks-
Neil: … sold out of our top 15 styles in four weeks, and it was just complete mayhem. We would be up all night responding to customer emails, helping to process orders.
Dave: I think what was really important was that we spent that year and a half from when we started talking about the idea to when we launched really understanding customer problems and how we could solve them. And it started, really, by trying to solve our own problems. We were frustrated consumers and couldn’t understand why glasses were so expensive, why the shopping experience of walking into a store that was cramped where all the product was behind lock and key and you have a salesperson who’s pressuring you to buy something that you don’t really understand… And, next thing you know, you’re walking out with a bill for several hundred dollars. That didn’t make sense to us.
Then we spent a year and a half just doing surveys, focus groups, camping out in optical shops, observing how-
Dave: … other people shopped. And that enabled us to come up with… Some of these innovations were really unique at the time, like a home try-on programme. Since we’ve launched, there have been a bunch of businesses that call themselves the Warby Parker of a certain category, or you have the Airbnb of X, or the Uber of Y. Neil mentioned the best businesses solve real problems, and so really starting by understanding the problem that you’re solving, not saying, “Oh, we can take that and transform it into this other category.” Those insights tend not to be as powerful as really talking to customers, understanding what their key issues are, and then designing solutions like a home try-on instead of trying to copy something or transform something that exists in the world.
Nathan: Yeah. Look, from what I’m hearing, that year and a half, it sounds like you guys really did the work. You didn’t just come up with an idea, order some stock, and then just see what happens. You really did the work, and you came up with what is an incredible offer. It sounds like a no-brainer. So that’s probably why… Would you say that things were game busters? Great product, incredible offer. What do you have to lose?
Dave: Right. Right. We realised we were asking consumers to change behaviour, that 99.99% of our customers had never bought online before. It’s a pretty foreign experience when you’re used to walking into a store or going to your eye doctor’s office and having someone walk you through the experience. So we said, “Okay. How do we make this value proposition so incredibly compelling that people feel comfortable doing something that they’re not used to? And how can we de-risk the purchase process as much as possible for those consumers?”
So first by having a really clean, easy-to-use website with great photography and a brand that conveys quality and trust, then offering free shipping and free returns, no questions asked. So really, again, de-risking that purchase, offering a free home try-on so that you can try on the product with no obligations, having great customer service. Our first customer service line was a 1-800 number that called all four of the founders’ cell phones at the same time and, when one of us answered, would stop ringing on other phones.
Neil: So it was whoever answered it first.
Nathan: That’s funny.
Neil: It was amazing.
Dave: And, yeah, just really tried to make it, as you said, a no-brainer for customers to at least try this. We knew from our own product testing that once people saw the glasses and put those glasses on their face that they were really blown away by the quality, and they couldn’t believe the price. So our goal was just to get as many glasses on people’s faces as possible and then let the product speak for itself.
Nathan: Interesting. Back then, there wasn’t a Shopify, right? It’s easy to spin out these incredible stores with templates, and there’s a lot of brands that are starting to emerge now where they can go direct to consumer, e-commerce brands that go direct to consumer. They can use the power of Facebook ads, social media, all these things to build these large companies. And they can see what other companies are doing and replicate very, very fast.
I’m curious. As time has gone on, it’s got much easier to create a physical product business similar to what you guys are doing. What would you say to anyone watching around dealing with competitors? Because it’s hard to patent physical products and the name and all these different things. So I’m curious.
Neil: You want some barrier to entry and something that you’re doing different. If not, it’s going to be really hard to stand out. To your point, it’s never been easier to start a business. It’s never been less expensive. But it’s also never been more crowded and more difficult to get somebody’s attention. When we started, it was before Facebook even monetized. So there weren’t ads on Facebook. You would just get people to like your page. And now-
Dave: It was before Instagram even existed.
Neil: Yeah. So, now, you launch a business. You’ve got to set aside money to be advertising on Facebook and through other mediums. You might have competitors purchasing your brand name and other keywords to try and draw traffic away from you. So you really need to stand out from the fray and be doing something novel and different and that is really value additive to the customer, similar to what we were doing in those early days.
Dave: Yeah. I think, at the end of the day, the best businesses offer what consumers have always wanted, which is high-quality products at a great price with convenience and great customer service. To Neil’s point, there’s more noise than ever, and so creating signal out of that noise requires you to have an offering that is really differentiated.
For us, because we were first, I think it was a little bit easier to have that. But we were also, again, kind of starting from first principles and really designing what we thought was a unique solution as opposed to trying to observe what other people were doing and then iterating on that.
As a result, when we launched, we immediately sold out of all our inventory. We had a wait list of 20,000 customers. We didn’t spend a penny on customer acquisition for our first three years in business.
Dave: It was all word of mouth-
Nathan: That’s incredible.
Dave: … and PR. I think that is a little bit harder today, given how many start-ups there are and how much noise there is in the environment. So the tactics to launch are different, but at the end of the day, having a great product and great service is what has always made great businesses.
Nathan: I’m curious. When you guys… Obviously, the company blew up. One thing that a lot of people face when it comes to dealing with physical products is stock and cash flow and managing that. Obviously, you guys had this advantage in the sense that you don’t have to put in the lenses, and you only assign the frames. So you’ve got a little bit of leeway there. Was that able to help you guys scale? You’ve raised over 300 million. Is that correct?
Neil: Yeah. We’ve raised about $300 million.
Nathan: Yeah. So yeah. In the early days, though, how did you… Talk to me. What did that look like?
Neil: In the early days, we took a bet and bought a bunch of frames that we had designed and produced. And, frankly, we couldn’t even make bets on the ones that we thought would sell best because we just had to reach the minimum for each style and colour lay. But going forward, we had some data that we could say, “Okay. These frames seem to be doing better than those. These colour lays are doing better. Let’s start purchasing based on that.” But our thought was we’d rather sell out than necessarily be stuck with a tonne of stock early on, because we knew that we were going to learn things and we were going to tweak the product. So that was sort of our mindset in the beginning.
Dave: I’ll say just talked to a lot of other entrepreneurs that had launched websites or launched businesses, and they really tempered our expectations, said, “Just because you think you have a great idea doesn’t mean anyone else will. And just because you launch a website doesn’t mean anyone’s going to know about it.” So we kind of joked around that, if nothing else, maybe our parents will buy 100 pairs of glasses each and make us feel good about ourselves.
We were at Wharton and we put together this really fancy five-year financial model with a bunch of assumptions and projections, and day one had to throw that out the window because we hit our first-year targets in three weeks. And so we really didn’t know what to expect, but the one thing that we did know is that we had limited cash available because we had bootstrapped the business, and I think that constrained the amount of inventory that we had. And then, as we scaled, we really spent every penny on inventory instead of thinking about other areas that we could have spent money on.
I think that just forced us to be really disciplined. Constraints force creativity. Today, I think it’s a lot easier for entrepreneurs to raise money, but that’s not always the right option, even if that money is available, because it can enable investments in things that aren’t critically important in those early days of business.
Nathan: Was it easy for you guys with the traction you had to raise your seed? Or… Yeah, was it your seed round? Or was this…
Neil: Yeah, because we didn’t raise money until basically over a year from when we launched. We had proof of concept. We had customers. We had a brand that was resonating publicly. So that definitely made it easier for us. When we created that first presentation, it wasn’t just the problem, solution, the market size, and the team. It was all those things plus actual business performance, plus a site that people could go on, plus a 1-800 number that people could call and somebody would answer the phone within six seconds, and you could feel their smile through the phone.
So that made things a lot easier for us. We tried to use that to really get the right partners, so people that understood branding, people that understood technology, having some geographic coverage between New York, San Francisco and the Bay Area, and LA, given how important those markets are to the tech start-up world and to the fashion world, given that we were really a US-focused business at the time. I think every time we do something, we try and think of the 10 things that go into it.
Nathan: I see. When it comes to now, what’s really exciting for you guys? What’s on the horizons?
Neil: What’s exciting is some of the technology innovation. When we launched, we had to have a home try-on programme to send people pairs of glasses because you couldn’t try on glasses digitally. Now, with the iPhone X and the TrueDepth camera, you can have the Warby Parker app and you can virtually try on glasses. They’re true to scale and they’re true to fit. Our tech team has developed proprietary algorithms that enable us four to be true to scale, a fitting algorithm, so that way it fits as it would in real life. So those are some of the things that we’re really excited about.
Dave: Yeah. We’re also really excited to move into healthcare and healthcare services. Now we have around 100 stores across the country. In states that allow it, we employ an optometrist, so you can go in there and get a comprehensive eye health exam. There are some states that don’t allow us to employ optometrists, and there, we’re entering into agreements with independent optometrists that can be next to our stores and offer our customers exams.
And then we’re also really excited about the future of telemedicine. Our team developed an iPhone app that you can download and do a vision test from home, where we patented some technology that you can pair your phone with any screen that you have in your home or your office and we can measure the precise distance that you’re standing away from that screen and can display objects of a known size on that screen. You use your iPhone to indicate what you can see well and what you can’t.
And then we have an ophthalmologist who’s licensed in your state. They can review those results remotely and write you a prescription remotely.
Dave: We have a kind of similar experience in some of our stores. So we’re super excited just to make it easier for people to get new prescriptions and couple that with the glasses shopping process.
Nathan: Yeah. Wow. I’m thinking to myself I’ve got to check that out because, to be honest, sometimes things are starting to get a bit blurry for me. I don’t want it to come to that kind of, “I have to get glasses.” That’s crazy. Okay.
Dave: I’d say the other thing that we’re super excited about is continuing some of our do-good efforts. We announced a few months ago that we’ve distributed over five million pairs of glasses through our Buy a Pair, Give a Pair programme.
Dave: We have some amazing nonprofit partners that have distribution efforts throughout the world. And then we’re also scaling some of our programmes here in the US where we have programmes in New York City and Baltimore and hopefully soon in some other cities. We’re actually going to schools, administer eye exams for free, and then any student that needs glasses, we’re providing them for free. Our team has designed a whole range of styles and colours that kids can choose the glasses that they want to wear.
We recently announced an expansion of this in New York City where every kindergartner and first grader is going to have access to free exams and free glasses, and really excited about the impact that this is having. In New York City, there are 1.1 million students in public schools, and 200,000 of them need glasses and don’t wear them. So this is just a really big opportunity to give those kids and those students an opportunity to learn and engage in school and just thrive in life.
Nathan: Yeah. Wow. That’s incredible. It makes the work you guys are doing so much more purposeful.
Nathan: I think that’s where the real gold is, right?
Nathan: Okay. Well, look. We have to work towards wrapping up. Couple last questions. The first question is I’m noticing a massive trend with a lot of D2C brands, direct to consumers, starting to set up these retail stores to further build and foster their relationship with the customer and really build brand. I’d love to hear your thoughts on that. And then the last one would be just, any words of wisdom that you’d love to share just to finish off this interview?
Neil: Sure. We want to be serving our customers, and there are still a lot of customers that buy in physical stores. So we started opening up stores. We thought we’d have a handful of them. They started performing really well, so we started opening more. It’s really that simple. You try something. You de-risk it. You invest more into it. Our very first store was in our office, so it’s not like we were paying extra rent for it. People were coming into our office to try on glasses. Suddenly, we’re selling several million dollars of glasses out of our office, and we thought, “Oh. Maybe we should try this at street level.”
So we did a pop-up store. That did really well. We had a lot of learnings from it that gave us the confidence to then sign a 10-year lease. That store did well, so then we opened up another one and another one. It’s just about experimenting, testing, learning, and applying those learnings. We’ll continue to open up lots of stores because there are still lots of people buying glasses in stores. And we say “buying.” It’s just one step of the shopping process because we find that people are transacting online and offline, and these journeys are far more complex than people think. The majority of people that transact in our stores have been to our website first, and they’re not just there to look up the address or the hours of operation because, frankly, Google shows them that. They’re there to shop and figuring, what pairs do they want to try on in person? So they’re coming in informed, and they know about the brand.
So we just want to create as exceptional, holistic experience as possible through whatever mediums we have at our disposal.
Nathan: Incredible. So yeah. Parting words from each of you? Anything that you wish you knew or want to share with anybody that are either just about to launch something or just recently launched something, maybe just got their first batch of customers?
Dave: We got some advice early on that if you’re walking down a path towards a giant pot of gold, you shouldn’t stop to get distracted by any little shiny coin that you see along the way. I think we’ve really taken that to heart where we think one of the biggest reasons that we’ve had success to date is our focus. We sometimes tell our team that strategy is what we say no to. It would have been, in some ways, easier for us to launch a dozen different products in different categories or expand into a bunch of other companies or say yes to all the partnership opportunities that people reach out to us about.
But, for us, we really want to stay focused on solving our customer problems, offering the best products and experience to our existing customer base, and learning and iterating and then designing adjacent opportunities for that customer set. We’ve just seen so many businesses that have failed due to lack of focus, but it’s rare that you’ll see a business that fails for being too focused.
Nathan: Love it. Neil, want to continue on, or anything you want to share?
Neil: Do whatever it takes to make customers happy and make them feel good/smile. Personal notes, whatever it takes.
Nathan: Incredible. Well, look. Thank you so much for your time, Neil and Dave-
Neil: Thanks so much for having us.
Dave: Yes. Thank you.
Nathan: … for the interview. And yeah. Thank you so much.
Key Resources From Our Interview With Neil Blumenthal and Dave Gilboa
- Visit the Warby Parker website