How the Warby Parker started ....................................................

[Chris Ryser]

How we became eyewear entrepreneurs: Neil Blumenthal and Dave Gilboa of Warby Parker
By Susannah Hutcheson 9:54 am EDT June 30, 2017

Welcome to our series “How I Became a …,” where we’re digging into the stories of accomplished and influential people and finding out how they got to where they are in their careers. We’re finding out what their biggest challenges, their biggest passions and their biggest pieces of wisdom are — for you.

Note: This interview has been lightly edited.

Eyeglasses are expensive, good needs to be done around the world, and almost 15% of the world’s population doesn’t have the access to glasses that they desperately need.

Those principles propelled Dave Gilboa and Neil Blumenthal into co-founding and running Warby Parker. The company, which was started out of their grad school apartments, has transformed into a business with over 50 stores around the country, over 1,000 employees, and a program that gives a pair of glasses to someone in need with every purchase.
USA TODAY College caught up with co-CEO’s Dave Gilboaand Neil Blumenthal to talk starting a brand, lost glasses and business school.

What’s your coffee order?
Dave: Usually I just prefer a straight black coffee.
Neil: A bottle of water.

What’s the coolest thing you’ve ever done?
Dave: Starting and growing Warby Parker has been an inspiring and rewarding journey. Starting a business with very close friends, building a team, creating a brand, making millions of our customers happy, and putting millions of glasses on people’s faces through our nonprofit partners has been really amazing.

Neil: Not to be repetitive, but I plus-one Dave’s. And, before business school I was at VisionSpring, and I started a bunch of their programs, including one in Bangladesh that celebrated and distributed a million glasses to someone in need. To be a part of that was pretty cool.

Career path?
Dave: I grew up the son of two doctors, and I was 100% sure that I was also going to become a doctor. I was a bioengineering major in college, went to UC Berkeley, took all of the pre-med classes there, took the MCAT, and while I was in school managed care started taking over the healthcare industry.

There were just major changes that, talking to my parents and friends, made it seem like the concept of being a practicing physician was evolving into something different. So I started looking into other paths and decided that it might be a good idea to learn some business and then one day be able to create that with other things to hopefully create a positive impact and make the world better.

So I joined a management consulting company — Bain &Company — and I worked there for three years in San Francisco and Stockholm.I moved to New York And worked for a small merchant bank called Allen and Company, working in finance and working with entrepreneurs to raise money and investing in healthcare and internet companies. I decided after a couple years of that that I wanted to figure out how to combine some of those business skills I’d learned with the idea that I could use those to help people. I took a few months off to travel before going back to business school to either start something or join an early-stage company.
While I Was traveling, I lost my glasses and they cost me $700. I lost them in Thailand while backpacking. I showed up to the first day of grad school without glasses, kind of complaining to anyone who would listen that glasses were too expensive. I Met Neil and we became friends, and Jeff (Raider) and Andy (Hunt) (our other two co-founders) were all kind of the same friend group at school. We had all had the same kind of experiences when it came to losing glasses, breaking glasses, and being frustrated by the process.
Then Neil came to us about the idea of making glasses, given his experience at VisionSpring, and we got together and decided we were going to bootstrap the business and launch out of our apartments while we were still in school.


Neil: I went to Tufts undergrad and was studying international relations. I didn’t know exactly what I wanted to do, but I had this idea that I wanted to make a difference and do good in the world. I think,like many college graduates, I didn’t know exactly what to do, so my instinct was to continue going to school. I did some grad coursework in the Netherlands On conflict resolution and mediation under the thought process that I would go to work for the State Department, foreign service, or work for a think tank that would come up with policy to end deadly conflict.

Continue Reading:
http://college.usatoday.com/2017/06/...s-warby-parker

and

http://visionspring.org

[Quince]

Had someone come in Saturday afternoon looking to pick out new frames. I asked if there was anything in particular she was hoping to find. She asked if I carried Warby Parker. I paused, then replied 'No, they are an online company.'

She responded that they did have stores. Which is somewhat true. From what I know they have one store. The name of my store is not Warby Parker- so no, I do not carry Warby Parker glasses.

[Robert Martellaro]

There's one in Milwaukee. They were loosing money before they started their B&M expansion. Their locations look to be in high overhead locations. You do the math.

https://www.warbyparker.com/retail

And they look like Apple Stores- both look cool, except there's very little service, and no genius bar. All foam, and no beer.

Best regards,

Robert Martellaro

[pknsbeans]

All foam, and no beer.

[Chris Ryser]

Their locations look to be in high overhead locations. You do the math.

Here is some math:

In 2011, Warby Parker shipped more than 100,000 pairs of glasses and had 60 employees. By the end of 2012, the company grew to around 100 employees.

As of April 2015, the company was valued at $1.2 billion.

[Robert Martellaro]

Here is some math:

In 2011, Warby Parker shipped more than 100,000 pairs of glasses and had 60 employees. By the end of 2012, the company grew to around 100 employees.

As of April 2015, the company was valued at $1.2 billion.

You didn't include my quote:

They were loosing money before they started their B&M expansion.

Let's look a little closer.

Warby Parker's annual revenue reportedly rose from $35 million in 2013 to over $100 million in 2015, but it isn't profitable yet.

https://www.fool.com/investing/2016/...ake-money.aspx

The year is now 2017.

Gilboa: There's no question that we'd be more profitable if we didn't have a social mission built entirely ...

Shontell: When you say profitable, are you profitable?

Gilboa: As a private company we don't really talk about that.

In other words, on paper at least, the money's going down the shiithole. As most pirate companies go, they'll take there ransom money and move on to a new project.

Best regards,

Robert Martellaro

[Tallboy]

Its been 5 years or so since I first was introduced to Parby Warker, I have no fear of them. Now that they have B&M they are just another competition.

We do a lot for the community also.

I had a person come in having aniseikonic double vision from cataract surgery and unable to wear her Warby PALs and she was furious that our doctor "must have messed up the RX, Warby Parky assures me it is right."

Predictive seg height measuring based on your frame choice. Definitely not scared of them.

[Chris Ryser]

You didn't include my quote:

Let's look a little closer.

The year is now 2017.

In other words, on paper at least, the money's going down the shiithole. As most pirate companies go, they'll take there ransom money and move on to a new project.

Every startup business takes time and effort to reach the goal they want to achieve.

Warby Parker's website is no 2 now after Zenni on the website listing of Optical On-line companies.

When Essilor purchased Coastal Optical in Vancouver in 2013, they paid some 35 millions of $s for a company that everybody was of the opinion that they were losing money big time. (Coastal has been renamed to Clearly)

Just watch what is going to happen when the merger will be allowed by next March after the delay.

[pknsbeans]

This forum confuses me so much!

For a while, I was under the impression I needed to have minimal markup and charge as a fee for service.

WP has a fair markup, especially considering what their frames and progressives cost them, and I haven't heard they've gone fee for service.

Apparently though, WP is doing great, while I need to get ready for BIG changes or I'll be headed for the soup line.

So....... What is it?

Or is it just be fair, treat people the way you'd want to be treated, do your job right, and the rest will take care of itself?

[King of the Lab]

I look forward to a post titled... "How Warby Parker Ended" .....

Because Essilux bought them out too...

[Quince]

This forum confuses me so much!

For a while, I was under the impression I needed to have minimal markup and charge as a fee for service.

WP has a fair markup, especially considering what their frames and progressives cost them, and I haven't heard they've gone fee for service.

Apparently though, WP is doing great, while I need to get ready for BIG changes or I'll be headed for the soup line.

So....... What is it?

Or is it just be fair, treat people the way you'd want to be treated, do your job right, and the rest will take care of itself?

Unfortunately, there isn't a single business model that is going to work for everybody. Independents should look at their region and clientele and work to fit their needs. If you are a boutique then dropping prices generally is not going to help you. If you cater towards low income then discount and multipair options are going to be more appealing.

Personally, I vote to go with your last suggestion of offering outstanding service and reaping the rewards of such. It means a lot more than saving a buck,to most people.

[mervinek]

i look forward to a post titled... "how warby parker ended" .....

Because essilux bought them out too...

+1 yes!!!!!

[Chris Ryser]

In other words, on paper at least, the money's going down the shiithole. As most pirate companies go, they'll take there ransom money and move on to a new project.

Here is some more about their pricing:


A Price That’s Right

Even apart from its stylish products and slick website, Warby Parker has another big selling point: price. The vast majority of its eyeglasses sell for $95; titanium frames cost $145. Shipping is free, as are returns. By comparison, The National Association of Vision Care Plans puts the average price of eyeglasses at $263.

“As customers, we’re so used to being ripped off: We don’t know the difference between a pair of $300 glasses and a pair of $400 ones,” says Simon Blanchard, a marketing professor at Georgetown University’s McDonough School of Business.

Another Warby Parker advantage: uniform pricing. “When all of your products are priced the same, people focus on something else,” adds Blanchard, who notes that Swatch Watch was successful with a similar strategy. “In the case of Warby Parker, customers focus on the glasses that best reflect their personality and style.”

The decision to price glasses at $95 comes with a back story. Wharton marketing professor Jagmohan Raju recalls that when the founders broached their idea to him, they originally planned to sell their glasses at half that price. “I really liked the idea overall … but after examining their analysis, I told them it’s not going to fly. [At $45 a pair], there’s no money [left over] for brand building; there will be no money in it for you and no money for investors.”

In addition to squeezing the business, a price tag of $45 was “too low” to be seen as credible to customers, according to Raju. “It would have put [Warby Parker] in a category I believed they did not want to be in. There are many companies selling cheap eyeglasses. Anyone can go on the Internet and buy two pairs for $99. But there is a perception among customers that the quality is not as good.”

The goal was to create a new price point that was still reasonable, but not low-end.

see all of it:

http://knowledge.wharton.upenn.edu/a...at-others-dont

[lensmanmd]

This forum confuses me so much!

For a while, I was under the impression I needed to have minimal markup and charge as a fee for service.

WP has a fair markup, especially considering what their frames and progressives cost them, and I haven't heard they've gone fee for service.

Apparently though, WP is doing great, while I need to get ready for BIG changes or I'll be headed for the soup line.

So....... What is it?

Or is it just be fair, treat people the way you'd want to be treated, do your job right, and the rest will take care of itself?

I'm not an advocate for fee for service. We are not a repair shop. Mechanics charge a "refundable" diagnostic fee that is credited if they provide the repair services, then nickle and dime you for shop towels, washers, nuts, etc. Who looks forward to visiting your local auto mechanic?
It is fair to charge for temples, temple covers, but the mark up is up to you. Enough to cover your expenses, enough to reap a small profit, or even pro bono for building goodwill and trust?

Personally, I vote to go with your last suggestion of offering outstanding service and reaping the rewards of such. It means a lot more than saving a buck,to most people.

I agree wholeheartedly. Quality of service and quality of products delivered drives repeat business. Value, IMO, is not how low the price paid is, but the combination of quality, expert service and appropriate pricing.

As an independent, you won't be able to price compete with Costco, Walmart and especially, online entities. What you can do to separate yourself is with the quality of service. Knowing your demographics is key. Luxury/Boutique, Family, Professionals, Working Class, etc. The brands that you carry. Are they the same as the big box retailers, because that is what marketing drives? Or do you differentiate yourself by carrying a selection of quality alternate brands that are stylish and priced accordingly? All of this matters to your pricing strategy.

The average person will try something cheap once to save money. If the product lasts a reasonable amount of time, works and is backed by great service, them may return. If one or more does not meet expectations, they will shop elsewhere. If the product you provide meets all three categories, with an acceptable price point, they will be repeat customers, and most likely refer others to you.

[pknsbeans]

(Alibaba frame + stock uncut + sizeable markup - ANY customer service) < WP price.

They are admitting that $45 was enough to make money, but not enough to grow business at whatever rate they'd like. By knowing how much factory direct materials are, doesn't WP has a much higher rate of markup than most independents?

The lesson I take from WP and frame companies that sell online for barely my cost is to OWN a line of house brand frames. They may not have a horse and carriage, a playing card suit, or an obnoxious vowel on them, but it brings back "value" to the customer.

[pknsbeans]

I agree wholeheartedly. Quality of service and quality of products delivered drives repeat business. Value, IMO, is not how low the price paid is, but the combination of quality, expert service and appropriate pricing.

I appreciate the input. It was more of a rhetorical question towards Chris. Many of his posts imply independents are oblivious to what the internet is doing/will do to traditional optical, but then tells how great Costco and WP b&m are. Which is it?

Or are you highlighting the common denominator between these two is not that they are eliminating the consumer-retail experience, but the retail-wholesale level? I think with frames, that is partially possible. Of course having some designers is a must. Free form lenses, not quite yet financially possible for most independents.

[optimensch]

Uniform pricing ie $95 per complete pair, no variance implies you are selling the most base, lowest common denominator goods, like a dollarama.
What other product is sold in a chain of stores, other than dollarama, where ALL the goods sell for the same price?
Keeping peoples interest with a wide enough assortment, carrying various lines and various price points and not only your own PRIVATE LABEL CHINESE base goods, is the way to go.
WP handcuffed themselves to a certain extent with this format. Good luck with that in the long term, especially as independents sharpen up their offers and continue to push/fight back against this one dimensional repetitive company

[Quince]

"In addition to squeezing the business, a price tag of $45 was “too low” to be seen as credible to customers, according to Raju. “It would have put [Warby Parker] in a category I believed they did not want to be in. There are many companies selling cheap eyeglasses. Anyone can go on the Internet and buy two pairs for $99. But there is a perception among customers that the quality is not as good.”The goal was to create a new price point that was still reasonable, but not low-end."



This seems silly. I've lost track of how many times I get EyeMart patients who admit: 'I got what I paid for.' It is a shame that the industry prices are dictated by a monopoly, but that is how the world turns. If people are looking for the best price- they tend to have an understanding that they are giving something up. To say I'm going to have a set price for PALs that doesn't fluctuate with different frame choices tells me that I either have zero variety in quality or that they are on a spectrum of some-what ripped off to extremely ripped off and they have no way of knowing which is which. That is why there are different prices. Because not all frames are the same. At least not in the real world.

But hey, at least they get to focus on which frame really brings their personality out. Never mind having an educated opinion on the fit for long-term comfort or optics. We wouldn't want to distract them with details.

[Chris Ryser]

I appreciate the input. It was more of a rhetorical question towards Chris. Many of his posts imply independents are oblivious to what the internet is doing/will do to traditional optical, but then tells how great Costco and WP b&m are. Which is it?

Both, Costco as well as WP are companies that work according to the latest business principles, and it looks as if they are successful doing so.

The internet has, and is changing many ways of thinking in every field there is.

The population that is not internet friendly, is slowly dying off and will be buried over the next ten to twenty years, and the ones that grew up with it will dominate the population that will have to live with it, more and more, if they want to or not.

We all have to realize that corporations as well established as a Sears, are becoming a thing of the past, because they did not follow the modern times, as some of their major competitors did.

[Quince]

Keith at Laramy-K sent out an appropriate e-mail to relate to the idea of online presence and the path of digital tech. Apparently, Eyemart is moving towards e-commerce for existing customers, so we will have to see how that goes...

For now, I'd like to add a quote from the newsletter:

"Obviously, you still need to nail your online presence. Most of your customers get their first impressions of you there. You need be in the social spaces and nurture your online reviews like they’re your babies.
But before going further into “digital tech”, go all-in on your strengths, not your weaknesses. In other words, master the physical. Everyone is looking for ways to use “digital tech” to improve their customer experience when the “real” and the tactile are what will truly help you stand apart in your market. It may not be as sexy or exciting. And it certainly won’t be a quick and easy fix. But, "real and tactile" will help you tell your story, connect with your community, and build a culture—far more so than “digital tech.”

[Chris Ryser]

Here is another page of interesting reading ...........................


E-Commerce as a Jobs Engine? One Economist’s Unorthodox View

Andrew Ross Sorkin JULY 10, 2017

Retailing is dead. Sales clerks are losing their jobs by the thousands. The employment picture for young people with only a high school education is going to get even worse. And all this is happening because of Amazon and its ilk, which are driving the shift among consumers toward e-commerce.
We’ve heard this story over and over in recent months: The echochamber keeps repeating that the retail apocalypse is upon us.

And yet, according to one economist, Michael Mandel, it is all wrong. We have it backward.

Mr. Mandel is turning heads from Washington to Silicon Valley with a provocative and unorthodox argument: He asserts that the move toward e-commerce is creating more jobs than are being lost in the brick-and-mortar retailing industry — and that these new jobs are paying much higher wages than traditional retail jobs.

Mr. Mandel, chief economic strategist at the Progressive Policy Institute in Washington,contends that most economists are using the wrong job numbers to measure thee-commerce industry. He says that government numbers and conventional industry classifications don’t properly count all the jobs associated with e-commerce —in particular, the numbers miss large parts of the industry like fulfillment centers and distribution warehouses. As anyone who has noticed the growing volume of big brown boxes being delivered to people’s homes can imagine,facilities like that, which are tied to the e-commerce sector, are expanding rapidly.


Mr. Mandel has combed through the job statistics on a county-by-county basis and come to this counterintuitive view: From December 2007 to May 2017, by his count,the e-commerce industry has created 397,000 jobs in the United States,and this compares with the loss of 76,000 jobs in the traditional retail industry. And those jobs related to e-commerce, he says, pay about 30 percent more than the brick-and-mortar ones.

Read all of it:
https://www.nytimes.com/2017/07/10/b...retailing.html