Warby Parker In Conversation

Since launching in 2010, Warby Parker has forever changed the way we view and purchase prescription eyewear.

The first $95 per pair online Rx eyewear brand – and the first to pioneer the buy-a-pair/donate-a-pair-to-someone-in-need model – the gentlemen behind Warby Parker have enjoyed overnight success and seen their business model mimicked by a slew of Buddy Holly-come-lately imitators. But they’ve stayed one step ahead of the competition by continuing to innovate – with their Virtual Try-On tool, 5 Pairs/5 Days home try-on program, collaborations with Suno and Steven Alan, and the introduction of prescription sunglasses for Spring 2012 – and by putting their money where their mouth is through Warby Parker’s ongoing philanthropic efforts. (The name Warby Parker is taken from two characters in Jack Kerouac’s journals.)

Dossier contributor Lauren David Peden recently sat down with Neil Blumenthal and David Gilboa (who co-founded the company with fellow Wharton MBA classmates Andrew Hunt and Jeffrey Raider) at their new Soho showroom to get the lowdown on what goes into designing Warby Parker’s stylish specs and how they continue to dominate an increasingly crowded playing field.

Lauren David Peden: So first, how did you guys meet?

Neil Blumenthal: We met in graduate school while we were getting our MBAs at Wharton in Philadelphia. It was Dave and I and two other close buddies, Jeff and Andy.

Lauren: And what’s your background?

Neil: I used to run a non-profit called VisionSpring, where we pioneered this [business] model to train low income women in the developing world to start their own businesses giving eye exams and selling glasses in their communities. One of the things that most people don’t realize is that there’s almost a billion people on earth that don’t have access to glasses, which has a profound impact on their ability to learn and to work. So what we were doing at VisionSpring was creating a sustainable model so that people could get the glasses they needed and in the process create jobs, which is ultimately the most important thing in a lot of these communities. We trained low income women to start their own business, and they’d sell glasses in places like Bangladesh, India, Ghana and El Salvador for just a couple of dollars.

Lauren: How would they get the glasses?

Neil: We would design them and sell them to these entrepreneurs who would in turn sell it to their community. And one of the things we realized is that fashion matters — no matter where you live in the world, no matter what your socioeconomic status is — and people would rather be blind than wear a donated pair of 1970′s cat eye glasses. Because the same exact dynamic that occurs in New York or L.A. occurs in a village, and that is if you’re wearing something that’s inappropriate, you’ll get ridiculed by your friends and family. So we would design according to the needs of places; like India and Bangladesh, people love gold wire frames, and in places like El Salvador or Guatemala the aesthetic was more similar to what you have here in New York.

Lauren: And, Dave, what’s your background?

David Gilboa: Growing up I always thought I’d be a doctor since my parents are doctors. I was a bioengineering major in college, took the MCAT and was all set to go to med school, but because of a lot of changes in the healthcare industry, it just didn’t seem as rewarding to be a physician anymore. I still wanted to do something to help people, but I thought that starting a business or leading a business to help people would be a way to achieve the same goal. Not knowing anything about business, I went and joined a strategy consulting firm, worked there for about three years and then moved to New York and worked for a merchant bank, where I invested and advised a lot of early stage healthcare companies. After doing that for five years I realized that I didn’t want to stay in consulting or finance for the rest of my life and felt like I had enough background to go and do something that I was really passionate about. I took a few months off to travel before business school and ended up losing my glasses when I was traveling in Southeast Asia. It would have cost me $700 [to replace them], so I showed up to the first day of business school without owning a pair of glasses and went the first semester without owning a pair of glasses. I started talking to Nell, Jeff and Andy, who were my friends at school, about why glasses were so expensive. It didn’t make sense to any of us. Jeff had a similar situation where his glasses were five years old, his prescription had changed a couple of times, but he couldn’t justify paying several hundred dollars for a new pair of glasses. I had just bought a new iPhone that cost me $200, and the technology behind a pair of glasses was invented 700 or 800 years ago. I couldn’t figure out why they were so expensive and from talking to Neil, who had spent a bunch of time in factories all over the world and knew everything about the manufacturing process, we realized that there is no fundamental reason why glasses need to be so expensive, that there’s essentially an oligopoly that controls the industry that artificially marks up glasses ten to 20 times to what they cost to manufacture.

Lauren: How did you guys go about from talking about this kind of injustice to starting the company?

Neil: We literally start talking about it in between classes, and the light bulb immediately went off: wow, here’s this really powerful idea to design the frames that we love, sell it direct to customers online and in the process do good in the world, because we’d be bringing down the price of glasses – and it’s something that got us really excited. Basically that night none of us slept and we came back to school the next day and were like, ‘Hey, this is a good idea.’ We ended up going to a bar to discuss what we needed to do to make this happen, and we sort of committed two things to each other that evening: one was that we were going to work really hard because we knew that starting a business and fashion label was going to be the hardest thing that we’ve ever done, and number two was to make sure that we remained friends throughout the process, because we had all seen very talented and smart people start businesses and for whatever reason end up becoming enemies. This was really born out of our friendship, and it should be something that only made that friendship richer, rather than destroying it. We knew that it was more the act of saying that it was one of our primary objectives that helped set the tone, but we also tried to do a bunch of things to make sure that we remained friends, and that was, as cheesy as it sounds, to go to the same bar on a monthly bases and chat between the four of us, and put one person in the hot seat and say, “Hey, you’re doing this well, this could be improved – and if you shoot me a ten-page email at two in the morning I want to punch you in the face.” What that allowed us to do was to work super well together. Any issues that might have been beneath the surface would immediately come up and we would resolve them. The question was: What do we need to make this into a reality? We immediately started designing our first collection, under the premise of what it is that we love and inspires us

Lauren: And what is the Warby Parker aesthetic?

Neil: Classic, American, heritage. One of our design philosophies is that you should always be able to look back 20 years and be proud of what you were wearing. Stuff that will hopefully live on forever, but also under the belief that eyewear is fun, and that it should reflect your personality. Sometimes you’re in a serious mood and sometimes you’re in a more fun mood, so we try to take classic shapes and make slight twists, and then use updated color palettes. So an example is that we have this color “gimlet tortoise” that’s a green tortoise that we’re really excited about. And Dave’s wearing our grey stone color. We’ve found colors that are fun and styles that you are a little different, but still very, very wearable.

Lauren: Was philanthropy always involved in it? And why sell primarily online?

Dave: We started the company because we love glasses, we think they’re a great fashion accessory, but we don’t think it makes sense to charge several hundred dollars for them. So when we started designing the business model, we realized that in order for this to be successful and to provide the same quality eyewear that people are used to paying $600 for but actually make it affordable, we would have to cut out all of the middle men. For us to be able to deliver a quality product at the price point we wanted, we realized that we were going to have to do all the design in-house, we would have to source materials on our own, work with independent manufacturers and then sell directly to our customers online. That way we could avoid all the licensing fees, the retail markups and all the middlemen. Internet distribution is what allows us to sell the high quality product that we offer for less than a $100. Part of our thesis is that for under $100 people can really start to think of glasses as accessories and not buy a pair every two years when your prescription expires, but really think of them in the same way as you would a handbag or sneakers, where you’re going to want to own multiple pairs and wear them for different occasions with different outfits, because we think that glasses are just a great form of self expression. They are one of the only things that you wear on your face, especially for males, so it does allow you to express your personality. Online distribution was critical for us to offer our glasses at this price point. We also recognize that fit is a huge challenge.

Lauren: That’s what I was just going to ask. Weren’t you afraid that people might balk at buying glasses online?

Dave: We realized that 99.9% of our customers would never buy glasses online, and that they would be taking a risk buying an unknown brand of glasses in the first place. We wanted to make it as easy as possible for them so we came up with a couple of options so that people could try on the glasses before they had to make a purchase decision. One was this Virtual Try-On functionality where you can upload a photo of yourself and virtually fit the glasses on your face. But we thought as eyewear consumers ourselves, would we feel comfortable making a purchase just based on some software website? Well, maybe, but probably not. We thought that at least for the initial purchase we’d want to touch and feel the product, see what they actually felt and looked like on our face, get feedback from people that we trusted. So we came up with this concept of the at-home try-on where you can select five frames for free, we’ll send them to you without prescription lenses, we’ll include a free return shipping label, you can keep them for a few days, get feedback from the people who you care about the most, and then send them all back to us with your prescription, let us know the frame or frames that you liked and then we’ll go ahead and make you a custom pair. That’s been hugely successful, and within 48 hours of launching our site, we realized that we were completely out of inventory for our home try-on program. We just had way more demand than we ever expected. We started getting calls from people saying, “We know you’re in Philadelphia. I’d love to try on your glasses, can I come to your store?” And we said, “The store is in Neil’s apartment, but come on over.” So we had all of these customers come over, and they loved meeting people behind the brand.

Lauren: I love that. It’s so grassroots.

Dave: So when we moved to our real office we decided to dedicate part of the office to a showroom for our customers. You can see that it’s full of customers [he gestures to the room behind us, where Warby Parker staffers are helping clients find the perfect frames]. We have a waiting list that’s about four weeks long to make an appointment.

Lauren: People can make an appointment online?

 Dave: Yeah. We think that the future of all retail and especially our business is going to have some online and some offline component. So we’re trying to get that mix right and really be able to offer great value by leveraging Internet distribution but also giving people a way that they can physically try on the product.

Lauren: Who does what with the four of you? Is there a division of labor, or do you all do a little bit of everything?

 Neil: Once we graduated – because we actually launched while we were in school, [in] February 2010 and we graduated from graduate school in May 2010 – we had features in Vogue and GQ, and it shot off like a rocket ship. We hit our first year’s sales targets in three weeks, our top 15 styles in four weeks and accumulated this wait list of 20,000 people. Once we graduated, Dave and I started running the company as co-CEOs, Jeff returned to the private equities firm that he was at before school and Andy works in venture capital. The four of us make up the board, plus recently we had one of our investors join the board, so all four of us are intimately involved in all major strategic decisions. The four of us are really close friends and are constantly interacting both socially and for business decisions.

Lauren: In terms of your creative process, do you guys design the glasses? Neil, wasn’t that something that you were doing with VisionSpring?

Neil: Yeah, that was something that I previously had to learn; design and manufacturing. My first trip to Asia was actually with one of the founders of Oliver Peoples. He taught me what to look for when you’re visiting [factories], how to manufacture, some of the stuff to think about when you’re designing eyewear. So one of the things to think about, that most people don’t recognize at first, is that there’s so little room for error with eyewear because the human eye can see a millimeter difference, so it’s something that we spend a lot of time on. One of our first hires was somebody with 20 years experience in the optical industry, an optician by training, so somebody who really understood fit. That’s also something that’s deeply important to us. How do we make stuff really wearable but still look great?

Lauren: And do you want to address the non-profit aspect?

Neil: Yeah. Early on I think what really motivated us was that we saw that there was this amazing opportunity to bring down the cost of glasses, from $500 to $95, and in the process we would be transferring millions of dollars from these large multinational corporations to normal people, and we thought that was an inherit good. But we also recognized in those first days, when we were sort of incubating the idea, that even at $95 there are hundreds of millions of people without access to glasses, so we thought how could we best serve them? We knew the non-profit model, and the best way was this VisionSpring model. So we thought how could we best support them and train more people to distribute more glasses throughout the world. We originally thought we’ll give a percent of revenue, a percent of profit. But at the end of the day, that’s not solving the problem. The most important thing was getting glasses on the faces of people who most need them, so we committed to ensuring that every pair we sell gets glasses on someone’s face. What we do on a monthly basis is that we tally up how many glasses we’ve sold, and then we make a donation to VisionSpring to cover the cost of producing that number of glasses. We’ve quickly become one of VisionSpring’s most important donors.

 Lauren: Are you donating money or are you donating Warby Parker glasses and prescriptions?

Dave: Both, but the majority is money, and the reason why is because Warby Parker frames would look ridiculous on someone living in rural India. And that’s something that’s really important to us, and something that we really loved about the VisionSpring model is that it treats people with dignity rather than needy beneficiaries. To use the cliché, it’s “teach a man to fish” versus just giving away free stuff. It allows people to make that conscious decision: “Hey, I like this pair of glasses. I think they’re worthwhile. I’m going to use some of my hard earned money.” Even if it’s just a couple of dollars, it changes the dynamic. It allows VisionSpring to design glasses according to the needs and wants of these communities.

Lauren: I have Warby Parker reading glasses, but I don’t have your regular glasses because my astigmatism is so bad and when you first launched you weren’t doing that type of prescription. Do you now offer glasses for astigmatism?

Neil: We do. We cover over 90% of prescriptions, or at least when you look at the distribution prescription relative to the population, there are some of you who have a particularly high astigmatism, like a minus 15. We think that those people are better served going into a doctor’s office and getting those glasses because it requires a more intimate interaction that we can provide online.

Lauren: And are you doing progressives now?

Neil: Not yet, but that’s something that we’re working on.

Lauren: And why no red frames? I’ve been asking since the beginning, why don’t you guys have red frames?!

Dave: We’ve just introduced a new color, burgundy fade, and we do have a summer collection that has some additional frames that are more of the reddish hue.

Lauren: Alright, I’ll look for those. Now, obviously when you started you were the first ones doing the reasonably priced glasses/donation model, and now TOMS is doing something similar and there are several other companies trying to do the same thing. Do you tell yourselves that imitation is the sincerest form of flattery?

Neil: We try and tell ourselves that, but it just hurts because the team here is spending a lot of time to come up with innovation, and when somebody just copies you so blatantly, you sort of get a pit in your stomach. But at the end of the day it really hasn’t been a business threat, so we just focus on designing beautiful glasses and making it as fun and easy to shop for them. As long as we keep doing that it’s going to be really tough for someone to copy us.

Lauren: So what’s next for Warby Parker’s journey?

Dave: We just launched prescription sunglasses, so we’re super excited about that. These are basically our same frames, with Teflon covered screws and polarized prescription lenses for $150, whereas those would usually be $600 or $700. Our hope is that our whole generation will now be able to buy prescription sunglasses, whereas they would never ever have considered it before.

Lauren: And you’re actually able to turn a profit with keeping the glasses at $95 and sunglasses at $150 – and you donate a pair for every pair sold, too? It’s kind of shocking.

Neil: Yeah, but I think it demonstrates how crazy the markup in this industry is. As much as we pride ourselves on using great materials, it’s just not the same as a circuit board inside of an iPhone. I think the other thing is that we’ve just tried to be really smart about the supply chain. We work directly with the manufactures – even those who produce the screws – so that way we’re able to get the best quality for the best price. We’re also being smart in how we market the glasses and how we spend money. We’ve found that the customers have been our number one advocates. They’re the ones that are driving the traffic through our sales. Over 50 percent of our traffic and sales were driven through a referral, which is something we take a lot of pride in.

Lauren: I have to ask: Who buys the monocle?

Neil: Some people buy it for costumes or a joke, but it’s been interesting, we’ve heard from a number of chefs that buy them because they need help reading recipes in the kitchen. They won’t want to wear reading glasses because they fog up so they just clip it to their chef uniform.  You can put a reading prescription in it. Some people put their distance prescription. It’s been great to see people use them for a functional purpose. You can actually go to [the restaurant] Eleven Madison Park and if you say that you’ve forgotten your glasses, they’ll bring out an oak tray with all of our frames, including a monocle.

Lauren: That’s such a great idea.

Neil: It’s a great collaboration, because a lot of how we think about providing customer service comes more from the hospitality industry than the retail space. And the number we pride ourselves on most are not our sales figures but our customer satisfaction scores. Since Warby Parker’s inception it’s always been in the high eighties. It’s called the Net Motif Score. It’s a standard for measuring customer satisfaction, but instead of doing a survey with 50 different questions, you ask them how likely they are to refer this product to a friend. Our score is currently 88. And the highest other scores we’ve ever seen were 70, maybe 72, respectively, which are Apple and Zappos’ [scores].

Lauren: Wow, that’s impressive. And when did you move into this new space?

Dave: September.

Lauren: And how many employees did you start with and how many do you have now?

Dave: We had zero when we started. We weren’t even paying ourselves salary. And now we have over 70. Two years ago we were still full-time students, hanging out at our apartments. So it’s been an exciting couple of years.

Photographs by Patrick Butler

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