05.07.13 5:51 PM ET
Warby Parker Thrives by Giving Away Glasses Whenever It Sells a Pair
Warby Parker’s first office was inside cofounder Neil Blumenthal's apartment, where the fledgling company's glasses samples were displayed across his dining-room table. Soon after, the startup took the plunge for a real office, in New York’s Union Square, and was promptly kicked out when an endless flow of customers broke the building’s one elevator.
Three years since four Wharton School of the University of Pennsylvania students conceived of the idea, Warby Parker has defied expectations. By bringing a personal, low-cost experience to customers—and combining it with an altruistic business model—the scrappy, Web-based startup has since shaken the traditional optical industry, which has long been dominated by massive companies like Luxottica.
Blumenthal, speaking at the Wired Business Conference in lower Manhattan on Tuesday morning, described the business as “launched like a rocket ship.” That's no understatement. This past January, the company closed a $41.5 million round of financing. Its investors include American Express and J. Crew Chief Executive Millard S. Drexler. The company recently hooked up with Google Glass to give the future of eyewear a little flair.
Warby Parker's reinvention of the high-priced optical industry relied on one main tactic: cutting out the middleman. “The markups in this industry are insane,” noted Blumenthal, saying most glasses are sold for three to 3.5-times their wholesale price.
“We thought we could build a company that stood for doing good in the world if we could sell beautiful glasses that people wanted at a fraction of the cost and sell them directly to consumers,” Blumenthal said. But what the brand really focuses on is building a narrative that people will want to talk about. Now, the company is hoping to form a model of “what should be the future of all businesses,” by thinking not just about stakeholders, but about customers, employees, and the world at large.
The company’s altruistic foundation, mirrors a TOMS Shoes–style give and take. As customers of the brand know, for each pair of glasses purchased, Warby Parker donates a pair to a developing country. Blumenthal, who formerly served as a director of nonprofit VisionSpring, explained that each month the company’s sales are tallied up and a donation to produce the equivalent number of glasses is given to VisionSpring and other eyewear organizations. In the developing world, he said, a pair of glasses has been found to increase productivity around 35 percent per recipient.
For Warby Parker's founders—Blumenthal, Andrew Hunt, Jeffrey Raider, and David Gilboa—such wild success means they have to be careful to ensure their story won't go the sour Facebook route. In the beginning, they agreed to an equal share in the company, and came out with strict rules to ensure friendships would stay intact. Blumenthal remembers they would meet once a month at a local bar to do a review and a hot seat for each founder, with complaints like “When you shoot me a 10-page email at 2 in the morning about what's supposed to be my area, I want to punch you in the face.”
Three years later, despite its massive success, Warby Parker's homey atmosphere, with its stacks of books and refreshments, still feels like you’ve just wandered into a friend’s apartment—albeit a friend who’s way hipper than you. And the thought-through style (their name was the result of 2,000 attempts) infuses everything the company does. Even the company's annual report is ridiculously good-looking.