Warby Parker’s leap: From affordable glasses to AI game-changer

Almost everyone we talked to told us why this idea would never work. I think it just put a chip on our shoulder and made us want to prove these critics wrong.

Immediately we had a wait list of 20,000 customers and it was just off to the races. We personally called every single person on that wait list just to show them that we actually cared.

We really only spent money on three things.

Hundreds of stores and a deep social mission.

There's still a billion people around the globe that need access to glasses and don't have access. We're proud that we've now distributed over 20 million pairs of glasses to people in need around the world.

We think that the best way to experience AI is going to be through our glasses. We believe that Google has the best technology out there and we're excited to partner with them to bring really innovative products to market as soon as next year.

Yeah, thanks for having me on.

I was born in Sweden, but when I was a kid, moved to the US, to San Diego, and both my parents are doctors. My dad's a pediatrician, my mom's a dermatologist. They were both the first people in their families to go to college, and they really attribute their education as kind of the core reason that they created great opportunities for us as a family. And so they were, you know, very much encouraging of me and my sister to study in general and in particular to study healthcare. And so growing up, I was 100% sure I was going to become a doctor. My only question was what kind of doctor? And I went to Berkeley undergrad. I was a bioengineering major, which meant I had to take all the premed classes. I took the MCAT, started applying to med school, and was kind of all set to follow in my parents' footsteps. But while at school, a couple things happened. One is that a lot of things were changing in the healthcare industry in the late 90s, early 2000s when I was in school. HMOs, managed care was kind of taking over, and just talking to my parents and their friends who were doctors, they all talked about the good old days before kind of bureaucracy set in and when they could really focus on patients. And for the first time, started to question, you know, is being a practicing physician like the only path for me? And at the same time, a bunch of my friends from college were going into other fields and being hired by firms. They said, you actually don't need to know anything about business or you don't need to know anything about these fields that they're going into. They're just really looking for smart people and they have great training programs. And so as a result of that, I did an internship at a strategy consulting firm called Bain my junior year of college, the summer between my junior and senior year. I really loved it. They gave me a full-time offer and so I accepted that and much to the disappointment of my parents, kind of went down the business path. And I thought I'd be, you know, still wanted to do something to help people one day, but thought there might be a different path where kind of learning something about business, learning something about management, that I could combine that with healthcare one day and it'd be just valuable to kind of understand how business works. And figured that going into kind of consulting or finance would, you know, be a great learning ground for that. So I spent three years at Bain and then I moved to New York and worked for a merchant bank called Allen & Company that was starting their healthcare practice and was helping a lot of healthcare companies raise money and make strategic decisions. And realized during that time that it seemed like the management teams were having a lot more fun than I was. And after a few years of being in financial services, felt like I'd learned a lot. And that was really kind of the time to go back and apply those skills with what I was really passionate about, which was kind of, you know, helping people and doing something more healthcare related. And thought that going to a startup or starting a company would be a great way to do that. I didn't have any great ideas, so decided to apply to graduate school and got into a dual degree program at Penn where I would get my MBA at Wharton and then a master's of biotech through the engineering school. And thought that maybe I'd kind of come across an interesting idea or meet some interesting people in those endeavors. It was a kind of a unique opportunity in my late 20s when I was single. So thought I'd take a few months off to travel before going back to school. And this is showing my age, but I handed in my company-issued Blackberry on my last day of work at Allen and Company, bought a one-way ticket to Hong Kong, and then traveled around for about six months, just kind of staying in hostels.

No real plan, just, you know, depending on who I met or what kind of interesting endeavors I came across, would kind of choose where I was going to spend the next couple weeks. I spent that entire six-month period traveling without a phone, which now seems really crazy. This was back in 2008, where it was only kind of semi-crazy. And every few days I would find an internet cafe and send an email to my mom so she knew I was still alive. But it was pretty freeing, especially having worked really crazy hours for a few years and always being connected, to just be able to live spontaneously. Along those travels, I ended up losing my only pair of glasses. I left them on a plane. So I came back to the US about to start grad school and I had to buy two things: a new phone and a new pair of glasses. I went to the Apple store. The iPhone 3G had just come out, and I bought that for $200, which was this magical device all of a sudden, especially not having had a phone at all for a few months. And before that, a Blackberry, kind of all of a sudden had this supercomputer in my pocket. I paid $200 for that and realized my glasses were going to cost $700. So I started complaining to anyone who would listen, including all my new classmates at school, about how glasses were so expensive, and realized that there were lots of other frustrated consumers, including many of my new classmates. We started talking about kind of some of the dynamics in the optical industry and how they didn't make sense, and then had lots more conversation that ultimately led to us deciding to start a company together that became Warby Parker while we were full-time students.

That's right. Yeah. It was very frustrating at the time to lose my glasses, but it was a happy accident that just made me question a lot of things at a particular moment in time where I was about to start school, had a lot of free time and a lot of opportunity to kind of decide how I was going to spend that time. And it also happened to be at a time where there was a major transformation in terms of technology and how people were shopping with the rise of e-commerce. This was before Amazon had really taken over the e-commerce world, but you had companies like Zappos selling shoes and Blue Nile selling engagement rings and diapers.com selling household goods, kind of showing that you could sell a variety of products online. This inflection point where for the first time, as we started talking about the idea, I thought that, you know, it might be possible to actually sell glasses online and might be possible to create a brand online for the first time. There were a lot of very lucky elements to the timing of losing those glasses, starting school, meeting my co-founders, and kind of they had each of their own set of experiences that kind of led to the spark that eventually led us to start a company together.

Yeah, absolutely. You know, I think at the time, you know, carriers were subsidizing the initial purchase of phones, which yeah, I think they've stopped doing, or at least to the same extent. So maybe they learned that that wasn't necessary. But yeah, I think the main insight was that glasses are, it's technology that's been around for 800 years and almost every other kind of consumer category has experienced price deflation over time as, you know, technology becomes more efficient and the production around it becomes more efficient. But this is a unique category that has actually seen a lot of price inflation.

And that didn't make sense to us. And so because of that, we just kind of started asking questions around why does this category operate very different from other categories? Why can you buy every other product online but you can't buy glasses online? It was just, yeah, this massive consumer category that had very little innovation on the product side or distribution side. And again, being business school students was kind of the perfect time for us to, you know, ask a lot of questions, just ask why, why, why, and actually have the time to explore the answers.

I never really had an itch to be a founder necessarily. You know, I think it was one of those things that, yeah, it was just kind of a happy accident and kind of being born out of frustration as a consumer and kind of seeing this glaring part of the world that just didn't make sense. And then wanting to do something about it and that being the spark that kind of led to wanting to found a company. I think before that, would have been, yeah, just as happy to join an existing company, join a startup. I never really had the goal of, you know, I really want to be a founder. I want to be an entrepreneur. You probably like, you know, a lot of other founders. It was, yeah, more accidental, but then kind of once the opportunity was in front of me, then became really passionate about it.

The four of us were classmates. We were buddies first. We all kind of shared a frustration. We all had individual stories around why we were kind of frustrated eyewear consumers, either having lost glasses or broken them and not understanding why they were so expensive. And Neil, my co-founder and co-CEO, he had spent a few years running this great nonprofit called VisionSpring where they would go to some of the poorest parts of the world that didn't have access to glasses or eye doctors, train locals to administer basic eye tests and then have locals also sell subsidized glasses into those communities. And so he had been to factories where they were actually producing their own glasses for some of the poorest people on the planet on the same production lines using similar materials to glasses that would cost hundreds of dollars in the US. And so through kind of that work, we recognized that there's a really big opportunity here. None of us had started a business before. None of us kind of knew how to build a website or really kind of any of the elements that are required to start a company. We joke now, but it's probably true. The hardest thing we had to do was come up with a name that all four of us liked. At the time, there were some sites that were selling glasses online. They had names like $39glasses.com and gogglesforyou.com. And they really focused on just price as a differentiator. They had really poor quality, really bad design and customer service. And we wanted consumers to feel like they weren't making any sacrifices when they were coming to us, that they were getting really high quality, beautiful products at a great price point with great customer service. We also recognized that, you know, glasses don't only help you see, but they're a really important fashion accessory. They're for many people, it's the only thing that they wear on their face. It tends to be kind of an expression of your personality first and foremost, have to look good. And we wanted people to kind of think of a fashion brand when they heard our name. We didn't want to name the brand after ourselves for a few reasons. One of which we didn't think Gilboa Blumenthal really rolled off the tongue as a fashion brand.

Yeah.

And so we spent about six months peppering our friends and family every day with, you know, different name options. What do you think about this? What do you think about that? We would have these hours-long brainstorming sessions and explored names ranging from, you know, different mythological creatures to authors or artists that we felt represented the brand ideals. And we ended up spending a lot of time talking about the Beat Generation writers. And coincidentally, the New York Public Library did an exhibit on Jack Kerouac's private journals. So I went to that exhibit at the main branch library and it turns out he had written about all these really interestingly named characters in his journals that never made it into any published works. And there were two names that jumped out at me. One was Warby Pepper and the other was Zag Parker. Just thought they were really unique and sounded sophisticated. And so I brought those back to Jeff and Andy and said for the first time in our exploration of like over 2,000 names, all four of us got really excited about these names and we decided to combine the two and make it our own, to Warby Parker. And it also helped, especially when we were bootstrapping the business as full-time students, that the URL was available for $9 and there were no IP issues, and so we could trademark and own it, then really spent the next few months and years building a brand around it.

That's right. Yeah. So each of us, you know, when we went to business school, each of us had worked for four or five years and we had kind of taken our life savings from a few years of working. We got so excited by this idea that we all agreed that we were going to kind of all pour our life savings into standing up this business. At the time, we talked to a lot of entrepreneurs and people that started successful companies and they kind of deflated our expectations. So they said, you know, just because you're excited about this doesn't mean that anyone else is going to care. And so you should be aware that, you know, if you're putting your own money in or if you're taking money from other people, that's likely going to go to zero. We felt a lot more comfortable losing our own money than raising money from friends or family. And so, yeah, we kind of all committed to put in an equal amount and see if we could, you know, launch the business and spent a year and a half while we were full-time students, not taking salaries, didn't have an office, really tried to be as scrappy as possible. Yeah.

We tried to spend as little as possible. In the early days, we even joked there was kind of almost official company policy that we wouldn't buy any pens. We would go, there was a TD bank on the corner that we would go in that had free pens that we would go in and, you know, just take a few anytime we needed them. And being at school, there were a lot of kind of free resources that were available to us from computer labs to office space that we would liberally use. We didn't pay ourselves a dime. We really tried to delay hiring people for as long as possible. We really only spent money on three things. The first was getting a website up and running since none of us knew how to code. At the time, Shopify didn't exist, a lot of the modern tools that are available that make it really easy for people to launch businesses today. Back in 2008 to 2010 when we were kind of in the idea formation stage. The first thing we spent money on was getting our website built. The second was our initial set of inventory since our suppliers didn't give us reasonable terms. We had to prepay for all inventory upfront in the early days. The third thing was we hired a fashion publicist. We recognized that you could only launch a brand once. We thought it was so critically important that we got credibility from the fashion and design world. And I think we surprised a lot of people at the time that kind of learned, oh, you're launching an e-commerce-enabled company. Don't you want to launch in TechCrunch? And we actually wanted to avoid that as much as possible. We thought that would just encourage copycats. But we did want a stamp of approval from some folks in the fashion world. And we were able to launch with these great features in GQ and Vogue in large part, you know, because of those relationship-building efforts through our PR firm. And that really put us on the map in a major way and that was kind of off to the races as soon as we got those articles placed.

We realized like we didn't have a marketing budget. We had zero dollars available and so we really tried to leverage our relationships to introduce the brand through trusted sources as much as possible, whether that was, you know, calling our friends that worked at interesting companies in New York like Condé Nast or Tory Burch or kind of other places where we thought there would be influential people. And we asked, hey, can we bring a kind of a roller bag of our glasses and set up a trunk show in your conference room at lunch and just let people try on glasses. We didn't have a point-of-sale system, so we just had our laptop open and people kind of went through the whole e-commerce checkout on a conference room table. And so we did that as much as possible. We hosted people in our apartments in Philadelphia where we were in school at the time. Our goal was just to introduce the brand through trusted sources, whether that was press or in person, and then blow people away by the customer service that we offered and hopefully get those customers to tell other people. At the time, our customer service number, we just set up a Google Voice number that called all four founders' cell phones at the same time. We just spent 24 hours a day just handling customer orders, customer service, would fall asleep every night responding to customer emails, and really just wanted to go out of our way to show customers that we cared about them and wanted them to have a good experience.

That's right. Yeah. I think one of the innovations that kind of really put us on the map and generated a ton of excitement, both from a press standpoint but also from a customer standpoint, was our Home Try-On program. So, you know, we spent a year plus developing our brand and designing our styles and really thinking about how we could sell glasses online. And we did a lot of surveys and testing with potential customers. We found that in spite of all the things that we thought were really compelling from a customer value proposition standpoint, that there was still a lot of skepticism about buying glasses online, especially from a new brand that people didn't know about. So, you know, we asked, "Would you buy glasses if there was free shipping and free returns?" And, you know, some people said yes, but a lot of people said no. They're used to going in a store and trying them all on. Well, what if they're $95, including prescription lenses, you know, a fraction of what they're used to paying? And a few more people said yes, but there was still just a lot of skepticism. And then we got our product samples in and we wanted some feedback on them. So we invited people into our apartments and asked them to try on the glasses. And everyone that tried on the glasses said, "Oh my God, these are amazing quality. These are $95. I would 100% buy these." And that gave us the insight that we should just send these out. We just need to get as many glasses on people's faces as possible. And we couldn't afford to open stores at the time. So we said, why don't we just ship our glasses to customers' homes and let them try them on and then they can send them back to us along with their prescription and then we can go ahead and make these glasses for them. So we introduced our Home Try-On program and that really got a lot of attention, including in our initial GQ article that called us the Netflix of eyewear. This was back when Netflix was actually shipping DVDs back and forth. It just generated a ton of press. We also found that when people got their Home Try-Ons, they loved taking photos of themselves in all five and they would post it to, at the time it was Facebook. Instagram hadn't even launched yet and it was a great viral marketing sensation. Or people would have their glasses shipped to their office and ask their office mates which glasses look best on them and then the next day we'd get a bunch of Home Try-On orders for other people in their office. And so it was this kind of great viral marketing tool that also enhanced, you know, the individual customer journey because of that program. We just got massive immediate attention and I remember sitting in my classroom a few hours after we launched our website, the day that the GQ article came, and I had my phone set up to get a notification anytime we got an order. And the first order came in and I got a buzz and I let the other guys know that we got our first order and everyone was super excited. And then 10 minutes later another order came in and then another order and then another order. And I realized by the time our 90-minute class was up, we had taken more orders than we had inventory for. We didn't have any sold-out functionality or waitlist functionality. We'd never contemplated that that would be a necessary function on the website. So we called an emergency meeting and we discussed, like, do we take the website down? Like, how do we handle this? And we called our one developer who sometimes would disappear for days at a time, but he was available and he was able to build some waitlist functionality that he put up. And immediately we had a waitlist of 20,000 customers and it was just off to the races. And we had our sisters and brothers and wives and girlfriends, anyone that was available for a few hours to help process orders and respond to customers. And really wanted to make sure that kind of everyone that found out about the brand in those early days kind of walked away with a positive experience.

Yeah, none of us are technical and we had, yeah, lots of ups and downs. It still had lots of bugs in it and not something that we were really proud of. And there was kind of a whole roadmap to, you know, improve the site over the next few weeks. And then our publicist called us and said, "Hey guys, GQ is hitting newsstands tomorrow. I just went to your site, it says coming soon. What's going on here?" And this was in the middle, it was kind of, I think it was like right around Valentine's Day on Feb 14th and we knew that GQ was coming out. It was the March edition and so we thought we had until March. We didn't realize that the March edition actually comes out in Feb. And yeah, so we kind of stayed up till four in the morning working with our developer, trying to squash as many of the bugs on the site as possible. But yeah, it still wasn't something we were proud of. So yeah, like my mom didn't know the site was live. Our best friends didn't know the site was live, but we just had to push go. Yeah, these articles started hitting newsstands and all of a sudden there's just a massive influx of orders and yeah, really caught us by surprise. We had been working for a year and a half to kind of get everything perfect and then we just kind of had to let go and wing it from there.

Almost everyone we talked to told us why this idea would never work. We were all students at Wharton. There was a business school competition and we've

Been working on this business plan, and we're really excited about it. And so we said, you know, let's enter the MBA business plan competition. And we didn't even make the finals. And there were a lot of very successful alumni judges that provide very detailed feedback. And they provided, you know, a whole host of reasons why this idea would never work. That primarily that we were trying to do too much, and that, you know, it's hard enough to launch an e-commerce site. It's hard enough to launch a brand. It's hard enough to launch a company that has a social mission and a social enterprise. And doing all those things together is never going to work. Pick one lane. You know, be a retailer of other brands of glasses. Be your own brand of glasses, but sell through existing distribution channels. Start it, you know, either be a for-profit or a nonprofit, but don't try to have a social mission as a for-profit business.

Yeah. We, you know, recognize that, you know, they're really smart people that provided very thoughtful feedback. If we had been a solo founder, it's likely that we would have been really discouraged and maybe so discouraged that it would have kind of caused us to not move forward with what we were building. But I think because there were four of us, you know, we were immediately able to kind of pick each other up and say like, yes, this is valid feedback, but here are the five ways that we're going to overcome these things. We really trusted each other. I think it just put a chip on our shoulder and made us want to prove these critics wrong. You know, when we were talking to, you know, potential partners early on, whether it was factories that we had to work with or lens suppliers that had kind of had to take a bet on us and, you know, introduced us to important relationships they had. I think what probably got us over the hump was just the passion that we had, the conviction that we had around building a brand that stood for something that made the world better. And that there was this unique opportunity to kind of blend design and technology and social entrepreneurship to do something that hadn't been done before. While we recognized that that added a degree of difficulty, that's what made it so exciting and that's what kind of created the passion that enabled us to convince these early partners to take a bet on us.

Yes, absolutely. Being in business school, we had an advantage of having access to some of the brightest minds in business, where the professors at Wharton are often, you know, paid sometimes millions of dollars by the biggest companies in the world to be consultants on everything from how to optimize their supply chain to how to optimize pricing. And we talked to every single professor, kind of got their advice on what we were building, and we were very open about, you know, our perspective and wanted people to poke holes in it. I remember distinctly we walked into a pricing expert's office and he knew nothing about glasses. We said, we're going to introduce this new brand. We're going to sell prescription glasses for $45. And he stopped us. He said, that's never going to work. We said, well, we have all these slides. We can showcase all our analysis, like why we think this is going to be really compelling to consumers and why we think we can make it work. He said, I don't need to look at those slides. I can tell you that your costs are going to be much higher than you think they are and you're not allocating nearly enough money for marketing, especially for introducing something that is going to be new to the consumer landscape. You need to raise prices to account for both of those things. Of course, he was right, and with his help we ended up doing a big conjoint analysis and a survey of consumers, and we found that the likelihood that someone would purchase actually increased as the price went up. They thought $45 was just too low. It was, you know, a tenth of the price of what people were used to paying, and that there was just way too much skepticism around the quality, you know, paying a tenth of the cost. And so as the price went up, people were actually more likely to purchase. But then after we hit $100, then that likelihood to purchase plummeted. And so I think there's just kind of a psychological barrier around $100. Now, there's been a lot of inflation since then. So maybe that type of analysis would be different today. But that's how we landed on $95 as our entry price. And we really wanted one all-in price that included not only the frames, but lenses, coatings, shipping, that people weren't worried about being upsold or having, you know, additional hidden charges that they were kind of used to seeing when they were purchasing glasses. We wanted to be very transparent and include everything that a customer needs.

And we still have that pricing today. So the majority of our eyeglasses are still available for $95 now, 15 years later. And we've introduced a variety of products at different price points, but have really always wanted to make sure that we stand for transparent and fair pricing.