The biblical story of David and Goliath is a well-known parable. The story goes that Goliath, a giant and champion of the Philistines, challenged the Israelites to send out their champion and decide the outcome of their ongoing war in single combat. None of the Israelites dared to face the fearsome behemoth, except David. David and Goliath is often referenced as a moral lesson of how underdogs can overcome the odds and be successful.
Well today’s brand is the “David”…WARBY PARKER…that took on a “Goliath” and disrupted the eyewear industry!
The year was 2010.
The challenge was this: How do you get people comfortable ordering glasses online?
When Wharton professor Adam Grant heard about his students’ idea for a company that sold $95 glasses online, his response was: “Absurd, ridiculous and sort of insane! You can’t buy glasses over the internet. You have to go get your eyes tested. And then you have to try them on. This is not going to work.”
In fact, the four students asked him to invest in their business, and he turned them down. He just wasn’t convinced people would buy eyewear online, and he didn’t think the Founders were actually serious about their idea.
Well those four gentlemen, who would go on to create Warby Parker while attending Wharton Business School, proved him wrong…very wrong!
So how did, Dave Gilboa, Andy Hunt, Neil Blumenthal, and Jeff Raider have the VISION to disrupt the prescription eyewear industry and create a company valued at over $1 billion dollars…yes, you heard that number correctly….but I’ll say it again…over $1 billion dollars!
Here is the cliff-notes version of the back story to bring you up-to-speed.
Just before starting at Wharton, Dave Gilboa took 6 months off to travel and backpack around the world. During his trip he lost his glasses…his only pair! Upon his return, before entering the Wharton MBA program, Dave set out to purchase two things: a new iPhone and a pair of glasses to replace those he lost. According to Gilboa, “I went to the Apple store and spent $200 on an iPhone3, this magical device that did things that I couldn’t have imagined were possible even a few years earlier.” He moved on to his next purchase and noted, “I was gonna have to pay several times that for a new pair of glasses. It’s technology that’s been around for 800 years. And it just didn’t make sense to me.”
Put yourself in Dave’s shoes for a moment and think about it this way: How could it be that a pair of glasses costs several times more than a computer-like device that literally put the world into his hands and fit in his pocket?
The idea further blossomed in a computer lab as the four friends bonded, bemoaning the exorbitant cost of a single pair of glasses. Neil Blumenthal had previously served as director of VisionSpring, a nonprofit social enterprise that trained low-income women to start their own businesses selling affordable eyeglasses. He noted that he had “…traveled to factories to produce the glasses that we were distributing for people living on less than $4 a day, and then 10 feet away literally on a production line that had the same equipment – we saw some of the biggest names in fashion – coming off the production line. And it was sort of this moment that, ‘Oh – why are glasses so expensive in the U.S.? Certainly the manufacturing process is not different…Why couldn’t glasses be cheap enough to own multiple pairs, a fashion accessory like handbags or shoes?” Andy Hunt was the one who noted the absence of e-commerce in eyewear, saying “I couldn’t believe no one was selling glasses online.” Then Jeff Raider joined the conversation just before the bell rang. His friends thought that his particular interest in starting Warby Parker resulted from the fact that he couldn’t find a pair of eyeglasses that suited his own quirky style.
The rest is history!
As they started exploring the problems that they identified, they learned that one company, Luxottica, had a massive concentration of power in the eyeglass industry. This company owned most of the eyewear brands we all know well: Ray-Ban, Oakley and Oliver Peoples to name a few. Digging further, the Founders also uncovered that Luxottica had exclusive licensing deals with dozens of luxury lifestyle brands – like Chanel, Ralph Lauren and Versace. They also owned Sunglass Hut, LensCrafters, Pearle Vision, Target Optical and Sears Optical. Finally, they held EyeMed, the second largest vision insurance provider in the United States. It became clear that Luxottica controlled the majority of the industry: the glasses, the stores, and the doctors. This gave them the power to mark up prices however they wanted. Awareness of this monopoly pushed these four students to take them on and attempt to disrupt the system.
In order to turn their VISION into reality, they had to identify and solve several problems. First they focused on price. If Neil, Andy, Jeff, and Dave wanted to sell glasses that started at $95, then they would have to trim the fat and avoid unnecessary markups along the entire manufacturing-to-customer journey. Their solution was to create a vertically integrated company that designed, marketed and sold everything itself, eliminating all middlemen. Simply put, they designed all glasses in-house, ordered the materials themselves, got rid of licensing fees, and sold direct-to-consumers via their website.
Next they tackled the challenge of delivering a meaningful customer experience. Not being able to try on glasses, traditionally a key to sales, was a major barrier. To address this issue, they offered a home try-on service before purchase. Potential customers could choose up to five styles they would like to test out, and Warby Parker shipped them for a five day in-home trial. The customers shipped back, for free, the samples they were not interested in. In addition, customers were able to upload a photo of themselves to the company’s website and participate in a “virtual try-on” service. This direct-to-consumer engagement allowed Warby Parker to continually improve the customer experience through data-driven reporting.
The Founders also had a higher purpose, their dedication to philanthropy. Following the “Buy a Pair, Give a Pair” model first introduced by TOMS shoes in 2006, Warby Parker followed suit. Not only did they offer people the chance to buy affordable and stylish glasses, but they also provided glasses to individuals in need across the globe.
Alleviating the problem of impaired VISION is at the heart of what Warby Parker stands for and over eight million pairs of glasses have been distributed to underserved people around the world.
I can’t finish this episode without sharing why they named the company Warby Parker. The founders combined the names of two characters, Warby Pepper and Zagg Parker, created by the novelist Jack Kerouac, who inspired them to break free from the shackles of social pressure and embark on their adventure. According to Neil Blumenthal, “When we looked at folks that inspired us, we often looked at literary figures because of the tie between VISION and reading.”
These four Wharton students managed to successfully take down Luxottica, the Goliath behind overpriced glasses. In fact, in 2015, Fast Company Magazine named Warby Parker the “Most Innovative” company of the year (and just for the record, Apple was ranked #2).
So did David crush Goliath? You bet!
As the Founders concluded, “We believe everyone has a right to SEE.” I guess, with VISION (pun intended), anyone can change the world, like Warby Parker did!
If there’s one thing I know for sure, it’s this:
- Your product is NOT your brand.
- Your brand is your Core Value…AND
- You use your product as the vehicle to drive your Core Value.
- Warby Parker uses eyewear to drive their Core Value of VISION.
So the next time you’re looking for an eyewear brand that is chic, reasonably priced, and philanthropic, remember this:
VISION is how Warby Parker SCORES!
I’m Rich Keller, the CATALYST and see you next time on The CATALYST Effect!