Photo: Daniel Goodman / Business Insider.com
Warby Parker completely disrupted the designer eyewear industry when it launched two years ago. The company sells prescription glasses online for $95 instead of the usual designer prices, which can run around $500. They do this by working all the way down the supply chain.
There’s also a social element to their business: For every pair of glasses they sell, they donate a pair to people in need.
We caught up with one of Warby’s four co-founders, Neil Blumenthal, at the Social Commerce Summit, to talk about how his company has scaled up its operations since launching. Here’s what he had to say:
How did you guys start out?
Four of us were full-time MBA students at Wharton. We knew there were three things we had to get: a website, a collection and PR. We knew we only had one shot. We launched on February 15, 2010, and it was mayhem. We hit our first-year sales targets within the first three weeks. We sold out of our top 15 styles in four weeks. We wait-listed some 20,000 people.
We didn’t think we’d grow this quickly. We hired one of our classmates’ wives to help us with customer service. We thought she was going to work 10 to 20 hours a week, and she worked 90. There were all hands on deck. We were surprised that we actually graduated. After that, we immediately started hiring — siblings, cousins, anybody who could help out.
What’s the biggest lesson you learned early on?
We didn’t even contemplate sold-out functionality on the website. Within the first 24 hours we decided we needed a developer. Elation turned into an “oh crap” moment. In that first week we spent a lot of time thinking about, “How are we going to respond if we can’t meet customers’ needs?” We were just so apologetic. It eventually set the tone for our customer service team. We’re a customer-centric organisation. We’re proud of our net promoter score (88), which people use to measure customer satisfaction. We’re higher than Zappos and Apple. It’s higher than any published score we’ve ever seen.
Our culture was ingrained in the first week. We hired people who were super sharp that we could give autonomy to. They don’t need to get approval to give people discounts.
We’ve tried to do stuff that’s authentic and makes sense. Customers have rewarded us by telling everyone they know. When we’re in The New York Times or CBS Sunday Morning, that creates a huge spike in scale — it creates a new plateau.
How did you market your product?
50 per cent of people who come to our site have heard about it from a friend. Word of mouth has the highest ROI of any other form of marketing. We’re in the process of hiring an online marketing team.
We’ll do things that make sense for our brand — like create an impromptu event at the New York Public Library during Fashion Week. We created a holiday bazaar.
Which is a step toward establishing a brick-and-mortar location.
Yes — we’re potentially exploring a brick-and-mortar location.
And as you’ve grown, you’ve also established relationships with boutique stores.
Right. We’ve got nine showrooms across the U.S., including our New York headquarters. People still buy the glasses online, but it’s a great marriage of physical and digital. It’s the future of retail.
Would you consider your decision to potentially move into brick-and-mortar stores a pivot?
It’s less a pivot and more expanding on something that’s working. I’ve always thought of ourselves as a fashion brand. We’re an e-commerce company. We cut out the middle man. Through our own brand we avoid a licensing fee. We go directly to the consumer to avoid the high retail mark-ups.
Working out of our apartments in Philly, it was a non-optimal customer experience for them to visit our apartment to check out the glasses. But we found that people loved meeting the people behind the brand. We built these great relationships with customers. There’s no better way to do that than in the physical environment. So when we moved to New York, we chose a space where there was a showroom. People would book up to three weeks in advance.
How else have you scaled up?
We moved to a space on Houston and Lafayette [in Soho] this fall. Back then we had around 25 employees; now we’ve got around 60.
Last year you guys raised a bunch of investor money. How have you used it?
We’ll continue to strengthen the team and experiment with different marketing channels. All of our experiments seem to be working so far. We grew over 500 per cent from 2010 to 2011.
What departments are you expanding right now?
Pretty much every department. The customer service, tech, web content and design teams, finance, HR — we want to lay the foundation for growth. Before we even launched the business, we spent a lot of time building up the brand. It was very clear who we wanted to be. 70-five per cent of the interview process is devoted to personality and fit. We’re a social mission-driven company. We’ve offered health care from Day One. We conduct quarterly 360 reviews.
We also have executive coaching for our management team. We use a coach named Bryan Neuberg. We really want to buck the trend that hired mercenaries come in and leave — that founders want to just come in and then exit. That’s not how we think of this business. We think of building a 100-year brand that people will know and love.
How have you altered your supply chain as you’ve been growing?
We’ve expanded the number of suppliers that we work with. We’re meeting with them and talking with them, helping them think through how they scale. Warby Parker has three distribution centres in the U.S. alone. The acetate for the frames comes from a 150-year-old, family-owned Italian company; the frames are assembled in Asia; and the lenses are edged and inserted into the frames in the U.S.
We source raw materials — everything from hinges to screws. We’ve gone pretty far down the value supply chain to create such great quality at such a great price. It’s the same production line. Before business school, I ran VisionSpring — which is Warby Parker’s main partner — and we used to produce our own eyewear. I’d spend a bunch of time in the factories. I went with one of the founders and learned all about the manufacturing process. I had relationships to leverage and hired more people with supplier relationships.
We’ve tried to do our best to over-communicate with our suppliers. They’ve never seen an eyewear brand grow this quickly before. We’re experiencing double-digit month-on-month growth. It’s a lot easier to scale a website than a production line.
Since you launched, a bunch of copycat brands have emerged. How did you respond?
There are 10 copycats in the U.S. alone — and even more internationally. We often find they’ve stolen our images or copied the language from our site. We even found some were fraudulently donating to charities, which is illegal and incredibly unethical.
We’ve just tried to focus on creating an awesome company. We’re not going to do that by looking back. The other thing is that on the Internet, you can’t hide. I’m sure we’ll have a few more people pop up in the next few months. It’ll be hard for them to build something if they’re just copying and not being original or authentic.
What’s the biggest obstacle you’ve faced?
We’ve been really fortunate where the hardest thing we’ve faced is finding the exact right people for the roles we’re trying to fill. Getting engineering talent.
And now whenever we do projections, we double them. So far, that’s been working.
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