How Warby Parker’s Founders Took $2,500 and Built a $1.2 Billion Company
After a lengthy chat about the ridiculous high cost of new glasses, four friends from the Wharton School of Business decided to launch their own eyewear retailer company in February 2010 called Warby Parker.
Named after the two characters found in Jack Kerouac’s unpublished journals, Warby Pepper and Zagg Parker, the neophyte brand set out to prove that glasses need not be expensive.They began selling glasses for $95, and in four weeks, sold out all of their available 15 styles and gathered a wait list of about 20,000 customers.
The company managed to keep prices low by designing its own frames and working directly with suppliers. Their strategy allowed them to cut out licensing fees and eliminate additional markups.
Warby Parker lets customers virtually try on different frames on its website and a free five-day try-on at home too. For every pair of glasses sold, the company donates a pair to entrepreneurs in developing countries without access to proper eye care.
In an interview with Forbes, co-CEOs Neil Blumenthal and Dave Gilboa explained the company’s standard and business model.
“The standard we want to set is that companies can do it all. That you can offer an amazing product, scale, and do good in the world without charging a premium,” the co-founders said.
The duo also explained the company’s buy-one-give-one model wherein the donated glasses are actually sold to help developing-world entrepreneurs start their own business.
“We’ve always been focused on impact. At times, good intentions have unintended consequences. Giving something away in the wrong environment can create a culture of dependency and hurt local businesses,” Blumenthal and Gilboa explained.
The company, along with partner VisionSpring, helps low income entrepreneurs to start their own businesses and sell glasses at an affordable price. “It ensures that glasses are always available, that the glasses are pairs that people actually want to wear and that it has a multiplying effect of creating jobs in communities in the developing world.“
Having donated a million pairs so far, Warby Parker is now working with Johns Hopkins and New York City to provide glasses to local kids.
“We think it’s crazy that there are children in America that don’t have the glasses they need to succeed in school. Working with the City of New York and Johns Hopkins is enabling us to provide glasses to children from low-income families in urban areas as well as measure the impact of that in hopes of ultimately affecting public policy at a federal level.“
As leaders in social entrepreneurship, Blumenthal and Gilboa observed how other companies’ involvement to communities has evolved.
“The language of social entrepreneurship has become much more prevalent. It has expanded from the nonprofit sector into other areas. It has manifested itself in the B Corp movement, in which traditionally non-mission-driven for-profit companies are thinking about solving problems and serving all of their stakeholders, not just shareholders,” the co-founders said.
“Our hope is that we are serving as an example to other entrepreneurs and executives that you can run your business in a way that does well financially while also doing good in the world.”
Warby Parker, which was founded with the $2,500 seed investment from Wharton School’s Venture Initiation Program, reached its billion dollar mark last year with a valuation of $1.2 billion as of April 2015.
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