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Consumer

Dave Gilboa

Co-CEO and Cofounder, Warby Parker

One day in a Wharton computer lab, Warby Parker cofounder Dave Gilboa took to his favorite activity: complaining about glasses.

“I’d lost mine while backpacking Thailand,” Gilboa, also co-CEO, remembers. “But when I went to replace them they cost $800 — that’s $600 more than my brand new iPhone 3G, a multiprocessing computer. It was nuts.”

Yup, #sucks. And as Gilboa vented to fellow students Andrew Hunt and Neil Blumenthal, the pair became instantly enthralled.

“Andrew couldn’t believe no one was selling glasses online,” he says. “And Neil explained that while working at an eyewear nonprofit, he’d created glasses for people living on less than $4/day… So, why were they so expensive? Why couldn’t they be cheap enough to own multiple pairs, a fashion accessory like handbags or shoes?”

Jeffrey Raider joined the conversation before the bell rang. And then over frantic emails that night, the four friends debated the industry’s pitfalls (high cost to consumers) and potential solutions (e-commerce, in-house design). That 2009 exchange became the genesis of Warby Parker, a now-leading eyewear brand that keeps prices low by designing, marketing and selling everything itself. Glasses start at $95 with lenses.

How Warby Parker disrupted the $140B eyewear industry

Dave Gilboa Co-CEO and Co-Founder Warby Parker Disruption

EYEWEAR IS A MORE than $140B industry that, pre-Warby, was a borderline monopoly.

“There’s a massive concentration of power wherein one company, Luxottica, owns most eyewear brands you can think of: Ray-Ban, Oakley, Oliver Peoples, Persol,” Gilboa explains.

Luxottica also owns Sunglass Hut, LensCrafters, Pearle Vision, Target Optical, Sears Optical — a massive collection of more than 7,000 stores. (Walmart, in comparison, has only 5,000.)

“And that’s just the surface of their business,” he continues. “Not only do they have exclusive licensing deals with dozens of luxury lifestyle brands — Chanel, Ralph Lauren and Versace — but they also own EyeMed, the second largest vision insurance provider in the United States; they power vision insurance for Aetna.”

Put simply, Luxottica and its largest competitor, Safilo (Gucci, Fendi and Dior), control the industry: the doctors; the stores; the glasses. They markup prices however they want, and we’re stuck with the same product regardless of age, taste or income.

“And while I’m not here to knock anyone’s business, that was really the impetus for Warby Parker,” he concludes. “We wanted to disrupt a system wherein glasses are marked-up hundreds of dollars for no value added. That may be a great deal for the industry, but it’s terrible for the consumer. Glasses simply shouldn’t cost that much.”

The Issue: A Monopolized Industry

We were driven to disrupt a system wherein glasses were marked up hundreds of dollars for no value added.”
Dave Gilboa Co-CEO and Co-Founder Warby Parker Disruption
It's terrible for the consumer. Glasses simply shouldn't cost that much.”

WHEN ITS FOUNDERS dreamt of Warby Parker back in that b-school computer lab, they knew: In order to cut prices, they would need to cut costs. Everywhere.

“So, we started looking at the frames we loved — really digging into the cost of the materials and the process of making them,” he recalls. “And we realized we could dramatically bring down prices, even when using the best materials, by getting rid of additional fees like licensing.”

To avoid markups, Warby Parker designs product in-house. They sell directly to consumers via their website and stores. And least sexily, but most importantly, they order their own materials (like acetate) from Italy and then manufacture frames at the same Chinese factories as their high-end competitors. They trimmed all the fat.

“We built an independent, vertically-integrated brand that avoids unnecessary markups. Basically, we do everything ourselves,” Gilboa says.

This disruptive process enables Warby Parker to keep prices low, selling lensed glasses for less than $100. (Some frames and options like thinner lenses cost more.)

“And this also gives us a close relationship with our customers that provides constant feedback — data which we use to improve everything from the design of our frames to the UX of our website,” he explains. “A traditional eyewear company would never allow for that communication to exist.”

The Answer: A Vertically-Integrated Warby

We realized we could dramatically bring down prices, even when using the best materials, by getting rid of additional fees.”
Dave Gilboa Co-CEO and Co-Founder Warby Parker Disruption

THE WARBY PARKER THESIS is simple: Four eyes good, two eyes bad. (Shoutout to all our Orwell fans out there.)

“It boils down to our idea that glasses should be an accessory the same way shoes or bags are accessories,” Gilboa explains. “You should own multiple pairs… should fit them to your mood or your style. After all, they’re the only thing you wear on your face. What could be more expressive than that?”

And by lowering prices from $500 to $100 per frame, Warby Parker enables you to do just that: Express yourself. (They also distribute a pair of glasses to someone in need for every pair sold.) So, no matter where you interact with the brand — their website, social media or in one of their stores — remember this: It is not the Disruption way to pay an exorbitant amount for basic necessities.

IN Conclusion: YOU DO YOU

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