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July 11, 2011 12:27 am
While their business school classmates were socialising, the founders of Warby Parker used their spare time to develop a business idea that has now reached almost $5m in sales.
Their plan? Selling affordable, vintage-inspired glasses frames complete with prescription lenses online. And, for every pair sold, the company works with non-profit eyewear organisations such as VisionSpring, to donate a pair of glasses to someone in need. The founders say more than 1bn people in developing countries do not have access to glasses.
By avoiding the middleman and sourcing materials directly, the company sells its glasses at a fraction of general retail prices, with each pair costing approximately $95. The frames are made in China in the same factories that create brands such as DKNY and Chanel, while the lenses are made in the US. Customers submit their prescriptions when they place their online order for frames.
“It never made sense to us that glasses cost the same as an iPhone when the technology has been around for 700 more years,” says Neil Blumenthal, one of the founders.
Along with co-founders David Gilboa, Andrew Hunt and Jeffrey Raider, the four friends are graduates of the class of 2010 at the Wharton school at the University of Pennsylvania.
“Business school is the ideal place to launch a new consumer brand,” says Mr Gilboa. It was easier for the students to make the entrepreneurial leap, he adds, because they were already committed to forgoing an income while studying for two years for an MBA.
The entrepreneurs tailored their Wharton experience around launching their idea. By developing a concept in the first semester, Mr Gilboa says they had a further three semesters to take full advantage of the courses targeted at launching a business.
The four picked their courses strategically to advance their eyewear company. “We recognised that by starting this company in school it was going to eat up every minute of our free time,” adds Mr Gilboa. Assuming leadership positions and excelling academically became less important for all of them, he adds.
An entrepreneurial healthcare course was a game changer. “At that point, we’d decided to write a full business plan and committed to investing our life savings to start this business,” says Mr Blumenthal.
Since all four founders took the course, they were able to use classes to pin down specifics of the company and set goals. Three of the founders also took an enabling technologies course to learn how to set up an e-commerce business.
Professors doubled as business advisers and an adjunct professor – who is also a practising attorney – helped them set up their company. They also used faculty knowhow to understand how word-of-mouth marketing applied to their business. “We literally met almost every professor in the marketing department,” says Mr Blumenthal.
Fellow students helped the four to market-test their ideas, and classmates spread the word after launch. “It’s a great forum to get as much feedback as possible,” says Mr Gilboa, referring to the 800-plus students in their MBA class.
In the year since graduation the company has grown to 30 employees and sold over 50,000 pairs of glasses. The four – who took out several loans as well as investing their savings – have opted to reinvest profits. Two of the founders went through Wharton’s recruiting and now work on Wall Street but remain board members.
As a team, they lean on some of the routines learnt during their MBA, such as 360-degree evaluations, a team feedback exercise that was a requirement in Wharton’s small learning groups.
The founders also speak at business school conferences, sharing their business dilemmas. “We’re recognised as innovators and now we are speaking alongside some of our professors,” says Mr Blumenthal.
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Mr Blumenthal ran VisionSpring before attending Wharton and wanted to combine a business proposition with a social mission. “The school holds us up as an example to students to show how you can use your MBA for more than to go into consulting or finance.”
Warby Parker – named by combining characters from author Jack Kerouac’s journals – has expanded its collection and now offers sunglasses. But it will continue to stick to its business model, and for every pair sold someone in need will receive a pair of prescription glasses.
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