By Guy Cookson, Partner at Hotfoot Design
Back in 2008, Dave Gilboa was about to return to college in Philadelphia when he lost his glasses while backpacking in Thailand.
“When I went to replace them they cost $800 – that was $600 more than my brand new iPhone 3G, a multiprocessing computer,” he explained later. “It was nuts.”
Gilboa did some research into why his new designer glasses cost so much, and what he discovered surprised him. It turns out that a single company, called Luxottica, owns three of the best known eyewear brands – Ray-Ban, Persol and Oakley. Luxottica also makes glasses for almost every major designer brand, including Burberry, Chanel, Dolce and Gabbana, DKNY, Giorgio Armani, Ralph Lauren, Paul Smith, Prada and Versace.
And as if that were not enough, Luxottica owns retail stores – including Sunglasses Hut – and even operates a vision insurance company.
Luxottica’s control of every aspect of the supply chain helped explain the high cost of Gilboa’s new glasses, and would be enough to deter most people from even thinking about entering the eyewear market. But Gilboa sensed an opportunity and, together with three friends, formed a company in 2010 with a $2,500 seed investment. They called it Warby Parker – named after two characters from a Jack Kerouac novel.
The company founders realised they could design, manufacture and sell great quality designer glasses for less than $100, and even give a second pair away to charity, just by avoiding expensive licensing fees and unnecessary mark-ups – so long as they sold direct through their own website, rather than traditional retail. Almost everyone thought they would fail, because how could you choose a pair of glasses without trying them on first?
They aimed to solve this by inviting people to choose five frames to try on at home with no obligation to buy.
This got a fantastic response from their early adopters, and the company started to generate a buzz even before the official launch. Coverage in GQ and Vogue soon followed. Fast forward just seven years and Warby Parker is now a so-called unicorn – a firm valued at over $1bn.