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STARTUP

How Warby Parker Almost Broke

Sudden success may seem like a happy problem to have. Until it happens to you.

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What happens when all your wildest dreams come true? Your startup launches with features in GQ, Vogue, and Daily Candy. You sell out of your initial product line in a matter of hours. First, you celebrate. Then things break. That’s what happened to Dave Gilboa, co-founder of Warby Parker.

While finishing their MBAs, Dave and his co-founders Neil, Andy, and Jeff came up with the idea start a company that would design and distribute hip eyewear online. But GQ wanted to do a profile on the co-founders before they even had a business. That gave the co-founders 30 days to get Warby Parker up and running, which they barely managed to do. 

Within 48 hours of the magazine story, thousands of orders had been placed. And Warby Parker was unprepared. They’d forgotten to build a “sold out” function into the site. As Dave remembers it, “We weren’t sure what to do. Should we take down the website? Keep taking orders and then profusely apologize?” In those 5 minutes of debate another 10 orders came in.

In the aftermath, Dave and his team learned several lessons:

Understand where the system breaks down

Gilboa admits he “developed a fancy Excel model projecting potential growth scenarios, but didn’t spend nearly enough time understanding what happens to the critical processes once we launched the site. If volume is 50x or 100x more than expected, how do you ensure quality control? Because we didn’t, we were left scrambling to keep our head above water.”

There can be a high cost to free services

Initially, Warby Parker used a single, free Google Apps email account to manage customer complaints. With multiple users accessing a single account to send thousands of emails, Google assumed Warby was spamming and shut down the account. That left Dave’s team without any way to contact customers or field complaints. Luckily, the team had friends at Google, who helped restore the company’s account. Warby Parker quickly switched to NetSuite for customer relationship management.

You can’t cure what you haven’t diagnosed

Early on, Warby Parker’s team had no way of segmenting customer calls. Was someone calling because the prescription was incorrect? The frame was the wrong color? Nobody knew until they answered the phone. It was inefficient and frustrating for everyone. A ‘contact-us’ form, which asked customers what type of problem they were having, helped customer service reps resolve more issues in less time.

Success Stories: Warby Parker

The founders explain how they dramatically undercut the dominant glasses makers.

IMAGE: amlamster/Flickr
Last updated: Apr 17, 2012

SCHUYLER BROWN is the host of Founders@Fail. He currently works at High Peaks Venture Partners, where he sources and evaluates potential investments. Brown holds a B.A. from Columbia University and an M.B.A. from Columbia Business School.




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