Editor's note: Inc. magazine will announce its pick for Company of the Year on Monday, December 11. Here, we spotlight a contender for the title in 2017.?
Warby Parker has always had its eyes on the future.
Yet when the eyeglass company first launched in 2010, naysayers thought its direct-to-consumer model eschewing traditional retail channels seemed, well, shortsighted. "We got a lot of advice from people that said, 'You guys are crazy, this is never going to work, if this was a good idea it would have existed already,'" recalls Neil Blumenthal, Warby Parker's co-founder and co-CEO.
Now, Warby Parker is thriving -- with $215 million in venture capital, $1.2 billion in valuation, and an Inc.-estimated $250 million in revenue -- and the direct-to-consumer market is too. Other startups have taken note of Warby's success, and have adopted the model that allows them to skip the middleman, improve customer service, and lower prices. Now you can buy anything from shoes to luggage to mattresses to watches in the same fashion.
And when Warby, which started as an exclusively online retailer, first started experimenting with brick-and-mortar stores in 2013, others once again took notice. A rising number of companies -- such as Everlane, which sells clothing basics; Allbirds, a shoe brand; and Away, a luggage company -- are opening up physical locations even as retail is supposedly dying.
"Warby Parker paved the way for a more seamless online shopping experience by successfully executing the details many retailers have struggled to navigate, primarily through use of its showrooms and try-on programs," says Jana Vyleta, an analyst at Mintel, a market research firm. She adds that Warby is noteworthy because of its commitment to style and quality while still being affordable, not to mention its ability to innovate in a stagnant industry.
Blumenthal and co-founder and co-CEO Dave Gilboa say they're not thinking about Warby's impact on other companies. Instead, says Blumenthal, they're just trying to focus on what's best for the customers. "But it wouldn't surprise us if a number of these other companies look at us as a model for what they should be doing," he adds.
For a company so ahead of the curve, Warby has never been brash or aggressive about its expansion. The company prefers measured, calculated growth, seen through its slow but steady advance from single vision acetate prescription glasses to a product line that now includes prescription and non-prescription sunglasses, progressive lenses, a monocle and metal frames. "[We] start by serving a narrow set of customers extremely well and then learn about what works and then expand beyond that," Gilboa explains.
But this year, Warby ramped up the game, beginning to manufacture lenses in-house and branching out into the telemedicine sector. "We really used this year as a year of transformation," Blumenthal says. "And it's one in which we wanted to go further up the funnel, so to speak, and down the value chain. And what we mean by that is, how can we provide more products and services to our customers to make it easier for them to buy glasses?"
It was with this customer experience mindset that Blumenthal and Gilboa opened an optical lab in Sloatsburg, New York. The 34,000-square-foot, $15 million facility allows Warby to manufacture some of its own lenses and fit them into frames--essentially, taking part of its supply chain into its own hands. (Warby also works with a few third-party labs across the country.) "For orders coming out of that lab, we have the lowest return rates, we have faster turnaround times, and so we're seeing really positive results for taking more control over our supply chain," Gilboa says.
This year, Warby also entered the burgeoning field of telemedicine, or using technology to provide health services, by launching Prescription Check, an app that allows customers to take an at-home vision exam prior to buying new glasses. Not everyone is a fan, though. While Warby limits test eligibility to those without eye health issues like glaucoma, and stipulates that the check doesn't take the place of eye health exams, critics like the American Optometric Association told Business Insider that the app could be "dangerous."
And despite its massive seven-year growth, Warby still trails behind eyewear giant Luxottica, which owns a huge slice of the market and drew in more than $10 billion in sales in 2016. And while certainly disruptive, the startup has a ways to go.
But Blumenthal and Gilboa have never been afraid to take on Goliath. "A startup needs to create the future in which it's going to succeed," Blumenthal says. "And an incumbent needs to maintain the status quo, or hopes to maintain the status quo, which is often why they're not innovating and looking towards the future."
This article has been updated to include where Warby Parker manufactures.