
Over 400 Startups Are Trying to Become the Next Warby Parker - fourmii
https://www.inc.com/magazine/201805/tom-foster/direct-consumer-brands-middleman-warby-parker.html
======
harshaw
It's hard for me not read this article and see a metric f-ton of hubris. If
the depth of your thinking is that you are the Uber of X, the warby-parker of
Y, you are so screwed.

If you've been around startups - the key is some kind of very early customer
feedback loop; Customer Development from the lean startup process, the working
backwards process from Amazon, etc. Adding VC money on top of this seems like
fuel to a group of founders who haven't really considered that their model is
not sustainable. And the VC's don't fundamentally care - they just need some
small percentage to succeed.

One key quote from the article is "that CAC is the new rent". That's a nice
way to view D2C. And let me tell you the last time I was doing D2C our CAC was
$500 and you had to spin a pretty good yarn to make the lifetime number add
up.

~~~
cylinder
These people are such brilliant visionaries that they thought they best use of
two years of their 20s/30s was to borrow $200k to go to business school and
get an MBA.

Wow /s

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UtilityDave
Optician here with some relevant experience regarding the opthalmic space,
recognizing that isn't primarily what the article is about.

For the most part glasses still have to be custom made to some extent.

That process has been getting more sophisticated (smarter edgers, free form
surfacing everywhere) and faster processing times.

But getting the formula right on mail order is hard.

First you have limited information about and from the patient. You have a PD
(pupillary distance) and all of these services, that I have seen only collect
a binocular pupillary distance.

The lenses have to be, at the very least cut to shape to fit the frame
selected with the optical center of the lens moved so it sits over the pupil
of the wearer when they are in the "gaze posture" appropriate to the glasses

That is to say if they are distance glasses the pupils will be looking
straight ahead, while using the glasses, but the person's eyes may be 3mm
narrower than the frame selected, so before grinding the lens that 3mm must be
taken out of the "middle"

If one eye was in two and the other was out eight though (very uncommon) you
have a reject pair.

If the glasses were of high power and one eye was out 1 and the other eye were
out 2, if we were over 14 diopters of correction we fail quality. But not
because the glasses, how they fit the patient's face 2000 miles away.

~~~
mikestew
Hey, UtilityDave, all of your comments are dead on arrival (I vouched for all
of them, as they seem well within guidelines). You might want to email the
mods to get that fixed, as the only sin it looks like you've committed is not
using your account.

~~~
UtilityDave
I mostly want to try to spread more information about this sector of the
economy, it is interesting, and I really wish there were more competition.

Right now there are competitive garden walls if you want to use Zeiss,
essilor, rodenstock, and Hoya lenses it is a nightmare to keep everyone
current, and lab networks are very difficult to use for end user opticians let
alone patients.

If you want to disrupt opthalmic dispensing

Start by making good EHR for offices with good product and lab network
integration.

None of the big boys have gotten that or lims with solid legacy support going
yet.

~~~
mikestew
Maybe you're just tacking on a general reply to my comment, or maybe you
misunderstood what I am saying. When I say "dead on arrival", I mean that your
comments are "dead" in that no one can see them (unless they change a setting
from default). _YOU_ can see them, but no one else can.

That said, it looks like the mods have fixed it behind the scenes, as your
last comment did not show up as "dead".

~~~
UtilityDave
I was unclear. Thank you ( just woke up) thanks!

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a-dub
Oh man. The subway ads for this shit are so annoying. At least there was
comedy value in the sketchy lawyers and plastic surgeons. If I see another ad
for a boring ass household sundry that has been "reimagined", I think I'll
puke.

Moreover, who buys this shit? If I had a bunch of overpriced bath towels that
I bought from one of these DTC things, I'd be terrified of the idea of a guest
seeing them and recognizing them.

~~~
stolson
You know, it's crazy but things like Brooklinen slowly worm their way into
people's heads that they need this kind of stuff.

I'm sure that they're nice sheets, but I just hear more and more "I've heard
they're really great quality/convenient/etc" and the actual anecdote where
they got this is several degrees removed. The ads just look nice.

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sytelus
I am in market for new glasses and I looked at Warby Parker. I have to say I
am not impressed at all. The choice is very limited and buy cycle is too long.
When people need glasses, they usually need _now_. Bezos understands the value
of instant satisfaction, these guys don’t. There are easier tech solutions
they could have used like try it out on your photo (which companies like Zenni
have implemented quite well but they have same issues). These guys insist on
sending you frames which don’t arrive for a week and then you order and then
someday you receive glasses. When I walk to local LensCrafters, I can walk out
with a pair in couple of hours. Their website is also nightmare to browse
through but it might make perfect sense to them. As a customer, I don’t care
about their business categories of try at home or not. I just want lots of
choices and I want them now. Amazon has truely spoiled me.

They are indeed doing good level of PR in publish-for-pay websites like
inc.com, however.

~~~
jnwatson
I’ve never walked out of a store with eyeglasses I just baught. I don’t think
that experience is typical.

~~~
smackfu
It totally depends on your prescription. If there’s no astigmatism, the lenses
can be stocked and cut to the frames you need. Astigmatism adds another two
variables that make it much harder to stock. Also the stronger your
prescription, the more alternative material options there are to keep the
thickness down, which again makes it harder to stock everything.

~~~
UtilityDave
Most offices who keep stock lenses keep cyl (astigmatic correction) up to two
diopters in quarter increments in my experience.

The main limitation is usually material choice.

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ghaff
Good article. The gist of the piece is that a lot of these direct-to-consumer
businesses are trying to "disrupt" markets that the vast majority of people
don't see as broken.

There do seem to be some different categories of products here. One is
essentially trying to create new luxury brands for, e.g. toothbrushes, that
either don't exist or are pretty old-line and non-millennial.

Others are trying to take business from entrenched dominant companies as in
eye wear--which is what Warby-Parker did. However, as the article notes, it's
not clear how many of those there are. Are high-end towels, etc. really an
example of a market failure today? Probably not.

~~~
adventured
> The gist of the piece is that a lot of these direct-to-consumer businesses
> are trying to "disrupt" markets that the vast majority of people don't see
> as broken.

You can do interesting things with products when you remove some of the vast
middle-men distributors that sit between you and the customer and reclaim
margin. Whether producing a higher quality product at a lower or similar
price, or producing an equal quality product at a far lower price.

Plus, the big product conglomerates and retailers have an effective monopoly
on traditional product access (Colgate, Kraft, Procter & Gamble, Walmart,
Target, Costco, Walgreens, et al). The margin saved by removing some of the
middle-men, can then be used for distribution-marketing-sales to reach out to
customers in order to breach that comfortable group monopoly.

~~~
ghaff
Maybe.

>A Bristle subscription would be more convenient than going to CVS when you
need a new toothbrush--you'd order online, set your replacement-head
frequency, and forget about it.

Picking up a toothbrush every now and then--assuming you don't just get given
them at every cleaning by your dentist--is so far down the list of problems
that I and most people have as to be negligible. Furthermore, I doubt if
middlemen markups on toothbrushes are a big problem when in fact overheads are
probably far lower overall.

There are clearly some things like eyeglasses that the existing market is
fairly broken. But most goods simply aren't in that situation.

~~~
Swizec
As someone with a toothbrush subscription: I now change my toothbrush every 3
months. Left to my own devices it was closer to every year.

I am assured by everyone that this is better. I don't really feel like it's
something worth thinking about so I am happy it's being taken care of by not-
me.

~~~
lotsofpulp
A wholesale pack from Costco and a repeating calendar event on your phone
accomplish the same thing, and I don’t see how shipping an individual
toothbrush can be cheaper than that. And I would think many people already
have spare toothbrushes lying around in case family or friends visit and don’t
have theirs.

~~~
ghaff
That's my feeling anyway. Managing a bunch of subscriptions sure seems like a
lot more mental effort than adding things to shopping lists when they're
running low or doing as you say. (Unless it's really something you use
substantial and predictable quantities of.)

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jaggederest
You really need a special market to make DTC super compelling. I think the
elements are:

* High margins

* Repeat purchases

* Low competitiveness

For those, glasses, razors, mattresses all hit at least 2 of 3. I wonder why
nobody has done DTC with... say shoes? Probably too much competition.

~~~
bpicolo
There's a crap ton of DTC shoes: [https://www.gq.com/gallery/direct-to-
consumer-shoe-brands-fo...](https://www.gq.com/gallery/direct-to-consumer-
shoe-brands-for-men)

Paul Evans has tons of NYC subway ads

~~~
extra88
There's some good-looking stuff and maybe some aspects are appealing to
higher-end customers but to me, shopping online for something like shoes is
more about price. I don't see them beating Johnston & Murphy which has
comparable or better prices and has physical stores.

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toss1
From TFA: "To one frequent DTC investor I spoke with, though, any young DTC
company's moving into retail early in its lifecycle is a red flag that it
might be overspending on online marketing. 'Because if it's working online,
why all the retail stores? Why not stay online and scale over time? I could
see one or two stores as PR plays, but why take on all the overhead, the cost
of the build-out?'"

The answer?

Customers have a severe lack of imagination.

I've found this in several different fields, even among smart customers
(except those whose expertise is in the area of what you're selling) -- you
really have to show and let them see and feel what they're going to get.

Once they've seen it, they'll go online for a better price, but using
permanent locations, popup stores, or other IRL interactions could be key for
many of these DTC startups.

~~~
bpicolo
Seems silly to judge on that considering brick and mortar is still like 85% of
retail sales.

Permanent locations are crucial for a lot of different consumers for a lot of
different products (especially fashion). I buy clothes way more living in NYC
than I ever did when I was living in a rural area because of the local
choices.

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tuna-piano
Why is it that some small high growth companies in non-tech industries get
tech-type valuations and prestige, while others do not?

It feels like companies like Warby Parker can use a certain style for people
to think they’re super innovative- when in reality they’re just normal boring
delivery/sunglasses/sheets/etc with none of the characteristics of real tech
companies.

~~~
ghaff
>with none of the characteristics of real tech companies

You mean they sell an actual product?

OK. That's glib. But it's often not clear what many "real tech companies" are
actually selling that has consumer value at the end of the day. At least
sunglasses and sheets are something that people value and use.

~~~
tuna-piano
I'm mainly thinking many companies in the tech industry can earn huge profits
due to (1) It's easier for software companies to achieve huge global scale
than physical companies and (2) Potentially amazing economics. Marketplaces,
network effects and high fixed low variable costs = Winner take most.

The sunglass/sheet/etc market is not winner take most.

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throwaway413
Off-topic, but I’m really curious where the jury stands on the Ombraz
Kickstarter. They make these sunglasses with a strap instead of arms. So far
when I’ve showed them to people, I’ve gotten extremely mixed responses.

[https://ombraz.com](https://ombraz.com) (I am not affiliated.)

~~~
ghaff
I'm not sure why I wouldn't get normal glasses and a good Chums strap for
them. I suppose these are theoretically more secure but I've flipped while
kayaking and I've never had trouble losing glasses so long as I had a
retainer.

The idea is interesting on paper but a good retainer strap seems a lot more
versatile.

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goatherders
There is nothing on earth that would convince me that my toothbrush is an
extension of myself. Nothing.

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choperius
Most of the DTC stories I hear seem to be very US-centric, including most of
the companies mentioned in this article. What are successful DTC companies
coming from outside of US?

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oldgradstudent
Most of them will probably fail. Still, I thank them for funding my favorite
podcasts.

