
Warby Parker Grabs New Investment, Closing $41.5M Round - antr
http://techcrunch.com/2013/02/25/warby-parker-grabs-new-investment-from-american-express-j-crew-ceo-closing-41-5m-round/
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trotsky
I don't get it - warby parker seems to already be killing it, brand and
mindshare wise. I could easily see them following a path similar to any number
of fashion brands - closely held and reliably growing and profitable for
decades.

But now, to shoot for the half a billion minimum exit in 7-8 years or less
because these venture firms financial models only work one way. Since the
probability of a young eyeware company organically arriving at a five hundred
million dollar rain is essentially zero, it almost guaranteed they've got to
plot a new course or ten. Now every decision you make has to include
evaluating if it would alienate one of few potential suitors, or if it can
provide growth and market numbers that would look good on a prospectus.

I'm not privy to their numbers, so maybe I am just a victim of a really good
hype machine. But my impression is that they've got strong sales growth,
margins that most ecommerce shops would die for, strong customer loyalty and
would be profitable if you limited spending to core business and traditional
customer acquisition models.

Considering how overheated the commercial bond market is (and shows no serious
signs of waining) I think there's a real possibility somebody like Warby
Parker could do a debt or convertible debt deal at surprisingly nice terms.
You could do a lot with say $20M for 7 years at 6% and still own a company you
don't hate working for at the end of it all.

Sure, conventional wisdom says it's impossible to raise for web/tech outside
of the specialized PE cliques. But that truism developed in an age where a)
sovereign debt paid 5% and equity markets were reliably bullish in decade
based timescales.

Ecomom almost certainly could have been a reliably profitable company at some
level and contribute a number of high paying american jobs to the economy. But
because that's the last thing any venture investor is looking for they went
down a rabbit hole of wasteful gambles where growth trumped logic.

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bitcartel
Slick website and nice service providing first world convenience, but still
Made in China.

SZDaily: _"It is said that at least 60 percent of the spectacles on the earth
are made in Shenzhen... At present, there are nearly 500 spectacles
manufacturing companies in the city, mostly in Henggang Subdistrict, Longgang
District, producing nearly 200 million pairs of spectacles a year. Ninety-five
percent of their products are exported to more than 130 countries and regions,
accounting for more than 70 percent of market share in Europe and about 60
percent on the global market."_

[http://www.szdaily.com/content/2012-07/20/content_6962497.ht...](http://www.szdaily.com/content/2012-07/20/content_6962497.htm)

WarbyParker: _"We design our frames here in the US, then source our material
(high-quality cellulose acetate) from a 150-year-old, family-owned Italian
manufacturer. Our frames are then crafted in China"_

[http://blog.warbyparker.com/post/12789294212/i-have-a-
questi...](http://blog.warbyparker.com/post/12789294212/i-have-a-question-
about-where-warby-parker-eyewear-is)

As for the Italian manufacturer, it's likely they are referring to
Mazzucchelli founded in 1849 and famous for the tortoise shell look. Well, it
appears they may have outsourced acetate production to China too!

[http://www.optiboard.com/forums/showthread.php/47085-Acetate...](http://www.optiboard.com/forums/showthread.php/47085-Acetate-
from-China-vs-Italy-Any-major-
differences?s=dbb860c8b32cd91deb57daa53785745e&p=403951&viewfull=1#post403951)

[http://www.alibaba.com/countrysearch/CN/mazzucchelli-
acetate...](http://www.alibaba.com/countrysearch/CN/mazzucchelli-acetate.html)

~~~
jasonwatkinspdx
What's so bad about made in China?

~~~
bitcartel
Nothing at all, just highlighting the fact that despite all the beautiful
marketing, Warby Parker is really no different from other online glasses
retailers.

 _"A new concept in eyewear... Warby Parker was founded with a rebellious
spirit and a lofty objective: to create boutique-quality, classically crafted
eyewear at a revolutionary price point."_ <http://www.warbyparker.com/our-
story/>

Given that Warby Parker are most likely using the same supply chain as their
competitors, what exactly is their competitive advantage, to justify total
funding of $50.3 million? It can't just be a prettier website, can it?

~~~
jasonwatkinspdx
Well, much like apple, many people are willing to pay more for a pleasant
experience.

I've used several of the cheap Chinese glasses sites and the product quality
all seems uniform but some of them have a better curated selection of designs
than others. Warby also lets you do the 5 pair try on at home thing which I'd
say is worth paying a bit more over the rock bottom price.

As far as the funding, I'd guess it's because they've been quite successful,
and also because they're apparently in talks with Google regarding Glass.

~~~
bitcartel
Agreed, although you could argue that Apple provides something of tangible
difference i.e. iOS and OSX, whereas Warby still sells the same Chinese
glasses but with a better customer experience.

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cschmidt
I bought my last pair of glasses at Warby Parker, and I did really like the
home try on service. You pick out your top 5 choices, and then send them to
you with clear lenses in a box. You can spend an evening (up to 5 days really)
trying them on and seeing which look best on you. Then you send them back and
get the real pair with your prescription. They are real inexpensive as well.
It was a nice "internet" experience, compared to trying things on in some
random shop.

~~~
ry0ohki
Same here, the main problem lately is they don't have enough pairs to send out
(you frequently see that a pair isn't available for at-home). Hopefully this
money will build their inventory significantly.

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jeffclark
Just for my own curiosity, I'd love to know how much faster the round got to
closing after rumors leaked out that Google was partnering with WP to create
some Glass concepts.

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aliston
When Warby Parker was first getting off the ground, the idea of buying glasses
online was completely new. They've done a great job of validating the model,
but now they're facing a lot of competition and I'm not sure their brand is
enough to allow them to compete.

I ended up buying my two pairs of glasses from a competitor... The first pair
was only $30, and that was only because I opted for a higher end lens. The
second pair was a designer brand that was at a similar price point. Since the
lens cost has gone down dramatically for all of the online retailers, on what
basis is Warby Parker going to compete?

Glasses are an industry that is all about brand labels. For people that care
about that sort of thing, they'll go buy RayBan or Gucci or whatever else over
a Warby frame at a roughly similar price point. For folks that don't care
about that sort of thing, they'll buy a cheaper non-name brand fram for less
than the Warby price point.

~~~
stuff4ben
What competitors did you buy from? I ask because I'm getting some new specs
and just got the try-for-free thing from WP. If I can spend only $30, I'll
gladly do it.

~~~
bitcartel
You could keep using your old frame and just get new lenses put in if your
prescription has changed. 39DollarGlasses offer this service.

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kmfrk
Warby Parker is so interesting, not because it's a story of an eyewear
company, but because it's a story of a fascinating business model by design-
savvy people.

I probably wouldn't wear their glasses, but they are beyond compare to their
competition in this regard.

Kinda like a Zappos for glasses, with the difference that they make their own
shoes.

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brittohalloran
Pulling for these guys. Just a great David vs Goliath and they seem to have a
chance making a dent.

~~~
Aloisius
Who is Goliath in this case? I just got glasses this year so I honestly don't
know. My glasses are all made by little Californian, German or Belgin
companies that my optometrist stocked.

 _edit_

Answering my own question, it appears Luxottica and Safilo make most of the
glasses out there.

~~~
beaner
Goliath is probably Luxottica, who owns a lot of other companies and sells a
large share of high end eyewear.

60 Minutes did a piece on them:
<http://www.cbsnews.com/video/watch/?id=7424700n>

