Isegoria

Fast Company praises hyper-hipster eyewear-retailer Warby Parker for its fanatical focus on execution and brand:

By designing and manufacturing their own frames and selling directly to consumers over the Internet, they’re able to charge as little as $95 per frame, a fraction of what a similarly nice pair of glasses would cost at a typical optical shop. That price also includes prescription lenses, shipping, and a donation to a not-for-profit such as VisionSpring, where Blumenthal previously served as director.

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Last July, just four years after their launch, Blumenthal and Gilboa announced that they had distributed their millionth pair of glasses, up from 500,000 just a year before. According to a person familiar with the company’s finances, annual revenue is “well over” $100 million. The fashion press has been impressed and so have investors, who have put in more than $115 million to date, which Blumenthal and Gilboa are investing in an expanded product line that includes progressive lenses and, of course, a fast-growing retail presence.

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“A lot of subtleties go into a brand,” says Sasha Tulchin, the company’s director of creative services, who came to Warby by way of Tory Burch and Cole Haan. Tulchin invokes the dinner-guest metaphor as well, imagining the Warby Parker brand as “quick-witted, but wears her intelligence lightly. Looks sharp without planning to. Takes a dare. Always offers to help with the dishes.” Tulchin goes on to cover Warby Parker’s preferences in graphic design, color palette, and serif and sans serif fonts (Utopia and Proxima Nova). “The Warby Parker voice is witty, intelligent, informative, playful, delightful. We are not trite, pretentious, sarcastic, long-winded,” she says. “Every time we create a piece of copy, every time we create something new for marketing — every time it’s either in our office or externally projected — we do it with these filters.”

This carefully cultivated persona is at least in part Blumenthal himself, who still reads (and rereads) every written word that his company puts out into the world. “This is five years in, a 500-person company, and the CEO is approving every marketing message the company puts out,” Lerer says with awe. “Every CEO does that in the early days. You do it with 10 people, and if you’re good you do it with 25 people. You don’t do that when you have 500 people. Neil still does it.”

Behold our new aristocracy:

Blumenthal has long been the company’s public face, but it was Gilboa who first landed upon the idea that became Warby Parker. Born in Sweden to a pair of doctors, Gilboa is even-tempered, quiet, and analytical, speaking with an uninflected precision that can seem at once removed and intense. As a teenager growing up in San Diego, Gilboa tells me, he’d often accompany his father to the hospital, hoping to learn as much as he could about various medical specialties. “I was 100% convinced I was going to be a doctor, and I was just trying to decide which kind of doctor,” he recalls.

While he was a premed student at the University of California, Berkeley, Gilboa learned about HMOs, which convinced him that he might want to look for other options. He wound up in business, first at the consultancy Bain & Company and then the boutique investment bank Allen & Co., before returning to school to enroll simultaneously at Wharton and in a biomedical engineering master’s degree program at the University of Pennsylvania’s engineering school. (“He’s the smart one,” Blumenthal says, chuckling, as Gilboa tells his story.)

A few weeks before starting school, Gilboa left a pair of $700 Prada frames in an airplane seat-back pocket. “I’d just bought the iPhone for $200 and it did all these magical things that people wouldn’t have believed even a few years earlier,” he recalls. “Meanwhile, a pair of glasses: The technology has been around for 800 years. It didn’t make sense that I was going to have to pay that much for a new pair of glasses.” He complained about this to Andy Hunt, his study-group partner, who was, like Gilboa, a former finance guy and a glasses wearer. “We started talking about why glasses were so expensive,” Gilboa continues. “Then we learned a little bit about Luxottica.”

Founded in 1961, the Milan-based company takes in about $9 billion a year, running the eyewear business for most major fashion houses, including Armani, Chanel, Prada, and Ralph Lauren. Luxottica markets its own frames too: Oakley, Oliver Peoples, Persol, and Ray-Ban are all Luxottica brands. Consumers find these frames for sale at LensCrafters, Pearle Vision, and Sunglass Hut, all of which are (you guessed it) Luxottica subsidiaries. Luxottica also happens to own one of the top vision-insurance companies, Eye-Med, which, if you have coverage from Aetna or Anthem Blue Cross Blue Shield, is your carrier.

Luxottica is in fact so powerful in the $65-billion-per-year eyewear industry that Gilboa and Hunt likely would have moved on to other ideas had they not heard about a kid in their MBA classes who knew more than pretty much anyone else in the world about how to work outside of the traditional eyeglass-supply chains. “There’s always a moment of serendipity in any startup,” Hunt says. “For us, it was meeting Neil. The company couldn’t have existed without him.” (The fourth cofounder, Jeffrey Raider, happened to be sitting in the computer lab next to Blumenthal when Gilboa and Hunt broached the idea. He worked at an private equity firm after Wharton and eventually cofounded Harry’s, the Warby Parker of men’s grooming.)

In person, Blumenthal cuts an unusual figure. He has a tendency to speak in the looping manner of Woody Allen dialogue, and he’s physically goofy with a geeky affect that is heightened by the (nonprescription) glasses he wears every day. Yet he is remarkably light-footed in social settings. The son of a tax consultant and a nurse, he grew up in Greenwich Village — a savvy New York City kid with an entrepreneurial streak. As an 8-year-old, Blumenthal persuaded his parents to order him an As-Seen-on-TV food dehydrator and attempted to start a dried-fruits stand on Mercer Street. By high school, he was taking advantage of the city’s lax attitude toward underage drinking and moonlighting as a club promoter. “You partied for free, you got paid — and you got to deliver this amazing service to your friends,” he says, flashing a sheepish smile. “So maybe that was my first triple-bottom-line business.” (Since 2011, Warby has been a certified B Corporation, considering its environmental and social impact in addition to its profitability.)

In college at Tufts, Blumenthal double-majored in international relations and history and dreamed of becoming secretary of state. He took the foreign-service exam and did well, but not well enough and, a few months after graduation, and wound up with a fellowship in El Salvador, where he helped shape VisionSpring’s now-famous market-based approach to philanthropy: Rather than simply give away free eyeglasses, the organization supplies frames to entrepreneurs to sell to their neighbors. (The strategy has won numerous accolades, including three Fast Company Social Capitalist awards, and has been adopted by organizations such as Toms Shoes and Matt Damon’s Water.org.) “That’s when the entrepreneurial thinking kicked in for me,” Blumenthal recalls. “I was trying to understand how we could get entrepreneurs to spend more time selling glasses, doing margin analysis, going over to China to try to source glasses at lower cost.” In other words, Blumenthal’s experience was a perfect match for Gilboa’s idea. When Warby Parker launched, it included a buy one, give one feature through a partnership with VisionSpring.

Although Blumenthal technically oversees Warby Parker’s stores and marketing while Gilboa tackles customer service and technology, the duo are, in fact, jointly responsible for all major decisions. The arrangement allows them to be more hands-on than might be possible in a typical high-growth startup, but it also means that both men must be constantly in sync, a feat that is particularly impressive given that they are, in some sense, polar opposites. “Dave and Neil are left brain, right brain,” says Hunt, who is now a venture capitalist with Highland Capital Partners.

Ben Horowitz was facing a particularly tricky management situation, where two excellent organizations within his company went to war with each other, when he happened to watch the most insightful management training film ever made:

The very next day I informed the head of Sales Engineering and the head of Customer Support that they would be switching jobs. I explained that, like Jodie Foster and Barbara Harris, they would keep their minds, but get new bodies.

However, after just one week walking in the other’s moccasins, both executives quickly diagnosed the core issues causing the conflict. They then swiftly acted to implement a simple set of processes that cleared up the combat and got the teams working harmoniously. From that day to the day we sold the company, the sales engineering and support organizations worked better together than any other major groups in the company.

In tech, intelligence is an important quality, but it is not the only important quality, and this was a difficult lesson for Ben Horowitz to learn:

I felt that it was my job to create an environment where brilliant people of all backgrounds, personality types, and work styles would thrive. And I was right. That was my job. Companies where people with diverse backgrounds and work-styles can succeed have significant advantages in recruiting and retaining top talent over those that don’t. Still, you can take it too far. And I did.

For instance, you can’t allow the heretic to continue blaspheming:

Any sizable company produces some number of strategies, projects, processes, promotions, and other activities that don’t make sense. No large organization achieves perfection. As a result, a company needs lots of smart, super engaged employees who can identify its particular weaknesses and help it improve them.

However, sometimes really smart employees develop agendas other than improving the company. Rather than identifying weaknesses, so that he can fix them, he looks for faults to build his case. Specifically, he builds his case that the company is hopeless and run by a bunch of morons. The smarter the employee, the more destructive this type of behavior can be. Simply put, it takes a really smart person to be maximally destructive, because otherwise nobody else will listen to him.

Why would a smart person try to destroy the company that he works for?

• He is disempowered.
• He is fundamentally a rebel.
• He is immature and naïve.

His example of the flake takes the archetype to another level:

Some brilliant people can be totally unreliable. At Opsware, we once hired an unequivocal genius—I’ll call him Roger (not his real name). Roger was an engineer in an area of the product where a typical new hire would take 3 months to become fully productive. Roger came fully up to speed in two days. On his third day, we gave him a project that was scheduled to take one month. Roger completed the project in 3 days with nearly flawless quality. More specifically, he completed the project in 72 hours. 72 non-stop hours: No stops, no sleep, no nothing but coding. In his first quarter on the job, he was the best employee that we had and we immediately promoted him.

Then Roger changed. He would miss days of work without calling in. Then he would miss weeks of work. When he finally showed up, he apologized profusely, but the behavior didn’t stop. His work product also degraded. He became sloppy and unfocused. I could not understand how such a stellar employee could go so haywire. His manager wanted to fire him, because the team could no longer count on Roger for anything. I resisted. I knew that the genius was still in him and I wanted us to find it. We never did. It turns out that Roger was bi-polar and had two significant drug problems: 1. He did not like taking his bi-polar medication and 2. He was addicted to cocaine. Ultimately, we had to fire Roger, but even now, it pains me to think about what might have been.

When you borrow time by writing quick and dirty code, you incur technical debt. When you borrow time by making easy management decisions — or none at all — you incur management debt. Ben Horowitz shares an example he calls putting two in the box:

What do you do when you have two outstanding employees who logically both fit in the exact same place on the organizational chart? Perhaps you have a world-class architect who is running engineering, but she does not have the experience to scale the organization to the next level. You also have an outstanding operational person who is not great technically. You want to keep both in the company, but you only have one position. So, you get the bright idea to put “two in the box” and take on a little management debt. The short-term benefits are clear: a) you keep both employees, b) you don’t have to develop either because they will theoretically help each other develop, c) you instantly close the skill set gap. Unfortunately, you will pay for those benefits with interest and at a very high interest rate.

For starters, by doing this you will make every engineer’s job more difficult. If an engineer needs a decision made, which boss should she go to? If that boss decides, will the other boss be able to override it? If it’s a complex decision that requires a meeting, does she have to schedule both heads of engineering for the meeting? Who sets the direction for the organization? Will the direction actually get set if doing so requires a series of meetings?

In addition, you have removed all accountability. If schedules slip, who is accountable? If engineering throughput becomes uncompetitive, who is responsible? If the operational head is responsible for the schedule slip and the technical head is responsible for throughput, what happens if the operational head thrashes the engineers to make the schedule and kills throughput? How would you know that she did that? The really expensive part about both of these things is that they tend to get worse over time. In the very short-term you might mitigate these effects with extra meetings or by attempting to carve up the job in a clear way. However, as things get busy the mitigation will fade and the organization will degenerate. Eventually, you’ll either make a lump sum payment by making the hard decision and putting one in the box or your engineering organization will suck forever.

His other examples are overcompensating a key employee, because she gets another job offer and having no performance-management or employee-feedback process.