Why Your Company Is Not "The Warby Parker Of X"

Just because your startups says it's "the Warby Parker of (fill in the industry)" doesn't mean you are. Entrepreneur Jamie Quint counts the ways.

What does Most Innovative Company Warby Parker have that apparel startups like Everlane and Beckett Simonon don't? A monopoly to take down, writes Jamie Quint.

Unlike the world of apparel, Warby Parker entered into a vertical of monoculture--eyeglasses--that's all but consumed by a single company, Luxottica.

Quint has the bulleted dish, which is:

  • Luxottica is a $20 billion company.
  • It makes glasses and sells them.
  • 500 million people wear its products.
  • 65 million pairs were sold last year.
  • It owns Ray-Ban and Oakley. It makes glasses for other brands it does not own, including Ralph Lauren, Chanel, Prada, Burbury, Prada, Tiffany, and many more.
  • It owns glasses stores Lenscrafters, Pearle Vision, Oliver Peoples, Sunglass Hut, and others.
  • It owns Eyemed, the nation's most popular vision insurance company.
"Breaking this monopoly is the reason Warby Parker has been so successful," Quint writes. "They were able to cut the cost of designer glasses in half while managing 60%+ operating margins and doing so while still donating a free pair for each one they sell."

Warby Parker is a disruptive innovation. Frank & Oak, Everlane, Bonobos, and Beckett Simonon, for all their elevator-pitch merit and flashy goods, aren't.

The "Why now?"

Quint thinks that a critical mass of online customers have given online brands two novel advantages: low starting costs and a massive early reach.

Back in the day, if you wanted to start a retail brand, you'd have to invest in a physical space before knowing whether or not you've got customers--and be limited to those in your surrounding area. However, companies like Flint and Tinder and Everlane had outsized signups before they even launched--such is the product-market fit magic of Kickstarter, social media, and increasingly badass analytics. Companies can get at more customers for less money than ever before, Quint writes, meaning that "it is easier than ever to build a brand from scratch."

All this growth has an counterintuitive consequence: As the brands get big online, they go offline.

Moving into meatspace

Quint quotes Bonobos CEO Andy Dunn, who says what almost half of would-be pants-buying customers weren't into it because they wanted to feel the product, and, maybe more telling, “the cost of marketing a Web site and the cost of free shipping both ways was approximating a store expense.” (Something which isn't stopping Zappos from building a city, but we digress). Younger brands, Quint notes, are also experimenting with physical shops: Frank & Oak had a holiday popup and so did Everlane.

Gapfinding

The winners of this not-quite-Warby free-for-all will be those that find the cracks left by the big brands, Quint says, noting that Frank & Oak makes J. Crew menswear at a low price point, Bonobos makes a better-fitting preppy brand, while others are a bit fuzzy as to differentiators. Those are the ones you don't want to be.

"The brands that will do well are the ones that understand that they are not going to win by leveraging better economics due to their 'online only' nature, because these economics don't exist," Quint writes. "The brands that succeed will be the ones that are good at finding gaps left in the single-brand retail marketplace that previously have not been exploited due to the difficult pre-internet economics of starting a new single brand retailer, and aggressively pursuing them."

The Problem With “Warby Parker for X”

Drake Baer covers leadership for Fast Company. You can follow him on Twitter.

[Image: Flickr user Desiretofire]

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1 Comments

  • GUEST

    Of course Everlane isn't the Warby Parker of tees. The consumer cost for WB frames is 25x the COG for the company.