Vinay met the founders of Warby Parker during an investor pitch in 2009, where they acquired seed funding. At this early stage in development, Warby Parker did not intend to sell online, hadn’t worked out pricing, and were relatively unfamiliar with their market. Because Vinay’s venture group saw potential in Warby Parker, he stayed on as an advisor to work through these early issues.
For starters, they looked into the market. At the time, another company owned the lion’s share of eyeglass brands, serving a large market (with 1 eye glass/optometric store per 7,500 people). Sixty percent of these stores were owned by two major companies, so Warby Parker would need to change the game in order to pull ahead and beat out the competition. Affordability was key to their success, and they set out to lower their prices. However, if they were to enter the brick and mortar world, they’d be looking at a price war with major corporations who they simply could not compete with. Instead, they opted to sell eyeglasses online.
To the founders’ credit, Vinay was not involved in the decision to take this project online. They alpha tested and had an extremely high satisfaction rate with volunteers, followed by an increase in organic online searches. The next step was to adjust their pricing model to determine the correct margin. After testing $65, $75, $95, $105, and $115, they found that most people were willing to pay $75 when viewing the product alone. But when the glasses were shown on a fashionable model, most people were willing to pay $95. It made no difference if the model was a celebrity, so Warby Parker locked in a price of $95 and set out to create a fashionable brand.
Without a beta launch, venture groups were unwilling to fund Warby Parker. They did, however, raise enough seed funding to launch. Due to the disruptive nature of their offering (ordering glasses online), early marketing was key. They reached out to multiple magazines and asked to be contacted whenever they had residual ad space available for a discounted price. After three months, they were contacted by GQ Magazine, where they placed an ad that was tremendously helpful to their launch. Two weeks later, Vinay led the group’s presentation and they were given venture funding.