Most of the time, work should be all about business and not personal. That can be a relief when you think your boss is crazy; resent your coworker for dropping the ball on a project; or say too much at the company happy hour. The only snag is when you happen to be in business with your best friend.
That’s the challenge for Dave Gilboa and Neil Blumenthal, the cofounders and co-CEOs of direct-to-consumer glasses juggernaut Warby Parker. The two pals met in business school and have been in business together for almost 15 years.
In that time, they’ve blown past their expectations. The certified B Corp went public in 2020 via a direct listing, closing on day one at $40 per share—for a $4.5 billion valuation. (Its market cap hovers around $1.8 billion today.) Alongside their charitable endeavors—donating a pair of eyeglasses per every pair sold via the Buy a Pair, Give a Pair program—and commitment to low-cost lenses (most still start at $95), the duo are most proud of the near-impossible balance they’ve been able to strike as friends and coconspirators.
Fortune spoke with Gilboa and Blumenthal about the billion-dollar company’s dorm room beginnings; why they haven’t raised prices; whether they’d recommend other besties go into business together; and why their professor ripped their initial business idea to shreds.
The following transcript has been lightly condensed and edited for clarity.
Give us a general overview of what Warby Parker is.
Neil Blumenthal: Warby Parker is a lifestyle brand that sells eyewear, contacts, and provides eye exams and eye care. We have over 250 stores across the U.S. and Canada and sell primarily through WarbyParker.com and our two apps. And for every pair of glasses we sell, we distribute one to someone in need.
Dave Gilboa: We started Warby Parker in 2010, really to solve our own problems as frustrated eyewear consumers.
We met the first week of school, right after I’d lost a pair of glasses, and I had to buy two things: a new phone and a new pair of glasses, and I realized that my glasses were going to cost way more than an iPhone. And that didn’t make sense to me, or Neil, or Jeff [Raider] and Andy [Hunt]—our two other cofounders.
We realized there were a lot of other frustrated consumers, so we set out to launch a brand by designing the glasses that we would want to wear and selling them directly to consumers—initially online. This enabled us to cut out all the middlemen and all the unnecessary markups and pass those savings back on to our customers.
Who were some of your first customers? Were they friends, family?
DG: We launched Warby Parker when we were full-time students, and our first customers—as well as the people we surveyed for every aspect of the business, from potential brand names, to mock-ups on the website—were really all our classmates. So once we got our initial set of inventory, our first customers were our closest friends from school.
NB: When we were developing Warby Parker, we were asking all of our friends for feedback. And of course, they loved the idea that you could buy $400 glasses for $95. But then we would tell them that the way they’d save money is that they were going to shop from us online.
To be honest, they didn’t love the idea of shopping for glasses online. They didn’t understand how they’d make sure the lenses would fit. Building a business is, frankly, an emotional roller coaster. There are moments when you feel super smart, and moments when you feel super dumb. This was one of those moments where we got the pricing right, but maybe not the channel, and it actually forced us to go back to the drawing board. That’s where we came up with this idea for a home try-on, wherein we ship people five pairs of glasses to try on. If there’s a pair you like, then we put in prescription lenses.
That gave us the confidence to continue to move forward. So even though we got some initial feedback from our friends [that] it wasn’t a great business idea. It helped us improve the business and ensure we’d be successful.
DG: We spent a lot of time thinking about how to price our glasses, and we landed on $95, including prescription lenses. That’s a fraction of the price you’d pay anywhere else for similar quality glasses. That would typically be $400 or $500.
Being in business school, we had the opportunity to engage with professors who are experts in a variety of fields. We went to one professor who was a pricing expert. Initially, we walked into his office and said, “We have this great idea, we want to sell eyeglasses that normally cost $400 or $500, and sell them for $45.”
[Editor’s note: Warby Parker is able to sell glasses at such a comparatively low price for the same reason that many direct-to-consumer giants are able to do so: It cuts out the middlemen and obtains materials at cost. It also manufactures its glasses in-house. By not outsourcing production, the firm has more of a handle on margins and operating costs.]
And before he looked at a single slide—he didn’t know anything about glasses—he said, “That’s impossible, this will never work.” We said, “Well, we’ve done all this analysis, and we have these beautiful slides, and here’s why we think we can sell them for this price.” And he said, “That’s not a believable price. People are never going to believe that you’re offering the same quality for one-tenth of the price. You need to reconsider this. And your costs are also probably going to be higher than you expect. And you’re going to want the opportunity to invest in creating awareness and marketing.”
So then we engaged in a pretty sophisticated conjoint survey [a statistical analysis to measure how customers value different products] with a lot of potential consumers. We found that the willingness to purchase actually increased as the price point increased until we hit $100. And then it dropped off a cliff. There’s a psychological barrier around that $100 price point. And if we really wanted to maximize, we could have offered our glasses for $99.99. But that really felt like a discount product. And we wanted to connote the fact that we were offering something special and unique, so we landed on $95, and that’s still the price point that the majority of our prescription glasses are sold for today.
Are you committed to keeping that $95 price point forever?
NB: We’re often asked that. The thing that we've always been committed to is exceptional value and exceptional customer experiences. Anything you buy at Warby Parker is typically a fraction of what it would cost elsewhere. We launched in 2010 with $95 prescription glasses with anti-scratch, anti-reflective coatings, lightweight lenses and frames. And to this day, still, we’re selling $95 glasses.
Now, we’ve introduced some more complex constructions that start at $145 or $175. That is still a fraction of what it would cost someplace else, because we’re using premium materials like Japanese titanium or complex constructions that are difficult to produce. That’s sort of our principle: We want to treat consumers as we want to be treated, which is with a great experience, a smile, and great value.
What do you think is the secret behind Warby Parker’s success?
NB: I think the fact that the two of us and our cofounders are pretty nice guys has actually gone a really long way. That might sound trite, but we were successful because we had so many people supporting us; not just our parents and extended family, but our friends, classmates, former coworkers, and former bosses. Over the years, we earned a lot of goodwill, and people were eager to help us—to offer us advice and make introductions for us. That really enabled us to launch Warby Parker and accelerate what would have been a much more challenging process without all of that external help.
DG: I think one of our secrets of success at Warby Parker has been the clarity in our vision and the type of organization we want to build. From day one, when we taught startups about the concept that eventually led to Warby Parker, we were really clear that we wanted to build a brand that mattered and had a positive impact. That’s been hugely motivating for us. It’s enabled us to attract and retain some of the most talented, curious, impact-driven people in the world who want to work for an organization that’s doing good.
It’s also really created a focus on treating our customers well. We think about how we can do good for all of our stakeholders, and that has to start with customers. Being obsessed with exceeding customer expectations and solving customer problems has enabled us to continue delivering great experiences and offering great value. That has translated into positive business results.
Would you recommend starting a company with your friends?
NB: We’ve certainly had a bunch of success starting a business with our friends. It’s been an amazing process, and it’s still a joy, 14 years in, to be doing this with your best friend. It makes the highs higher, the lows less low. But to be honest, we’ve spent a lot of time investing in that working relationship. We know what each other is going to think. I think we also assume positive intent. If one of us has an idea, or one of us makes a mistake, we don’t beat each other up about it, we talk about it. If we have an idea, we seek advice from each other. That’s really helped us build Warby Parker, and we think it’s an amazing gift that we’ve been able to go through this journey together.
DG: I can’t imagine starting a business without my best friends, but it requires a lot of work. I spend more time with Neil than I spend with my wife. Any relationship requires investment, feedback, and real partnership, and I feel fortunate that we have that in each other. There are lots of instances in which friends or family members start businesses and have bad outcomes. There are certainly some cautionary tales, [but] that just necessitates the investment, upfront, to have clarity around roles and responsibilities and ongoing ways to continue to build and maintain trust amongst founders.
What’s next for Warby Parker?
DG: We’re super excited to continue to expand Warby Parker. We’re now 14 years into our journey, but really feel like we’re just getting started. We now have 250 stores across the U.S. and Canada, and over the next few years, you’ll see us open hundreds of additional stores. We’ve been scaling the assortment of products and services that we offer to many different kinds of prescription glasses and different lenses, including multiple types of progressives and precision progressive lenses.
We’re scaling our contact lens business and our eye exam business. We’ll continue to introduce innovative leading technology like telemedicine in our virtual trial that enables customers to see exactly what they look like in any of our frames and digitally renew their prescription from their phone. In general, we’re really just excited to continue to make it easier for our customers to see.
Whose idea was it to give glasses to someone in need?
NB: When we were developing the business plan for Warby Parker, we kept thinking, “What’s going to motivate us to continue to work at this new company?” We knew that building a business is really hard, whether it’s in the first week or 10 years, and it really came down to wanting to have a positive impact on the world. We thought, “What is one way to do that?”
Just as we thought it was outrageous that glasses were so expensive—the fact that 800 years since glasses were invented, they cost as much as an iPhone—we thought it was equally outrageous that there were people around the world without access to glasses, an 800-year-old technology that should be widely available to everybody.
We know that glasses play such an important role in enabling people to learn in the classroom, or to succeed at work. So we sort of committed to each other that we’d build a company that has lots of impact. What’s a really concrete way to do that? We came up with the idea to distribute a pair of glasses for every pair that we sell. What we’re trying to optimize for with our Buy a Pair, Give a Pair program is to enable people to see to learn and see to work. From day one, we’ve been providing a pair of glasses for every pair that we sold. And we’ve now provided over 15 million pairs of glasses to people in need around the world and here in the U.S.
What’s your number-one piece of advice for young entrepreneurs?
NB: Outwork everybody. Work incredibly hard and diligently, and be super proactive. Anticipate what your boss’s needs are, anticipate what your coworkers’ needs are. If you’re dealing with customers, anticipate what their needs are, and always take the first step. Be proactive. It’s not something that you’re necessarily taught at school—even the word “proactivity” is not commonly used. But proactivity, we found, is one of the big keys to our success.
DG: Dedicate yourself to something that you’re really curious about. There are so many aspects—whether you’re starting a company or going to work for an existing organization—that are mundane, that are unsexy, that are tedious. And you need to get through those things. There should be enough that’s motivating to you, that causes you to enjoy the struggle, that causes you to enjoy some of those unsexy parts of the journey. Because you’re so motivated and so excited about learning and continuing and honing your craft.
What is the best and worst piece of business advice you’ve ever gotten?
NB: The best piece of advice we received was “Strategy is what you say no to.” A big key to our success is staying focused and being willing to say no to certain things. That doesn’t mean no forever, but it means no for now to stay focused, to do one or a few things very well. That enables you to do more things later along the line.
DG: One great piece of advice we got early on was that big problems that take a long time to develop generally don’t have good outcomes. So if you’re ever facing a big existential question, challenge your thinking to break that into the smallest pieces possible where you can take the first step. You can learn from what works and what doesn’t, and iterate along the way.
Take any big problems and big questions and break them down into smaller problems and smaller questions. If you ever feel like you’re standing on the edge of a cliff, and the only way down is to jump in and hope that the parachute deploys, you probably want to survey your surroundings and see if there’s a path where you can take a step down, and then another step down, and you can learn along the way.
