Foundr Magazine Podcast with Nathan Chan

Cannabis King

How Matt Morgan, a misfit from Montana, took the booming marijuana industry by storm.

A typical life was not in the cards for Matt Morgan. Fortunately, he found an atypical career.

Growing up, he was fired from every traditional job he ever had, and when he tried college, he lasted just 10 days before dropping out. Next, Morgan became an electrician apprentice at the age of 19, still hoping to find a career path that he might enjoy. But like his previous ventures, this too was short-lived and he resigned after a year.

Having always possessed an entrepreneurial flair, Morgan did find quick success as a realtor, which would lead him in a roundabout way to the world of legalized marijuana. Finally, it was in the Wild West of the cannabis boom where Morgan found his home.

Within a three-and-a-half year period, Morgan would become one of the most recognizable leaders in the cannabis industry. He is the founder of multiple cannabis companies, such as Bloom Dispensaries and Reef Dispensaries, with the latter becoming the first in the world to hit a $100 million revenue run rate. In 2018, Morgan was named one of the most influential people in cannabis by High Times.

But as we all know, the highs are so often preceded by lows, and had there not been an financial crisis in 2008, he may have never entered the business in the first place.

Taste of Entrepreneurship

Growing up in Missoula, Montana, Morgan had a hard time finding his niche in the working world, but he did find one thing that he was quite good at, which ended up being a gateway drug to starting his own business—real estate.

“ really opened up my eyes to entrepreneurship,” Morgan says. “Running your own business. You know, basically, eat what you kill. It’s totally up to you, whether you’re going to survive or not. That’s the type of environment that I thrive in.”

And thrive he did. By the time he hit 22, Morgan became the managing partner of his own real estate company.

By early 2008, he had begun to take notice that prospective homebuyers were reaching out to him with very specific guidelines on the type of home they wanted to purchase. Not only were they asking for roughly the same amount of land, they were all specifically requesting that each home have a shop out back — a detached garage or external structure that could be used as a hobby space.

And if it didn’t have a shop, he didn’t have a deal.

This left Morgan perplexed. He had met most of their demands, and more times than not a deal fell through because of this one caveat. This finally left him to ask himself, “what’s so important about these shops?”

At the time, Montana’s legal cannabis industry had just started to boom, and people wanted in with a place to grow. This was an industry that Morgan was not in tune with at the time, but he started to pay attention to.

Then the financial crisis of 2008 hit and Morgan’s real estate business was dead in its tracks. He needed a new play.

Despite his youth, Morgan was old enough to have seen one tech boom and one housing boom, and had an itch that he may be in the presence of the next gold rush.

“All these crazy people talking about this marijuana stuff, there must be something to it,” Morgan says. “So I started digging into it.”

One day, after months of research, it became clear to him that marijuana was going to be the next big boom.

“That day I went and found a light and a warehouse and I was damned if I wasn’t going to grow some marijuana, “ Morgan says.

Growing Pains

With the exception of spending some time on his grandparent’s farm, Morgan wasn’t that experienced in horticulture. He knew the basics of how to grow some crops, but after looking around at the competition, he felt he could succeed in marijuana.

“How hard could this be?” Morgan says. “There’s a bunch of hippies in tie-dye with hoop houses out in the wilderness growing, you know, grade-A cannabis. I’m sure I can figure it out.”

He didn’t. At least not at first.

Morgan set up a small operation in his garage, and after about 15 failed attempts, he finally found a grow system that worked. Then in 2009, he teamed up with another grower in Montana and they opened a state-of-the-art, 15,000-square-foot cultivation facility, one of the largest in the state at the time.

This new abundance of space gave them a controlled environment to grow a significant harvest of plants. Within Montana’s medicinal marijuana caregiver program, as long as you had a patient card, you were legally allowed to grow six plants per patient that you were a caregiver for. With Morgan’s patient list growing to over 500, he was legally growing over 15,000 plants. Not bad for a guy who didn’t know much about the business just one year prior.

But just as quickly as he had struck gold, a new law would bring things grinding to a halt.

Next Stop: Arizona

Per Morgan, in 2009 Missoula’s population was over 65,000 people and the city was home to over 60 dispensaries. That equates to around one dispensary for every thousand people.

In short, that’s a lot of dispensaries.

The state began to worry that the new industry was growing too quickly. So to help slow it down, Montana had an emergency legislative session and reversed its laws so that a caregiver could now only have three patients total. Instead of having 15,000 plants, Morgan was suddenly only allowed to have 18 plants total.

Once again, Morgan was stopped dead in his tracks. Feeling the cons outweighed the pros of running the facility in violation of the new laws, he shut down his operation in 2010.

Having tasted the fruits of his labor, he turned his focus elsewhere. He immediately began to look around the country for states with more favorable marijuana laws so he could scale a business.

“I knew I had the skills sets at that point, I just needed the right vehicle and platform to do so,” Morgan says.

Arizona ended up offering that platform.

The Grand Canyon State was about to roll out an extremely favorable and innovative program that was to be the first of its kind, and Morgan wanted to be a part of it. Morgan says the state’s population was also substantially larger than Montana’s, and it was going to allow a permit holder to have unlimited plants, unlimited square footage to grow, and unlimited weight in product. He felt like it was a “dream” and couldn’t wait to head south.

“I literally packed up all my stuff into my Chevy Silverado and I drove down to Arizona within that week,” Morgan says. “And literally, probably the best decision I’ve ever made. I was 25 years old.”

Upon his arrival, Morgan opened up a chain of hydroponics stores to help gain a foothold in the area and to network with the locals as he waited for the new laws to roll out. While doing so, he befriended the son of a senator who would become key in helping him land one of the state’s limited marijuana licenses. (Morgan chooses not to divulge the senator’s name during our interview.)

“These licenses were looked at as a valuable asset,” Morgan says. “There’s no way these guys are giving some kid from Montana one of these licenses that could end up being worth, you know, millions of dollars.”

His chances may have been slim, but a senator’s chances were very good.

After agreeing to terms, Morgan says he and the senator’s son partnered up and convinced the senator to put his name on the application. Soon thereafter, the two won a Sedona license through a lottery system and within four weeks after that, they purchased a Phoenix license on terms from its winner for $450,000. With two licenses under their belt, Bloom Dispensaries was well underway.

Like Morgan’s real estate business, Bloom took off, and in under a year grew to 100 employees and was generating $1 million in revenue a month.

Everyone came calling.

By 2013, Bloom was drawing national attention and was destroying its competition. This led to private equity firms and wealthy families to reach out to Morgan for advice and potential opportunities.

“People were starting to look at marijuana,” Morgan says. “It was still kind of in the shadows, but it was starting to come to the light.”

Due to Morgan’s knowledge in the space and Bloom’s exponential growth, companies wanted to replicate his success and learn his secrets. However, Morgan says one such wealthy family, worth billions, wanted to do more than talk. They wanted Morgan and offered to purchase Bloom in order to get him. However, after negotiations between the family and Bloom’s investors fell through, the family extended a proposal to only Morgan for him to come and launch their new venture.

Realizing a good opportunity when he saw it, Morgan accepted their offer. As for Bloom, he divested his shares and gave the company to his partner in order to remain on good terms. Now armed with over $100 million in capital from his new partners, Reef Dispensaries was born. And its growth was on a whole other level.

“I came out of the cannon like a cannonball,” Morgan says.

Reef quickly expanded to 200,000 square feet of cultivation, had two extraction laboratories, and six retail dispensaries, with one of them becoming the busiest dispensary in the world. And to top it off, Reef became the first cannabis company in the world to hit a $100 million run rate.

Despite the success Morgan was able to create at Reef, he says tensions began to grow between him and his partners. After months of disagreements, Morgan resigned as CEO of the company in November 2017, forcing a buyout and shocking the cannabis industry.

The Next Frontier

Morgan’s next major move took some time to develop.

Much like the beginnings of Bloom, an entrepreneur reached out to Morgan about a potential partnership. However this time, the individual challenged Morgan to look at the other chemical compounds in the cannabis plant other than THC, and to research how they were being used in the healthcare space. After spending close to a year discussing healthcare and the science on how to use cannabinoids, the two of them founded Oneqor Technologies.

“It’s really a hybrid of a biotech pharma company that’s leaning heavily on cannabinoids in the cannabis plant, excluding THC, the psychoactive one,” Morgan says.

After spending 10 years in the THC business, Morgan says he was becoming bored with the industry. Oneqor presents something new and exciting for him, plus he’s able to operate it almost like any other typical business. Working in a business that doesn’t deal with THC is a whole new frontier, and one with barely any restrictions.

And without the restrictions, Morgan’s ambitions grew.

On top of helping brands such as GNC create private label CBD products, Morgan wants Oneqor to revolutionize the market. He hopes to dominate the cannabinoid industry in the same way Intel did with computers by becoming the secondary brand.

“If you see a product and you know it has cannabinoids in it, I don’t want it to say CBD inside,” Morgan says. “I want it to say Oneqor inside.”

Matt Morgan’s Playbook for Building a Business

In a span of less than 10 years, Matt Morgan became a leader in the cannabis industry by creating Bloom Dispensaries and Reef Dispensaries, along with his new venture Oneqor Technologies. After some early growing pains, Morgan came up with his own playbook on how to grow a successful business.

Believe In Something

Many founders, especially first-time entrepreneurs, tend to look at only the financial aspect of creating a business, rather than if it’s something they actually want to do. Other times, people may start a company because they feel that the idea might be a fun thing to do.

Morgan believes, that although the financial upside is something to consider, you must also believe in the product and have passion for it if you’re looking to build a company. Otherwise, you may lose interest and not do the things needed to succeed.

“You shouldn’t pick something you want to do because you think it’s cool,” Morgan says. “You should pick something you do because you believe in it and you see a lot of upside potential. Or else, what are you doing it for?”

Look at the CEO

Morgan credits much of his early success to the teams he’s built. From building a C-suite team to hiring the employees for his stores, he believes that everyone is important. And to find those right employees, it starts at the top with the CEO. That means either looking within yourself if you’re the CEO, or by sitting down with your leader and asking them what their core values are. Skill sets are important, but if your employees don’t share the same values, the culture won’t work.

“You want to hire people that have the same core values as you, because you can’t teach people core values,” Morgan says. “They’re born with that…or their environment, whatever it may be. You can teach people anything, but you can’t teach them that.”

Be Uncomfortable

Another trait that Morgan says led to his success is the ability to go outside his comfort zone. He used to be a nervous wreck, he says, but wanted to rid himself of that anxiety. So beginning from the age of 20 until he was 28, he put himself in uncomfortable situations daily in order to grow as a person. This not only helped in his everyday life, but also as a professional and leader. It helped him with everything from speaking in front of 10,000 people to raising capital for his businesses. In order to succeed, you must be willing to put yourself in uncomfortable situations and get to the point where you’re calm and collected in every situation.

“Human beings have a defense mechanism and they don’t like getting out of their comfort zone,” Morgan says. “You don’t know what to say, what to do, how to operate. But that’s really your biggest growth potential as a human being, is outside of your comfort zone.”

Maintain Focus Among the Chaos

Founding your own startup can come with lots of unexpected surprises. Especially within an emerging field such as the cannabis industry, things can become chaotic as the rules are still being established. Unfortunately, there will be a lot of chaos around you, a lot of drama, and a lot of arguing. But the only thing you can do is figure out how to control your reaction to it and always remain focused on your goals. Find what makes you relaxed and focused, and master it.

“One thing that has really helped me with that is meditating,” Morgan says. “It’s really helped me, you know, keep my concentration, collect my thoughts. … There’s not really anything that can rock me mentally.”

Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Nick Allen


Key Takeaways

  • A look into Morgan’s struggles to fit into the traditional working world
  • How real estate became the gateway drug to entrepreneurship
  • The impact of the financial crisis of 2008, and how it led Morgan into the cannabis industry
  • From 15 failed attempts at growing marijuana to a patient list of over 500
  • How a change in Montana’s laws sent Morgan’s business to Arizona
  • The political relationships that helped the launch of Bloom Dispensaries
  • How Bloom Dispensaries reached $1 million in revenue and dominated the cannabis industry
  • Why Morgan decided to sell Bloom and launch Reef Dispensaries with new partners
  • Growing Reef Dispensaries to become the first cannabis company to hit a $100 million run rate
  • Behind Morgan’s decision to quit as Reef Dispensaries’ CEO and his next step with OneQor
Direct download: FP269_Matthew_Morgan.mp3
Category:general -- posted at: 10:50am AEDT

Figuring It Out

Why Marie Forleo walked away from Wall Street to help people build lives they love.

Marie Forleo was on the brink of the American dream.

After graduating as valedictorian from Seton Hall University, making her the first in her family to graduate from college, she’d landed her first post-grad job on the floor of the New York Stock Exchange. Her peers were millionaires, and she was on track to become one, too.

But that dream came crashing down after a panic attack halfway through a workday left her sobbing in the pews of the nearest church. Just six months into her job, the little voice in her head was telling her that she was on the wrong path, and she knew she had to make a change.

Of course, she was petrified by the idea of leaving her job behind (especially with the mountain of debt that came with the pursuit of the American dream), and she didn’t know if she’d ever find something that would truly fulfill her.

Determined to figure it out, Forleo eventually made her way to a new career path that would not only bring her happiness, but would also enrich the lives of many others experiencing their own difficulties.

Today, Forleo inspires millions through her work as a life coach. She has over 578,000 YouTube subscribers on her award-winning channel, MarieTV, with over 49 million views spanning 195 countries. She’s also ushered 55,000 students through her eight-week marketing school for business owners called B-School. She’s even been interviewed by Oprah herself. And now, Forleo’s got a new book coming out, Everything Is Figureoutable, in which she unpacks the life lessons that she considers to be the secrets to her own success.

While coaching wasn’t her next, or even her next-next career choice after leaving Wall Street in the dust, by trusting her gut, advice from her parents, and the tiny voice of truth in her head, she found her way there eventually and built a life she loved.

Struggling to Start

When she was younger, Forleo dreamed of becoming a Disney animator or a fashion designer. But amid her disillusion with the job on Wall Street, all she could think was, “What else am I going to do?”

With her head spinning and stomach performing an intricate gymnastics routine, she called her dad. She was horrified by the idea of disappointing him, but didn’t know what else to do.

“I was quite broken,” she says.

She told her dad about how unfulfilled her coworkers seemed, her growing fear that she would end up like them, and her unmet desire to do something that brought joy to herself and others.  After baring her soul, Forleo nervously waited for her dad’s response.

What he said would shape the course of her entire life. He reminded her that she would be working for the next 40 years or more of her life, and she needed to spend that valuable time doing something she loved.

She quit her job two weeks later.

But as little voices in our heads often do, Forleo’s told her just enough to get her out the door, but didn’t offer much insight on what she should do next.

She loved design, but was also fascinated by business, so she decided to give the world of magazine publishing a go. Through a temp agency, she got an ad sales assistant position at Gourmet magazine. Forleo loved her boss and publisher, and, with a desk conveniently located right next to the test kitchen, she believed she had finally found her niche.

But six months in, the voices of doubt took up their chorus once again. “I couldn’t deny the fact that I didn’t want to be there,” she says.

Forleo wondered whether a more creative role in the magazine industry would quiet the voices, so she snagged a job on the editorial team of Mademoiselle. Sure enough, when she reached that six-month hurdle, the voices told her that, once again, it was time to move on.

Discouraged, frustrated, and afraid for her future, Forleo wondered if there was just something wrong with her. Why couldn’t she find any work that made her truly happy?

A Calling for Coaching

The profession of life coaching wasn’t something most college graduates in the 1990s considered or even knew existed. In fact, Thomas Leonard, who is commonly called the father of the profession, only began his work in the 1980s.

So when Forleo stumbled across an article about life coaching in the early 2000s, it was as if she was uncovering a buried treasure.

“When I read this article, I swear to you, it was like the clouds parted and cherubs came out and they were shooting little sunbeams into my chest,” she says.

At just 23, Forleo questioned whether she had anything to offer as a coach, but she says something about it just felt right. So she enrolled immediately in a three-year, part-time training program. When the six-month wall that had diverted her path so many times arrived, she pushed through it like tissue paper.

And for the last two decades, Forleo’s “move along” voices have been silent.

In 2001, she launched her first weekly newsletter, called Magical Moments, which attracted a modest following. Slowly, but steadily, her reach grew. Forleo attributes much of her success to her tremendous patience, calling herself “a worker bee.”

Her skills and audience grew, and she launched new, ever-evolving platforms. As the 2000s rolled into the 2010s, Forleo launched B-School, her online course on marketing for business owners, as well as her wildly successful YouTube channel, MarieTV.

But her journey wasn’t all unicorns and balloons. She encountered moments of failure (like the time she tried to build a custom coaching platform without a lick of relevant tech expertise), but each one taught her a valuable lesson.

“I realized the power of positive quitting,” she says. “I think there’s a big distinction between giving up and moving on.”

She also learned the principal of, as she puts it, “simplifying to amplify.”

As Forleo began to draw international attention for the work she was doing, she felt the pressure to create more, attend more, and give more. Pulled in so many directions, the beginnings of burnout set in and she felt she wasn’t giving her best to her flourishing business.

“Having a really successful, thriving business is not just about the money,” she says, emphasizing each word. “How does your team operate? How do they feel showing up to work every day? How do you, as the founder, feel? Are you so stressed out that you want to run away and hate that you even started this thing?”

So in 2013, she decided to scale back and focus instead on the things that enabled her to make the most impact. She says she killed over a million dollars in revenue with a snap of her fingers.

But the flood of creativity and renewed sense of direction that followed laid the groundwork for her to rapidly recuperate that amount and much more. So when others tell her that she should be investing more time in a particular platform or conference or trend that she feels will take her off track, she has no problem saying no.

“I’m not out there to chase things,” she says. “I’m not going after vanity metrics. I give no shits about any of that. The metrics that matter to me are the lives I can impact, the profitability of the company, the difference I can make through our philanthropic endeavors, and am I actually enjoying my life.”

She also knows who to listen to when considering what to add to her business—her customers.

“The feedback, the iteration, the constantly making it better is how you get to something that’s legendary,” she says. “And I think folks don’t have the patience or the ability to focus over time and the desire to make something extraordinary, and that’s why we have so much mediocre.”

Forleo says that the Customer Happiness department is the largest chunk of her 30-member team because they are committed to responding to every single email received. So, for example, when she noticed an influx of emails from MarieTV viewers lamenting that they most enjoyed listening to her show in the car as they drove but hated running up their data, she created a podcast to solve the problem.

And if anything is clearly evident, it’s that Forleo is, to her core, a committed problem solver, a trait she attributes to her enterprising mother.

Sharing Her Secret to Success

Forleo’s mom, the child of two alcoholic parents from the projects of north New Jersey, “learned by necessity how to stretch a dollar bill around the block like five times.”

She was always looking for ways to save money, so if something was broken and the price for a professional to fix it was too steep, she would fix it herself. From a leaky roof to cracked bathroom tiles, lack of experience or a college degree didn’t keep Forleo’s mother from tackling even the most complicated projects.

One day, Forleo found her mom hard at work fixing her favorite radio, a Tropicana orange with a red and white straw for an antenna. Staring at the fully disassembled radio, amazed, Forleo asked her mom how she planned to put it back together again.

Her mom told her that nothing is too complicated if you just jump in and get to work, because “everything is figureoutable.”

That conviction lodged itself deep in Forleo’s heart, and it carried her through everything life threw at her, from difficult relationships to launching her own business. So when the time came to write her second book, she knew she had to share this principle with the world.

In Everything Is Figureoutable, which comes out this month, Forleo builds on three simple rules:

  1.     All problems (or dreams) are figureoutable.
  2.     If a problem isn’t figureoutable, it’s not a problem. It’s a fact of life.
  3.     You may not care enough to solve this particular problem or reach this particular dream, and that’s OK. Find something you really do care about, and go back to Rule #1.

While these principles can be used in every aspect of life, Forleo feels they are particularly applicable to entrepreneurship, a career path she feels is often “over-glammed.”

She says that being an entrepreneur is a lot harder than it looks because it’s all about suffering in the short term to reach long-term goals, and sometimes that period of suffering can feel neverending.

“I think we all really feel stuck in our lives from time to time, but if you do embed this belief that everything really is figureoutable, it gives you this energy to get up and go again,” she says.

Forleo also insists that the ability to change direction is essential for a business owner.

“To survive as an entrepreneur, you have to be incredibly nimble and flexible and to keep evolving yourself,” she says. “Otherwise, you’ll get left in the dust.”

And she advises any founders who are living in fear or doubt about their business or career path to pull out a trusty journal and write it all down.

“We, just as humans, underestimate the value of writing things out and writing things down,” she says. “When it comes to feeling stuck—when it comes to feeling fear, which can stop many of us—we allow it to stay amorphous and kind of shapeless like a boogeyman in our head, rather than being concrete and specific about it on the page.”

Forleo’s particular brand of down-to-earth optimism has inspired millions, and, through her new book, she is excited by a new opportunity to share a piece of how she achieved her dreams.

As Forleo’s business continues to grow, expand and evolve, one thing has remained ever constant: the belief that her audience can fashion a life they love, just like she did. Because, after all, everything is figureoutable.

Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo


Key Takeaways

  • Why Forleo was miserable living the American dream
  • The advice Forleo received from her dad that empowered her to walk away from her job on Wall Street
  • Her brief stint in magazine ad sales and editorial work
  • How Forleo discovered the world of life coaching
  • The journey of scaling a newsletter, online course, and YouTube channel to an international level
  • Forleo’s thoughts on positive quitting and the motto “simplify to amplify”
  • Why Forleo decided to scale back on her business and kill over a million dollars in revenue in the process
  • Who Forleo turned to when deciding the new direction for her business
  • The valuable lesson Forleo learned from her mom, which inspired the premise for her new book Everything is Figureoutable
  • Forleo’s survival tips for entrepreneurs
Direct download: FP268_Marie_Forleo.mp3
Category:general -- posted at: 8:46am AEDT

Blake Mycoskie had a number of hits and misses as a young entrepreneur, but it was a trip to Argentina that inspired the idea that would become his mission—and end up having a huge impact on the business world.

Mycoskie wanted to find a way to help the children he encountered who didn’t have proper footwear, but he wanted to do it in a for-profit, self-sustaining way. That’s how TOMS came to life.

From there, Mycoskie blazed a trail in the way companies think about social good, by popularizing the one-for-one giving model and building the beloved brand that still exists today. TOMS generates hundreds of millions in sales and still stays true to its mission of giving back to communities around the world.

Check out this episode to learn more about Mycoskie’s advice for those who want to pursue social entrepreneurship, the business model that led to his success, and the expansion of TOMS into other types of products.


Key Takeaways

  • Why the idea of a “job” was foreign to Mycoskie growing up
  • How Mycoskie’s entrepreneurial spirit led to him founding everything from a laundry service to a reality cable television channel
  • The trip to Latin America that inspired the idea for TOMS Shoes
  • How Mycoskie changed the social entrepreneurship game with his one-for-one model
  • Why social good isn’t necessarily the right path for every business
  • Mycoskie’s personal reasons for selling half of TOMS to Bain Capital
  • How TOMS was able to grow completely organically through social media when it launched in 2006
  • The journey to achieving millions in revenue and donations
  • The reasons behind TOMS’ expansion into eyewear, coffee shops, and more
  • How Mycoskie continues to innovate despite a lack of background in apparel design
  • Mycoskie’s best advice on choosing the right partners and building a sustainable business
Direct download: FP267_Blake_Mycoskie.mp3
Category:general -- posted at: 10:11pm AEDT

Why are glasses so expensive?

Dave Gilboa could not stop asking himself that question. After leaving his $700 pair of eyeglasses on an airplane while returning from Southeast Asia, he could not wrap his head around why a technology that was so archaic could cost him more than his iPhone.

Within his first weeks as an MBA student at the Wharton School of Business, he repeatedly brought this question up among some of his new peers. Gilboa, along with fellow students Neil Blumenthal, Andrew Hunt, and Jeff Raider, had all shared in the pain of losing or breaking glasses and had all agreed: the high markup made no sense.

Inspired by Gilboa’s pricey misfortune, the four of them founded Warby Parker. Now led by co-CEOs Gilboa and Blumenthal, the billion-dollar empire with 2,000 employees is revolutionizing the prescription glasses industry by selling stylish eyewear online at affordable prices.

The New York City-based company is also on a mission to combat the global problem of impaired vision through its charitable Buy a Pair, Give a Pair program. Since the company’s start, the program has distributed over 5 million pairs of glasses to those in need by donating a pair of glasses for every one sold.

But long before they could build an ecommerce giant, the team would first have to learn how to even build a website.

A Moment of Clarity

Prior to going to Wharton, all four co-founders had already spent some considerable time in the workforce. This allowed for each of them to gain valuable real-world experience, and it helped guide them to understanding if they had an actual problem to solve and a business to move forward with.

However, it was Blumenthal’s experience while running the nonprofit VisionSpring that would become crucial to the early concept of Warby Parker. During his time with the company, they trained low-income women in the developing world to start their own businesses. Participants were to take their new skillsets back to their rural communities and administer vision screenings and sell glasses. But it was something else Blumenthal had witnessed that would have a lasting impression on him.

“I had been to the factories,” Blumenthal says. “Here I was producing glasses for people who were making less than four dollars a day, but 10 feet away were factories that were producing…the $700 pair of glasses Dave had. So we knew something was awry.”

A light bulb went off and the classmates soon pulled together $120,000 and went to work on developing Warby Parker in 2008. The problem they wanted to solve: How can we make glasses we want, but at a low cost?

Eager to launch, but more focused on preparation and planning, the founders began sketching out all the main aspects of the company. With limited funding, they knew they’d have to really refine and plan each facet of their business before revealing it to the public. Their first steps were to design glasses that they’d want to wear and then find a manufacturer who could produce them for less, starting with Blumenthal’s connections.

The next step would be trying to figure out how to sell their glasses directly to the consumer. The answer was simple.

“This magical thing called the internet,” Blumenthal says.

The founders all knew that ecommerce was an innovation they wanted to take advantage of for their direct-to-consumer brand. Had they come up with this idea 10 years prior, the company may not have gone any further than an idea. With a brick-and-mortar store requiring a lease, utilities, and other costs, they knew it would be hard to make their new dream a reality with limited capital.

“If we did , we would have one location that we might be able to attract some local customers, but with the power of the internet, we were able to all of a sudden, launch a store to the entire US,” Gilboa says.

But there was a small problem. None of them knew how to build an online store, nor did they understand the many other details that came with creating an online shopping experience.

“We started talking to friends on how you build a website,” Blumenthal says. “And then we started visiting a bunch of websites that we would normally already go to. But now with a critical eye, we were understanding, okay, what’s the shopping flow?”

Over the next year and a half, the four of them kept chipping away at all the details of Warby Parker. Nothing got overlooked. They spent countless hours going over the vision and mission of the company, and worked on all the brand architecture of what they wanted their company to be.

In addition, the group constantly sought out feedback from friends and professors. Could something like this work?

One glaring concern that kept surfacing was whether or not a person would actually buy a pair of glasses online. With fit being so important, it would be hard for a person to gauge on a computer screen if a pair of glasses would fit their face and feel comfortable.

This forced them to reconsider their business model, and ever the problem solvers, the home try-on program was born. Breaking new ground, Warby Parker would allow a customer to select five pairs of glasses from the website and then ship them free of charge, allowing five days to test out the frames.

This was a major ecommerce innovation that would get them past the biggest challenge facing the business’s core premise. But there was one other challenge that would prove nearly impossible to overcome—agreeing on a name.

Thank You, Jack

Prior to Warby Parker’s launch, brands had already started to emerge that were selling glasses online. Customers were able to purchase glasses from sites such as 39DollarGlasses.com and FramesDirect.com, but they were sacrificing other elements, such as quality and customer service, for their lower prices.

The founders wanted to take a different approach with their company. They wanted to launch a fashion brand that not only offered great quality, prices, and service, but also one that made the world a better place. The company vision was clear and ambitious. But they could not come up with a name.

“We wanted kind of a proper name and didn’t think Gilboa-Blumenthal, our last names, really rolled off the tongue,” Gilboa says.

They sought out inspiration and ideas from historical authors and artists. People who represented the brand ideals that they were trying to carry out. One author that stood out to them was Jack Kerouac, the novelist and poet who was a pioneer of the beat generation.

Coincidentally, the New York Public Library was holding an exhibit one afternoon with some of Kerouac’s private diaries and journals. Seeking inspiration, Gilboa made a visit to the exhibit and stumbled upon some of Kerouac’s unpublished works, finding some interesting character names.

Two jumped off the page: Warby Pepper and Zagg Parker.

“So I took those back and the four of us were discussing,” Gilboa says. “We all loved those names and were debating, do we pick one of those, and we decided to combine the two and make it our own. And the URL happened to be available for nine bucks.”

After six months of debating and with over 2,000 names rejected, Warby Parker came to life.

Getting Noticed

The challenge for any new brand is figuring out how to gain exposure. With a small marketing budget, the co-founders had to be strategic about finding a cost-effective way to maximize their exposure in such a competitive industry. Realizing glasses are an accessory and that the fashion industry was an insider’s game, the team hired a fashion publicist to help set up meetings with editors and writers at major publications.

In February of 2010, WarbyParker.com officially went live. Within days of launching the website, they were featured in GQ, where they were dubbed “the Netflix of eyewear.” Soon after, another profile appeared in Vogue. From there, things went viral.

“We ended up hitting our first year’s sales targets in three weeks,” Blumenthal says. “Sold out of our top 15 styles in four weeks and it was just complete mayhem.”

Soon, they found themselves sold out of all their inventory with a waitlist of over 20,000 new customers. Warby Parker was an overnight success, a year and a half in the making.

Onward & Upward

Today, Warby Parker is valued at over $1 billion and has cemented its place among the top glasses retailers in the world. Even after they made it to the big time, however, the team kept innovating.

In 2013, Gilboa and Blumenthal began to expand their brand with more storefronts, having now opened close to 100 stores in the US and Canada. And within some of those stores, they’ve begun to employ their own optometrists where states allow it.

On the technology side, they’ve found new ways to cater to the customer. Within the Warby Parker app, any customer with an iPhone X can now virtually try on any one of their frames. In addition, they’ve made a move into telemedicine by allowing eligible customers to take eye exams from their phones, allowing a licensed doctor to write them a prescription remotely.

But no matter how large the company becomes, the team’s underlying values remain the same: they do whatever it takes to make customers happy.

3 Tips for Standing Out From the Crowd

When Neil Blumenthal, Dave Gilboa, Andrew Hunt, and Jeff Raider founded Warby Parker in 2010, they knew it wouldn’t be easy. But with the right planning, execution, and maybe some good luck, they felt they could make the world a little better, one pair of glasses at a time. The founding team knew that in order to get any attention in the noisy fashion industry, they had to be different and they had to stand out.

Here are Blumenthal and Gilboa’s tips for helping your new startup gain exposure.

  1. Be Novel

From the beginning, the founders knew that it would be hard to get any immediate attention in the fashion industry without the help of insiders. They knew their service and product would be different from any other retailer before them, but if no one knew who they were, it wouldn’t matter.

So the team hired a fashion publicist to get them meetings with top fashion publications. By being able to tell their story directly to their target audience, and through a medium that their audience trusted, it was a giant step in the right direction. And since Warby Parker was so different from its competitors, once it got on the insider crowd’s radar, it wasn’t hard for them to draw media attention.

“There was a bunch of things that we were doing that were novel,” Blumenthal says. “Selling glasses online, in 2010, was pretty novel. Having this home try-on program was really novel. Providing a pair of glasses for every pair we sell, was really novel. Charging $95 instead of $500 was really novel. So they really wanted to write about us.”

In today’s startup world, it’s never been more crowded and harder to stand out. Be different with your concept and separate yourself from the fray.

  1. Don’t Get Distracted 

Although WarbyParker.com went live in February of 2010, the four co-founders spent over a year and a half focusing on their company’s mission, product, and business model. And after they found success, staying focused became an even more important priority.

“We got some advice early on that if you’re walking down a path towards a giant pot of gold, you shouldn’t stop to get distracted by any shiny little coin that you see along the way,” Gilboa says.

It would have been easy for Warby Parker to launch dozens of different products or to expand into new markets for monetary gain. However, that would’ve brought about great distractions that could have pulled them from their main goal, which is to solve their customers’ problems by offering them quality products and experiences.

“We’ve just seen so many businesses that have failed due to lack of focus,” Gilboa says. “But it’s rare that you’ll see a business that fails for being too focused.”

Remember the problems your business is trying to solve and stay focused on it. By always learning and iterating, you’re working towards providing the best service possible for your customers.

  1. Above All Else, Make the Customer Happy

From the very beginning, the Warby Parker team knew they had to keep their customers happy. They understood that they had to not only provide a great product, but also provide superb customer service.

In the beginning, all four co-founders were directly in touch with their customers. They each replied to customer emails and even set up an 800 number that would be sent to their personal cell phones until someone picked up. They were willing to do anything to make sure the customer was always satisfied.

“Do whatever it takes to make customers happy and make them feel good,” Blumenthal says. “Smile, personal notes, whatever it takes.”

Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Nick Allen


Key Takeaways

  • How losing a pair of $700 glasses led Blumenthal and Gilboa, along with fellow MBA students Andrew Hunt and Jeff Raider, to identify a major business problem
  • How Blumenthal’s experience of running a nonprofit informed the early stages of Warby Parker
  • A look into the 1.5 year process of bringing the co-founders’ business idea to life
  • Why the team decided to merge eyewear and ecommerce
  • The process of familiarizing themselves with the world of online shopping and websites
  • How the name Warby Parker came to be, and why it took brainstorming over 2,000 names to get there
  • The team’s cost-effective approach to marketing and launching the website
  • How powerful press placement led to a sold-out inventory and a waitlist of over 20,000 new customers within weeks
  • What’s in store (literally) for the future of Warby Parker
  • The single piece of advice Gilboa and Blumenthal received that helped them be successful, and how other entrepreneurs can apply it to their own business
Direct download: FP266_Warby_Parker.mp3
Category:general -- posted at: 8:52am AEDT

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