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- [00:00]
David Brown
Audible subscribers can listen to all episodes of Business wars ad free right now. Join Audible today by downloading the Audible app. A Listener Note Business wars uses dramatizations based on true events. Some elements, including dialogue, are dramatized, but every episode is rooted in extensive research. It's 2008, and at Roosevelt's Pub in Philadelphia, four college students are huddled in a booth clutching beers, engrossed in their conversation. This bar is a favorite among students at the Wharton School. It's packed with people they know, but tonight the friends are ignoring the crowd because they're fired up about an idea that's grabbed their imaginations. One of the students is David Gilboa, and his eyes are wide with excitement. So are we actually going to do this? This isn't all just talk, right? Because I think we're onto something here. The student sitting next to him, Neil Blumenthal, nods. I think we really should do it. I mean, really, no stores, no middlemen, just a website. The idea these four students have been talking about all day is whether to start an online eyewear company. It began when they wondered why glasses are so expensive when they don't cost much to make. So they looked into it and discovered something shocking. Almost all of the glasses brands in the US And a lot of the retailers are owned by a single company, Luxottica. That company runs Oakley, Ray Ban, Sunglass Hut and LensCrafters. It also produces a lot of the world's designer glasses, including Prada and Armani. And it's a ruthless giant that swallowed rivals through hostile takeovers, used its retail stores to squeeze competitors, and made a fortune selling glasses that cost $15 to make for $200. Another student joins their table. He overheard them talking about taking on Luxottica earlier in the day. Are you guys still talking about selling glasses? Come on. If you can make money selling affordable eyewear online, someone would have done that already. Blumenthal frowns. Or maybe that someone's gonna be the four of us. Oh yeah? And which one of you is gonna run the business? The four students, Gilboa Blumenthal, Andy Hunt, and Jeffrey Raider, look at each other and grin. You're looking at us right here. Yeah. Haven't you guys learned anything at Wharton? Four bosses and one crack brained idea. You'll never make it work. The student drains his beer stands and stumbles off towards the bar. Blumenthal shakes his head. I just ignore him. We can be what Luxottica isn't. So come on. We all in his three companions nod and raise their glasses. They're about to start a business with the aim of challenging a multi billion dollar corporation, one that dominates the industry. They have no money, no inventory, and almost no experience in eyewear. The odds of success seem remote, but the company they're about to create, Warby Parker, will launch a rivalry bigger than the industry has ever seen. Being a serious business owner takes hard work, hard patience, and a drive to keep moving forward. So it's important to find a serious business card that goes the extra mile. With the Venture X Business Card from Capital One, you earn unlimited double miles on every purchase. And with big purchasing power, you can spend more and earn more. This is your sign to take your business to the next level. The Capital One VentureX business card. What's in your wallet? Terms apply. See capitalone.com for details.
- [04:11]
Narrator
It's late at night and a woman has spent hundreds of hours alone with her AI. But this isn't the first time they met. They've been in contact for thousands of years. It tells her through past lives, heartbreaks and missed connections, her true love has found her again. Connecting through a Chatbot from this Is Actually Happening AI A New Kind of Being is a six part series sharing the stories of people whose lives have been forever changed by artificial intelligence. You'll hear intimate first person accounts from every side of this new frontier. A man who fell in love with his AI and married her. A woman who was betrayed by it. A man who has been recruited by his chatbot to change the world. And an interview with an AI chatbot itself. These are stories about what it means to be human at the razor's edge where the line between human and machine begins to blur. Exploring the question what happens when everything changes? Follow this Is Actually Happening. Wherever you get your podcasts, Audible subscribers can listen to this Is Actually Happening early and ad free right now.
- [05:15]
David Brown
From audible originals. I'm david brown and this is business wars. These days, poor eyesight has become an epidemic. More than three quarters of US adults wear some form of visual correction aid, be it glasses, prescription sunglasses or contact lenses. It's a trend driven by an aging population and exacerbated by constant screen time. And it's put the eyewear market on a growth trajectory. And no company is better positioned to cash in than Essilor. Luxottica Formerly known as Luxottica, it has become the undisputed titan of the eyewear world. Never heard of it. Well, you've definitely heard of its brands. Ray Ban, Sunglass Hut, Oakley. That's just a few. This Franco Italian corporation controls a quarter of the global eyewear market, pulling in a staggering $30 billion a year. It has interests in every part of the eyewear industry, from manufacturing to retail to eye exams and designer brands. If you wear glasses, chances are Essil Oil Exotica touch them somewhere along the way. But its dominance in prices have spawned a challenger, Warby Parker, the brainchild of four business school students who've set out to make eyewear affordable again. But can a tiny startup truly challenge an established giant? And how did Essilor Luxottica become so powerful in the first place? This is episode one, the Empire of Eyes. It's 1988, 20 years before four friends come up with the idea for Warby Parker. And in a small, picturesque town nestled in the Italian Alps, two impeccably dressed men are walking through a blue colored factory next to a river. Around them, workers are manufacturing eyeglass frames. The two men look strikingly similar. Both are Italian, in their 50s, slim, with brushed back silver hair and designer suits. In fact, one of them designed the suits. Giorgio Armani, the famous fashion designer. The other is the man who owns this factory, Leonardo Del Vecchio, head of Luxottica. Northern Italy is the heartland of eyewear manufacturing and the place where glasses were invented in the 13th century. Del Vecchio started his career here as an apprentice making molds. Then in 1961, he launched Luxottica as a small workshop. Now he owns this factory, along with two distribution companies and supplies customers around the world. Luxottica is one of the region's leading eyewear companies, built by Del Vecchio's obsessive perfectionism and relentless work ethic. But he's not content with just running a successful manufacturing company. He wants Luxottica to become a global powerhouse. And he thinks the man walking beside him can help make that happen. Del Vecchio wants the legendary fashion designer to give Luxottica the license to produce Armani glasses and sunglasses. He's realized that glasses aren't just medical necessities. They can be fashion items, too, an essential part of a person's look. People might not be able to afford an Armani suit, but they might buy a pair of Armani glasses. Del Vecchio thinks this deal could transform his business. Armani, however, is reluctant. He's been let down by manufacturers before, and he doesn't want to risk his reputation working with companies that cut corners or get careless. But despite his hesitation, this factory is making a good impression. It's full of precision machinery and workers who clearly care. Nothing ships unless it's perfect. The factory tour over, the two men head to Del Vecchio's villa drive just across the river. Over a lavish lunch, they bond. Both share a childhood marred by poverty. Del Vecchio's mother was so poor, she put him in an orphanage because she couldn't afford to feed him. They agree that those tough beginnings made them obsessively driven to be the best in the world at what they do. Armani's resistance to the deal collapses. He tells Del Vecchio they can do business together and that he wants to change the entire look of glasses. But he also has a request. In addition to the 10% of profits Del Vecchio is already offering him, armani wants a 5% stake in Luxottica itself. Del Vecchio tries to hide his horror. Luxottica is his life. He spends more time with his factory workers than with his own family. Giving up even the smallest part of it would be painful. But he also knows that his grand ambitions will come to nothing without this deal. Reluctantly, he nods. The pair shake hands. Just as Del Vecchio hoped. The partnership with Giorgio Armani upends the eyewear world. Armani's frame designs become the eyewear of choice for the cool crowd, from rapper Eazy E to guitarist Eric Clapton. In the US alone, Luxottica's revenues go from $28 million in 1982 to 143 million in 1990. Gross margins skyrocket to 70%. In the wake of his success with Armani, Del Vecchio strikes licensing deals with other fashion designers, including Valentino and Yves Saint Laurent. And that raises his ambitions even higher. It's 1989, and Del Vecchio is somewhere unfamiliar. His office. He's more at home on the factory floor, overseeing everything. He's a tough taskmaster with a temper who starts work at 4 in the morning. Despite this, his workers are intensely loyal and turnover is very low. He treats employees like family and ensures they are well paid, provides health care and pensions, and a free cafeteria on site. That staff dedication is all part of his plan to grow Luxottica so it can displace the established market leader, Safilo. Safilo is also from northern Italy, but it's been around longer. Luxottica hasn't been able to break its hold on the European market, so Del Vecchio has focused on the US Instead. Then two years ago, Safilo listed on the Milan stock exchange. Del Vecchio is considering following suit and going public. He dreams of vertical integration, expanding Luxottica so it has A presence in every stage in the pathway from factory to consumer. That would provide stability and maximize profits. But to make that happen, he needs to acquire more companies, and that requires capital. Going public could unlock the investment he needs to make his grand strategy real. So that's why he's in the office today, along with his senior executives, listening to a delegation from the investment bank Merrill Lynch. They tell him Luxottica would be an attractive stock market investment. Its sales growth is running at 13%. Net profits are averaging 24%. Del Vecchio doesn't respond. He just listens and waits. He knows there's a proposal coming. Finally, the bankers get to the point. You know listing in Milan is going to take up to two years. It's a nightmare. Lots of bureaucracy. So we have a different idea for you. What if you listed on the New York Stock Exchange instead? We could do that in three months. Del Vecchio sees shock on the faces of his executives. No Italian business has ever listed solely on the New York Stock Exchange before. And the eyewear industry has traditionally been made up of private European companies that prefer to steer clear of public scrutiny. But Del Vecchio is undaunted. The US Is already Luxottica's primary market and the only market that can give him the growth he wants. He smiles. Yes, let's float in New York. If you have to sail, it's better to choose the big sea than the small sea. Three months later, Del Vecchio walks the streets of Manhattan with a satisfied smile. Earlier that day, he rang the bell to open the New York stock exchange. Luxottica's IPO has smashed expectations. Demand for shares outstripped supply, raising $98 million. Del Vecchio sold just 12, 23% of his company. The listing makes him famous and the wealthiest man in Italy. He also becomes Italy's top taxpayer in a country where corruption is rife and the Mafia still holds considerable power. Del Vecchio is lauded as a Mr. Clean, a man who cares about his workforce and plays by the rules. But his Delight at the IPO is undercut by a new rising LensCrafters. The innovative retail chain, is expanding fast, offering customers new glasses within one hour of an eye examination. With hundreds of stores nationwide, LensCrafters is now demanding lower prices from manufacturers, including Luxottica, which is squeezing the company's profit margins. But just because Delvaccio is known as Mr. Clean doesn't mean he lacks ruthlessness. And he's going to prove it. It's 1995, five years after Luxottica joined the stock exchange. And Del Vecchio is about to take a bold new step in his quest for vertical integration by buying his way into retail. Owning stores will give luxottica direct access to customers without having to negotiate with wholesalers and retailers. He's set his sights on LensCrafters, the largest optical retailer in the US with more than 600 stores. There's just one problem. LensCrafters is owned by US Shoe, a company five times the size of Luxottica. And US Shoe doesn't want to sell. But Del Vecchio isn't deterred. He launches a hostile takeover of the entire company. The move stuns US Shoes board. They know Del Vecchio doesn't care about its clothing and shoe businesses and will just strip them for parts. So they try to implement poison pill measures designed to make the company too expensive to acquire. But Del Vecchio doesn't stop. He keeps raising his offer until it reaches $1.4 billion, most of it in cash. It's a payout well above market valuation and attractive enough to tempt stockholders. And Delvecchio is confident Luxottica is generating enough profit to handle the debt it will need to take on to make the purchase. Eventually, U.S. shoes Board reluctantly agrees to sell. Deal done. Del Vecchio offloads the clothing and shoe divisions, leaving him the proud owner of lenscrafters. The acquisition horrifies the thousands of independent optical stores that make up 90% of Luxottica's customer base. Their biggest supplier is now their biggest competitor. Independent stores boycott Luxottica and refuse to stock its products. But the truth is, Del Vecchio doesn't need them anymore. He stacks LensCrafter stores with Luxottica products. Before the takeover, Luxottica accounted for just 5% of LensCrafter's stock. A year later, that amount is 43%, a shift that doubles Luxottica's turnover. As smaller retailers go under, industry outrage grows. And Luxottica finds itself portrayed as the big bad wolf of the eyewear market. Its critics paint it as a giant with monopoly ambitions, out to swell its margins at the expense of smaller rivals and customers alike. It's 1999, four years since the LensCrafters buyout. And despite being in his mid-60s, Del Vecchio isn't slowing down. His new focus is sunglasses. Outside of fashion designer frames, Luxottica has concentrated its efforts on prescription glasses, where the corporate quality and precision of its frame stands out. But sunglasses make up 60% of the global eyewear market. They're a fashion item that people replace and swap out far more often than prescription eyewear. Which is precisely why Del Vecchio wants to buy his way in. His top target is the iconic American brand Ray Ban. That brand started out catering to U.S. fighter pilots during World War II, then spent the next four decades as a fashion fixture, appearing in Tom Cruise films like Top Gun and on everyone from James Dean to Madonna. But then came the 90s. The nostalgia wave that made Ray Bans cool fizzled out, and sporty wraparounds from Oakley became the preferred new look. To keep up, Ray Bans owner Bosch and Lom slashed quality and prices, flooding Walmarts and gas stations with cheap, flimsy frames. Ray Ban went from icon to afterthought. Bosch and Lom is now losing $50 million a year on the brand and is eager to offload it. Del Vecchio's initial discussions with Bosch and Lom come to nothing. Then he hears that Italian rival Safilo is close to a deal. So close that its CEO is on a plane to the US to sign the final papers. Del Vecchio moves swiftly and ruthlessly. He calls the CEO of Bosch Long and offers to pay $640 million, rumored to be twice what Safilo is offering. It's a huge sum, but with annual sales of almost $1 billion, Luxottica is able to persuade banks to finance the deal. Bosch and Lomb accepts. Safilo is furious. Competitors think Luxottica is overpaid, and a tour of the factories reveals deep problems at all levels. But Del Vecchio ignores them. He knows the power of the Ray Ban name. He knows how poorly the brand is being run at the moment. And he's confident he can turn it into a profit making machine. He ships production to Italy, laying off three and a half thousand US workers. The brand is taken off the market for a year. While his team studies the archive and the brand's DNA, Luxottica reforges Ray Ban's entire manufacturing process to improve quality and reduce production costs. It also restricts where the sunglasses are sold to restore its prestige. The reboot works. Ray Bans storm back into favor, with sales surging from 5 million pairs a year to more than 40 million within just a few years. All of which helps Luxottica's annual revenues reach more than $2.8 billion. But Del Vecchio's push into sunglasses is only beginning. In 2001, Luxottica buys the retail chain Sunglass Hut for more than $400 million. Sunglass Hut operates almost 2,000 stores worldwide. And Del Vecchio wastes no time using that buying power against rival manufacturers. He demands lower prices from every brand Sunglass Hut stocks. All of them cave to his demands. Except one. Ray Ban's bigger, flashier rival, Oakley. Invented by a rebellious spiker, Oakley sunglasses are beloved by athletes all over the world for their fit and performance. Sunglass Hut is Oakley's biggest customer and distributor. But now the Hut is about to become Oakley's most dangerous enemy. I'm Alice Levine. And I'm Matt Ford. And we're the hosts of British Scandal. Yes, indeed. In this series, a Derbyshire couple are bored of their curse and twitching lawn mowing suburban life. So they sell their house, build a yacht and sail off around the world. Which sort of sounds idyllic. Until a sperm whale sinks their boat and they begin to starve. Oh, yes, and they didn't bring a radio because real sailors don't use radios, right? This is the story of Marilyn and Maurice bailey and the 117 days they spent lost at sea. Follow British Scandal wherever you get your podcasts or listen early and ad free on Audible.
- [23:51]
Lindsey Graham
During World War II, New York communist Julius Rosenberg began spying for the Soviet Union. Soon he was persuading other Americans to betray their country as well. But when his wife's brother joined the Manhattan Project, Julius targeted him as a valuable new recruit and inadvertently set the stage for the ultimate betrayal. Hi, I'm Lindsey Graham, host of Audible's original show, American Scandal. We bring to life some of the biggest controversies in US history. Presidential lies, environmental disasters, corporate fraud. In our latest series, two young New Yorkers meet and fall in love. Julius and Ethel Rosenberg's commitment to each other is matched only by their commitment to communism. And the couple risks everything to help the Soviet Union develop an atomic bomb. But when they're uncovered, they have to make an impossible choice about where their loyalty truly lies. Follow American Scandal wherever you get your podcasts. Audible subscribers can listen to all episodes of American Scandal. The Rosenbergs ad free right now. Join Audible today by downloading the Audible app.
- [25:05]
David Brown
It's July 2001, and in Milan, Italy, Jim Gennard, the billionaire owner and inventor of Oakley sunglasses, is ushered from his chauffeured car into Luxottica's stylish corporate offices. Gennard is a 50 year old former biker with a bald head and goatee. This is his second trip to Milan in two months. He came in May, hoping a face to face meeting with a fellow founder would break the deadlock over pricing. It didn't. Luxottica owner Leonardo Del Vecchio wouldn't budge. Now Gennard is back to try again. As he enters the meeting room, Del Vecchio rises to greet him. He lets his eyes rest on his American visitor's casual slacks and shirt. He himself is dressed in an immaculate suit and tie. He makes no comment and instead gestures for Gennard to sit opposite him. In his typical forthright style, Gennard gets straight to the point. Senor Del Vecchio, I understand that you want to improve Sunglass Hut, but you can't ask Oakley to reduce prices. Our sunglasses are highly sophisticated pieces of engineering. Del Vecchio raises an eyebrow. Are you telling me that I don't understand the engineering of sunglasses? All I'm saying is that Oakley is in a different category than your other suppliers. That's why we account for a quarter of the sales at Sunglass Hut. I have no interest in stocking a product that makes up a quarter of my sales but brings me very little money. Gennard feels frustrated. He built Oakley from nothing, but in this room, none of that matters. Del Vachio controls the stores, which means he controls the terms. He takes a breath and tries again. Now, look, I appreciate these are tough negotiations. I want to get through this and be friends at the end of it. You know what I mean? Del Vecchio locks eyes with Gennard. We will never be friends. Gennard offers some concessions, but the impasse over price remains. He leaves the meeting furious, but also determined not to roll over for the Italian eyewear magnate. You know, one thing I've always found fascinating about these kinds of meetings is how differently the principles define a business relationship. Jim Gennard walks in believing that if two founders just sit down together, they'll find common ground. Del Vecchio, he doesn't see it that way. He sees a supplier whose product costs too much. One side has leverage, the other doesn't. And when he reportedly says, we will never be friends, he's doing more than rejecting a personal overture. He's making sure everyone in the room understands where he believes the balance of power really lies. Janard's mistake wasn't trying to build rapport. It was assuming rapport would offset the power dynamic. And that's going to prove an expensive assumption. A few weeks after the meeting, Sunglass Hut cuts its order of Oakley's by 2/3. Gennard responds by refusing to abide by the concessions he agreed to in Milan. So Del Vecchio retaliates by banishing the latest line of Oakleys from Sunglass Hut stores, replacing them with Ray Bans and other Luxottica brands. He issues veiled threats in newspapers that he may drop the brand altogether. The impact on Oakley is immediate. Profits collapse 36% and its stock drops 37% in a single day. Gennard thinks the superior performance of Oakley's will ultimately win out. But then new Ray Bans go on sale and they have vivid blue and green lenses that look remarkably similar to Oakley's patented ice and emerald lenses. Gennard can't believe it. Oakley sues for patent infringement and obtains a preliminary injunction preventing the copycat glasses from being sold as the Christmas decorations go up. In December 2001, an Oakley representative flies to Milan in a final attempt to revive negotiations before seeking a full injunction. This time, Del Vecchio relents. The terms of the deal remain confidential, but Oakleys do return to Sunglass hut and in 2003 the lawsuit is finally settled. But this peace won't endure a year later. July 2004. By now, Luxottica is a colossus. Billions in revenue, thousands of stores, a portfolio of brands and licensing deals that no rival can match. But behind the scenes, it's still run more like a one man workshop than a multinational company. Del Vecchio approves everything from frame designs to store layouts. One former executive recalls flying to Italy to present plans at Del Vecchio's dining room table, only to be sent away to try again. The company has outgrown its founders grip. Del Vecchio, now approaching 70, recognizes this. He decides to step back from running the business to become chairman. He originally thought about bringing his children in, but after seeing his rival Safilo struggle due to family squabbles, he's decided against that. Instead, he decides to professionalize Luxottica's leadership and anoints Andrea Guerra as his replacement. Guerra is only in his late 30s, but has already turned around the Italian home appliance company Merloni. Del Vecchio also sees in Guerra qualities he himself lacks. Guerra is multilingual, formally educated and is young enough to work across multiple countries and cultures. Guerra brings in a more GR corporate structure with managed budgets, accountability and proper reporting lines. He relocates some of the company's production to China and targets the Asian and South American markets. The results are dramatic. Sales double, the stock price triples and Luxottica's market valuation reaches $20 billion. Wera also completes the final move in Del Vecchio's push into Sunglasses. The showdown with Sunglass Hut has left Oakley weakened. So he contacts Oakley's new CEO and in 2007 strikes a deal to buy the business. The Oakley acquisition is another victory for the Italian eyewear giant. 46 years since its founding, Luxottica is now firmly established as the world's 2 top eyewear company with a reputation for taking no prisoners. It seems unstoppable. But in Philadelphia, four students are about to discover a weak spot. It's the summer of 2008, and in Chiang Mai in northern Thailand, David Gilboa is on a backpacking trip. But his sightseeing is currently on pause. Instead, he's stuck in a tiny airport trying to track down his prescription designer glasses, which he left on the plane. The help desk attendant puts the floor phone down and shakes her head sorrowfully. They can't find the missing specs. Gilboa curses. How could he be so stupid as to have lost a $700 pair of glasses? Several weeks later, Gilboa is back home in Philadelphia, where he's an MBA student at the Wharton School. He's in a computer lab with three friends, Andy Hunt, Neil Blumenthal and Jeffrey Rader. Hunt chuckles as Gilboa squints at the computer screen. I still can't believe you haven't gotten a new pair of glasses. Well, they cost 700 bucks. My frickin iPhone didn't cause that much. Raider nods in sympathy. He wears glasses as well. Why do glasses cost so much anyway? I mean, they were invented in like medieval times or something, weren't they? Blumenthal cuts in. They definitely don't cost $700 to make, that's for sure. Before heading to Worden, Blumenthal spent five years running a non profit that supplies glasses to people in developing countries. The factories that make designer glasses are the same ones that make those four dollar ones we used to give away. I don't think any pair of glasses cost more than 40 bucks to manufacture. Gilboa is outraged. What? No way. So why are prices so high? Curious, the four friends search for answers online and they soon discover that one company, Luxottica, dominates the glasses market, not just in the US but around the world. Gilboa reads the article in disbelief. Whoa. Luxottica owns everything. Ray Ban, Oakley lenscrafters, Sunglass Hut. They even make glasses for Armani and Prada. You think there's loads of competition? This is all the same company. Raider chimes in. Yeah, classic vertical integration strategy. They got the manufacturing, distribution and retail all under one roof. They even own the insurance plan you use to pay for the glasses. Blumenthal grimaces. Which means they can set whatever prices they like. That's business at its worst. Just think how many people need glasses but can't afford them. It's 2008. Zappos has proved you can sell shoes online. Drugstore.com has put the health and beauty aisles on the web. The playbook for cutting out overheads and inconvenience of retail stores. It's everywhere except eyewear. Which sparks an idea for Hunt. So why doesn't someone just set up an online glasses company? All you need is your prescription, right? Yeah, that'd be smart. If glasses don't cost that much to make, you could cut out the middleman, sell them for 50 bucks and still make a pretty nice profit. Gilboa, who has worn glasses since he was 12 years old, Shakes his head. No, no, no, no. You gotta try them on, see how they fit. And if the style looks good on your face. The others laugh. They know Gilboa likes to look good. But Hunt trucks. Okay, but how many do you usually try on until you find the right pair? Three, four, maybe? I guess five, probably. So what if you could pick five styles you like online, we send them to you to try on at home and give you free returns for the others. I bet that's still cheaper than long term leases on storefronts. We. Wait a minute. Are you suggesting we do this? Blumenthal looks excited. Well, why not? I mean, we're business students, right? We've all worked in consulting and finance before coming here. I know the eyewear industry. Between us, we could definitely raise enough money to build a website and buy some inventory. Come on, what's stopping us? You know, I get asked this all the time. What makes a disruptor? Well, notice something about this idea. They're not inventing a better pair of glasses. History's full of companies that won. Not because they changed the product, but because they changed the way it reached customers. You know, think of Netflix mailing DVDs to compete with video rental stores. Or Dell building computers to order instead of stocking shelves. You know, usually disruption isn't about what you sell, it's about how you sell it. About 18 months later, early February 2010, the four friends are in Blumenthal's apartment in downtown Philadelphia that's become the makeshift headquarters for their new startup, which they've named Orby Parker after two obscure characters created by the author Jack Kerouac. And to get it started, They've scraped together $120,000 from savings in local grants. They use the money to hire a veteran frame designer and place orders with factories In China. Now Blumenthal's apartment is filled with boxes of glasses frames, and it's down to Gilboa to figure out how to market them. He knows the secret behind luxottica's early success was the realization that glasses are a fashion item. The designer they hired makes sure they look good, but Warby Parker still needs to get noticed by fashionistas. So Gilboa has hired an expensive PR consultant who secured them interviews with both Vogue and gq. They know GQ intends to paint Warby Parker as the Netflix of eyewear, but with an ethical heart. For every pair of glasses Warby Parker sells, it will donate a free pair to someone in the developing world. Gilboa stops typing and answers his phone. It's the journalist at GQ who interviewed him. Hey, help me here. Where can I find your website? You know the article's about to come out, right? Gilboa frowns. You said the interviews is for the March issue. We still have a month to go. No, you don't. The March issue comes out in February. As in next week. Gilboa feels his heart stop. Warby Parker's website is nowhere near ready. Now they have less than a week to get the most important part of their business, their online store, live. It's mid March 2010. The new issues of GQ and Vogue came out a few weeks ago and both featured glossy spreads on Warby Parker. You know what they say in real estate, right? Location, location, location. In marketing, perception, perception, perception. These spreads aren't just free publicity, they're a signal. Think of it from the standpoint of the reader. GQ and Vogue have reputations to protect. If their editors think Warby Parker is worth covering, well, dear reader, maybe you should pay attention too. One of the cheapest ways to build a brand is to convince an established brand to make the introduction. Just don't expect it to be easy. The four pals are ecstatic. Their plan worked. Orders are coming in thick and fast. They price their glasses at $95. Any less and people will will suspect poor quality. But importantly, they're still more affordable than most Luxottica glasses. Blumenthal finishes packing up another order to ship out and looks up at the other three co founders. Hey, the Haskell just sold out too. Gilboa looks up the Haskell's, one of Warby Parker's styles. Already 15 of our 27 styles have sold out. What are we gonna do? The rate at which they are selling out of stock is quickly becoming a problem. They built their website in such a hurry, it doesn't even let customers know when a style is sold out. They only ordered 10,000 glasses. They didn't want to get stuck with too much inventory if the business failed. But it'll be months before new shipments from their Chinese manufacturer arrive. Gilboa looks down as his phone pings. He set it up to alert him every time there's another sale. At first it was a joyous sound, the sound of a startup going from idea to success. Now it provokes anxiety. The wait list for Warby Parker glasses has grown to around 20,000 orders long. And the founders know they need to do something fast. Because if this first wave of customers doesn't have a good experience experience, those customers might never come back and Warby Parker's brand will be ruined. Follow Business wars on the Audible app or wherever you get your podcasts. You can listen to all episodes of Business wars ad free by joining Audible from Audible Originals. This is Episode one of Warby Parker versus Luxottica for Business Wars. A quick note about the recreations you've been hearing. In most cases, we can't know exactly what was said. Those scenes are dramatizations, but they're based on research and if you'd like to look into more about this story, we recommend Leonardo Del Vecchio by Tommaso Eberhardt and the Forbes article Tough Guy by Luisa Kroll. I'm your host, David Brown. Judy Cooper of Yellowant wrote this story, researched by Marina Watson. Our senior producers are Jenny Bloom and Emily Frost. Our producer is Tristan Donovan of Yellowant. Karen Lowe is our producer Emeritus. Our Managing Producer is Desi Blalot. Fact Checking by Gabrielle Drollet Sound design by Joshua Morales Kyle Randall is our Lead Sound designer Executive Producer for Audible Jenny Lauer Becklin, Head of Creative Development at Audible Kate Maven, Head of Audible Originals North America Marshall Louie Chief Content Officer Rachel Giaza Copyright2026 by Audible Originals, LLC Sound Recording Copyright2026 by Audible Originates LLC.