Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses for an audience of ambitious entrepreneurs. Joining me is Andy Balinsky. He is the founder of lendable. It’s a one-stop shop for all things optical online.
They’ll even, do you get tired of me being so fascinated by this, Andy? They even let me like do an eye test on their website. And if I want to get lenses for my old glasses, I can get that. And if I want to contact from them, I could get that. And if I need, um, insurance for my eyes and go see a local doctor and have it covered, they do that can you give me a sense of the revenue that you’re producing right now at lendable? How big is the business?
Andy: We’ve, uh, we’ve helped over a hundred thousand customers with vision care products
Andrew: over how many years.
Andy: about four years, launched a business in early 2017.
Andrew: dude, it’s fricking impressive. What’s the most impressive thing that you do to me, it feels like, are you telling me that I don’t have to go see an eye doctor if I want to get glasses or see if I need to wear glasses?
Andy: fortunately we can do a lot of what you, you know, we’re used to doing at an eye doctor, um, not everything. And we still very much think that you should see your eye doctor at least once per year, uh, make sure that your eyes are healthy. Uh, there are plenty of things that can not be done online to, to really investigate the, the health of your eyes.
But when you think of vision care, the majority of what is related to vision care is materials. Materials are contacts and lenses and frames. Um, traditionally used to buy those at the doctor at a retail store. we have.
Created a unique business, which was really the first category of what we sold. not something traditionally that, you know, re optical retail stores or even doctors suggested or marketed. And the concept was, uh, what we call lens replacement. So to the point you made earlier, you have a frame, it might be a frame you’ve had for five years.
It might be a new frame. You just bought at a boutique, maybe on Amazon, even at a garage sale. Right. A cool frame that you found, you know, from, from the olden days, uh, if those, you know, you might need new lenses for that frame, right? Your prescription is not going to be in that frame just yet. And traditionally you would have actually just purchase a, a frame with prescription lenses from your doctor.
Or from a optical retail store. Um, but you know, we did not want to have individuals have to limit the points of sale or places, you know, that they were able to buy frames from just to those that had prescription solutions. And so we created a, uh, a new category, if you will, a new purchase behavior, um, where rather than having to buy a new frame every single time, or rather than being limited on the frames, you could buy, you could buy a frame from anywhere or reuse the same frame by having us just make new lenses for that frame.
Andrew: What was this it’s about convenience? Like, is it just to save people the trip to go to the store? Or are we talking about, you’re able to get a better price because you’re doing it online.
Andy: Yeah.
There’s, there’s a few value props. Conveniences is surely one of those pieces. Um, you know, when you purchase a frame from somewhere else and bring it to a store, oftentimes the store wouldn’t make new lenses for it. There’s a liability there. Um, you know, they didn’t sell it to you either. They don’t want to help you for that reason or.
You know, they don’t want to take liability of something you bought somewhere else, because it is possible that the frame can get damaged or break in that process. Um, so convenience and I guess capability is, it is surely one, um, you know, from a price perspective, lendable is not the cheapest, uh, of any vendor in the, in the world online or offline.
Uh, but we, we are very affordable and, and, you know, I’d say quite a bit less expensive than some of the more, um, well-known optical retail stores and many doctor’s offices. And then I would say from there, you know, Prescription eyewear is not a medical device any longer. It always will be, but it is not only a medical device.
Um, people wear glasses for as an accessory like shoes, like, you know, jewelry. It’s a, it’s a fashion accessory at this point. Um, you know, really what Warby Parker helped democratize was, you know, you should have lots of frames because we can make the same quality of frame for a whole lot lower price. Uh, and so now people have, you know, kind of taken that lead and are buying lots of frames that they wear with different outfits or things like that.
And so, you know, the, uh, frame that you’ve got for your daytime outfit might maybe should have sunglass lenses in it. And you need a different brain for reading lenses at the end of the day, or when you’re staring at your computer for blue light. And
Andrew: Or when Snapchat comes out with the new lenses and you want them to be prescription you’re the company that has to deal with them to put that in. All right. I get, I get where you are. You told our producer this idea for doing something like this, haunted you from the time that you worked for hot. Look, this was the member only, I think, um, flash sale site, right?
You were noticing a trend there of, what was selling and that put the idea for lendable in your head. What did you notice when you were there?
Andy: Yeah. So it’s not quite that actually. Uh, but th the, the story does begin there. Um, I ran business development at Haute look, uh, early part of 2009. And, you know, Holbrook was a flash sale site that you saw brands, whether they were apparel, accessories, brands sell, um, you know, flash sales for overstock or extra product, uh, and you know, two to three day sales, 80% discount.
Uh, that was a way for brands to liquidate and, you know, buyers to now get access to really great products, the emergence of accessories brands that I noticed that I had never heard of before. Um, and how much demand there were for some of those specifically in the eyewear space, um, frame brands I hadn’t heard of were doing, you know, sizeable sales over two to three day periods on outlook.
And I was through that process. I got the idea that, you know, I. There was an accessories brand that I could create. I didn’t know if it was going to be an eyewear. Um, but really
Andrew: else could it have been? If not eyewear, what else were you seeing? that was POS that was
Andy: uh, you know, jewelry, hats, you know, belts, you name it, accessories were something that, you know, have very high perceived value.
Um, the costs are not necessarily that extensive. And so that provided me the idea or the opportunity along with a set of relationships in the flash sale space that I had that were just unique, uh, that I could have created a brand. And sold it through these third-party sites pretty well pretty quickly, um, versus having to worry about building my own direct to consumer audience.
And so that was the first idea for it. Uh, that led to actually starting an eyewear brand, which for the first year was run primarily through the flash sale sites. Um, fortunately had quite a bit of success. It was really right along the time when Warby Parker was gaining some notoriety. We decided to take that concept and try it ourselves.
And so removed our brand from the flash sale sites sold the direct to consumer added the prescription lens aspect. And then really the idea for lens of bull came through the course of about three and a half years, building that brand where we, uh, we sold prescription lenses on top as an add on product.
So we didn’t have a, we didn’t have enough cool tech to let you buy the frame and the lens in one in one shot. And because we did that, customers would come to us and they’d say, I love the lenses you’ve just made for me for really inexpensive price. I have a pair of Ray-Ban frames or a pair of Warby Parker frames, or a 30 year old frame that got passed down from generations in my family.
I need new lenses. Can I send them to you? And we were a brand. So we of course turned those, you know, inquiries down. But a version of that inquiry kind of kept coming. And it, of course, that set a light bulb off to us that, uh, there was a pain point that customers had in the, in the prescription lens space, which is very different from frames and very different from context.
Um, maybe it was the cost pain point. Maybe it was a, where do I get lenses for these old frames that I’ve got pain point. Um, all of that kind of overtime led us to the first version of lens of, or the first category, which was this lens replacement service. Um, which of course has come, you know, quite, quite full circle since then, but that really was how the initial idea started.
Andrew: why didn’t you start your accessories business while you were at halt? Look, was that going to be a conflict of interest?
Andy: it sure would have been
Andrew: It would have been because you’re competing against the other companies in there. All right. So you’ve you filed this away. You said this makes sense. You then you, the company was sold to Nordstrom.
I think it’s now considered Nordstrom rack. Whenever I go to the site, that’s where I get redirected. You stayed through the sale
Andy: I did it for about six months.
Andrew: as employee number six. Did you do well financially from the sale?
Andy: You know, as an employee, number six sounds great. Uh, being a 23 year old, without too much knowledge about how, uh, how equity works and all that stuff. I can’t say there was any, any real life changing opportunities for me coming from, uh, you know,
Andrew: What did you learn that,
Andy: a great learning experience.
Andrew: So if somebody is now in their early twenties, listening to us and saying, I’ve got an opportunity to work at a startup, I want to learn from Andy’s experience.
What, what can we pass on to them when they’re
Andy: Ooh, locked in your equity, locked in your equity, on your option grants on, on day one. Uh, you know, look,
Andrew: lock-in?
Andy: make sure that that is part of your employment agreement or your
Andrew: Ah, you didn’t even get options. You didn’t get options. Didn’t get equity of the, company. You were just salaried.
Andy: I think things listen to was very, very early in, uh, in, you know, startups. I mean, it was still the way that people think about startups today, 2009, it was incredibly early.
So there were, I don’t think, you know, young individuals were sophisticated because there wasn’t that much. Uh, that much to learn from at that point, um, today, you know, it’s almost par for the course, at least from the startups that I’ve worked at, started myself or invested in that, uh, you know, really all the early stage employees and even later stage, but, but definitely the first 50 or a hundred employees are all, uh, you know, option holders, um, as just kind of par for the course, uh, compensation.
So it’s probably not a, a concern that many people will run into these days. But 11, 12 years ago, um, you know, it wasn’t quite the same.
Andrew: Okay. You then went on and you created chirp ads. Was this like, this was funded by, by science, the accelerator, or was it owned by science or what was the deal with science and.
Andy: So yes, science is a really, really cool, great company, uh, based out of Santa Monica here in California. They, you know, they. Drink transferred kind of ideas many, many times since I was there, but originally they were a, uh, you know, an incubator of sorts, a fund and an incubator. And so as part of the incubator and the kind of centralized group of individuals, there would come up with business ideas.
Um, some of those were brand new ideas from scratch. Some of those were, you know, ancillary businesses to some very successful non within the incubator businesses. And, uh, there was an idea for a mobile advertising business that, uh, the, the partners at science came up with, um, you know, The model at that point was they would create the general business idea and strategy.
There were some centralized resources, tech, accounting, legal, um, that they would put to really craft the initial pieces of the business. And then they would go out and look to hire, you know, presidents or CEOs, sometimes co CEOs to take, you know, maybe a 10% of the way, their idea, and really bring it to, you know, the rest of the 90% and then operate it.
Um, and so I was hired to, uh, to come in as a co CEO of, of chirp ads at the time.
Andrew: Yeah, chirp ads. I’m guessing from the name chirp, it had something to do with Twitter. But when I went back to look for old references to it, I couldn’t find the page. I couldn’t find anything.
Andy: chirp heads was a native mobile advertising network. And what that actually means, uh, what most people think of, you know, mobile ads they think of in app or in game, it was a lot of it was gaming based. So we were actually looking at the mobile web, um, and you know, mobile web ad inventory was very much.
Uh, low budge at the time, it was not being monetized by, by big publishers. They were getting tons of mobile ad traffic, but there were not good ad units, not good designs, not good kind of technology that sat in between the ad world and the publishers. And so what we did is we actually built a, an SDK, um, software development kit that we would work with publishers to, you know, basically build ad units that looked native and native is very much what you think of when you think of Facebook ads, they look like posts.
So let’s take espn.com for example, and there is a, you know, a list of headlines for the day and it’s small, you know, kind of maybe, you know, a half an inch height, um, little, you know, with boundary w with, uh, with some grid lines around it. And we would actually, rather than we would build an ad unit that fit directly into the, um, you know, espn.com homepage that looked just like the headline above it, but it was actually an ad.
And then we would go out and work with advertisers who were looking at. You know, be on those sites. Um, and so then we did that with hundreds of other websites, uh, after that.
Andrew: okay. I’m with you. What happened to the business? It seems to make total sense native ads that feel like they’re part of the site. What happened?
Andy: Yeah, Uh, the, the story there, um, sciences actually had an opera, so we were playing outside of the gaming app space. Um, but that was the, the biggest space in mobile ads was in, in games, uh, in app. Uh, and so we were playing outside of it, but that was just more challenging. The majority of the publishers were still thinking about their apps, even if they had a mobile website.
Um, and again, in gaming, uh, so in mobile games, um, like angry birds, for example, right. That’s where the majority of, of action was happening in this world. Science had an opportunity to actually acquire a pretty sizable mobile gaming network out of San Francisco called play Haven. And, uh, so they did. And then, you know, that was kind of a, that was an upgrade for the concept at least, and the opportunity.
And so what happened there was we actually, uh, you know, kind of shifted what chirp edge was working on to kind of bring the team into the play Haven world. Uh, and so we started, you know, basically focusing on the play Haven business at the time and, you
Andrew: they said it’s in gaming where advertising. So it’s going to be really big. Why do we have this smaller bet on everything except for gaming, let’s roll them in. And they get to make that decision because they essentially, they own the company. Right.
Andy: Correct. Yeah. I mean, it was, you know, they, they don’t get it. We were still the, you know, CEOs of the company and got to decide if that was a strategy we wanted to pursue, but it was a great opportunity and it was a very smart savvy moved by the science team. So, uh, you know, it ended up being advantageous for myself and my, my cozy,
Andrew: equity wise. How do you do with a deal like that in the
Andy: I’m sorry.
Andrew: How equity wise, how do you deal with a deal like that? In the end, we talked about the
Andy: Yeah,
Andrew: getting options.
Andy: the deal is done differently. You know, each, you know, there was a, an equity component on the initial business. Um, and you know, we kind of just looked at the stock of that and the way that the play Haven business was purchased, and there was a, you know, kind of a transfer of stock from one to the other.
And, um, that’s about as much as I think
Andrew: and you still have the
Andy: the group with here, but, um, we started running. I’m sorry,
Andrew: You still have the equity in the business and play Haven. What happened to play Haven?
Andy: it doesn’t exist anymore. Yeah. Play Haven got sold again. Uh, so first nine months bought play Haven rolled, chirp beds into it, ran that business for about a year and then had an opportunity to sell that business. Um, so to a company called the Raku up in San Francisco, which was a large Facebook canvas, uh, app and game maker.
Andrew: All right. So you get some more experience now, it’s time for you to start your own business, right? Like from scratch with your buddy. How do you guys reconnect? And what’s that first version that you talked about earlier,
Andy: We’d actually been running the ivory Mason frame business alongside, uh, everything we just talked about as a
Andrew: co owned it as a side business. you could, while you were working with, on this project with science, you CRE you helped, I guess he had his own shop, right? Where he was selling frames and you partnered up with him. You did. Okay. All
Andy: did.
Andrew: How to do and what was it doing?
Andy: Uh, it was doing great. I mean, it was the idea I mentioned before, you know, we’d, we’d sold frames and lenses direct to consumer for, you know, it ended up being about three and a half years. Saw an opportunity in the Len space, uh, to really produce a new business, a new concept that, you know, had some, potentially had some enterprise value.
Um, and it was kind of a perfect storm of the second exit of the play Haven business alongside, um, you know, us kind of coming to an agreement on a concept for this first version of lendable, uh, Being able to properly fold the ivory Mason frame business, um, which had a nice, you know, cash component along the way, but really it was not a, uh, an enterprise value building entity.
Um, and so that was the middle of 2015. We took the next six months or so to really figure out exactly kind of how we wanted to proceed with lens. The first version of lendable and beginning of 2016, started started building. Um, and that was, you know, the hiring a developer, designing out a site, uh, building the business, you know, rules and concepts.
And, uh, we ended up raising a little bit of friends and family capital at the beginning of that year to, to help support it, um, in advance of a January, 2017 launch.
Andrew: When you were selling frames before you got into lenses, what was working for you? How did you get customers to the Shopify store that you set up?
Andy: yeah, K to two primary ways outside of the traditional Facebook ads and Google ads. Um, and definitely we were doing quite a bit of both of those, uh, but the two other ways, and again, we didn’t add a giant initially Stressless, but the first year that we had. A pretty sizeable flash sale business, meaning we were selling our frames on these third-party sites that had millions and millions of customers.
Um, we did quite well. We sold a lot of units and we would include a little business card or a little marketing card in each of those shipments that said, we hope you love our frames. Right. Come back to see more, you know, more options. Here’s a 20% discount come to the site. And I don’t want to say we had.
Many many tens of thousands of customers that did that, but we didn’t have, uh, just a few thousand that did that. And so we had a nice built-in foundational customer base, uh, through, you know, that kind of multi-channel or omni-channel, um, distribution. Uh, so that was one. And then one thing that I’ve raised and did quite well was actually do, and this was before the influencer world kicked off, but we were.
Uh, maybe ahead of our time, we were doing deals with partnerships, with, uh, influencers, some people that had big YouTube presences. Uh, some, you know, others that had some kind of blossoming Facebook and Instagram presence, Twitter presences, and it was a variety of different celebrities or what you called at that point influencers.
And so we got access to their audience and we were probably running one or two of those per month, um, for a fair amount of time. And so those two aspects of, of acquisition or uniqueness, that kind of what helped build a, uh, uh, an audience for us.
Andrew: How do you find out about ideas like that? Like working with influencers. Is it just you dreaming it up yourself or are you part of a group of friends who are constantly talking about what’s working for each other?
Andy: Yeah, well, you know, this was back in 2011, 2012. Um, so there really was not much talk about, uh, I think the influencer idea so much, it was really, probably just beginning right around then. Um, I want to say we had an opportunity. We had a, just a mutual friend, introduced us to somebody that had a very big YouTube presence.
They wore glasses and while they were making videos for something completely unrelated to, to eyewear, um, you know, it seemed like the person had a great engagement from an audience and somebody that we, you know, I guess conceptualized ourselves, that they could have a frame and a new collection that was named after them, that we could build a royalty payment system towards them.
And. That got them very excited and ended up causing them to go organically, make lots of videos for us. Um, you know, we had a web presence that promoted them a little bit, but primarily they kind of ran with it and it became a template for us to use, um, you know, for other, so maybe we got lucky. I’d say, you know, we, we’re not a, you know, super high level thinkers as it related to really creative strategy, but, uh, you know, a little bit of that and a little bit of luck, uh, it turned into something that, you know, clearly is now a very obvious part of a marketing mix for a consumer brand.
Andrew: all right. Before I continue with your story, I told You my, my sponsor, one of them is HostGator. Let me ask you this. Andy. If someone were to sign up to host Gator and decide that they want to sell something, maybe an accessory, is there one idea, one thing that you see that still works, that would still be a good area to pursue that hasn’t yet been tapped.
I kind of liked the idea of belts, but you tell me, what do you see? That’s still hot. If someone wants to go and create it and sell it. Yeah.
Andy: You know, somebody much smarter than me is going to have to come up with the, the still, you know, the product that still can be sold that nobody else is doing, or that is still hot. Uh, at this point, you know what I say about eyewear? Um, anyone can make glasses there’s factories overseas. There are distributors here in the U S selling frames is, you know, It’s not a, it’s not a commodity, but it is not, you know, an incredibly complex thing where we have a unique, uh, differentiator.
And I would say, you know, expertise at this point is really on the prescription lens. Um, as well as on the software side. So you can, you know, making prescription lenses as a custom product for every single product you sell that has a separate supply chain from, from frames. Um, and you know, it requires medical information to be interpreted properly.
Oftentimes that medical information is not distributed from the doctor to the patient that we’re now working with as our customer. And so you, there are aspects that do not require the doctor, but we’ve had to build software that, you know, gets the, gets us the information that we need, that the doctor wasn’t providing the patient.
Andrew: I get that. But what you’re saying is if someone, if there are no accessories that are. Are no little openings where the value is bigger than most people realize as far as you can tell.
Andy: I think Amazon has captured all the value on any of those that might have existed. No, nothing that pops to mind.
Andrew: I’ll tell you the thing that pops to mind for me, you tell me if this makes sense to you. I kind of throw it out in the past, but the more I think about it, the more, I think it’s a great idea. Imagine somebody put a go to HostGator and say, I’m going to start selling spices. You know, McCormick has got basically the market locked on these fricking spices.
We all have them in our house. And if it’s not that it’s like the whole foods, three 65 nonsense. They don’t have any flavors. Right. I get the crushed red pepper because I love it on my pizza. I’m a new Yorker at heart. It’s not spicy at all. It’s nothing. It tastes like nothing. Imagine someone says I’m going to build a brand.
And on spices, I go after influencers who are already, who are already cooking online anyway, give them the stuff that feels more authentic, much more flavorful costs may be five times as much, but it’s worth it. It’s fricking spices. It’s going to stay in your, uh, actually, you know what. Maybe cost five times as much, and it’s half the size because if you keep it in your shelf forever, it also expires and it doesn’t have as much taste and boom.
Now you got a brand new area. Do you like that idea for, for someone who’s going to go and sign up for HostGator or do you think it’s not
Andy: I think it’s brilliant.
Andrew: all right.
Maybe I
Andy: shallot through a rough trough. It’s not a brand that I’m involved in it at all, but Trump took what you just described in the hot sauce world and created a beautiful high-end hot sauce product. That is a primarily pushed by influencers and it looks high end and it is sold at a high end price, but they built a really big business.
So
Andrew: There you go. I’m not Indian, but every fricking Indian friend that I have has their own personal spices. A friend of mine who’s Indian gave us like these little beautiful tins that they bought with like their grandmothers spices that they put in so that we could have the stuff this flavorful, right?
The fact that people going through that much trouble means there’s something there. All right. Listen to me, people, whether you take that idea or anything else. If you need a website to host it, go to hostgator.com/mixergy. When you do, they’re going to give you the lowest possible price and they’ll take great care of you because HostGator’s already low price.
And my URL is going to get you of any lower price, hostgator.com/mixergy. Go start your site and tell me about it. Okay. I get, I get what you’re doing. I see that you’re finally listening to your customers will come back and say, look, I have these other frames. You keep saying, no, they say, come on you say no.
Well, before you proceed, you do some kind of math. You strike me as a guy. Who’s got number one, good design sensibility. I keep looking at my fricking hair in the cameras. We’re talking because everything about you like that t-shirt looks like it’s like a nice t-shirt, even though it looks very casual, the frames behind you look good.
Right? It seems to me like your thought out though, about the business. You’re not just saying we’re going to go into the lens business. You do a spreadsheet or some kind of math. What did you notice in the numbers that other people hadn’t realized.
Andy: Yeah. Uh, I don’t know that it’s, that other people hadn’t realized, but what we did notice is that, uh, you know, the traditional places where consumer would purchase lenses right outside of the, the new. Sites, the Warby Parker is the direct to consumer online sites. Um, traditional optical retail stores and optometrist’s offices.
Uh, the margin on the lens product that they sell is 99 plus percent. And I hate to break it to those of, uh, of you out there that, you know, maybe thought that you’d been getting a good deal at your traditional optometrists forever. Um, not to say that all of them are completely overcharging, but there is surely a, uh, an overcharge of, of materials, uh, concept in that world.
Um, you know, the same lenses that we sell for 75 bucks, a, you know, a well-known optical retail store might sell for 200 or two 50. Identical lens comes from the same manufacturer, same factories. Same features on them. And why is that? You know, industries all start somewhere and this industry started at a price point that that was far higher than, uh, where is that today?
And so it didn’t take. It wasn’t that, you know, they, they have sure they have store costs, right. There’s rent. Um, but building an e-commerce business has lots of costs too. Right. And you don’t just mitigate, I think the idea of, you know, you don’t have store locations, right. And he’s, and mitigates all, all of that, but you know, what a store could sell, they’re selling to a local region only, right.
I build an online site now I can sell to the whole United States. And so frankly, what we did on the lens side was we lowered the price. We didn’t get better pricing. Our costs were no different. We were willing to take a lower margin, um, by offering a much more competitive price to the consumer because we would be able to over time.
And this is I think an obvious, you know, business concept make up for it in volume. And so we weren’t losing money. We just, weren’t maybe not making as much absolute as many absolute
Andrew: When we started this interview, I suggested that because that’s one of the things that I saw online when I looked you up and you said We’re not the low to low price option.
Andy: We’re not the lowest price option.
Andrew: lowest, but it’s still, you’re saying you’re lower than the local store. So that’s one thing you discovered. The other thing that the, that the local store, I saw tech crunch video that they did, where they tested you guys out to see how it worked a couple of years ago.
You were willing to replace lenses where local stores weren’t why weren’t they willing to take an old pair of glasses, swap out the lenses and charge me the $200 or whatever you said per lens. What did, what were, why weren’t
Andy: Some are, and many are not for the liability reason. So the, the lens replacement process. Um, I mean, think about it, but you’re basically making a new product from scratch, right? So it goes through, it’s an, uh, uh, a factory and it goes through, you know, a bunch of different machines. Um, and the frame has to go through these machines as well.
When the lenses are getting put into, into the frames, um, you know, the potential for breakage, the potential for damage while it is not high, it is not zero. And if you’re, you know, optical, retail store X. Uh, that has somebody who brings in a $500 frame or a one of a kind frame that you didn’t sell them.
You can’t get again. Right. They have a, uh, sentimental relationship with this frame and the customer. Are you for the even $200 lenses that you might be able to sell them? Are you necessarily going to take that risk? Uh, because what is the policy around that? Right. It’s just a tough thing to manage. And stores individually are not doing hundreds of orders per day, right?
They’re not necessarily making up for it in volume because they’re one individual store. We took a different approach. Um, we have a very low breakage and damage damage rate. I mean, incredibly low, uh, majorly sub 1%. So, you know, the, the end result doesn’t really have as much risk as maybe a store might think, but yeah, that’s, that’s really the reason.
Uh, it’s just that, you know, there is liability there and it’s a customer service issue. It’s a potential cost issue. Um, Yeah, we’ve been able to manage it incredibly well, but I would imagine that that’s the reasoning around, and these stores make more money when they sell your frames and lenses together.
Right. They that’s just the long and the short of it. So if they tell you, they won’t do a certain thing, unless there’s an odd another vendor that will, and there wasn’t. So, you know, which is where we stepped in, um, make things easier on the consumer. That’s really what our goal is.
Andrew: You’re saying, if you go to a local store, they say, we’re not going to do it. There’s no other store in the area that’s willing to do it. You say, all right, I’ll just come back in here and I’ll and I’ll buy a new, a
Andy: exactly right.
Andrew: a new
Andy: Or hopefully these days the customer will go home. They’ll Google it and we will pop up. Number one on every search they might might throw out there.
Andrew: Do you think it hurts? The company is called lendable and there’s no E at the end, is there.
any, at the end of him,
Andy: there is not, but if you type that into Google, you will still make it to lendable.com. I would say that the most expensive thing we had to buy, uh, before we launched other than, you know, uh, resources was, uh, was the lendable with an E URL. So we do own that. And that will still take you to lendable.com.
Andrew: And it wasn’t an, a word, right? You bet you, you just created it.
Andy: We graded it. Yeah.
Andrew: Lendable all right. Um, so you’re starting to offer it. What do you do when the first pair of glasses break? How do you handle prep? How do you handle preparing? Sorry, I keep calling glasses the frame when it does happen. What do you do?
Andy: you apologize profusely and you replace it as quickly as possible. No.
Andrew: And can you, if it’s like a, one of a kind.
Andy: There are instances where, you know, rare, rare frames or hard to find or ones that were discontinued years ago, uh, you don’t, and you have to trust that the can set the customer tells you, you know, what the price was right. There is of course terms and conditions that we are not bound to replace. You are to some degree taking a risk.
Um, but we don’t, you know, it’s not, it’s not that ad hoc, right. So we. Our lab is an incredibly high quality and, and, you know, has been in business many years and, um, we inspect every single frame when it arrives. Uh, there are some very simple characteristics of a frame to determine if it is going to be at risk.
Um, now it doesn’t mean that you will never break a brand new frame. Of course, anything is possible in a custom product business, but, uh, the likelihood of that is incredibly low. Um, so if the frame is at risk, we will communicate to the customer that risk in advance of actually running the job. They can give us a go ahead, which means that they’re taking liability or they can say, you know what?
I don’t want to take the line. I don’t want to take the risk. I’d love Mike, my friend back, and we just send it back to them. Um, so we’ve got some terms and conditions and processes around that.
Andrew: but are you telling me that beyond the terms and conditions that if you break somebody’s frame, you’ll try to go and find another pair. Just like it to replace it. You will. Oh, wow. Oh, that’s a good move. That’s elegant.
Andy: Yeah. Yeah. Look, you know, look, we’re, we’re not, we are of course a for-profit business, but, uh, you know, very few consumer businesses are successful when people make one purchase from them over time. Right. So we’re all about built. Well, we’re all about offering a great service to consumers, but from a business perspective, we’re all about longevity, right?
And long, you know, value that we can get out of the lifetime of a customer, um, them to tell their friends and their family for them to come back and right. People are going to have new needs for vision care products, many times throughout their life. Um, that there is, this is not a one-time, you know, onetime thing.
And we know that, and that was really built into the kind of brand ethos initially and the policies and processes we put in place. Um, so if we take a hit on the first one, you know, hopefully they feel like we handled it properly and we’ll come back, you know, many times over.
Andrew: And he told us how you got into, uh, lenses, because people kept complaining and asking for, for help with it. What’s the next product that you offered and how’d you come up with that?
Andy: Yeah. So in the year, uh, the year that we were building. The lens replacement business, which was what lens of what was supposed to be. Um, we spent a lot of time in a different optical retail stores, physical stores, frankly, we were trying to, you know, steal ideas, deal, understand their pricing, figure out how we could build a solution that was better, what some customers were complaining about.
Those types of things. Um, I think is, you know, good for competition. Uh, and you know, we, we really. Kind of saw a lot of, a lot of issues. Um, look at the, at the beginning, you know, a core issue is we are building for online, right? We’re building to be able to, uh, allow people to purchase these things from, from home or from anywhere and be able to ship nationwide.
And so the difference between online and offline was a clear differentiator for us, but there are three core product categories in vision care. Correct lenses, which is what we were planning to get into frames, of course, because the lenses need to go into something. Um, even though the initial business was, they will go into an existing frame that you bought elsewhere, uh, and contact lenses.
So, you know, lendable basically changed its longterm vision and yes, pun intended, uh, lots of vision ponds in, in my world. Um, you know, even before we launched that we were going to enter this space. Our differentiator was going to be lens replacement. This was a purchase behavior that we were going to bring to market.
Um, and even today, you know, there are now competitors, but I do strongly believe that lendable is the, you know, is the leader in this, uh, small but quickly growing category. Um, but the obvious, you know, next extensions of, of product were frames and then context. Um, and so. If you come to lendable today, uh, we, we do more than just that, but you can replace replace lenses and existing frames.
You can buy a brand new frame, uh, either from a private label brand that we created, it’s called everyday eye wear by lendable. Uh, or we now sell lots of well-known brands that, that people see other online sites, uh, Ray-Ban frames, Oakley frames, uh, Bose audio frames. Uh, our net vote, Kate spade, Brooks, brothers who go boss, you name it.
Um, there’s a pretty wide variety of Snapchat spectacles. As you mentioned before, uh, of frames that are available on our site. Um, you know, we also want to be a discovery platform for new up and coming brands. We sell brands like westward leaning and Coco and breezy and Toms, which a lot of people know about in the shoe world, but not so much in the eyewear space.
So anyways, that was kind of second and now, you know, contact lenses as well. Um, and we, what we really want to be as your one-stop shop. Right? You’re it’s the same customer. And rather than have to have them go to one website or one store for each individual product, we’ve centralized the ability to purchase all of these in one place.
And of course, offer incentive to do so.
Andrew: So there was a big player in the space. What is it called? Luxotica,
Andy: are still let’s oughta go. Yep. Luxotica would be considered the largest, you know, uh, frame manufacturer, licenser and, and, you know, uh, optical retail store owner. I believe in them.
Andrew: They own the stores, like what are the brands that they, that they own, or
Andy: Lens LensCrafters, sunglass hut, Pearl vision, uh, a ton more, but those are the three
Andrew: Ray ban. They create those
Andy: Ray-Ban Oliver peoples, uh, Oakley, um, Brooks, uh, Vogue Barnett. Uh, yeah.
Andrew: How tough was it for You to compete in their world? When you got started before you started
Andy: You know, I don’t really think we were competing in their world. I mean, look, the modern day at 10 years ago, Luxotica dominate. I mean, when I say Don Ray-Ban and Oakley are probably the two largest or most well-known maybe highest volume selling frame brands in eyewear. So, um, you know, that is always that, and that will continue.
Um, but the ability to create a Shopify site and to design and manufacture some frames at a factory. Um, it has never been easier. So over the past five or 10 years, I mean the number of new eyewear brands that we see pop up on a daily basis that you’ll get Instagram ads from, or you’ll see, you know, on Amazon, uh, I mean, it’s stop.
So, you know, I, we never. And, and we understood this before we launched the reason that the first idea for lens of what was this lens replacement businesses, because it was the frame space was saturated. Um, even if the majority of it was happening offline, you know, Warby was dominating online and then you were starting to see, uh, zany eyewear, which is a massive business of very, very low cost, um, frames.
But, you know, those are the frames that people are buying in, in droves. Uh, and there were lots of new sites popping up. So. Competing in that world yet. I mean, you’re, it’s an incredibly saturated space. And I think for us, it was taking this different approach. Let’s, let’s have a reason outside of selling frames or having to build a brand around frames that people come and interact and engage with us, which was lens replacement.
And then of course, we had to get creative on ways to not just say, okay, we sell frames. Now everybody should come and buy them. Um, we had to let people give them reasons that our frames were, you know, were good. We had to have unique lens options around them. We had to have, you know, really good pricing.
Uh, we had to have a re you know, when somebody sends their frames to our lab they’re without their frame. Right. So the idea of while their frame was at our lab, you know, their Ray-Ban frame, get new lenses. We had the ability to sell them in advance of them. Sending that in a really
Andrew: Uh, in the same box, maybe that they’re going to be using to send back their
Andy: And then it’s, you know, the one thing I think people understand all the lots of the in store, the physical retail stores don’t really push so much. Um, there’s a lot of different lens types, right? So sunglasses, of course, versus eyeglasses. That’s a very obvious distinction. Um, but I glasses now can have blue light coating and that’s a specific lens and they can have transition lenses, which is when they’re sunglasses, outdoors and clear lenses indoors.
And so. Lendable offered all those types of lenses. And so it was on us to kind of create narratives that are truly valuable and helpful to consumers, that you can have different frames for different parts of your life, right? Different lenses, essentially for different parts of your life. Um, and that was probably going to be what was best for your eyes and the health of your eyes and the protection of your eyes.
Long-term rather than wearing the same lenses, uh, hunting, you know, 24 hours a day.
Andrew: Yeah, the blue light thing is I’ve heard it just go through companies, Slack like wildfire, where there are few people who get it and it becomes so exciting that people feel so happy to wear these blue lenses. I don’t know what the science is behind it, but it makes people feel more comfortable with their screen.
And then it goes through the companies. Slack and pretty soon the company starts buying these
Andy: Yeah, it’s true. It’s true. You know, we, we saw that early on again, because we have been, we’ve been building businesses off of the computer, uh, for, for a number of years. You know, it, it is a real thing. I fatigue, um, rays that are emitted from screens, phone screens, TV screens, primarily computer screens, blue light rays.
They are harmful to the eyes. And I am not a, a doctor, so I don’t want to give too much medical guidance, but from everything that I know and that we’ve seen, um, you know, there is a, a real value in being able to protect yourself from those blue light rays entering your eyes and getting through the lenses into your eyes.
And so the idea of blue light. Lenses is, uh, I mean, anyone who works on a computer looks at their phone or watches TV, or an iPad, you know, should be wearing those. They, they not only protect from the blue rate blue rays that are emitted for potential iHealth or eye deterioration over time that can, you know, headaches and, uh, and squinting and things of that nature, but also for sleep.
So when really bright lights and blue light specifically enters, uh, your eyes, it, you know, it messes with your sleep and it becomes really difficult for people that are staring at screens before they go to sleep to get into a quick, deep sleep. And so blue light lenses, Knight lenses, even slightly orange tinted lenses, which can have blue light coating are recommended for different aspects of your life to protect against these things.
And, um, the average frames, you know, average frame does not have those lenses in them. And so it does become the need to. Buy a different pair of glasses or get new lenses in an existing frame.
Andrew: All right. I’m going to tell you about my second sponsor. I don’t think you know them. It’s called VRBO. And then I want to come back and find out how you got that Snapchat deal, because that just is something I kept reading about. And I, I imagine it’s not a huge deal, but I also know that You’re probably not going to tell me how big it is, how many
Andy: You’re right.
Andrew: are buying it, but here’s the deal with VRBO.
Well, when you hire by the way, Andy, because what VRBO does is it lets you test the people who you’re considering before you hire them. Do you do any of that at lendable? What’s your what’s your process or what kind of tests do you give your,
Andy: on the technology side. Um, so, you know, that’s the, it’s quite, at least we’ve found it to be pretty easy to be able to, to vet individuals through some conversations like this, uh, you know, on some really non-technical parts of the business, but, uh, you know, you can, you can talk a big game, uh, in Europe.
You know, abilities to, to develop product and build, you know, create software and, uh, write code. Um, but you know, we do have some tests that we give to new developers that join, join the team and, uh, you know, to really gauge their, their capabilities.
Andrew: and I think that makes so much sense because there’s so many ways for people to basically take credit for work that they’ve done in the past, that was actually in collaboration with other people who did most of the work. What VRBO does is it says work. Going to let you test your people. And it doesn’t just have to be for developers.
It could even be for an assistant customer service person, somebody who’s just going to be chatting with your, with your customers. What you could do is you create a test for everyone who is applying for a job. And the test could be with questions that come up throughout the day, or maybe it’s even a video.
Maybe you say, I’ve got somebody who’s coming into our office right now. Here’s what they say. How would you respond? And the person can respond with a text bite with a text answer below, or maybe you say here’s a video of one of our customers complaining. Now in a video from you, how would you respond? So what you’re doing is you have all these different elements to test the people who are applying for work and see their responses.
What that allows us to do as people who are hiring is first of all, figure out who really has the skills by giving them, uh, Work that’s directly related to the work that they’ll be doing for you. And number two, it allows us to screen people faster so we can hire faster. And we could, in many ways, reduce bias.
If you’re giving somebody a writing assignment, you want to get a sense of what their writing is and not what they look like. All right. Whether it’s. For reducing bias for predicting successes for hiring faster or any other reason. If you’re looking to test your candidates, if you’re looking to have one more screening process that actually, or a screening process that actually works, go to vrbo.com/mixergy and Andy, you and everyone listening to me can use it for free.
If you use my URL. It’s vrbo.com/mixer, G V R B O e.com/m I X E R G Y. I’m grateful to them for sponsoring. Snapchat how’d you get
Andy: we shared an office, uh, uh, basically similar office buildings kept meeting the team. Um, they caught on that. There was a, you know, an optical business, uh, that was doing some things and, uh, the prescription lens space. They were creating a new, you know, new frame product as, as most people know, um, this was years ago and, uh, you know, it was really, uh, we were all teams were walking to lunch and, and kind of caught wind of each other.
And, and it really started from there. It was really, uh, you know, the, the Venice, California startup scene, a lot of, uh, you know, walk on the street and you’ll, you’ll do a deal a couple of years ago. It was definitely a thing. So it was, it was just a very lucky by kind of by chance partnership.
Andrew: What’s your hangout situation. I remember, uh, Mike and Peter who created science. They used to have these big events where people would go and meet, and they basically ran this the so-called social scene for awhile. So Cal tech social scene. What’s your thing. Do you do dinners? Do you do scotch wine?
Andy: at this point, I’m just trying to get out of the house the last year. You know, we’ve gone fully remote. Um, just over, just over. 13 months now, maybe 14 months. Um, so there, I would say the entire scene has, uh, you know, gone to Twitter and gone to clubhouse and things like that. Um, but, but yeah, you know, there’s, uh, I don’t live on the West side.
Um, so my scene is a little bit more, uh, away from
Andrew: What’d you do before in the
Andy: yeah, dinner’s movie.
Andrew: touch?
Would you just bring out people like, I mean, for
Andy: My family is still here, So,
Yeah. So, uh, you know, a lot of my friends I grew up with her are still around. So I try to, I mean, work is an all day, all night thing for me, but I really try to separate. Um, and not that I love the, the Las, you know, the so Cal tech scene, but, um, you know, I think it’s important to have balance of things that are unrelated to that, uh, in, in some time that you’ve got.
Andrew: you know, the move and I’m getting a sense that you’re not going to do this. The move is if there are people who you really want to get to know, and you want to work with them. Get to know them a little better. Invite them to your parents’ house for dinner. It’s a click. I’m going to go over to my parents’ house for dinner Friday night, come on over.
It creates a more like personal connection with them, but I’m sensing from you that you want to keep your work life a little bit separated from your family
Andy: you know, I think there’s a certain time and place, uh, at the parents’ house for certain individuals, for sure.
Andrew: You have done that. You know what I would do? I, I didn’t, I don’t think I brought work friends over for dinner with the family here with my kids and my wife. But I did with my, with my wife. Obviously we do dinners at the house. The house is a really big one. If you bring people to your house, even if you’re bringing pizza in from outside, it creates a bond closeness.
Right.
Andy: Sure.
Andrew: What else do you do? I, what else did you do in the, in the get together in person
Andy: Uh, I golf a lot. So, um, a lot of my free time is spent.
Andrew: that helps.
Andy: Yep.
Andrew: All right. This new thing that you’ve created lendable plus product. I see it on the homepage. Where’d you come up with that idea? How’d you know, that was going to be the next big one.
Andy: Well, that’s a very long story, but, uh, you know, really what I, what I want to let everyone know about that is, um, we’ve we built an incredibly comprehensive. Vision care platform, which means we, we sell all the products that one might buy at a physical store or might need for parts of their vision care frames, lenses, contacts, um, soon to be iHealth, vitamins, uh, drops, accessories, that type of stuff.
Um, we offer an online vision tests and, you know, we’ve had vision insurance for the business in the past. Um, personally I’ve had plans that other, you know, I’ve gotten through corporations, but, um, No those follow a very traditional model. There’s a network of doctors. A plan is. Paid for either out of your paycheck or from an employer.
Um, and those plans, and there are a couple of dominant players in the space and, and those plans are, uh, they’re okay for some people, but for many individuals who wear contacts and glasses and have, uh, some greater kind of vision care requirements, uh, those plans really become essentially glorified discount programs, or maybe not even glorified.
Uh, discount programs that really lock you into very narrow set of benefits. Um, and you know, we kind of got to a point where we were looking at how do we make our very comprehensive offering that people come and purchase individually from us, um, into something that was a little bit more, uh, you know, incentivize people to.
Or made that people’s lives easier by putting together packages, um, plans to really that, that, you know, could compete with, or it could be an alternative to what that traditional vision insurance plan looks like. Um, but you know, we could make them far more transparent. We could make them far more comprehensive.
Um, we could actually save tons of money out of pocket, uh, because it really ended up being pretty high out of pocket requirements through the traditional plans, even though you are paying for coverage.
Andrew: Yeah, And what the traditional plans do is give you, eye exams and
Andy: Yeah,
Andrew: on glasses. Right. So I could see
how you
Andy: in many cases required to pay a copay and you have to do it at a very specified network of doctors.
Andrew: Yeah. Okay. So the, the glasses part, I get, you got that wrapped up. You’re just cutting back on your price on your profit per pair of glasses, per a pair of contacts, et cetera. That makes sense. But you’re offering people the ability to keep their
Andy: Yeah.
Andrew: how you had you,
Andy: Yeah. The, the idea there is, um, you know, if you’re see any doctor you want, if you need an eye exam, you need a contact fitting, uh, see any doctor you want, you are not locked in, um, to a specified right in the middle of the country. The closest optometrist oftentimes is not, you know, it’s not an accessible, uh, or the, the closest network optometrist is not super accessible.
So, um, rather than inconvenience people by doing that, uh, we make available our online vision tests. Which not everyone wants or needs or qualifies for, but many do, um, or see any doctor you want do any service you need at that doctor, you will be a cash payer to them. Um, but then we will reward you for that.
And we we’re, we’re doing, we’re
Andrew: not paying for that. You’re
Andy: um, you know, for having done that, uh, in the form of a gift card that can be redeemed for cash or credits to other, you know, other vendors that you buy things on the internet. Uh, we will be soon adding in a network. So provider locations that will give you a very, very large discount on those services that you can go into if you are lendable plus member.
Um, but really lendable plus plans for those that do not have a employer based plan. Um, really will, you know, uh, are second to none in the comprehensiveness. So an annual supply of contacts, a frame with lenses, high quality lenses, a reward for seeing a doctor or an online vision tests, deep discounts.
There is, you know, and the ability to redeem all of these benefits online without having to go in store in person is really the core differentiator. Um, and we definitely want everybody to check out lens of hopeless.
Andrew: What it seems like you did was You said we found a way, and I know that we’re running a little bit late, so we’re going to close this out in a moment. But what we, what you did was you said, we need a subscription service. it looks like people are already buying this insurance and the insurance is not that great.
Anyway, why don’t we have a subscription where people pay us monthly, they’ll get discounts on our products. And we can’t replicate that the doctors, but what we could do is just give them money. I would give them some of the money back that they’re paying us in the form of gift cards, et cetera, and discounts.
If they go see a doctor, you nailed it. And now you’ve got your
Andy: You said it as eloquently as I could have.
Andrew: All right. lendable.com for anyone who wants to go check it out. L E N S a B l.com. And if you throw in the E before the.com, it’ll still frickin work. And I want to thank the two sponsors who made this interview happen. If you need to hire people, go check out vrbo.com/mixergy. And when you’re ready to get a website, go to hostgator.com/mixergy.
Andy, I’ll let you, go.
Thank you.
so much. And thanks everyone.