Socially Conscious Entrepreneurship: Warby Parker and “Friends” Share What Keeps Them Going, What Keeps Them Up at Night

Did you know companies that practice “conscious capitalism” show a 1600% higher return on profits? And that companies with a more diverse board are more profitable?
A recent panel in NYC called Entrepreneurship with a Conscience hosted a discussion on ‘doing good’ with your business (plus some great tips for finding, starting or raising money for that new idea).
The event featured alumni from “Friends” schools, including:
  • Moderator – Marshall Heinberg, previously Head of Investment Banking and Senior Managing Director at Oppenheimer & Co., Inc.
  • Neil Blumenthal, co-founder and co-CEO of Warby Parker
  • Jessica Holsey, President of Susty Party
  • Peter Laughter, CEO of Wall Street Services and a founding member of the NYC Chapter of Conscious Capitalism
Given the title of the event, as well as the hosts—a group of ‘Friends’ schools—many of the moderator’s questions had an ethical angle to them. ‘Friends’ schools are known for their Quaker roots, and in the case of Brooklyn Friends, as well as others, encourage leadership in areas such as service and ethics. The panel topic is timely, as businesses with a focus on socially responsible causes are on the rise.
Some themes clearly emerged from the discussion:
  • Panelists supported co-leadership and multi-stakeholder models
  • Consumers value style and price first, even in socially conscious businesses
  • “Greenwashing” is rampant—B Corp certification helps legitimize environmental stewardship
  • Socially conscious businesses are more profitable
Why a Socially Conscious Business?
Many folks have heard of Warby Parker. They sell high-design eyeglasses at a value price using a model that has disrupted the market: It allows customers to order eyeglasses online, try them on at home, and then return the unwanted glasses. Co-founder Neil Blumenthal followed his ‘Friends’ education with a not-for-profit job selling glasses to people making less than $4 a day, then with a stint at Wharton business school. Among his advice to the audience: hire for passion, think about long term impact, and build a stakeholder-centric model. He noted that at Warby Parker, they screen “entitlement” out in the hiring process as the “root of all evil”.
For Jessica Holsey from Susty Party, an undergraduate degree from Harvard led her to her dream job on Wall Street. Inevitably, the question ‘to-grad school or not-to-grad school’ arose. But the entrepreneurial itch kicked in, as did the desire to create something that had a positive impact on the world. Enter Susty Party—based in Brooklyn, NY, Susty creates disposable tableware that is compostable yet colorful, party-ready, and responsibly made in partnership with non-profit factories who employ the visually impaired community.
When panelist Peter Laughter shared his point of view as the CEO of a Wall Street recruiting firm and founding member of NYC’s Conscious Capitalism, the audience needed a bit more orientation. What is Conscious Capitalism [besides, seemingly, an oxymoron]?
Conscious Capitalism is a movement that builds on the foundations of Capitalism to elevate the innate potential of business to make a positive impact on the world. There are four organizing principles:
  • Higher Purpose (including, but more than, making money)
  • Stakeholder Orientation (creating value with and for various stakeholders, i.e., customers, employees, vendors, investors, communities, etc.)
  • Conscious Leadership (creating value for and harmonizing the interests of the business stakeholders)
  • Conscious Culture: (developing the ethos underlying the social fabric of a business)
Peter advocated for a multi-stakeholder framework, contending companies that do this are more successful. He stated that companies which practice Conscious Capitalism are 1600% more profitable over a 15 year period on the S&P 500, and added that companies with more women and overall diversity on their boards are also more profitable. He warned against having a “myopic vision of profit.”
Applying a multi-stakeholder model to your business is one thing. Splitting the highest leadership duties quite another.
Neil and his Warby Parker co-founder, Dave Gilboa, are co-CEO’s. According to Fortune magazine, “in the last 25 years, only 21 companies in the Fortune 500 have used the co-CEO structure,” (before Oracle added itself that list in September 2014). These numbers suggest that for larger companies, co-leadership has a ways to go, but for smaller companies, faces fewer obstacles.
Neil explained that because ‘Work’ is evolving, turning into more of a community, this evolution lends itself to a shared leadership style. He likened it to a flat organization, an organizational model that is very popular among startups, and where titles may not be indicative of roles or reporting structures. According to Neil, “If you ask people at Warby Parker, they would say Dave and Neil share a brain; and that’s good.” When you are a founder, “It’s not work-life balance, it’s work life-integration,” punctuated Neil.
In Jessica’s case, she and her co-founder and co-president, Emily Doubilet, have complementary skills. Jessica is highly adept at finance while Emily excels at the creative. If the business question at hand is operations or finance oriented, Jessica will likely have the final word.
Environmental Stewardship and Diversity
It seems every business has gone green, from your bank to the oil companies to the dry cleaners. So how do you tell green fact from fiction? Greenwashing is the practice of using marketing and PR to deceptively present a company or its products as green, when in truth, they are predominantly not. Panelists advised businesses could seek a B Corp certification, which signals to consumers that the business has been certified by the nonprofit B Lab “to meet rigorous standards of social and environmental performance, accountability, and transparency.” B Corp likens itself to the Fair Trade movement for coffee.
Warby Parker knows that its consumers care about doing good. But when their customers look to buy a pair of eyeglasses, fashion and cost come first. The company made a choice to integrate social good into their culture—it drives internal mission and philosophies, and helps with recruiting. According to the company, Warby’s “Buy a Pair, Give a Pair” program has contributed to the distribution of over one million eyeglasses to people in need. Additionally, Warby Parker works with partners who train men and women in developing countries to give basic eye exams and sell glasses to their communities at affordable prices, thus positively impacting local economies.
What Keeps You Up at Night
So what keeps Warby Parker up at night? “Are there four guys somewhere thinking about how to disrupt us?” asked Neil, then assuredly answering his own question [Yes]. “The cost of starting a new business is decreasing. So are we moving fast enough? Talent—are we hiring the right people for the role?” Given there is a shortage of engineers, product people and data scientists, Neil added that businesses have to be thoughtful about hiring.
Starting Your Own Business and Raising Funds
The group shared some recommendations for looking for a job, starting your own business, raising funds, and more:
  • Network – Treat networking like mediation or any other practice. Don’t just network when you need it.
  • Ask to help – Ask people what you can do to help. Be a value creator.
  • Meet investors in advance – And vet them the way you would new hires to test fit.
  • Acknowledge what raising money means – Investors are expecting a liquidity event. If you want to run your company for a long time, your way, then raising funds might not be right for you.
  • Plan – What are you going to use the money for? Hiring, new products, etc.
  • Ask for more – value your business and ask for what you are worth.
All of the panelists lauded passion as a very important component of happiness in business. Peter Laughter summed it up by advising the audience, “Look at when you were the most lit up, the most effective, and follow that.”
Entrepreneurship with a Conscience was hosted by Brooklyn Friends School, Friends Seminary and Sidwell Friends at Dillon Gallery in NYC.

The Stories of Kim Kardashian and Paula Deen – Real vs. Fake Relationships with Fans

ImageWhat happens when a brand you love fools you once, fools you twice? When it comes to reality television, there is a thin line between real and rehearsed. Viewers demand authenticity, but flee if “real” is “too real” (read boring). When the line is crossed, does it mean a loss of fans forever?

Recently, both Kim Kardashian and Paula Deen have been in the hot seat for purportedly pulling the wool (or perhaps the fat) over their fans eyes. Celebrities, retailers and other brands say they want to build deep, authentic relationships with their fans. But like a player-boyfriend, these broad statements seem more like a means to an end. And as long as brands are getting what they want, they may have less incentive to act on the up and up.

So is it right to lie to your fans? Paula Deen seems to have waited until her empire was taken care of before announcing she had diabetes. A lucrative pharmaceutical spokesperson deal will certainly assure an infusion of financial juice to her portfolio. Nothing wrong with taking care of your livelihood and loved ones. But Paula’s crisis management PR team should have prepared her better for her big announcement. Deen’s interview answers came off as evasive, rehearsed and flat-out fake.

Tips for avoiding the Paula Deen PR disaster:

1) Share bad news with your fans soon after it happens.

2) If you choose to wait, be honest about why you waited. How about: “I was embarrassed; I wanted to get my health on track; I knew I had to change, but was suddenly lost about my identity and my legacy.”

Paula is playing the same game as politicians and baseball players–Lie, lie, lie until the media and the public forget and come around to loving you again. But it is too late for Paula Deen’s brand? Has Paula Deen (TM) jumped the shark?

While Paula Deen’s actions may have physically damaged fans, Kim Kardashian’s stunt packed an emotional punch. She was accused not only of turning her wedding into a publicity stunt, but also of shooting additional scenes to cover up her actions. In Kim and Kourtney Take New York, the editing makes it clear that Kim and her mother, Kris Jenner, are in a towncar heading from a Dubai hotel to the airport for a flight to the States. Mom asks Kim if she is excited to see her hubbie, NBA player Kris Humphries. Kim replies No. A serious conversation ensues in which mother tells daughter newlyweds do not normally feel this way. Fans come away feeling empathetic toward the heroine (Kim) who has made a human error (rushing into marriage for love). Mind you the first episode of the new season starts with a montage of media images about the divorce and insinuates this season of Kim and Kourtney Take New York will clear up any media-induced misunderstandings. This make E! Entertainment Television, or at least one of its post-production teams, complicit in the cover-up.

Whether or not the Deen or Kardashian empires will crash because of their duplicity will be the ultimate test. Once fans are duped, it is hard to build that trust back. When brands that sell themselves as authentic reveal themselves to be hypocritical, viewership declines, as does ancillary revenue. But truly addicted fans will likely keep coming back for more, just as in a bad romance. While we say we want to know the truth, what we really want is to be told we look good in these jeans, and no, our butts can never get too big.