tv Your Business MSNBC July 14, 2013 4:30am-5:01am PDT
they were a big hit online and then decided to open a brick and mortar store to take their business to the next level. how eyeglass company warby parker decided they needed to interact with customers. plus, he wants to rock 'n' roll all night and make money during the day. rock entrepreneur gene simmons in why you shouldn't listen to people to make money. that's all coming up next on "your business."
small businesses are revitalizing the economy. and american express open is here to help. that's why we're proud to present "your business" on msnbc. hi there, everyone, i'm j.j. ramberg. welcome to "your business" the show dedicated to giving you tips and advice to help your small business grow. it's been three years since e-commerce optical brand warby parker launched. why are retail stores now part of their expansion plan? we head to their flagship shop in the heart of soho to find out why this online business is also going offline.
when classmates neil blumenthal, jeffrey raider and david gilboa launched warby parker shook up optical world. doing it all online. >> we said what if we can work directly with manufacturers and sell them directly to consumers through a user-friendly website, we could offer quality glasses that cost $500 for $95. we were featured in "gq" and "vogue" and sold out of all our inventory and a waiting list of 2,000 customers. >> for two years they sold exclusively online. they didn't have stores in the business plan. their goal was to change the industry through internet sales. but what they sooned learn
surprised them. >> what we found is people really wanted to shop and experience the brand in person. >> they're not alone. internet retailers across industries are finding that while the internet is great to start an idea, ultimately there will always be consumers who want to do things the old fashioned way. touch and feel them before putting down the plastic. e-commerce site piperlime opened a soho location in 2012. and men's apparel has two in the works. bauble bar have two shops in new york city. >> consumers won't do all things online, they'll have a presence in two channels. >> opening a store takes money and planning. in the beginning this was not the focus of warby parker so
they sort of did it on the fly. inviting people over to neil's apartment and laying frames out on the dining room table. today things are much different. with a solid success story and funding behind them, warby parker has opened up two brick and mortar stores, with more on the way. the crown jewel, their 2,000 square foot flagship story on one of the most coveted blocks in new york city. >> we thought having a flagship in new york city with the brand would perhaps reach customers that were reluctant to buy online. >> calling it just a for does not do it justice. the two founders running the company, neil and dave, decided if they were going to move into brick and mortar, they were going to do it in their own tile. that's meant throwing some of the traditional thoughts of retail out the window. warby parker's short but vibrant
history is front and history. >> traditional retailers walk in here and they're like, neil, you're crazy. what are you doing, you're wasting all this selling space. we don't look at it on a square foot basis like that. it's, what is the experience we want somebody to have. and if we can have retail be a bit of entertainment, build community through this store, we think we'll sell more and more glasses. >> a photo booth to share different looks with your friends. glasses out in the open instead of behind locked cases. and a tablet checkout system instead of traditional register setup are some of the ways their physical store helps fans interact with the brand in ways they can't online. the stores have also helped the e-commerce site reach a whole new base. >> we're finding once people buy their first pair of glasses from one of or stores or show rooms,
the second, third, fourth time they're buying glasses they're doing so online. once we establish that trust, once people are familiar with the experience, they're much more likely to repurchase online. >> interacting with people at the stores also means they have a better pulse on what the customer wants. >> at times online we're just looking at sales data to help influence design, but it's less forward thinking and more backward thinking. we'll see people come in, maybe they're looking for a cat eye or a particular color we've been hesitant to put out there. that gives us confidence to push the envelope. >> would this have worked had you pushed them both simultaneously? >> that's a good question. we would have had to do a big launch to have lines out the door and over 4,000 people each weekend for it to have worked as it has now.
i think launching online allowed us to get more customers because we're not limited by geography. >> is demand what you expected or more? >> it's about double what we expected. >> why? >> we're hiring. if you're looking for a job, please go to warbyparker.com. no. >> that was a really interesting piece to do, particularly because those warby parker founders are truly forward thinking. how can you apply to some of their thoughts to your business. let's to this week's investor, who invested in warby parker, and the lead blogger for "new
york times" small blog you're the boss. great to be here. >> great to be here. >> we were talking how gorgeous that store is. >> i just got to visit it for the first time last weekend. it was beautiful. it was packed. it felt more like an apple store than an eyeglass store. like apple, they have a eye bar, like the genius bar. >> i want to talk about retail in general and how they're rethinking the idea of retail. it's not you're going in to buy something. it's an experience. how important is that? >> i would have to say apple really changed the current state of retail and what could be done and what's possible. and i think that warby parker very much fits into that theme with their own brand and own twist on it. >> for anyone with a brick and mortar retail store, do they need to be thinking of themselves as destination, as entertainment? >> there's no question that it's a powerful combination to have
retail and online. i have to warn people, when you look at the apple store, there's one big difference. apple is not giving their products away. the prices at apple are certainly not discounted. they give great service. products are great. there's an adage of business, price, quality, service. pick two out of three. when you don't see accounting for a company, it's difficult to analyze are they successful or just busy? if you're looking to get into a store, you need to understand it's not the cost of the rent. it's the rent, the employees, the health insurance, management. there's a lot of buried costs which are the reason markups are what they are. >> in the piece we mentioned a bunch of other stores that have now -- they're testing at least brick and mortar stores, online retailers. we did a company here on story, a retail space, that has retail
space and bauble bar was one of the people -- one of the stores having customers. do you believe to be big, to be successful, you need to have a brick and mortar presence? >> i think at the end of the day -- we started out having retail stores and now e-commerce. now the stores are doing e-commerce and they're figuring out they probably will need in most cases a brick and mortar store because a lot of the population want to touch and feel and experience the product. there's no question that having a great website and a great store is going to be -- i believe, who the reading retailers and competitors. >> it seems like war by parker tested online without putting the big investment capital in a store. >> they did. i think online and offline,
smashing together -- the differences are blaming every day. i think every outline retailer needs to have -- i i think warby a but they built this brand up from nothing and figured how to do enough offline to ship customers five frames to your home to try on for free in order to make a purchase decision -- >> the idea is basically they built a big brand -- >> they built a brand and now they've gotten to the point where they have enough momentum where people want to come in and see 100 different frames in a cool environment. >> it's such a neat company. chris and jay, thank you for
talking about this with me. stick around because we need you later in the show. >> no matter how informative or entertaining your youtube video is, content alone will not guarantee you an audience of potential customers. smart marketing is key. here are five of the most successful tactics of promoting a new youtube video. one, promote on your company blog. talk up each video in its own post. two, tell your e-mail list. when you upload new content, send a message out. three, connect to social media. facebook lets you imbed videos in your status. promote them on social book sites as well as stumble upon. four, do old fashioned marketing.
pick up your phone to give your trade groups, industries and blogs a heads up. five, if you can afford it, advertise your videos on youtube. they target potential viewers and linking back to the selected video or your channel page. want to extend the reach of your next small business event? check out the website over the week. a freon line tool that helps you. select from a set of themes and features to design a mobile experience for your guests. you can add map link, share notices and get push notifications through your app. one of the worst things about working remotely is people around you can hear phone calls and the computer screen. here now with tips to make sure you safeguard your company,
secrets while you're working, carol rock. now a cnbc contributor. also a best-selling author. great to see you. >> long-time friend. not old, long-time friend, j.j. this is so important because i find myself sitting in a coffee shop and i think, i'm talking to loud. i don't want people to hear this. >> the coffee shop is the worst entrepreneur. we might be chilled, having our own discussion. if you have anyone like me, who's incredible noisy, perhaps looking over your shoulder and your notes. as an intranewer you don't want any confidential meetings or confidentiality information in a coffee shop or hotel lounges, places that offer flex iblgt work space. there are so many options it may
seem like, i can't do that bit if you do your research, you can find a cool place. >> what's a privacy egg? >> this is something who sit to next to me on aan airplane, train, because i'm telling you, i'm the hosest guy looking over. i had a guy from a car company -- >> we're the same. i cannot help but looking. >> they have niece devices called privacy shield, it's a piece of plastic you can get and put it on your laptop, put it on your smartphone and that means only you can see it when looking in front of it. >> you'll be on the plane like this. >> no one on the play but sees it. we're all mobile, out and about, and a have redder. which is the expensive at all.
have you to shed your document. the as a guy a couple weeks ago left it in the seat pocket in front of me from a major pharmaceutical kl, which now in my possession. it's easy to take time to put it through the cheder and make sure any confidential information goes a -- >> if you don't have a she hadder right now use your toothpicks. i put it in look a million different -- >> trash cans. >> trash cans. we are the same, aren't we? >> how about what you get in the environment. who know you and know what's going on.
you may think you're being slick and use a coded word but if you mention that client we talked to. they're in the same building. a the love time you're coming from the meeting, carrying out the dialogue. >> especially in an office where everyone wants to talk and gossip -- >> there are entire twitter stream, ggs gold series from goldman sachs. and then accident, one luckily i found code names. >> this comes back from my investment banking days when you had a important client thaw come up with a code name. you could have fun with it. you're like an entrepreneurial
spy. if you're having conversations out on your mobile phone, use the code name so it's not clear who you're talking about. a simple thing can you do to protect your privacy and your client's privacy. >> the great thing is they're easy to use. cheap and easy. still to come, how do you mass produce your product and not give up the quality. how much is too much when it comes to information you should share on social media. >> and gym simmons in this week's "working with the pros." is like hammering. riding against the wind. uphill. every day. we make money on saddles and tubes.
but not on bikes. my margins are thinner than these tires. anything that gives me some breathing room makes a difference. membership helps make the most of your cashflow. i'm nelson gutierrez of strictly bicycles and my money works as hard as i do. this is what membership is. this is what membership does. to his fans gene simmons is best known as fame-spewing, bass player for legendary band kiss. but this israeli imgrant came to this country with a burning desire to succeed both in entertainment and business. a master marketer, entrepreneur. recently owning the third location of his rockin' brews franchise. we caught up with him at the
opening and sat down at his home to talk about his business philosophy in this edition of "learning from the pros." ♪ ♪ i want to rock 'n' roll all night ♪ >> you can't do everything yourself. partnership is wonderful. partner up with people who know more than you do about things that you don't know anything about. you can't know everything. it's difficult to kick the ball into the goalpost yourself. you need a good time. ♪ lick it up lick it up ♪ >> this whole idea that everybody's opinion is patently untrue. there's qualified and unqualified assessments. someone can walk up and say, you suck. your band sucks. that's fine. but i got 10 million others who like it, like it enough to pay
for it. so when do we listen to? ♪ we can't offer you >> you have an inferred few dishary duty to yourself to be educated, understand the blig picture and understand the structure of capitalism, how it works. the cost of good. i just have a passion. the most highly skilled people can have the same information i have. and i'm not from america. where i grew up, a few blocks down, it was free. i could learn the secrets of anything and everything. you cannot fail in america. ♪ never be the first one to do anything you'll be the coolest guy in the room. don't be the first groundbereakr
for you. in business it doesn't matter if it's expected or unexpected. this idea that it's -- surprise, it's original, who cares. whether it works or expected or unexpected. there's just success and failure. and everything else is just smoke and mirrors. ♪ >> who and what we are is most important. resume is follow-up. nobody reads anything. figure out what your headline is right away. say it as sua sixtily as possible. ♪ >> whatever it is you sell is where you sell it. look, loekd, location. have you to have the right thing and right time. ideas are worthle. ideas mean nothing. ideas are a dime a dozen.
what it means most is implementation, the ability to do something. and if you can actually make something work, and if you understand the process, then you can fill in all kinds of things in there, whether it's your idea or not. ♪ >> my philosophy is america is the blessed planet on earth to make a lot of money. i do. so do good stuff, make a lot of money, make something. life should be like space. endless. do good for other people and give back ♪ shout it shout it out loud ♪ >> it's time to answer some of your business questions. chris and jay are with us once again. this first one is about setting goals and achieving them. >> what are the four most important things a business
owner should focus on if they're going to be their best and achieve their optimal results. >> jay, can you narrow it down to four? >> absolutely. the reason failure rate is so high for businesses. there's three pieces to it. marketing management and finance. most people are really good at one, pretty good at second, and throw up their hands on the third. frequentedly i hear, i'm not a numbers person. the three right off i would say are marketing, understand what your customers are and how you're going to get to them. two would be management. understand how to hire, who to hire, how to manage. three, finances. you have to have a budget and figure out how to make money. fourth would be simpliening the competitive environment and where your niche is. >> anything to add to that? >> i'd probably share -- say them differently the first three. first, you have to hire great people. number two, don't run out of
money. good advice. i think focusing on the customer, obsessing on the customer. asking what problem are you solving for them is really good. maybe a broader one is i'd say -- i suggest people should let go of fear of failure. there's always a chance that will happen but too often i see start-ups trying not to fail instead of just playing to win. i recommend they do that. >> big risk, big reward. >> yes. >> next question, it's about quality versus quantity. >> as a fashion retailer that specializes in handmade products, how do you prepare yourself for mass production for future use without losing the handmade quality. >> good question. should she even be looking at mass production? >> it's like how do you make
handmade in mass production. i'd say increased revenue or growth or other ways to do that with higher-end handmade prices, instead of just increase quantity and lower your cost. >> jay? >> i would say the key thing is you cannot be everything to everybody. if you're going high-end, handmade, you're going for the top part of the market, you go for that. mass market is a different thing. you need to find out your niche, what you're capable of and who are your customers are. from price up to the highest quality so you need to figure out what your unique selling proposition is. >> you guys keep coming back to this idea of understand who your customer is and sell to them. finally, the last question.
it's about setting boundaries on social media. >> when it comes to social marketing and this push for facebook and twitter, can you ever be too personal. a lot of times we reveal information about our business or personal information about us, but can that bite you in the butt down the line. >> i think the easy answer is, yes, you can be too personal. >> absolutely. where do you draw the line. >> it gets down to branding. i once went on somebody's website. she had a salon and she talked about how she used to be a for tune teller. i don't if that's telling the services she's now selling. while it was honest and personal, i don't know if that would help her business of being a top-notch -- >> there's so much talk about being yourself and there's the fine line. >> the question is, you have
hundreds of thousands more fans and followers. what do you say to them? how do you find your vis? sometime people can be too personal talking about being a for tune teller. some are completely self-promotional. buy this, buy this, buy this. you have to find the right balance between the two. i think a good one is to focus on, what are customers say? >> appreciate you giving advice. >> thanks. >> thanks so much for joining me today. i hope you learned a thing or two. if you missed anything, click on our website. it's openforum.com/yourbusiness. you'll find web exclusive information to help your company grow. you can follow us on business. don't forget to be a fan on the show of facebook.
>> one entrepreneur says, don't hear everything you hear. >> everybody in the industry always talks about service, service, service. brut really the underlying theme for most consumers is really pricing. >> we'll tell you how the owner of a hardware store keeps prices competitive, turning a profit while being independently owned. remember, we make your business our business. ♪ i'm a hard, hard worker every day. ♪ ♪ i'm a hard, hard worker and i'm working every day. ♪ ♪ i'm a hard, hard worker and i'm saving all my pay. ♪ small businesses get up earlier and stay later. and to help all that hard work pay off, membership brings out millions of us
on small business saturday and every day to make shopping small huge. this is what membership is. this is what membership does. george zimmerman not guilty of the murder of trayvon martin. now what? the verdict came in late last night. george zimmerman not guilty of manslaughter, not guilty of second-degree murder and now he's a free man. protesters peacefully assem bemed overnight in cities across the country. hundreds marched. the issue of race,