The NCE building will have a new neighbor on Thayer street, once it’s safe to return! We are excited to welcome Warby Parker, who is opening its very first store here in Providence, Rhode Island, on Thayer St. Founded by Andy Hunt ‘04, Jeff Raider, Neil Blumenthal, and Dave Gilboa, Warby Parker’s mission is to inspire and impact the world with vision, purpose, and style. (Read more about the move in the Brown Daily Herald.)
Andy Hunt graduated from Brown University in 2004 with a Bachelor’s in Economics and History. He then earned his MBA in Finance from the University of Pennsylvania and went on to work in investment banking. Hunt later began to do research into the eyewear industry, motivated by his frustration with the high costs that came with buying and replacing his glasses. This frustration and research soon led to the launch of Warby Parker in 2010. Read more about his journey in this Brown Alumni Magazine article.
The company was started with the goal of proving that a business can scale, be profitable, and do good in the world—without charging a premium for it. From the very beginning, for every pair of Warby Parker glasses purchased, a pair has been distributed to someone in need. To date, over seven million pairs have been distributed—but amidst COVID-19, they have needed to largely pause the program. Now, as of April 1, 2020, they are temporarily shifting the focus so that for the majority of glasses sold, personal protective equipment and preventative health supplies are distributed to healthcare workers and communities in need. Learn more about their efforts, here.
Written by Chuck Isgar ‘21
On February 24, 2020, The Nelson Center for Entrepreneurship and Brown EP hosted Terri Cohen Alpert ‘85 for a roundtable discussion as part of the Roundtable Discussion Series moderated by Chuck Isgar ’21. Alpert shared lessons learned through the process building Professional Cutlery Direct and Uno Alla Volta, in particular the importance of creating a brand that connects emotionally with customers.
From Morgan Stanley to Starting a Business on $8,000
Going back to her time at Brown, Alpert has been willing to go off the beaten path. At Brown, she was one of few female concentrators in Physics.
Alpert began her career after Brown at Morgan Stanley. While she helped Morgan Stanley in building out software, she missed not having the opportunity to help make decisions that would drive the business. She decided to use the safe cover of maternity leave to begin a company.
She asked herself: “What niche could I offer better selection and inventory than anyone else?”
At the time, her husband was looking for his first great chef’s knife, prompting her to look into the kitchenware space. The efficiency of ordering and shipping kitchenware tools was not efficient at the time, presenting an opportunity to Alpert. She had a vision: if someone could place an order by phone by noon, they could get it shipped that day.
Putting $8000 into the business, Professional Cutlery Direct was born. The company began to grow significantly.
From Initial Success to Significant Challenges
Professional Cutlery Direct doubled year over year and Alpert felt that it was too easy. She thought that if she could do it, so could other people. Along these lines, Alpert cautioned entrepreneurs that financial statements are the rear-view mirror; they don’t represent what’s ahead. She realized that it was costing her more and more to acquire customers worth less and less, prompting her to do significant thinking about the company’s CAC (customer acquisition cost) and LTV (lifetime value).
Alpert admitted that the business came to the point that they were proving markets for the competition, including giants such as Williams Sonoma. “We were their R&D department, at no cost to them, and handed them the results on a silver platter.” After realizing that she was essentially building other people’s brands for them, she knew that they needed to develop proprietary brands. Some people began to see the company as the “Consumer Reports” of kitchen tools.
Building Uno Alla Volta with a Focus on Differentiation and Branding
While Alpert continued to run Professional Cutlery Direct, she launched Uno Alla Volta with the hopes of overcoming the obstacles that Professional Cutlery Direct was facing.
Alpert realized that a proprietary product would be instrumental to allow Uno Alla Volta to differentiate itself and gain pricing power. As customers became more expensive to acquire, she realized that they would need to maximize the lifetime value of their customers.
To increase customer lifetime value, Alpert discerned that they needed to be able to go to different aspects of their customers’ lives. In particular, they needed to create an emotionally meaningful brand that wasn’t restricted by product category. They needed barriers to entry, and in order to maximize the customer lifetime value they would need to have a nearly infinite supply of new products.
A Big Lesson for Alpert in Management
As Uno Alla Volta was working towards these goals, Alpert made one of the biggest mistakes in her entrepreneurial career: bringing in a professional management team. While she was optimistic that doing so would change the issues at the top of the company, she realized that was not the case.
She did this at the same time as her company was hit with a 35% increase in its biggest cost, catalog postage (due to an act of Congress) and the great recession. This team was not only expensive, but they built silos in a company of just 65 people and created brand destruction. Fundamentally, Alpert recognized however, that this was less the fault of the team than the CEO who hired and empowered them. Alpert, while transitioning from the role of entrepreneur to CEO was focused on what not to do, micromanage, as opposed to what she must do: lead a team with a common vision.
One by one, she got rid of the executives, worked to change the culture, and to get the brand right. It was a six to seven year process, during which the company’s revenues shrunk from $14 million to $8 million, the customer base shrunk, and the company built up over $4 million in debt. During this time, there were several things she had to figure out: how to dramatically increase gross margins, developing more proprietary products, and creating a greater story around the product.
Uno Alla Volta’s Growth
With many questions to solve, Uno Alla Volta figured things out in a big way. The company introduced one thousand SKUs per year, but still needed to flesh out the artisan stories behind the product. In an effort to create an emotional connection with the customer, they started to create personalized certificates corresponding to the items a customer purchases. They also worked hard to increase the company’s brand, in particular its name recognition.
Alpert shared that “retention is most important of all.” In a matter of a few years, they brought the 12 month retention of a newly acquired customer from 23% to over 50% retention. The first year value of a new customer rose from $20 to $56, thus allowing the company to spend significantly more money to acquire new customers. Alpert taught every member of her team how to interpret the company’s key metrics and financial results and the team celebrated each small win and learned how the math would compound. The team delivered on their brand promise to every customer every day, growing Uno Alla Volta to a $20 million top line with a 10% EBITDA margin.
Alpert encouraged entrepreneurs to look at customers, not channels. While customers who engage on multiple channels are often the most valuable, Alpert focused on asking herself: “how do we make each group of customers the most valuable?” She stressed that at the end of the day, relationships with customers need to be human.
Focus on learning how to interact in organizational environments
Alpert has done a lot in her career: she was one of few females in her time to study Physics, she went from Morgan Stanley to launching her own business as a project on maternity leave. She realized that hiring a management team won’t solve problems. And, of course, she also built a company with over a $20 million top line and a healthy bottom line. With all these experiences, the students in the room were curious about her recommendations for their continued journey at Brown and beyond.
She said that if she could go back, she would have studied leadership and organizational behavior much earlier. Over time, she learned that a leader’s job is to help people get emotionally attached to the goal.
While the corporate environment at Morgan Stanley wasn’t right for Alpert, she learned about how to get things done, and she also learned how to engage in a large organization. Along these lines, Alpert emphasized the significance of understanding how big companies operate. She suggested the importance of routinely looking for ways to move laterally to get more breadth with the goal of creating new mental pictures.
Treat every experience as valuable
Alpert left students with a few parting words which might help take the pressure off of those worrying about what’s next: she believes that all experience is relevant. Being out in the world helps you see where there is white space. With a reference back to her scientific background, she shared that everything is a hypothesis; she suggested treating what you’re thinking about as an experiment.
Despite the challenges she had to overcome, Alpert shared that she wouldn’t change the way she did things. Within that sentiment might lie the greatest lesson that Alpert shared with the group of students, albeit indirectly: everything you go on to do will be a part of your collection of experiences and learnings that will allow you to succeed in the future.
By Chuck Isgar ‘21
On February 7, 2020, The Nelson Center for Entrepreneurship and Brown EP hosted Charlie Kroll ‘01 for a roundtable discussion as part of the Roundtable Discussion Series moderated by Chuck Isgar ’21. Kroll shared stories and lessons learned from the process of founding and building Andera and Ellevest, companies focused on financial technology.
Beginning Andera as a student at Brown
Kroll attended Brown in the late 90’s, around the time of the dot com bubble. He was on his way to Wall Street, but a unique situation set him onto another track. As a student, Kroll had been running his own web design business. He entered a business plan competition, and while he didn’t win, his mentor, Steve Siegel, ScM ‘83, PhD ‘85 offered to be an investor. Kroll said “let’s do it.”
The web design business pivoted into Andera which provided an instant solution for banks to allow customers to fill out forms when opening checking accounts. Technology like this was very new to banks at the time. Kroll described the interesting process of selling this new concept: “nobody bought it, but everyone wanted to talk about it.”
Capturing a timely opportunity in the financial services industry
Kroll admitted that much of the success of Andera stemmed from the unique timing at which the business was expanding. Leading up to 2008, there was lots of excess in the financial system, and since banks needed deposits to fund loans, Andera was uniquely positioned to help the banks quickly open accounts for customers.
Andera survived the financial crisis fairly well and the growth continued. After expanding to over 100 employees, 3 offices, and 600 financial institution customers, Andera was acquired by Bottomline Technologies (NASDAQ: EPAY) in April 2014 for $48 million.
The inspiration for Ellevest
Kroll took some time off after the acquisition of Andera, but he knew he wanted to start something new in fintech. He shared with our group of students that as he was trying to determine what his next venture would be, he was asking himself: “what is the next 10 year shift and what role can I play in it?”
He saw financial advising as having been the same for many years, and he wanted to be around people innovating in investing. Charlie came to know Sallie Krawcheck, previously CEO of Smith Barney, CFO of Citigroup, global head of wealth management for Citigroup, President of Merrill Lynch, and considered one of the most successful women in Wall Street history.
Both having extensive experience in the financial industry, they started Ellevest with a question: why is it that men and women have different behaviors in investing? Most notably, they knew that women don’t invest as much as men, and they saw an opportunity to help women.
The emphasis on thorough testing when building Ellevest
Before beginning to actually build Ellevest, Kroll and Krawcheck had lots of hypotheses to test. After six months of diving deep into research and customer testing, they began to narrow in on who exactly their target users would be. Their initial target was mid-career professional women aged 28 to 35. To this day, they continue to focus on a target persona, which they call Elle.
There were tens of thousands of women interested in Ellevest before the launch. According to Kroll, they spent nine months just going through the waitlist, a time during which they would test out features with different segments of users.
Growing Ellevest: a continued focus on females
Ellevest officially launched in November of 2016. The company initially was pulled up market, but they are now going down market and figuring out how to best serve a wider audience.
In terms of the competitive landscape, Kroll shared that Ellevest competes with many other platforms, but also none at the same time since no one else is focused exclusively on women. When asked whether Ellevest would ever expand into the male audience, Kroll was clear to say that their focus is women.
There is strong reason to think that the focus is working. Ellevest has has been named on CNBC’s Top 50 “Disruptor” List, #14 on LinkedIn’s 50 “Hottest Startups To Work For” (and #2 in New York), and one of Entrepreneur Magazine’s Top 100 Brilliant Ideas.
Going forward, Ellevest is aiming to be more involved in banking. Their vision is that you start banking with Ellevest, and then realize that you can invest sooner than you thought.
The importance of diversity at Ellevest
Diversity is very important at Ellevest. The company places an emphasis on diversity of thought and point of view. The team is diverse, but they are all bound around Ellevest’s core mission of helping women invest. Kroll shared that having a team motivated by the company’s mission is such an important asset to the company.
Kroll’s advice for students on their journey in entrepreneurship
For the student entrepreneurs in the room, Kroll provided advice about the research phases of beginning a startup. He encouraged the student entrepreneurs in the room to focus on doing hands-on prototyping and user research. Kroll emphasized the importance of conducting your own user research as opposed to reading research reports.
Students at our discussion were curious to hear Kroll’s advice about what to look for when thinking about interning or working at a startup. He provided two core questions to consider as you think about joining a startup: Are you inspired by the people at the company? Importantly, do you respect the people with whom you would be working? In addition, he recommended seeing if you have an interest in the subject matter or industry of the startup.
Kroll left students not just with specific advice, but also inspiration. The inspiration that someone who lost a pitch competition could go on to turn an idea into a $48 million business. Inspiration about how to think about the future of an industry. Inspiration about how to use detailed research to create the best product for people. And importantly, inspiration about how a company can focus on a specific market in order to make people’s lives better.
We are kicking off our first black history month founder feature with Lisa Gelobter ’91 founder and CEO of tEQuitable, an independent, confidential platform to address issues of bias, harassment, and discrimination in the workplace. Back in April 2018, Brown University invited her to speak on behalf of the “Thinking Out Loud” speaker series, which showcases profoundly creative and accomplished scholars who not only tackle some of the biggest “Big Questions” there are, but also skillfully communicate their inner visions to broad audiences. Watch the video here. With 25 years in the industry and products that have been used by billions of people, Lisa has a deep and proven track record in software. She has worked on several pioneering Internet technologies, including Shockwave, Hulu, and the ascent of online video. Lisa’s experience ranges from small, entrepreneurial startups to large, established organizations. Most recently, she worked at the White House, in the U.S. Digital Service, serving as the Chief Digital Service Officer for the Department of Education. Previously, Lisa acted as the Chief Digital Officer for BET Networks and was a member of the senior management team for the launch of Hulu. She has an expansive background in strategy development, business operations, user-centered design, product management, and engineering.
Fun Fact: Lisa is also the computer scientist who developed the animation used to create GIFs, forever changing the way we text and tweet. She’s also responsible for Shockwave and was even a member of the senior management team for the launch of Hulu.
Ayanna Howard ’93
Ayanna Howard is a roboticist and professor at Georgia Tech where she is the director of the Human-Automation Systems lab. Her research specialties include human-robot interaction, assistive robots in the home, therapy gaming apps, and remote robotic exploration of extreme environments. It’s no surprise that she was recognized as one of “The Most Powerful Women Engineers” by Business Insider. Among all of this, she founded Zyrobotics, an award-winning educational technology company that makes STEM learning accessible to all children.
Ayanna was a part of the Artificial Intelligence podcast this past January which you can watch here.
Brickson Diamond ’93
Brickson Diamond is the CEO of Big Answers, LLC, which consults on diversity and inclusion strategy for clients in entertainment, technology and asset management, generating new partnerships and leveraging impactful connections. He previously served for five years as COO of The Executive Leadership Council, the preeminent member organization of Black executives in the Fortune 1000. Brickson is also a co-founder and chair of The Blackhouse Foundation, which provides pathways for Black multi-platform content creators into career opportunities within film, television, digital and emerging platforms. In addition to everything else, Brickson is a Brown University trustee who has worked on several aspects of the DIAP (Diversity and Inclusion Action Plan) for the University.
Kerlyne Jean-Baptiste ’16
Kerlyne Jean Baptiste is founder of KerlyGirl and is passionate about health and wellness. She, like many other black women with coily hair, grew up believing her hair was incapable of growth, and unmanageable. After years of chemical processing, and unhealthy hair products, Kerlyne became dissatisfied with the state of her hair health and started to create her own homemade regimen in 2015. In 2017, Kerlyne began to share her haircare tips and products and launched KerlyGirl as an effort to bring affordable natural products to people everywhere. KerlyGirl aims to cultivate the beauty of textured & coily hair with plant-based products.On February 6 Venture Cafe Providence held its first-ever Pitch Night and KerlyGirl had the pleasure of pitching and taking home first prize! Congrats to Kerlyne and the team!
Van Wickle Ventures (VWV), Brown’s first student run-venture fund, is excited to announce their first investment in 305 Fitness. 305 Fitness is a dance-cardio fitness brand founded by Sadie Kurzban ‘12, who began teaching the classes out of the OMAC here at Brown. She won the Brown Entrepreneurship Program’s Venture Pitch competition in 2008 and launched 305 in New York with the $25K cash earnings from the competition. Today, 305 Fitness offers over 500 classes a week across 6 studios and 3 pop-ups in major U.S. cities.
Sadie’s story is the perfect example of the kind of founder VWV was created to support – one who follows the entrepreneurship process and had close ties to the Brown community. VWV will be participating in 305’s Series A alongside world-class investors such as Founders Fund, RiverPark VC, and Healthyish Ventures, as well as earlier angels including Tiesto and Kevin Durant.
VWV is also delighted to announce the students comprising the second cohort. Chosen from over one hundred applicants, there were nine that blew the team away with their curiosity, intellect, and creativity. The group includes founders of 3 non-profits in addition to sports tech and hair care ventures, crypto enthusiasts, and a medical school student – and ask them about their gap years! You can learn more about the team here. If you know a Brown- or RISD-affiliated founder, please send them to email@example.com.