James Murray Wells started Glassesdirect.co.uk with the last £1,000 of his student loan. With the help of VCs, he is now aiming to turn it into a £1 billion company. Smallbusiness.co.uk got in touch with him to discuss how he did it.
Take us back to the beginning – where did it all begin?
I was a student looking for the right idea. I had always been entrepreneurial and was searching for a market to break into. I stumbled across the glasses market and realised that it hadn’t changed in 50 years. It was one of those stuffy sectors than needed updating, so we started really small with just a simple website.
How did you start-up on so little capital?
We convinced the suppliers to hold all the stock and to distribute it for us. That means that the frames and lenses, even the packaging were being stored for us and sent to the customers, so really we were just managing data.
Within two months of launching we were getting about 50 to 60 orders per day. I put that down to strong word-of-mouth advertising and the amount of money we were saving people on high-street prices.
Was there a lot of resistance from your competitors?
Well the typical high-street spend on glasses is £149 and our range starts from £15 with lenses, so yes, there was massive opposition from the high street retailers. We had everything from legal letters to hate mail, it really was a witch hunt. In fact, one of the big opticians contacted our supplier and threatened to stop buying from them if they continued to supply us. The website had to go down for two weeks while we sourced another supplier.
What was your reaction to that?
It really spurred me on. That was when I knew I was on to a winner – the more they kick and scream, the more you know you’re doing something right.
How are you funded now?
Well, in 2006-2007 we were taking orders of around 200 to 250 pairs of glasses per day. We had funded the company with £750,000 of business angel money and I realised we were only going to grab a very small percentage of the market with that financial model.
We were well positioned to become a global player, so in 2007 we decided to take on some venture capitalists, who took two seats on the board and provided £3 million funding. We’re now aiming to be a £1 billion company.
Where now for the business?
A change in financial model meant a change of focus. Rather than being a value product supplier, we realised that we could market glasses as a fashion accessory. The fact that our product is so cheap compared to the high street, means that people can afford to buy different pairs of glasses for different occasions.
We are also developing technology to allow people to upload a photo of themselves onto the web to try out pairs of glasses online and see themselves in 3D. What I really wanted to do was put the fun back into buying glasses, rather than this old fashioned, boring process.