Why I Joined Zenni

I am thrilled to announce today that I have joined Zenni Optical as their CTO.? I started in June and have recently crossed my first-month mark.? I know that there has been quite a bit of uncertainty surrounding tech workers today and I want to spend the extra time describing my decision process to help others find clarity in the face of uncertainty.?

I want to thank Nylas for providing me with a strong platform to take myself to the height of my technical career.? We went from a Series A company at the beginning of 2020 to raising $120 million in Series C led by Tiger Global with an over 10x increase in valuation in 14 months.? I started with 20 engineers and grew the team to close to 200 talented and passionate Engineers, Product Managers, and Designers.? We are ranked #30 top Engineering team by Comparably, and I was humbly selected as one of the top 100 Engineering Leaders by Alumni Spotlight this year.? Nylas got featured by Google at Google Next, and revenue grew proportional to valuation as more customers adopted features that the team developed.? I am proud of what the team and I accomplished during my time there, and will fondly remember it as one of the pinnacle achievements in my career.? Despite my departure, I know Nylas is still on a great trajectory to become a unicorn and beyond.

There is tremendous pressure to be part of a hypergrowth company.? With the economic downturn, it became more difficult to keep the growth trajectory no matter how hard my team and I worked.? It was evident after Q1 that the goals for 2022 are almost impossible given the current economic environment.? Given the challenging economic outlook surrounding tech, I started reflecting on what would make my life more meaningful aside from the valuation of the company that I work for.? I talked to many friends and investors and self-explored for a stronger purpose. In addition to solving technical and business challenges, I am looking for the best opportunity to take my career to the next level and have a greater impact in the world.????

I am passionate about what I do and I treat work as one of my many hobbies.? I want to be very thorough in finding the purpose of my next chapter.? I started to leverage my network of friends and recruiters, and in the process talked to over 20 companies.? I also toyed with the idea of starting my own company and wrote 2 business plans as part of that process.? I want to share the logic that I used to evaluate the field.

Most of the 20+ companies I talked to were tech startups.? They range from Series A to late stage.? Some of these were unicorns.? The stock market and crypto market crash that happened really helped me to see that some of the old SaaS formulas need to be rewritten during this down cycle.? I created my own set of evaluators.??

1. How close is the company to profitability? All of the companies that I talked to are not profitable today.? They are doing a great job in deploying their raise to expand their market share and hiring really fast as part of that process.? Not only the path to profitability is not clear, but the process of getting there will also be extremely difficult.? As you cut your staff and expenditure, you have to be clearer on what not to do.? It is very evident that most leaders have not thought through that very deeply.?????
2. Is the solution vulnerable to budget cuts in a recession?? Over half of the companies I talked to during this process are vulnerable to budget cuts.? In the face of uncertainty, there will be less appetite to try new approaches and unproven tech.? It would be hard to change the way people work when there are threats of layoffs and more lean teams, slowing down the pace of digital transformation.????
3. What’s the probability that the equity will be worth more?? Most of the Series A-D companies I talked to have an amazing valuation that likely will not hold up in the public market.? For example, I talked to an amazing SaaS company, which was valued 100x ARR in their last round.? The company has grown over 300% year-over-year, but it is very clear that with a down market and increased competition that the growth would slow in the next 4 years.? I used a simple comparison between this company and some of the 2021 IPOs.? For example, Peloton is one of the highest flying IPOs.? It went from $127 per share to now about $10 per share.? Gitlab did well with its shares going as high as $137 per share to the low of $30 per share.? The average valuation decrease in the public market is 60%, so these extremely impressive start-ups will have to grow tremendously in a challenging market to keep their current valuation.? Once I applied this thinking to the equity portion of the packages, I concluded that the probability for the equity package to be worth anything in the next 4 years is less than 10%.? I strongly believe cash is king for the next few years.
4. Will the company survive 5 years from now? ?After the crypto crash rippled through the tech scene, I went through an extremely conservative model of evaluating each company.? There is a strong likelihood that the high-interest rate and high inflation would soon lead to unemployment issues.? Given that we had a 10-year bull market, this downturn could take 2-3 years to turn around.? I looked internationally as well.? China and Europe, in my opinion, are in a worse state than the US, so this one will be global, and probably no industry is immune.? Through this simulation, I found very few can turn to profitability without risk.? You will need a strong cash reserve to weather the various winters.???????????

In parallel, I quickly evaluated the two startup plans I came up with and investigated if they are viable.? I talked to a few of my investor friends and bounced ideas off of them.? I felt both of them have legs, with one of them having a good chance of becoming mainstream 3-5 years from now.? I got excited and joined a few angel investment groups to see how early-stage startups would fare in a challenging environment.? I sat through over 30 startup pitches.? After hearing passionate founders trying to raise a good seed round, I found that my valuation expectation is way off, and it is extremely likely that I will have to self-fund a significant portion of the build-out of the business.? There are many founders with impressive backgrounds who are already generating 7 figures in ARR.? I am surprised that they are having trouble raising at what I considered really low valuations.? I then applied my criteria above and tried to find if there are startups that I want to put money in as an angel investor myself, and I did not find one that I want to put money into.? I would rather invest in battered public companies that have battle-tested products and strong brands.? This is when I knew that I don’t have the risk appetite to start something on my own.? Cash will likely be worth 2-3 times more if you are able to invest your money wisely.

During my job search, I was referred to Zenni Optical and introduced to Julia Zhen, the CEO of Zenni.? Zenni Optical is not a “standard” technology company, and for someone with my technical background, I wasn’t sure if it was a good fit for me. ? I was extremely sure at that time that I want to stay on the technical path and work for the next hot SaaS startup or start my own company, but what happened next changed my mind.

Julia began by telling me the story of Zenni.? She and her late husband started the company in the garage of their Marin home 20 years ago and built it into a wildly successful business that sells over 30K pairs of glasses a day.? Since they were profitable from the beginning, they never had to raise funding.? She then described the company’s mission as to provide affordable glasses to everyone in the world.? Doing social good is as important as making sure the company is sustainable for the long term.? I became interested.

She then told a personal story of why she is driven to do social good.? During the start of COVID, she was so moved by pictures of nurses wearing garbage bags to save lives, that she made it a top priority to buy masks and use the Zenni distribution facility to distribute them to healthcare workers in the States.? She sent over 45K PPE kits in 2020 and received many letters thanking her for her generosity.? During one of these exchanges, one of the doctors had a chance to take a look at Julia’s charts and noticed that she had unusually high cholesterol.? This doctor immediately asked Julia to get a second opinion because the primary care physician said she is OK.? During this process, it was uncovered that she has a heart condition and needed a triple bypass.? She believes today that her goodwill saved her life, and her mission now is to do as much social good as she can for the rest of her life.? This moved me so much that my value system changed.? I found the missing element that I was looking for beyond money and technology.? I was offered to join the company at that time, but I want to do some soul searching to ensure I am the right fit.

Since I am new to the eyewear business, I started putting myself in the hypothetical role of the technology and product leader of the company and started researching the space.? As I drilled down to how the industry works, I found out how much it needs to be disrupted.? Zenni spent over $1B to set up manufacturing plants in the US and China so that everything that is produced is using top-notch material and equipment.? The fact that the cost of a pair of Zenni glasses can be more than 8 times cheaper than what I paid at an optometrist shows how inefficient the supply chain is.? I tried to understand the why, and what I discovered later motivated me to join Zenni more.??

Why glasses are so expensive is fairly easy to explain.? One company, Luxottica, dominates the space, and its historical predatory business tactics jacked up their prices for them by over 1000%.? The following clip shows how they were able to create a monopoly by owning the distribution channels and acquiring labs around the world to control supply and keep the price point high.????????????????????

Luxottica purchased Sunglass Hut in early 2001. It promptly told Oakley it wanted to pay significantly lower wholesale prices or it would reduce its orders and push its own brands instead.

Within months, Oakley acknowledged to shareholders that the talks hadn't gone well and that Luxottica was slashing its orders.

"We have made every reasonable effort to establish a mutually beneficial business partnership with Luxottica, but it is clear from this week's surprising actions that our efforts have been ignored," Oakley's management said in a statement at the time.

The company's stock immediately lost more than a third of its value.

Luxottica acquired Oakley a few years later, adding it to Ray-Ban, which Luxottica obtained in 1999.

"That's how they gained control of so many brands," Dahan said. "If you don't do what they want, they cut you off."

Zenni was able to compete by selling on the internet but now is faced with Luxoticca-owned eCommerce companies such as Eyebuydirect from its Essilor acquisition in 2013.? After my one week of soul searching and research, I knew that making this right is a mission that I can gladly take on.? Julia has already figured out how to manufacture high-quality glasses at a low cost and market them online.? I can bring the missing technical element that optimizes the operational efficiency of the company and serve its customers better.? Let’s compete fairly and bring the best and most affordable eyewear to people around the world.? The internet levels the playing field, and I firmly believe that I can apply what I learned in my career to digitally transform this space.?

I then quickly went through my selection evaluators, and Zenni passed.

• How close is the company to profitability?? Profitable for almost 20 years?
• Is the solution vulnerable to budget cuts in a recession?? No, during a recession when people have less money to spend, affordable high-end eyewear would actually sell better and help people in need.
• What’s the probability that the equity will be worth more? ?Zenni does not offer equity, but there is a profit-sharing plan.? It should perform better than equity packages for companies that are not yet public.
• Will the company survive 5 years from now?? Yes, and if we are able to lift the technical operations to be on par with Zenni’s manufacturing, we have a chance to build an even more profitable company that can help so many people for years to come.

Most of all, it came with a mission of making the world better that I was longing for.

At our executive offsite last week, we solidified our purpose and goal to be sustainable as a company and do social good.? Good vision is one of the most important human needs, it must? be protected.? Our challenge as a leadership team is to build a sustainable company that is accessible to third-world countries, where quality eyecare may not be available.? We are united to take on the challenge of competitive threats from Luxottica both online and brick and mortar.? They are continuing to acquire labs around the country and lowering their prices online to compete with Zenni.? It requires a great team of people to ensure quality lower-priced options remain viable.? After last week, I am even more convinced that Julia has a great team of leaders who think alike and are motivated by this mission.As the CTO of Zenni, I have many open positions to fill as we expand and fulfill our mission.? If you are looking for your next challenge and wish to join an already profitable company with a strong mission and a commitment to doing social good, please consider joining us at Zenni.? I would love to install a great engineering culture at Zenni, as I have done at the previous companies I’ve worked at.? It is going to take a lot to disrupt an industry giant.? To make eyewear affordable to everyone, Zenni will be building, partnering, and innovating to break through the barriers that exist in the industry.? Even if you don’t join, please let others know how unfair the eyewear industry is by sharing my post or some of the posts I included, and consider buying Zennis at zenni.com. the next time you need another pair of glasses.? We sell both prescription and non-prescription eyewear that protects your eyes.

For those of you who are searching for your next career decision, I hope sharing my thought process and journey helps you.? I am sure that a few of my friends will ask me why I don’t stay true to my pursuit of solving the most difficult technology challenges.? I found a cause that I can spend the rest of my life pursuing.? For those of you who are looking for a new mission, there may be a role for you here at Zenni.? You can apply here:? https://apply.workable.com/zenni-optical/?or send your resume to [email protected].