NVC@25 Fireside Chat: Ben & Frank Cofounder Mariana Castillo
To mark the 25th anniversary of the Edward L. Kaplan ’71 New Venture Challenge, the Polsky Center for Entrepreneurship and Innovation is hosting a series of fireside chats with alums of the program to discuss their startup journeys.
NVC alum Mariana Castillo, MBA ’16, cofounder and co-CEO of Ben & Frank, an online eyewear company based in Mexico, came in sixth place in the annual startup contest, which that year came with a $15,000 award. In the years since, her company has taken off.
Ben & Frank, which has physical shops where customers get eye exams but sells most of its glasses online, now operates 30 retail stores in Mexico, with plans to double its footprint by the end of the year and reach 100 stores in three years. It has opened its first store in Chile as it eyes expansion across the continent.
“The vision is to be the largest optical brand in Latin America in the next five years,” Castillo said during a virtual fireside chat with her former professor Steven Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business.
Castillo didn’t attend Chicago Booth with the intention of being an entrepreneur, but she was open to it. While there she needed to replace a pair of “ugly” glasses and had a good experience ordering from an online eyewear company, which cost her a quarter of what her glasses cost in her native Mexico.
While Warby Parker was at that point becoming a household name in the U.S., Castillo did some research and found there had been no innovation in the eyewear market in Mexico in a long time.
Castillo started the company with two fellow Booth students – including her husband – and a friend in Mexico with a background in fashion design. They named it Ben & Frank in a nod to Benjamin Franklin, inventor of bifocals, and also because it was easy to say in English and Spanish.
Within two days of launching an ecommerce site through Shopify they got their first customer, via a digital ad. Their co-founder in Mexico would send off home try-on kits while the students in Chicago juggled school and running the business.
“People would call the call center and it would be us,” Castillo said. “We organized our classes around that.”
The obvious question, of course, was whether they would face competition from New York-based Warby Parker. Through a contact they were able to learn that the founders were planning an international expansion, but not into Mexico, Castillo said.
“Usually American companies take a while to get to Mexico,” Castillo said. “Amazon went to India before Mexico.”
Castillo credits the mentorship and feedback from NVC with helping to prepare the business for some of the challenges it would face as it sought to scale. That limitation is one reason Castillo thinks Ben & Frank didn’t walk away from the NVC with more seed funding.
“We thought our company is venture backable, and I think it is,” she said. “But it isn’t necessarily super-venture backable because it will be difficult to be a billion-dollar company, which is what a lot of the judges are looking for.”
Castillo saw the promise of the business when, after holding a trunk show, the company sold $25,000 worth of product in a month. It raised $500,000 in an angel round.
Venture funds were reluctant to invest at first, with some American investors saying the Mexican market was too small, Castillo said. But as the company grew it was able to raise money from those that had initially rejected it.
Now 10% to 15% of the Mexican population recognizes Ben & Frank, which is known for fashionable, affordable eyewear, Castillo said. Its Net Promoter score is consistently above 90, she said. And investors are starting to see the potential in Mexico, where little venture capital has flowed.
“It’s prime for disruption,” she said. “The middle class is there.”
Ben & Frank has been profitable for several years, Castillo said, and she expects to do one or two more financing rounds to expand more quickly. But she doesn’t consider funding rounds themselves to be milestones to brag about.
“I think fundraising is more of a vanity metric for some startups,” Castillo said. “For us it is how do we make the most efficient use of capital.” A point of pride is offering her 320 employees fair salaries and health benefits, which isn’t necessarily the norm in Mexico, she said.
The startup experience hasn’t been without hardship.
“Working on a business for six years and never being able to turn your mind off is really hard,” Castillo said. “I think it’s super challenging to really sleep well at night.”
Early on, Castillo and her husband, Benny, made the decision that he would step back and take an advisory role, to mitigate the risk to their finances and their marriage.
“That turned out to be a good decision because we are still married and the business is still going,” Castillo said.
Being a woman at the helm of a company in Mexico, still steeped in a machismo culture, has its challenges. Suppliers often assume she isn’t the decision maker, Castillo said.
But as the investor and startup community becomes more conscious of diversity, she finds herself being sought out and championed.
“For me it’s been more good than bad,” Castillo said of being a woman founder. “It has given me a bigger spotlight than otherwise.”
Asked to offer to advice to current NVC students, Castillo urged them not to get discouraged if they don’t finish at the top of the heap.
“Don’t get demotivated,” Castillo said. “There’s always teams that win and those are not the teams that in the long run are there.”