CINCINNATI -- Sam Pellerito, the CEO of local startup Frameri, spent time edging eyeglass lenses in a friend's basement, fulfilling orders for the company's last customers.
It's ironic, he said, because it's what he did when he joined Frameri in 2013.
"I was the one making the glasses every day, and that's how I'm ending with the company," he said.
Known for its interchangeable lenses and frames, Frameri was one of the Tri-State region's most widely known startups, having gained notoriety from being featured in a 2015 episode of ABC-TV's "Shark Tank." But as WCPO previously reported, the company closed its Over-the-Rhine store in January 2018, and is no longer taking orders at its website.
The company simply couldn't raise enough money from investors to keep growing, Pellerito said.
"We were not bulletproof to the idea that if you don't have the right amount of runway, you will eventually run out of money," he said.
Created by Notre Dame University students
Konrad Billetz conceived of Frameri while pursuing his MBA at Notre Dame University, where the company won a $5,000 prize in the McCloskey Business Plan Competition in April 2013. The following June, the company came to Cincinnati as part of The Brandery, a nationally known Over-the-Rhine business accelerator.
Billetz and co-founder Kevin Habich didn't make a deal with an investor on "Shark Tank," but the show opened the door for a partnership with Hoya Vision Care, the world's second-largest lens manufacturer.
By June of 2017, the company had expanded into Colorado, New York, Tennessee, California, Pennsylvania, Washington and Oregon. Pellerito told WCPO then that he hoped that in 2017, the company would double or triple the number of vision practices it partnered with.
Frameri had made lots of loyal customers, with 40 percent of them returning to buy again.
"We had tremendous lifetime value," he said. "We really kept customers in our system."
But all was not well.
The company had raised $1.2 million in its "seed" round of investment, Pellerito said, and needed to raise at least that much in a second, or "Series A" round of solicitations. But investors have been shying away from retail startups, he said, in part because of the popularity of online sales.
Potential investors often wanted to know why Frameri wasn't doing as well as Warby Parker, another startup founded to sell designer eyewear. It wasn't a fair comparison, Pellerito said, because Warby Parker has much better funding and can afford to spend a lot of money on marketing.
"People wanted to see a 10-time return on their marketing investment," he said. "But it takes a long time and a really great team of marketers to get to that point."
Attempts to reach Habich and Billetz were not successful.
According to Habich's LinkedIn page, he left Frameri in January 2017. Habich still works in Cincinnati, doing consulting for startups, Pellerito said.
Go big or go to zero
Running a startup was not easy, Pellerito said.
"I cried once," he said, because of the stress.
Venture-backed companies like Frameri often have a "very binary" outcome, said The Brandery General Manager Tony Alexander. They either go big or go to zero, he said, which is often what VC firms want. "Sometimes it's better to die quickly if you have talented entrepreneurs," he said, so they can move on to another venture.
Alexander credited Frameri with doing a good job establishing its brand, and didn't fault management for not being able to attract enough venture capital. Most venture-backed startups fail, he noted, and said that of the 73 that have completed The Brandery, about half are still in business.
"We don't necessarily see it as a failure," he said. "We turn that around and say, 'It was a great shot at bat, and we're looking forward to seeing what Sam and the guys that were a part of Frameri do next."
What Pellerito plans to do next is to work with Felix Gray, which makes glasses that filters out blue light. Some members of the Frameri team have also talked about creating a new business, he said, and it's also possible a larger company might want to buy Frameri's intellectual property.
Many e-commerce companies that have died have come back to life, Pellerito said, and "it's not impossible that would happen with Frameri."
One lesson he learned from Frameri is that it's easy to become complacent and "get caught up in how amazing you are."
You might celebrate a win for a night, he said, but the next day, when you walk into work, you have to pretend it never happened.