Have you had an eye exam at Warby Parker? If you’re in health tech, or just healthcare, and you wear glasses, I recommend you make your way to a Warby Retail location soon just for the experience. Go to the website - you can make an appointment Apple-Genius-bar-style. (Sorry Bay Area folks - their first eye exam locations are East Coast and Midwest).

Why? Because how we look at trying to predict the future, current market dynamics, and competitive threats is wrong if we're only looking at the incumbent competition.

The optician was brisk, thorough, and sophisticated about my questions. When I asked about her experience working at Warby Parker, she took extra time to tell me the best part. She was able to spend time to help people, without having to worry about insurance codes and billing and revenue lifecycle management.

She told me a story about a man who walked around with masking tape on his 20 year old glasses - not just on the bridge - but holding together the lenses and obstructing his vision. He was finally able to afford the exam ($75 flat fee), and the replacement glasses ($95), verses his previous pair from 20 years ago that cost him $400. Thanks to Warby Parker.

If you’re an incumbent in the healthcare field, or a startup aiming to disrupt, there are lessons in this story for both sides.

1/ Look beyond competitors

Are you conducting a competitive analysis for your hospital, pharmaceutical product launch, or medical device? Is Warby Parker’s $75 flat fee eye exam on your map?

“The strategy playbook today needs to be based on the idea of transient competitive advantage- that is, where you compete, how you compete, and how you win is very different when competitive advantage is no longer sustainable” - Rita McGrath, The End of Competitive Advantage.

McGrath recommends a new level of analysis at a granular level - connecting the market segment, offer and geographic location. She calls this looking at an Arena - not focused on “near substitutes” seen in competitive analysis - but down to the level of customer needs, and connections with customer solutions.

I’d recommend also creating space in your analysis for emerging successful business models versus cool tech. Sure we can all imagine drone-based emergency services and virtual reality doctor visits. What insights can you extract from Airbnb’s marketplace model, Netflix's subscription model, or Amazon Web Services’ pay-per-use model?

2/ Practice radical customer centricity

In the healthcare field, customer centricity is NOT a given. In fact in many conferences and panel discussions in health tech, leading luminaries predict that we will not have a consumer-focused healthcare system for many more years to come.

What’s in the way? Healthcare is a massive $3 Trillion that is almost 18% of our GDP, and is based fundamentally on delivering services, paid through third parties, and doctors and healthcare administrators who are more resistant to change.

While the Centers for Medicare and Medicaid Services (CMS), private insurers and self-insured employers aim to shift a bulk of those payments to value based care, a type of pay for performance measured in health care outcomes, everyone expects a hybrid system for the foreseeable future. Value-based programs (payment deals tied to health outcomes) will exist on top of a dominant logic business model that is still based on services (payment tied to the quantity of hospital stays, MRIs, or hip replacement surgeries).

Sure, you can aim to disrupt with your consumer tech solution or wearable by working outside the system - but even the $3.2 Billion Fitbit market cap (down from a high of $10.7 Billion) is but a rounding error on in that $3 Trillion. You’re not going to move the mountain.

Yet the fact that something like Warby Parker absolutely disrupted my customer experience of eyecare is a sign that maybe it could be possible to be radically customer centric, now. The lower cost, brisk efficient service was 10x better than the hassle of visiting an eye doctor, dealing with the billing codes, and paying for my last pair of $800 glasses from the Luxottica Corporation. Let’s compare that experience to the not-yet-awesome retail clinics and you can begin to see how a new front line health services offering could emerge.

3/ Compete to win on a business model, not product or experience

To be sure, charging for eye exams in a retail location is not radical nor breakthrough innovation. Luxottica, which owns LensCrafters and Pearle Vision, have been offering this service from the start, competing with local optometrist offices. Luxottica is the world leader in frames, lenses, and eyewear, with over 80% of the market.

What is radical? Warby Parker recognized the weaknesses in Luxottica’s business model - high margins for frames and lenses - and built their own vertically integrated system to reduce costs, reduce prices, and still afford a buy-one give-one model.

The social impact story is no mere marketing gimmick; the company is a certified benefit corporation and strongly advocates a stakeholder management model, emphasizing its treatment of workers, the environment, and helping provide eyeglasses to the developing world. Social impact is built into their business model and powers Warby Parker to take on a true giant in their field.

What does this mean for an emerging or incumbent health tech player? It’s worth looking at the current incumbent models in health and thinking through the shifting business models. But make sure you’re tracking companies and sectors outside of health for ideas and experiences - what may be an inspiration today may be a competitor tomorrow. Finally, while incumbents dance slowly towards a pay for performance business model, imagine how your organization can leapfrog ahead and actually deliver superior quality and experience, demonstrated in the actual end customer value.