What does it take for a watch microbrand to become succesful

There are literally thousands of micro brands and independents out there in the value space from $300 to just under $2,000 and they are all trying to get you to buy one of their watches. The nature of these micro brands though is that most of them are defined by a small loyal following and relative obscurity from the rest of the world. So I asked myself how do you know which brands will be around in 10-15 years time and will not have faded into obscurity? What does it take to really become a recognized independent? Starting a watch company isn't really that hard. It's expensive but not as expensive as you would think. It's not free but as long as you adhere to one principle then you can get pretty far pretty quickly and that principle is don't build anything yourself. If you've got this dream of making your own watches from start to finish, cases, bracelets, movements, even if you just want to make your own movements, the startup costs skyrocket because you need a lot of really expensive machines to do that. You also need people to run the machines. You need specialists and engineers. The way to go about starting your own small-scale lower-priced independent is to be a sourcer. That means you find someone that will sell you a movement, a bracelet, a case, a dial, hands, crystal, bezel, a box to ship the watch in, someone to assemble it and someone to check if it works and someone to ship it. You can literally find someone that will do any or all of those things for you. You can also find someone that will design the watch for you. In large part you can reduce your role to coordination of parts and the updater of your website and marketing. It takes a little bit of cash but it is entirely feasible. For the most part you'll see that micro brands start with a responsibility for the processes that are closest to the customer. They will hire one watchmaker to do quality assurance, they will assemble all the components themselves and they will handle the customer interactions themselves. But the individual parts, somebody will be supplying those. Your job as a new watch brand will be to negotiate prices and volumes while controlling the quality of the components that you receive. I'm going to call this starting point and this kind of micro brand the assembler because that's largely what they do with some minor variations from brand to brand. The second piece of the starter puzzle is what you're building, specifically the designs. The first question you have to answer is are you going for the mass market or for the niche customer? All things being equal the mass market micro brand is going to prioritize having a sports watch, a diver, a chrono and an integrated bracelet watch in their lineup. Why? Because that's what a lot of people want. The niche micro brand is going to either prioritize a much narrower assortment, so maybe they only have dive watches and field watches, but no integrated or sports watches or they go so niche to only sell dress watches. So you might be thinking why on earth would you not go for the mass market offering? They are after all more customers. That's correct, but there's also a whole lot more competition and it's much harder to differentiate yourself. Those mass market customers are potentially also less picky about the brand and will shop around where the niche buyers tend to have stronger preferences. Initially, regardless, the goal is to have brand loyalists to spread the word and those niche loyalists are incredibly vocal. Just ask somebody like Studio Underdog. So on the one end of the scale you have mass market brands like Christopher Ward who obviously aren't micro anymore or Maine who also have their integrated watches, their divers, their sports watches and at the niche end you have Unimatic who only make divers and field watches. The second question is, you choose where your creative starting point is. Are you inspired? And by inspired, have you taken a look at heritage brands and found your inspiration for designs there? Maine, did you take a passing look at Vacheron and Universal Geneve? San Martin, did you just take a look at iconic subs and Tudor watches? There's nothing wrong, mind you, with starting here. Leaning more heavily on proven designs and packaging that at an affordable price is not a bad starting point. There's also degrees to this. Some brands like Steinhardt are openly homages where a brand like Maine can argue that they put their own spin on things and don't sell their watches based on an argument of our watches are just copies of. If you're not inspired, are you mainstream? And by mainstream I mean you just kind of follow the relatively generic, inoffensive and broadly conventional design rules. Your diver is not going to have a weird octagonal case, you're not going to have a 430 position crown, you're not going to make a brick bracelet, you're going to make a nice inoffensive diver watch with a crown guard, an aluminium bezel, partially gradated black dial, white plots, three o'clock date window and a three-link bracelet. Like I said, this is a continuum. What is inspired to me might just be mainstream to you and vice versa, but you are somewhere on this continuum. If you're not inspired and you're not mainstream, then you're a creative. You're Fernand Marais, you're Unimatic, you're Serica. Your claim to fame is much more original and to some degree, definitionally it makes you impossible to be completely mainstream. What we do is we combine those two dimensions. Mainstream and mass-market, that's Monta. Inspired and mass-market, that's Main. Mass-market and creative, that's Unimatic. And niche and creative, Studio Underdog. What you've ultimately got is four kinds of micro-brands. The inspired homage brand, the generic value brand, the design brand and the cult brand. Who succeeds initially is in part down to where you start and how you manage the transition to becoming bigger and what your risks are. So take the niche and creative brand like Studio Underdog. What's the challenge initially? Obviously, it's whether or not anyone will like this niche design language. Is there even a market? What's the second challenge? Staying power. And that's because you might find someone that for a period of time finds this approach interesting, but is it so niche that interest tapers off relatively quickly. A one-hit wonder, the crisscross of watch designs. That's your risk. The inspired mass-market brand like Main. Challenge number one, how do you stand out in a sea of homages and inspired watches? Why should the customer pick you? The mass-market mainstream brand? The first challenge is getting people to care. It's just a generic diver. Why would anyone buy yours? Is it price? Is it quality? What's your initial selling point? There are cool people and there are not so cool people. Cool people are subscribed to this channel and there are the uncool people who are not subscribed, but you're here. Don't you want to be cool? Don't you want to be part of the in-crowd that listens to an old man who talks about watches? Click subscribe now. Thanks a ton. That's stage one. Stage one is about proving you can sell a watch. Stage two is about proving you actually have a brand and this is where it takes you to the second stage of the micro-brand. Customers are buying a fair amount of your serica models, your main manhattans and your goofy pandas. So what are your challenges now? Regardless of where you've positioned yourself, mass or niche, creative or inspired, there are two challenges that you're faced with. Renewal and quality. Renewal is you need to keep your brand interesting. You're not Rolex. You can't coast with updates to models once every five years. Odds are you don't even have a complete lineup yet. The renewal element takes on various forms, but either you need to add new product categories. So if you have a diver, now you add a GMT or a field watch, or you add variety. You can see how this renewal thing plays out. Formax have added a product category in the Stratos, the UTC watch, and they've added variety in terms of dial materials and case materials. The same watches with different variations. Studio Underdog have continued to add variety with new dial combos, but have largely not done much in terms of expanding their lineup. When it comes to quality, you've got two drivers. Those initial Kickstarter customers are typically okay with a few kinks in the product. The moment you get bigger, you start to meet regular customers and they are less loyal and they are more critical. Simultaneously, you're also managing bigger volumes from suppliers and you are spending more time checking the quality of the stuff you're receiving. Plus, because you have more SKUs, there's just more work in quality assurance and quality control. Inevitably, you are going to start to ask yourself the question, where can we take control of more of the processes and potentially take more things in-house? This is where a brand like Christopher Ward, who are no longer a micro brand, take a stake in ownership of one of their suppliers. It's where Studio Underdog in-houses the assembly processes of their watches, and it's where you start to see brands playing around with improvements of components. They move from an aluminium bezel to a ceramic, they get a better movement inside, they add a micro just to the bracelet, those kind of things. But the second stage is where the decisions of the brand made at the very beginning of the journey start to have consequences and clear limitations. Renewal and quality do something else as well. They expose whether your original positioning was actually sustainable. Because the thing that got a micro brand its first hit often isn't the thing that can build a full brand. A brand built on inspiration can sell one watch, but you can't build a brand entirely on inspiration of others. So think of it this way, if you've got successful because of your Parmigiani Adjacent Integrated Bracelet, what's next? A Parmigiani Adjacent Chronograph? You can't do that. The entire lineup will look and feel and smell like a You also just can't start borrowing from everywhere. You can't have both a Vacheron-style chronograph and an IWC-style pilot in the same lineup, because they would feel completely incoherent. It will make your lineup look like a mess. You had an easy start, but now at stage two you have to actually be creative and original. So the one thing you avoided in the beginning is now your barrier for long-term sustainability. So what does that brand do when they are under pressure and out of ideas? Meteorite dials, skeletonized dials, ceramic cases, same watch, different materials, old wine, new bottles. But there are also problems for the brand that's built on strong creativity. Because how do you maintain that momentum on the one hand, and how do you transition from quirky one-time fun piece to consistent long-term demand? And a good illustration of this is the Moonswatch. It was a brilliant one-time idea, but how do you expand the concept without simply repeating it? Suddenly the creative brand faces a paradox. If the new design is too similar, people are going to say it's repetitive. And if it's too different, people are going to say that the brand has lost its magic. Cult brands are going to face the same problem as the creative brands, just much more amplified. Their appeal comes from being unusual. The moment they try to scale, they risk losing the very thing that made them interesting. And the mainstream mass market brand? What's keeping customers with them? What makes them special? Nothing. If I don't like their 1960s style skin diver from this brand, I'll just get a generic 1960s skin diver from some other brand. These brands then usually pick one of four directions. They try to extend the hit with variations, colors, and materials. They expand the lineup. You know, new categories, tool watch, dive watch, pilot's watch, whatever. They throw in even more creativity into the mix to make it edgier and wilder. Or they try to move upmarket with better materials, better movements, better finishing. The problem is picking one of those four won't make you sustainable. It extends the train tracks a little bit further, but it doesn't complete the track. At some point, new dial variations become boring. At some point, your lineup gets bloated. And at some point, you've priced your way out of what made you interesting. The brands that transition to a truly larger scale have a plan for all four pieces. That second stage just takes you to a whole new level of complexity. And having a good watch just doesn't cut it. And honestly, most micros don't make that transition. They don't necessarily all go out of business, but a lot of them languish in this forever small phase where they rely on their initial appeal to keep them afloat at whatever volumes they've become accustomed to. So Dan Henry works to extend their original hit as their solution. It doesn't truly get them to the next level. Formax have expanded the lineup a small amount, but mainly have just extended the hit with variants. Very few brands have done all four. And to illustrate that, I'll take Tudor's revitalization that took almost 15 years. And I know they're not a micro brand, but it's the same logic that applies. They expanded the lineup from the Black Bays to the Polarograss models to the FXDs and so on. They extended the hits with dial variants and material variants. They threw, relatively speaking, more creativity into the mix with the FXD, the Daring lineup, and also the one-offs like the P01s. And they've moved upmarket with improved quality across the board. That's all four dimensions. Set aside your love or hate for the individual micro brand, but take a look at how they deal with growth around that second stage. That's where you know who will languish and who will be big in 15 years' time. Now it's your turn. Tell me who has transitioned really, really well, who are struggling, who won't make it. Share in the comments, like, subscribe. Cheers.