Rolex (Audio)

all right David what's on your wrist well currently on the wrist is my stainless white face Daytona that my dad gave me I think it was still quite popular when he gave it to me probably

close to 15 years ago but not like it is today a strong choice I am actually also wearing a Daytona that I am borrowing from a good friend of the show M love it

well fun fact for listeners the watch that David is wearing is the one that I was wearing during the Morris Chang interview when we wanted to foreshadow this was our next episode yes and in

front of me here now in my hand but not on my wrist is my other Rolex that my dad gave me a long time ago my rasur

datejust dude you got to go one on each wrist great all right who got the truth is it you is it you is it you who

got the truth now is it you is it you is it you sit me down say it straight another story on

the way who got the TR welcome to the spring 2025 season of acquired the podcast about great companies and the stories and playbooks behind them I'm Ben Gilbert I'm David Rosenthal and we

are your hosts all you need for timekeeping is something that happens at a constant rate and some way to count it it could be sand in an hourglass it

could be a weight being pulled down by gravity on a grandfather clock slowly turning the hands moderated by The Tick Tock of a pendulum or it could be a

mechanical watch on your wrist driven by a complex and beautiful array of hundreds of gears and Springs today listeners we tell you the story that we

can't believe we have an already told on acquired Rolex o Rolex is a Cascade of paradoxes it's one of the best known brands in the world but despite that

it's one of the least known companies in the world they're privately held by a charitable Foundation the Hans wisdorf foundation so they don't have to disclose anything and really they never

do they're one of the most secretive companies that we have ever studied and David check me on this I think they're even more secretive than Ikea or Mars oh yeah it's funny that the closer to the

present day we get the less we know totally they operate like an intelligence agency over there yes like James Bond one might say oh or one might

not say listeners they make that everyone wants to buy but nobody seems to be able to get with famously long and opaque lists at retailers

except of course over a million people a year actually do buy one and for an average price of $133,000 each that is until you walk out of the store and then they instantly

become worth more at least for a lot of the models these days to your point about paradoxes of Rolex this is one of the greatest ones it is absolutely one of the very very top top tier luxury

brands in the world and yet they also sell a lot of units Hermes doesn't sell a million birkens every year there's probably 10 times more Rolexes sold than Burkin sold or at least on that order

it's a success built on the back of craftsmanship engineering and Manufacturing honed and perfected over 120 years it is one of the greatest brands in the world built meticulously

and so intentionally David and my favorite part of the Paradox this is the story of the most successful Swiss watch company but it wasn't founded in

Switzerland or even by a Swiss person no no it was not it's a 10 plus billion doll Revenue business performing a dead craft obsoleted by the digital world

they make a watch that can't tell the time as good as my Apple watch or even a $10 Casio for that matter so what is going on here how did Rolex become Rolex

this is a story we've been giddy to share oh so excited well one big disclaimer up front much like how our NFL episode wasn't about football and our NBA episode wasn't about basketball

this episode isn't really about watches it's about the business of watches yes if you want to know every time an episode drops check out our email list it is the only place where we will share

a hint of what our next episode will be and we'll share Corrections updates and little tidbits that we learn from previous episodes that's acquired. fm/

or click the link in the show notes join the slack come talk to us about this episode with the whole acquired Community afterwards acquired. fm/ slack

and if you want more acquired between monthly episodes check out aq2 our interview show where we talk to Founders CEOs and investors who are building businesses in areas that we've covered

on the show the most recent one was a very fun interview we did with a friend of the show guo Rous the founder and CEO of versel about really the whole history

of web development Frameworks and their latest and greatest product vzer a startup within a startup that lets you code web apps from scratch in just English instead of a programming

language yes search aq2 in any e podcast player and before we dive in we want to briefly thank our presenting partner JP Morgan payments yes just like how we say

every company has a story every company story is powered by payments and JP Morgan payments is a part of so many of their Journeys from seed to IPO or in

this case uh never being public ever uh and Beyond and listeners this is not investment advice but um you can invest in this and you can invest in many of the other great brands that we were

going to talk about on this episode either there's something kind of remarkable about the uh companies we wish we could invest in but actually we can't so this show is for informational

and entertainment purposes only David where do we start our story all right well we start as is so often the case with these big old European companies

back not in the last century but even the century before that on March 22nd in

1881 in kbach Bavaria about 30 miles north of nurmberg in present day Germany

where Hans eard Wilhelm wilsdorf is born to young Anna and Johan wilsdorf and you might say this sounds like a German name Bavaria wasn't a part of Germany right

well I was just going to get to that technically it's not Bavaria anymore technically it is part of the German Empire but this is a very very recent

development as the count ovon bismar had only just 10 years earlier convinced Bavaria to join forces and Unite with Prussia to form the Greater German State

German Empire in the aftermath of the Franco Prussian War where they battled Napoleon III over in France but as far as young Hans and his family are

concerned they're Bavarian they don't identify with this Germany thing this is foreign to them they are also Protestant

not Catholic which puts them in the great minority in Bavaria at the time now I say all of this deep European history here for two reasons one because

it's sort of a fun story and um calls back to our ourz and lvmh episodes and it's going to call back very directly to those episodes in a minute here but also I think it's important to paint paint

the picture of Hans is even from birth he's kind of this consumate Outsider he doesn't really fit in in any sort of national or religious identity in the

either established or changing European order at the time he doesn't really have a country he doesn't really have a religion or a people he sort of floats between the seams of Europe which Rolex

itself is going to do as we shall see in a very big way yep now back to Young Hans and his family his father Johan came from a line of successful iron

mongers and very likely Hans was destined to go into this business as well however when Hans is 12 years old tragedy strikes and both his father and

his mother die within a couple months of each other so he's orphaned just like this should sound familiar Ben oh yeah Louis Vuitton and dmes this is

absolutely freaking nuts the founders of arguably maybe the three biggest and most significant luxury brands in the world today were all orphans from the

1800s this is wild and I wonder how much of a statistical bias there is here if we were studying anyone from this era how many of them would be orphans

because of disease and War and yes all sorts of stuff just lots of people died for lots of reasons yes totally totally true but it's just so interesting right these Brands I mean much less so Rolex

but heres lvmh are so steeped in this European history and the tradition of the nobility but it's actually these orphaned Outsiders that founded them well I think it's a great Point Rolex

doesn't share that Heritage at all this is not steep to nobility this is not an artifact like a leather bag or a saddle that any kings ever had when you buy a

Submariner or a Daytona or even a datejust you are not buying Swiss history here you are buying 20th century modernity as we will get into so in the

wake of this tragedy Hans and his brother and sister are placed in the care of his uncles and the uncles decide that they are going to sell the family

iron mongering business to fund sending Hans and his siblings off to boarding school I see so Hans would later write in this amazing document that is

essentially his autobiography it's the first volume of four book set that the company published in 1945 for the company's 40th anniversary the Ruby

Jubilee Hans writes our uncles were not indifferent to Our Fate nevertheless the way in which they made me become self-reliant very early in life made me acquire the habit of looking after my

possessions and looking back I believe that it is to this that much of My Success is do H so Hans goes off to boarding school and becomes an excellent

student there he excels in math and he also excels in foreign languages particularly English and while he's there in boarding school there in

Bavaria he meets a friend who is from Switzerland and he develops an interest in that country and he no longer really has any family ties or anything to Bavaria anymore doesn't really care about Germany he's like oh great

Switzerland seems like a good place I'm going to go live there when I graduate which he does he moves to Geneva and he

finds work there first for a large Pearl Merchant so this business was buying like raw pearls from fishermen and then selling them to the famous Swiss

Jewelers there in Geneva and then he joins another local Trading Company in a adjacent industry to the jewelry business a firm called Kuno corten Kuno

corten turns out isn't in just any industry as far as Switzerland goes they are in the industry besides banking they're in the watch trade well you need something to bank yeah you need

something to bank exactly a country can't just have banking as an industry it needs a real economy to build banking on top of exactly you start with jewelry watches

then you get into Banking and Kuno Corton is actually a major player in the watch trade now they are not watch makers they are watch exporters so they

are facilitating the trade of all these best in the world Swiss watches out out of Switzerland and into other countries around the world and at this time this

is like the late 1890s Kuno is doing about a million Swiss Franks worth of business a year now I don't know exactly what the Swiss frank to US Dollar

exchange rate was in 1900 but today the Swiss frank is stronger than the dollar it's about one to one they're pretty close so call it a million dollars of business a year in the 1890s like this is big they're a big player and it's

important to remember too it's not like watches where this little corner of the Swiss economy exporting watches was a huge part of the Swiss economy and a

huge employer in the nation yes now we're saying watches here it's important to note what were watches at the time they weren't something you wore on your

wrist it was not wrist watches because basically Hans and Rolex hadn't invented that yet they didn't exactly invent it but hadn't popularized it yet we're talking about pocket watches yes that's

what the industry was at this time and part of the reason is functional pocket watches were bigger so the movement to accomplish a certain amount of precision didn't require as little teeny tiny of

tools and you had more margin of safety in bigger watches and so whenever anyone tried to make a watch and put it on the wrist at this point in history it was usually fragile or really inaccurate or

actually worn more as jewelry and so they actually didn't call them wrist watches they called them wristlets and they were mostly worn by women wristlets yes we'll get more into that later and I

know you chomping at the bit to give you the technical explanation of the crazy human craft and Engineering that goes into watches it's amazing it's so

unbelievably cool but back to the Han story for the moment so the job that young Hans gets here at Kuno turns out to be pretty pivotal for him and the

future of Rolex he is a secretary which means that he's answering letters from clients all around the world and then responding and coordinating with them

because remember he's really good at languages and what is his best language English so he's coordinating with most of their clients in the British Market

in the UK and he sits at this really interesting choke point of the whole industry where he understands how all the producers are sort of laid out and how the whole value chain works on the

Swiss side of things he's seeing the market prices and price action happen for all different types of watches from different makers and different parts etc

etc but he's also getting to know the buyers in Britain who are not individual people these are retailers these are the Jewelers in Britain these are the

distribution points for watches yep so he's getting the perfect business Market strategic background distribution relationships for going on to ultimately

found Rolex but it's not just that he falls in love with the business of watches there he also falls in love with the objects and watches themselves in

their performance so he starts this habit of he would take home batches of pocket watches at night and he would run his own tests for accuracy on them on

the product that Kuno Corton was trading in so he would set them all at the same time and let them go overnight and then he would check them in the morning how much they are disparate from one another

and check their accuracy and the legend goes that one day he gets the idea that he's going to take three watches that he's found to be quite accurate in this whatever this recent batch that he's

testing his and he's going to go get them tested at the local astronomical Observatory and have them measure these watches according to the strict Observatory timekeeping tests which are

also called chronometer tests so if you've ever heard the term chronometer a chronometer is a timekeeping piece could be a watch could be a larger clock could

be all sorts of devices that has passed these astronomical Observatory tests for being accurate enough for Celestial navigation yes David I'm looking down at

this Daytona right now and it says Rolex Oyster Perpetual which all three of those words we haven't gotten to yet superlative chronometer officially

certified cosmograph a lot of words in there that we will get to but at the moment where we are is chronometer officially certified yeah yes and today

this is like a oh you know cool that's cute your mechanical watch is like officially certified that it keeps good time back then this is critically important Celestial navigation if you're

involved in anything in shipping the maritime trade is critical if you have a crappy time piece you're going to go to the wrong place because you're using it for navigation and so to your point

Observatory chronometer certification no one's doing it for my pocket watch that I can set to the local church bell or whatever whenever I need to reset it but

young Hans has this idea he goes and does he guess what these three pieces that he takes these pocket watches they pass the test and they get certified as chronometers and he takes them back to

his boss's at Kuno and they're like whoa well let's slap that on the tin baby you know and it's this aha moment of Kuno and

then soon the rest of the industry realizes oh actually chronometer certification on pocket watches helps us move product here yep the other thing to

realize here is we are in an era where and this era would last the next 100 plus years but an era where having a

watch is super important yes it's not a fashion accessory it's not a nice to have without a pocket watch if you are leaving your house and moving about in

the world you're lost it's almost like not having your phone today day where you feel like I'm floating it's very uncomfortable totally it's even more than you're saying it's like a

smartphone in that you need it to function but pocket watches are also like smartphones today and that they're fidget devices if you're out in the world and like you're waiting in line or you don't know what to do with your

hands you're in a socially awkward situation you know whatever you're take your pocket watch out you're going to open the clask this is what people did it was just so ingrained in everyone's day-to-day existence just like

smartphone is today it's an essential tool for moving about the world which explains how it's such a huge industry that moves the needle for the nation of Switzerland and how there's these

businesses that can be exporting a million dollars worth over a hundred years ago and why there's so much attention being paid to it it's not a random accessory it is an essential

piece of Life a tool totally so after working at Kuno for a couple years and liasing with the British Market in 1903 Hans decides that hey I'm good

at English I like London I might actually want to move there so he moves to London at age 22 and he goes to work for another watch company there in London locally we actually don't know

the name I don't think anybody has ever found the name mm what you and I read probably five books between us and wasn't any of them yeah he works there

for two years and he writes two things struck me most forcibly about my new employers this British watch company on the one hand their commercial

competence and on the other hand their lack of specialization I soon gained confidence in myself and in 1905 at the age of 24 decided to set up in business alone feeling that my training and

education had prepared me so he strikes out on his own starts his own watch importing company there in London but remember the specialization piece that'll come back in a sec so Hans is

out on his own there's one problem though which is in order to do what he wants to do which is import Swiss watches and sell them directly

under his own Banner where he makes and keeps the profits there in London he needs some capital in order to finance the buy got to place the order yes so

through his lawyer he gets connected with a local man in London named Alfred James Davis who has some money to invest and say they meet through the lawyer

they hit it off immediately and decide to go into business together and thus in 1905 wilsdorf and Davis limited the world famous Merchant watch trading firm

is born and uh yes none of you know wisdorf and Davis however wilsdorf and Davis limited is Rolex yep as we shall see now it's often said that you know if

you read anything about the history people will tell you oh well Davis was hans's brother-in-law he married hans's younger sister Anna that is true but I

believe that didn't actually happen until after Hans and Alfred went into business together I think Anna met Davis through Hans but really it is Wills

dorf's company it's kind of funny that Davis's name is on it I kind of get the sense he's mostly Capital yeah he's there a little bit but it's almost as if

you know Atari instead of being Atari is Bushnell and Valentine that's the equivalent here I think that's right and obviously they get closer over time as they become family when Davis marries

hans's sister but yeah I think this is hans's business he's running it Davis trusts him yep and so what is the business doing well the business plan

when they get going is they're going to do what Hans has been doing his whole career at this point in time which is importing Swiss made highest quality in

the world watches into the London Market where there is high demand for them and they're not selling directly to Consumers right no just like back at

Kuno Corton the buyers are the retailers are the Jewelers no end consumer had any idea who made their watch at this point in time they would walk into the retailers say give me a fine Swiss watch

sir and the retailer would sell it to them and the retailer would take one out from the case you look down at the face of the watch the face of the watch has the Retailer's name on it and you're

just trusting that the retailer bought a good watch from some importer who bought a good watch from someone on the Swiss side who managed to create a good watch

by putting a movement in a case and all that together now there's a little bit of detail in there where sometimes the Importer would import a fully built watch sometimes the Importer would just import a movement and then they would

import a case differently and then they would put together themselves but this was the craziest thing that struck me is the retailer is the brand on the watch at this point in time yes there is no

brand for the product right so will SF and Davis is occupying the spot in the value chain where they are importing the watches and then selling them to retailers to Brand yes now you said

there a minute ago something really important which is there were kind of two ways that this would happen you would either import fully finished watches from Switzerland a whole product

so to speak and either a trading firm like wisdorf and Davis would do this or Kuno courton would export it or maybe the retailers would buy directly from Kuno Corton Etc if they were big enough if they were big enough yep what

willsdorf and Davis are doing is they're saying well Hans knows through his time at Kuno Corton all the best movement

makers all the best case makers right he operated one click up the value chain sort of aggregating on the Swiss side exactly so now that he's operating down on the Importer level one click down the

value chain he's like I can still aggregate all these producers and start building a watch myself yes so he's not making anything but he is assembling the

finished products so he would have watch makers there in Britain assemble the best movements that he would import from Switzerland with the best cases that he would find and that was part of his

value that he's adding to the industry here and this is probably an important time there is so much lingo in the watch industry and we're going to do our very

best on this episode to mystify it movement in laye is the hole inside that makes the watch tick and drives the

hands yep not the dial right correct no dial No Hands no case no glass front and

the movement I think like you said is kind of the critical piece absolutely that's the hard thing case is important dial is important hands are important but that's all Aesthetics and as far as

performance goes 100% movement it's like semiconductor production if you're a movement maker you're like tsmc here right chronometer officially certified refers to the movement actually in fact

only the movements are tested not the whole final cased watch not the finished watches yes so David who is he importing movements from and how does he meet said

movement maker well that brings us to the other half of the Rolex equation when Jean agler based in bienen Switzerland which is in the mountains of

the north of the country importantly not Geneva yeah not Geneva Geneva is in the southwest of the country in Switzerland right next to France so agler runs this

movement Workshop up in what is then a tiny little town in the Swiss mountains and it turns out that he's actually kind of like a generational Talent at watch

movement making and in particular what he's really really really good at is making movements that are accurate and on par with the highest quality most precise most accurate movements out

there on the market but are also much smaller in size he's making miniature movements and Hans had gotten to know Jean when he was working at Kuno Corton and kind of thought like oh hey man this

guy's a diamond in the rough up there in the mountains he's as good or better as any movement maker and he's making these miniature movements before there's a real Market it's almost like he's just doing it because it's the hardest thing

he can think totally it's like his hobby horse I'm going to push the limits of human achievement of how small can I make this thing yes I think it's probably known and respected in the industry but wasn't

a large player and Hans is like oh actually this guy is my ticket to differentiation here I'm keeping his address so I can write him a letter when I get to when I start my own company

yeah so here we are at the beginning of wisdorf and Davis Hans is importing these movements from agler that he's putting into cases selling his watches

here in the UK this is 1905 this carries through this relationship for the next 99

years until Rolex finally Buys agler in 2004 where agler is making the movements for Rolex watches and I don't think

there's ever any real formal Arrangement here it's basically a handshake deal yep that's correct we will make your movements handshake deal for 99 years yes all of Rolex everything it becomes

this is the basis of it and so they weren't exclusive yet so in 1905 they're placing their first order and there's already a little bit of a dance that's starting to happen where of course the

front of the watch on the dial is unsigned so the retailer can put their name there this already is starting to rub hods the wrong way he kind of feels like these are my watches why do the

retailer get to put their name on it and so he goes to agler and says the ones we're going to sell these are willsdorf and Davis watches I understand you made the movement but we got to Brand it

somewhere and so he gets agler to buy in on this idea that on the movement they're going to put a w and d and then also inside the case back for whoever

they're buying the case from they also inscribe W and d and so that's the state of things here in 1905 and those first few years after is there's a w andd on

the inside case back on the move M but not on the face of the watch yep which gets into the type of watches that they're making here now we're still in

pocket watch Land the wristwatch Vision hasn't really entered hans's brain yet even though iger's specialty is these small miniature movements so remember

what Hans said about his earlier British employers and their lack of specialization he continues in his autobiography talking about how he decided to do things differently here at

wisdorf and Davis quote I undertook the financial side and management of our concern from the very outset our success was assured by our fundamental policy to

trade only in Specialty horological Products and especially in new lines the first specialty we adopted was the traveling watch called a portfolio watch

cased in the finest quality Leathers this line I immediately placed in large quantities on the market the range covering every possible style and design so again we're not wristwatch yet but

he's like the way that I'm going to succeed and break through here is through differentiation yes to do something different it's like we always talk about the most important thing to

build a huge successful business is to do something different and unique that people have to come to you for and can't go to the commodity markets now that doesn't necessarily mean you're right

yeah cuz he's not right with traveling watches we don't tell any of the stories here on acquired of all the people who wanted to do something extremely unique and different and was not what the

market wanted but it's the classic you have to be contrarian and right yeah and you know I don't know I guess reading what Hans wrote there maybe he was right it sounds like the traveling watch was a

success enough he probably thought it was a success at the time yeah so then as Legend has it one day shortly after starting the company and focusing on

these travel watches Hans is reading an account of the second boore war in South Africa man Ben I never knew that all my

like European European history lessons G I tweeted this yesterday I know I know who knew that our livelihoods would depend on AP European History someday

that's right anyway Hans is reading an account of the second bore war in South Africa and he reads that the soldiers that had fought had worn wrist watches

so that they could coordinate their movements and their firing times and all the troop movements even while they holding guns do you know why in particular this war had them wearing

wrist watches oh I don't I just assume that the technology had progressed enough cuz wrist watches existed at this point in time they just weren't thought

of as serious watches that was part of it climate oh yes of course they can't wear their jackets and so they can't reach into their pocket and grab a pocket watch of course because it's hot

there yep well climate is going to become important again here in the development of the wristwatch industry so the soldiers and officers there would use these wrist watches because even though they weren't as accurate as

pocket watches like you said Ben you probably weren't wearing a jacket even if you were wearing a jacket like if you're engaged in battle you're G to stop put your gun down take your pocket

watch out of your vest open the case no the axis upon which you evaluate value is a different axis than when you're hanging out on the streets of London yes

supposedly as Hans is reading this like a bold of lightning he has the key Insight well hell it's not just soldiers these days it's actually like a lot of

people in the world that could benefit from having an accurate time piece on their wrist that they could just turn their wrist and look down and look at instead of a pocket watch now the funny

thing is he calls agler maybe he writes to igler I don't exactly know he sends him a text he places the largest order in iger's company history several

hundred, Swiss Franks for a bunch of these tiny movements and the great irony of this whole thing is he's kind of wrong the time was not right for

wristwatches yet the bore war was not the shove that the world needed to say whoa wrist watches the soldiers come back from the bore war and it's still

kind of the wristlets era there's not really enough inertia to make it take off everywhere now it's kind of okay because WIS dorf and Davis is still this small company so they don't need that

big of a market to address to feed the needs of the business but it would be another 10 years before World War I happened and you had this

incredible unfortunate Tailwind saying oh my God we need tons of wristwatches now yeah there does start to be a market for serious timekeeping wrist watches

particularly in the far reaches of the Empire so Australia South Africa of course after the bore war and especially India these are places where you're

probably not wearing a jacket or a vest that much so this is the initial seeds of the wristwatch market for wisdorf and

Davis so interesting but Hans is like a True Believer at this point in time this is going to be the future Way Beyond just the Empire people in Britain are going to want this too it's obvious to

him why you wouldn't want to have to reach into your vest to bring out your pocket watch he's like a zealot he's a total Zealot so he's like all right we've got this killer product we're first to Market we're basically going to

invent this whole Market we need a name for the product we need something that's going to make consumers know to ask for this product for our watches we need to

coin the term for the industry and he's inspired here by the Kodak camera yes which by then had been around for a while and was made not by the Kodak

company but by the Eastman company and Kodak I believe was the first invented product brand name and it was a name that meant nothing yeah I think that's

right and it intentionally meant nothing it was easy to pronounce it was easy to say you could see it once it was very memorable it worked in any language it was five letters it had a great sound to

it so supposedly Eastman came up with the name Kodak with his mother using an anagram set and he said that there were three principal Concepts that he was looking for in the name one it should be

short easy to pronounce it should work in any language and it should not resemble any other name or be associated with anything else yep anyway Hans takes inspiration from this and he decides

that he needs a Kodak for his new wristwatch and he writes I tried combining the letters of the alphabet in every possible way this gave some hundred names but none of them felt

quite right it was one morning when I was sitting on the upper level of a double-decker bus powered at that time by horses driving alongside cheapside in

London that a good Genie whispered in my ear Rolex he's good at mythmaking many startups are named this way today totally and a few days after this

fruitful Journey the Rolex brand was filed and then officially registered in Switzerland by wisdorf and Davis now this is a brand name this is not yet the

company name it's Rolex by willsdorf and Davis so they trademark it in Switzerland a couple years later they trademark it in London and you know it's short it's easily pronounceable it's memorable it's the same in every

language but there is this one other characteristic that makes it really perfect which is when you hear Rolex you can kind of think about

rolling a crown of a watch you know that little knob that's sticking out from it that you use to wind the Clock IT channels that and there's also the X

kind of has a timekeeping feel to it also it almost is like the tick tick tick tick tick tick tick the Rolex feels like maybe you're turning the crown until it hits the end or something like

that you can Intuit the type of product that would be called Rolex yes totally so Hans is like okay great I've got my

Kodak name got the brand invent this new category how am I going to legitimize this with customers well I have this one cool trick that I've used before exactly

I had the one cool trick I'm going to do the one cool trick just with wrist watches instead of pocket watches in 1910 he sends the

first wristwatch movement to the school of horology in Switzerland to be awarded the world's first wristwatch chronometer rating which is a big deal because

people just did not think these things were accurate before and without egler they kind of weren't exactly now getting certified at the school of horology in

Switzerland is nice and all but this isn't an astronomical Observatory this doesn't carry the same weight as something like uh oh say the Royal

Observatory there in England so Hans and agler keep working on these products refining the movements agler is getting better and better at

making wristwatch movements that are truly great 1910 goes by 1911 goes by we're here in 1912 wisdorf asks agler

specifically hey can you produce a wristwatch capable of achieving an observatory timekeeping certificate and David as you mentioned

the Royal Observatory and igler says let me try and let me get to work it still takes a couple more years so he works for two years and then finally in early

summer 1914 Hans takes one of iger's movements to the Q Royal Observatory in

England Kew Q for testing now Q is not only a well-respected Observatory for astronomical and

specifically time piece testing there in England it's where all the Marine chronometers for the British royal Navy are tested the British royal Navy at this point in time we're talking the

British Empire the greatest Navy in the world and it takes 45 days they put it through the ringer to make sure that this Marine chronometer is going to get our soldiers our Sailors where they need

to go and even more than that it is of course affiliated with the other great observatory in England the Greenwich Royal Observatory yes which you know was

where Greenwich meantime was invented we were talking like probably the most important timekeeping institution in the world have you been there David to

Greenwich no no I want to go have you there's an awesome some museum with the history of timekeeping when I spent some time in London a summer gez 15 years ago I went and spent a day there it was

amazing oh we got to go yeah we'll stop by on our way to Geneva perfect so again here we are it's early summer

1914 Hans has submitted this wristwatch movement to q and after the 45-day rigorous battery of testing on July 15th

1914 it comes back it is passed and it receives the First Class A Precision certificate known as the QA ke

w-a certification ever awarded to a wristwatch caus for great great celebration and Fanfare all around the

world except that it is 3 weeks after World War I starts yeah so between the time that Hans had brought the watch in for testing and when it finally gets

gets the certification Arch Duke France Ferdinand is assassinated in Bosnia by a Serbian nationalist the whole rats nest of European alliances gets triggered and next thing you know the whole world is

at War on the one hand nobody cares about watches there's a war breaking out on the other hand everybody cares about watching right exactly exactly so World

War I is truly the first Crucible moment for Rolex because it's the best thing that ever happened to the company in the industry it the whole world care about

wrist watches also it's very directly the worst thing because all of a sudden anti-german sentiment in Britain goes through the roof totally insane there's all sorts of horrible propaganda I

didn't realize this till now do you know why British people call German Shepherds alsatians yeah because they don't want to call them German it's because of this yeah there's all sorts of racism against

Germans in England and in Britain which is utterly ridiculous because the British royal family was German so Queen Victoria married Prince

Albert Prince Albert was a German Prince the whole British royal family was German this is when they changed their name to Windsor because before Windsor their family name was saxa cobber go

which isn't going to play well when you're at war against the Germans no no no no no no speaking of things that aren't going to play well when you're at war against the Germans you're not building a strong consumer brand in

Britain in 1914 called wilsdorf I mean if the British royal family is rebranding changing their name yeah wilsdorf and Davis also needs to Rebrand despite the

fact that at this point wisdorf is a naturalized British Citizen and feels no affiliation to Germany he really doesn't ever in his life consider himself German

totally totally but this is the birth of the company Rolex so in 1915 they renamed the whole company after the brand name Rolex and the Rolex Watch

Company limited is founded well David I was about to ask you how does this become a Swiss watch company and the answer is definitely right around this

time in World War I but before we tell that story now is a great time to think our presenting partner JP Morgan payments just like Rolex JP Morgan story spans Generations in the pursuit of

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acquired yes all right David so how are we getting to Switzerland yeah how does Rolex become a Swiss watchmaking company well obviously the anti-german sentiment

was part of it I think if that were the only Factor Rolex probably would have stayed in England yeah at this point wilsdorf is a naturalized citizen his wife is British the company is called

Rolex now or they're working on it it would have been fine yeah however the other reason that World War II in Britain is bad for business for the new

Rolex company is that Britain imposes a 33% import tax on watches early on in the war that's going to kill your importing business well it's interesting

I read that and yeah it's going to make it tougher it's crippling but it's still you could run a business you could figure out how to pass those prices along to customers that's often what

happens in the case of teror but one year later at the beginning of 1916 the British government puts the nail in the coffin they completely banned the import of all gold and silver

they made it impossible for wilsdorf to build this business based out of Britain because a lot of times he's actually exporting the watches for sale in colonies or he's importing a movement

he's importing a case or maybe he's taking a local British case putting it together making a Rolex watch and then it's getting shipped out somewhere else and he's sitting there thinking I can't get these precious metals and I'm paying

out the nose for these movements this is stupid to run my business here yep and I assume then as now rolex's margins in

the precious metal watches are way way way higher than in nonprecious metal watches it's insane a $10,000 watch becomes a $30,000 watch when you add

gold to it or platinum or whatever yep the Delta between it's like apple selling memory exactly exactly yes interestingly in the hype of 2020 to

2022 the precious metals were actually easier to come by as a customer because there was so much less demand to go buy a 3050 $100,000 watch that those would kind of be lying around while the steel

ones were flying off the shelves and there were huge lines for them totally so on the back of this in 1916 Rolex first moves the Assembly of the watches

to bienn in the Swiss Mountainside near igler is which makes sense they set up a office and basically say hey you're making the movements next door we're going to put a case on them right here

yep and then be able to export from Switzerland now to countries all over the world and not go through Britain first ultimately after the war in 1919

Hans moves both himself and the official company headquarters to Geneva where of course it still is to this day and even

to this day this is crazy design sales marketing and I think final assembly all happen in Geneva while production of the movement still happens up in the mountains in bienn it's super

interesting it would make sense if you are Britain to throw on some terrorists to finance your War you got to finance it somehow and at the same time it also makes sense if you're a business

operating in Britain in this time to say and I'm moving to Switzerland y but there's this alternative reason to move the business to Switzerland and Hans knows it if he's going to build a

globally renowned watch company he wants to do it in Switzerland this company becomes Rolex of Geneva not just Rolex again I'm going to look at this watch

all the way down at the bottom Swiss made don't you forget it or you look at a PCH Philip genive right there on the face of every pek Philip watch they are

extremely proud of this Jive I love it jev Ben jev oh oh I'm going to hear about that one aren't I it's okay it's okay we're

Ugly Americans here okay so then the question is why does Geneva have this Prestige why is Switzerland an amazing place for watchmaking well David will

you uh indulge me in let me wind the clock back I actually thought you were going to start the timeline for this episode back in the 1500s I was shocked that you only started it in the 1800s so

perhaps this is a good time to go and tell the history of watchmaking in Switzerland story by all means okay great a lot of this comes from Mark Bridge who is the founder and CEO of at

presentes a Marketplace for unique jewelry from independent artist Mark is one of David and my very best friends and insanely coincidentally and lucky for us and you listeners he wrote his

master's thesis 20 years ago on the Renaissance of the Swiss Watch industry amazing he sent me a copy of it we're going to link to it in the show notes it's awesome to have this resource

available just very conveniently from one our best friends so all the way back in the 1500s Geneva was a center of activity for the Protestant Christian

World led by John Calvin and if you know anything about Calvinism it is uh very focused on moral uprightness yes the Protestant work ethic yes one of these

tenants was Banning frivolous things like ornamental jewelry local goldsmiths and Jewelers instead focused on watchmaking since watches serve a real

function in the world and were not frivolous it was sort of this exception to the rule if you had that skill set there's also human beings are human beings no matter what rules you impose on them it's like you know life finds a

way status always finds a way that's 100% right so you've got the rise of Calvinism along with that religious reason that's sort of causing this local

pivot of Industries you have one of climate too there are these long harsh Winters and so an industry that could be done indoors in a small physical

footprint was perfect if you're going to go pick a profession out of a hat to have in Switzerland mountainous country long cold winter like this is a great one and especially because it's so

valuable at this point in time you can become an important player in Europe in the European economy making something that you can make in your climate third

there's a cultural reason so David are you familiar with the term itbl ooh no are you sure it's supposed to be Swiss not French I was going to

say I've been to Geneva and I've been to other places in Switzerland but I know very little about its culture and history talk to me about terar I know exactly what you're talking about but I

don't know okay well it's Swiss for establishment basically but Whata means in this context is that it's this system this sort of economic system that they

established in the area of the Jura mountains where very small independent companies often one to 10 people could focus on something small like a single

component and then you'd have dozens of these small companies work together to create the finished product it's almost like a distributed manufacturing system ah so this is where agler comes from

this is why he's got the workshop in the mountains yep exactly and so with this specialization of Labor in small companies you could get really really good at your tiny part making say

hairsprings that we'll talk about later or these essential elements of watch movements these tiny companies by artisanal Craftsmen these very labor

intensive companies got really really really good and pretty efficient at making their one thing so that's kind of the backdrop of how the Swiss are

producing things and lastly in the late 1500s the French had been rising as a watchmaking Powerhouse and when the balance of power changed in France and

the Catholics came to power the French hugenot refugees who had talents in jewelry and metal work and watchmaking fled to Geneva yeah these are the Protestants that goty kicked out of France that's exactly right and so the

Protestant Safe Haven of Geneva they brought their watchmaking expertise or if they didn't have watchmaking expertise that's all they could really do if they were Jewelers or or metal

workers since you can't make anything too shiny and too offputting y so this is how Switzer and gets the reputation

as the watchmaking capital of the world yeah exactly basically this creates centuries of momentum especially in this distributed aabis system of how Swiss

watches were made I kind of think about it as this beautiful blend of French Beauty and appreciation for aesthetic and swiss Precision yeah well I mean it

sounds like Switzerland itself it's a blend of French Beauty and German precision I love it well that's definitely one big reason why Hans is

like okay we got to move Rolex to Geneva to participate in this tradition as we're now going to be selling to the world but the other reason is after World War I they're like well we're going to be selling to the world now

Britain is still going to be our largest market likely but every country in the world is fighting or at least every European country has troops fighting in World War I they're all seeing the

benefits of the wristwatch this is going to be way way way bigger after World War I I need to be able to serve the whole world so they want to be in a

neutral country yeah Y and he just experience like oh Britain puts these tariffs on and gosh well I didn't really have a market for Rolexes in Germany before but if I did I wouldn't have been able to sell in Germany and like I don't

want that to happen in the future who's not going to put on a big tariff to finance a war Switzerland Switzerland yeah super interesting you know what

else happens in 1919 well now that we've set up shop next to agler for putting their movements in our cases it's time for us to get a little bit closer so

Rolex and agler arranged for a deal where in 1919 1920 armman egler who's the son of the founder Jean buys shares in Rolex unclear what the purchase price

was that seems to have been lost to history and joins the board so he owns about 15% and so the board is wilsdorf Davis and agler there's a second part of the

deal which is Rolex actually buys shares in agler too and this one's less talked about but there were two companies that were big purchasers of the movements

it's Rolex and Gruen and both of them were watchmakers Gruen I think was American was their second biggest client and both of them bought igler shares

also yeah cuz Rolex did not focus on the American Market until after World War I correct so the companies are a little bit more joined at the hip but still not

an exclus iive partnership yep and like we said before I believe still even though there's this Equity relationship there's no formal contract governing the

provision of movements here it's crazy but you know it's in both their best interest to keep it going of course so here we are now World War I is over we've had the chat GP moment shall we

say for wristwatches all these soldiers from countries all over Europe and the World experience the power of having accurate watch on your wrist they go home to their civilian lives they want

to bring it into their life and who makes the best and most accurate wristwatch chronometer timekeeping pieces in the world Rolex and so of

course they're going to buy Rolex no that's not true no no that is not what they're going to do it's Omega right well I think it's lots of companies I mean basically the market went from the

very early adopters in the British dominions far-flung reaches of the British Empire before to now like all of a sudden it's this giant European wide Market most of

which has they have no idea about Rolex like Rolex whatever I don't know what Rolex is like I've never heard of such thing before so I think it was like everybody was now rushing in and even though Rolex had this history probably had the best product it just didn't

matter right there was just massive demand for this new product category of which there were many good options and also there was massive demand but it was kind of like search engines before

Google product still kind of sucked you know even really in many ways the Rolex product Rolex probably kept better time

than competitors they were QA certified QA certified right but if you're wearing a wristwatch it's a lot more exposed to

the world than your pocket watch and you talked a little bit about how complex and delicate these movements are and especially in a miniature movement that

goes into a wrist watch any dust any water any humidity that gets into the case is going to jam up your movement and your watch is going to fail yep so I

finally like had this aha moment when I'm doing the research for this episode I'd always thought it's just ridiculous you know you go look at the watch market now rolex's all the other brands they're

like waterproof to 57,000 million meters like all I was just like what there's no depth that exists David Rosenthal watch a fish andado ladies and gentlemen

exactly but like why who cares and I was like oh this is why waterproof watches are a big thing it's not about water necessarily it's actually dust more than water it's dust it's humidity it's if

you're waterproof that's shorthand for saying you're element proof you're durable nothing is going to get inside this watch and mess up your movement if water can't get in you could subject it

in 100 meters of Still Water and no impurities would get in right you could throw it to the bottom of the ocean and it'll keep time forever you know etc etc like oh this is why this is important

yeah and servicing was a big deal like you had to get your watch serviced often and the more dust and humidity and stuff got in there like it might just break entirely yes exactly great I like where

you're going David because there's basically three big pillars of what makes a Rolex a Rolex or frankly what makes a good mechanical watch a good mechanical watch there's precise so there's officially certified chronometer

and there's the other two what's the second one oyster yeah so like I said there's demand for these products but they all suck because they're not

element proof well oyster is Rolex marketing speak for waterproof so there's this great race among high-end

Swiss watchmakers to now produce a waterproof wrist watch and a Swiss case making company called Francis bomgardner

which supplied cases to Patek and you know many other great watch brands in the early 1920s they invent a new case style called the Hermetic you'll notice

that your Rolex does not say hermetic the way they do it is they put the watch case inside another watch case oh that's right this is the weird hinge thing right it's like a scuba helmet they take

a watch and they put it inside a SCUBA helmet that is waterproof so it works it does make watches water and element

proof but it's big it's ugly and most importantly you have to unscrew the outside case the seal and take out the inside case every day in order to wind

the watch right cuz famously the crown is the most dangerous entry point for water or dust so you can't leave the crown sticking out of the Hermetic case

or it would defeat the purpose yep so that's the state of play through the early 20s and Rolex gets into this too they buy cases from bomgardner and they

make these hermetic watches you can go find them you see pictures of them in collector's books it's got a hinge on the left side and a little clasp on the right side that goes around the crown yep and then this is so awesome this is

like a forest Mars moment from Hans in October 1925 two Swiss casemakers file a patent

for a moistureproof winding stem and button B just like you're saying it's the crown of the watch the wind ing system and the button where water is

most on dust or most susceptible to getting in to yep and mind you Rolex has been dying to solve this problem they had at least three failed attempts to

create a waterproof seal inh house yes the whole industry has and Hans like Forest Mars reads the Swiss patent

filing register religiously every day he is reading all of the patents that are getting filed in Switzerland so he sees this patent get filed and he's like this

is it I got to get this right now so he goes to the two guys that invented this and he buys the patent and makes it exclusive to Rolex this turns out that this is the key component to making a

waterproof mechanical wrist watch that doesn't need to be put in a jar yep and when I was reading this I thought oh man Rolex didn't actually invent the oyster case they just watched someone else do

it but that doesn't really matter they saw that this was absolutely essential and willor jumped right on the opportunity and said who cares who came up with the idea we're in the position

to commercialize it to roll it out across all of our watches I need to strike first this is his genius he's not a watch maker and Rolex were not watch

makers until they finally bought igler in 2004 hans's genius is he sees the vision for where the Market's going he recognizes talent and Innovation and he

pulls it together and he makes it commercially viable and marketable yep in a way that like this patent got filed in the Swiss patent register any of the other watch companies who desperately

wanted to solve this problem could have seen it too but he jumped on it yep I mean really he's like the Mark Zuckerberg of his time oh that's a good analogy yeah me this Instagram you know

and then copying stories from snap Hans doesn't care he's like I'm gonna Market this and I'm going to make this the most successful thing possible I don't care that we didn't invent it h it needs to be in our product yeah that's

interesting for anyone who's a watch person who's sort of wondering what actually was in the patent it's essentially for the screw down Crown the Hermetic seal on the all oyster watches

going forward and of course it's named the oyster because oysters seal when they're closed it's a perfect thing to name it after everything works on a

threaded system so the back of the watch screws into the middle part of the case and then the Crown can screwed out also

so you have these airtight watertight threads that keep any impurities out so in July 1926 Hans and Rolex goes and registers

the product name oyster this is really really big and H he's like I am going to go big everybody in the whole world needs to know the Rolex name needs to

know that we are the exclusive owners of the oyster system he prepares to spend in Britain alone annual expenditures of

over 10,000 just on Advertising for the oyster models dude knows how to build a brand he's already naming components

he's not just marketing Rolex this is Rolex the only watch that has oyster yes oyster

technology a18 biotic yes really the parallels to Apple are just like incredible ah ah four hours from now I was gonna make that point

but so he's prepared to spend all this money he's got the product but he's like we got to do a big launch I don't want to just buy regular ads in the newspaper

here so in 1927 towards the end of the year the timing is right and that brings us to a young British woman named Mercedes glight now glates was a

secretary and bilingual stenographer in London much like young Hans was back at Kuno who happened to have a uh sort of

unique hobby of endurance swimming in the river temps in her free time which is insanely cold very cold and I assume

even back then quite polluted but uh so be it and she was so good at endurance swimming apparently she would swim for like 10 hours at a time in the river

temps and so in October of 19 27 she decided that she was going to attempt to swim across the English Channel maybe even more cold definitely cold

definitely pretty choppy and she did she became the first British woman to successfully do so that year in October 1927 however a couple days after she

completed her swim another woman emerged and claimed to have also swam the channel but have done it faster and now it turns out that that

actually was a hoax and Mercedes knew it was a hoax but in order to reprove herself she decided to Stage a Vindication swim that gets hotly covered

by the Press which mind you she's doing this Vindication swim she's already spent 15 hours swimming across the channel yeah Miracle she's still alive

at this point Hans is like oh this is our moment this is exactly the spectacle that we need so he comes up with the brilliant marketing stunt

of he is going to get Mercedes to do this Vindication swim while wearing a new Rolex Oyster model and uh what Rolex

doesn't talk about to these days is a footnote to history of it wasn't actually on her wrist was on a like a lanyard around her neck yeah it was on a small chain that she wore around her neck but nonetheless this is an

incredible stunt nothing ruins a good story like data let's just smooth it over like the truth yes this is still featured prominently on the Rolex website today mercedes's photo is

everywhere but it doesn't matter I mean at the end of the day who cares if it was on her wrist or not yeah she also doesn't actually make it but that doesn't matter either that's the other crazy thing I think it was a especially

cold day or especially choppy or something she makes it 10 of the 15 hours so the design of the test is a little bit arbitrary this is a watch while it wasn't on the wrist and it didn't make it all the way from England

to France it was still in the water a long time for 10 hours yeah pretty good um product testimonial shall we say for

a testimony so Hans after this event happens the next day he buys the front page of the Daily Mail newspaper which

is a nationally syndicated newspaper in Britain at the time I didn't realize you could do this back in the day you could actually buy the front page as an advertisement I think it was common I

think was a while before the front page was actually dedicated to editorial and early on it was very common for it to be a full page ad yeah so Hans does this and proclaims the success and

announcement of the world's first waterproof wristwatch fully enclosed in its own case without a second hermetic

seal around it and the triumphant launch of the Rolex Oyster so this is how Rolex tells the story after I had heard this told a few different times I sort of

expected to see this full page ad written in a certain way it is kind of buried maybe this is what the advertising style was back in the day

but the big words are not watch survives English Channel swim the big words are Rolex Oyster and it says Rolex introduces for the first time the greatest Triumph in watchmaking okay I

still don't know what it is then I see a picture of a woman's face then it says send for this colored brochure it's free telling you to send in for more

information then there's four sketches of the different watch faces you can get of the Rolex Oyster and then it says the Wonder watch that defies the elements

there's words all over the place you finally finely get to the tiniest text in the entire thing maybe the second tiniest font in this little corner it

says moisture proof waterproof heat proof vibration proof coldproof dust proof either Rolex hadn't found their groove in advertising yet or maybe

people just read a lot more words back then but if you put this up today our ticktock ified brains would be like don't care next there's way too many words and they completely bury the lead

that she did a Channel swim with this thing and it survived it's hard to know how much of this is just the state-ofthe-art in advertising at the time versus Hans designed and wrote All

That himself so one of his maniacal control things was I believe up until he died or pretty close to it he did all the creative for all the advertising oh

I didn't realize that yeah we'll get to it later but they do bring on the Jay Walter Thompson agency before he dies probably the rest of the company's like all right all right Hans we got to professionalize a little bit here and

that's when they get extremely good is in the 60s extremely good yes but I think it's fair to say there's two interesting takeaways here one they hadn't found their groove in advertising

yet but two advertising hadn't really been professionalized in a way that we would see in the madman era totally we're still before World War II here

we're not yet in the modern world yep the other thing that's really interesting is there was something about this that was sitting with me too doing this research this is a major major

major moment the Mercedes GLS moment the first brand ambassador of Rolex it's interesting that the moment and the

person that Hans chose for this launch was a woman super interesting back in 1927 super interesting yes the wristwatch was a ladies item before

World War I but after World War I really I would think the big Market is the men's Market it's interesting I dug into it in this era Rolex still was primarily

a ladies product the men's Market was growing but if you look at their product cataloges really up until till World War

II ladies models outnumbered men's models 2 to one whoa these are the little like Prince watches yep yep and definitely hans's Vision was like a wrist watches for everybody men and

women but it's interesting that they were really women's focused and then we did a little more digging and asked some friends and even to this day I believe

the market of buyers for Rolex watches is basically 50/50 men and women which is insane I would have guessed that especially because much of my research

was lurking on the Rolex and watches subreddits which are very particular type of dude and it comes across as a very male thing at least the way that

I'm exposed to watches I mean you you read the amazing journalism about watches on hinki and the whole world around appreciating watches it's kind of

male focused it's like a Porche 911 right it's amazing that rolex's history indexes so heavily to women and that even today they move a lot of units to

women even though that's not where I come across Rolex and my dayto day well it's certainly not where the Enthusiast Market is focused yes but it's one of the really unique things about Rolex so

many of the other really really high-end watch brands with CTI as an exception I think really are men's Brands oh yes

whereas Rolex yeah it really is 50/50 amazing all right so that's Mercedes glad that's the oyster story and that really is a huge watershed moment for Rolex and for the wristwatch industry

and she's effectively the first testimony I'm not sure they'd come up with that terminology yet but this is something that they would lean heavily into as their means of marketing in the

future they would hate you calling it a brand ambassador yes partner it's Rolex partner is what they call it no I think it's testimony I'm pretty sure it's this like very particular word that they

wanted to sort of invent and have to themselves and it's different than influencer marketing it's different than the way that someone appears in a advertising a perfume for a 5-year deal

I think it's this very long-term oriented you are a part of the brand and you are a part of the brand kind of for your lifetime flashing all the way for it's Roger Federer is the purest

embodiment of this today but that is to come in the future it turns out though back to the product of the wristwatch

oyster was huge but had a problem Ben like you said the key to making it work you didn't have to have the whole scuba jar that you enclose the

whole watch in but the crown had to screw down the crown had to screw down like a jar and so that meant that when you went to go wind the watch you had to

unscrew the crown pull it out wind the watch expose it to the elements and then screw it back in well if you know anything about humans probably at least half the humans on on the planet are not

going to be exactly fastidious about screwing their crown back in yes there are three pillars to what makes this a breakout product that enables the

wristwatch to really have its iPhone moment and that third of being Perpetual of being self-winding is the magic yes and these things are so intrinsically linked and I

didn't realize until getting so deep into the research self-winding watches are kind of cool on their own but just like before I was like waterproof whatever why is that important self-

winding yeah seems cool but how hard is it to manually wind your watch that's what people were doing with pocket watches for centuries it's actually because it's tied to the oyster and the

screw down mechanism if you forget to screw your crown back down you lose the element proofness of the oyster yes oh

okay I can't wait the way that the Perpetual movement works is totally genius but before we do that we want to thank good friend of the show fundrise

the team at fundrise is awesome they are CEO Ben Miller and tons of the folks there are huge acquired listeners just like all of you and since we first started working together three years ago fundrise itself has gone through quite a

transformation longtime listeners may remember that fundrise launched its move into Venture investing via an acquired sponsorship back in 2022 and at the time

fundrise was primarily known as the Us's largest real estate investment platform for retail investors and it wasn't obvious that this crazy idea that they had to bring democratized investing to

venture capital would work and fast forward today incredibly they have demonstrated that they can break into Venture investing in a big way Ben Miller and fundrise have invested in

data bricks anthropic canva andil ramp fellow Friends of the show vanta service Titan which just went public in December and had a successful IPO yep it's genuinely aw what fundrise has done

which is something that many people have tried over the years but no one else has actually been able to accomplish in Venture they've taken a retail platform that any American can invest in and

gotten pre-ipo access to some of the best private companies in the world they've created access to all the value creation that's been locked in these private companies over the past decade plus as growth companies have been

delaying their IPOs and staying private longer yep so when service Titan went public thanks to fundrise tens of thousands of reg investors got to celebrate alongside VC's LPS and their

employees yep just awesome we'll be talking about fundrise all season long and you can go check out their full portfolio that Ben and the fundrise team are building over at fundrise.com

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loss our thanks to fundrise so back to oyster and leading into the need for self-winding and the Perpetual element of Rolex if you can

create a self-winding wristatch well all of a sudden the element proofness of the oyster works fine for everybody because nobody actually has to unscrew the crown you never have to pop out the battery

and put in another one you never have to charge your Apple watch you name the analogy but you just set it and forget it yep you walk around all day your watch keeps perfect time is and it's

waterproof and you never need to wind it sounds like an amazing product who doesn't want that that's a Steve Jobs like product right there okay before

going into the Nuance of how rolex's particular self-winding mechanism works I think this is a good time to explain

how mechanical watches work at all what the key components are and frankly it's like Alchemy is one of the coolest things I've ever done to prepare for an acquired episode was go learn how a

mechanical watch works at a high level you need two major components to make a Time piece first a way to store energy and second a way to release that energy

in a predictable and precise interval which seems like oh yeah of course you could do that these days with you know a battery and electronics but imagine doing that without a battery and without

electronics exactly so yes on that first one storing energy there is something called a mainspring do you read about this in the resarch Arch David yep a

main spring can store potential energy so imagine a foot skinny piece of metal that you wind real tight and you stuff into something called a barrel this looks like a film strip that's kind of

stuffed inside a film canister that you'd see a stack of canisters in a projector room at a movie theater that's sort of what you should imagine a real tightly wound main spring inside that

Barrel now interestingly to your point David this kind of begs the question what is a battery right yes I said a battery technically that is a battery right it's like a mechanical battery

since it's a way to store potential energy to be used later now amazingly the way a mechanical watch works these days is so energy efficient that the

mainspring can store on the order of three days of potential energy to tick the watch forward it's amazing amazing okay so moving on obviously this isn't

sufficient on its own if you just release the main spring the barrel it would spin around real fast it would make all the gears Spin and you'd let all the energy out at once break the watch yes so you need something to

control the energy release from that main spring and do it in slow fixed time intervals all mechanically yes you need something to make the watch tick heyo

yes watch makers call this an escapement now an escapement in a mechanical watch has two key components to harness that

potential energy from the mainspring one is a pallet Fork come back to that and two is something called the balance so how does a pallet Fork work

well a pallet Fork looks like a little tea with teeth on the edges of the top of the te and it moves back and forth a tick and a talk like the pendulum of a

grandfather clock and as it flicks back and forth it moves all the gears on the watch forward one tick or One Beat and

there's this element that uh this maybe several steps down the chain where it's actually usually like the hour movement right that then drives all the other

movements off of that kind of depends on the watch and What complications are in it things like that but yeah the important thing to know is when one beat happens when the pallet Fork enables

everything to move forward One Beat what it's really doing is allowing what's called The Escape wheel to turn one click and that drives whatever else is

in the gear train for that particular watch gotcha which some watches is you know just hours and minutes some watches is hours and minutes and seconds some

watches is date day moon phase what you had for breakfast Etc right and with these complications which are the sort of features is really amazing because you can sort of think through what the

algorithm would be to make such a complication but when you're thinking through it you're thinking sort of like a programmer you're saying well if this then that you know if the date is 31 days yeah these are not computers right

all of the logic is encoded mechanically in a gear train it's beautiful yeah so where we left off here is our escapement where we've got the pallet fork and it's

this little T and it's a tick and a talk it flicks back and forth and moves the gears all forward one tick so how do you get it to tick back and forth what is the mechanism by which this pallet Fork

goes Tik Tok Tik Tok Tik Tok Tik Tock this is where we introduce a big hero of the whole mechanical watch Story the balance and the balance also has two

parts there's a balance wheel and a hairspring and these two things are stuck together around the same center point so picture the wheel of a bike that that would be the balance wheel

kind of like a hula hoop and then the gears go around the same axle on a bike you know you can imagine that you've seen the rear wheel of a bike in this

analogy those gears are the hairspring and the outer wheel is the balance wheel so that's what this component kind of looks like the hairspring looks really

cool it is another coiled up piece of metal although it's much looser and more fluid than the tightly wound main spring that we talked about earlier unlike

everything else that is incredibly tight inside a watch this component the balance almost floats and it moves with really low friction it's weird cuz it's

the opposite of everything else that's in the whole watch and the way it works is the hairspring spins really fast in one direction and for anyone who's ever taken a spring and tried to uncoil it

you know you kind of note that it only goes so far and then it wants to go back to its resting position and then you try to go the other direction and tighten it a little bit and that doesn't work either and it wants to go back to its

natural resting position that's what's happening here so you've got the hairspring which spins really fast in one direction and then the energy that

it has stored is overcome by the mechanical resistance of unwinding the spring so it stops and then it spins real fast in the other direction and this cycle goes back and forth spinning

back and forth tick and talk and flicking that pallet Fork back and forth to continually release one little interval of energy and one little

advance of the whole gear train it is beautiful amazing you can totally see why for the right kind of person this is like a Porche 911 or like it's just

catnip you can't get enough of this that's exactly right and you know you end up with fancy names and proprietary things that Rolex makes in the far future called a paracom hairspring that

has these amazing renders and animations and videos of how it works it's gorgeous now this happens really fast this isn't like I just described it where you go really far in One Direction and then you

run out of energy and then you come back this happens three four five six times per second depending on the watch and that's if you hold a watch up to your ear and you

hear these beats that's what you're hearing so the pallet Fork drives that whole gear train releasing energy that powers the hands and all the other complications the day the date Etc at

exactly the right pace so when you take a step back and you look at it all the craziest thing is that it depends on the exact physical properties of the metals

that are used the time is literally kept by the physical laws of the universe elasticity tensile strength inertia potential energy stored by specific

materials and they have this down to such a precise science today that watches keep time certified chronometers

keep time within 2 seconds per day Bonkers it's awesome I just named four parts of a watch there are 200 Parts this is an oversimplification but kind

of the general concept of how a watch works yeah the other parts are also amazing I mean things like there are jewels in the watch because all of these

gears need to turn on things that create friction and so you need extremely low friction things and well it turns out that like actually rubies and sapphires that are milled into little nuts are the

best way to do that and so they're actual Jewel Stones inside your watch that are being used for a mechanical purpose and because Jewels can be really hard minerals and you don't want these

things to wear out and so when you're slapping something back and forth six times per second you want to make sure that I mean most Rolex watches don't need to go in for service until every I

don't know once a decade it's crazy that these things just don't wear out yeah I mean gosh the Daytona I'm wearing right now I don't think has ever been serviced and it's at least 15 years old if not

more than that and keeps time perfectly it's so cool and this is a 500 year old art the idea of the mainspring that

applies energy to a escapement that has a balance wheel and a hairspring to oscillate it back and forth this isn't new every piece of digital technology

heck most analog Technologies are invented after this totally so to bring us back to the Perpetual on your Rolex watch you can imagine that adding this

element of selfwinding to the insane complexity that has been developed over Centuries with extreme tolerances that are already in these

watch movements not exactly a trivial thing to do you can't just code it up in software no and in particular what we're talking about here is remember I talked about the main spring that storees 3

days worth of energy inside the barrel all coiled up there's a ton of resistance on that I mean if you think about if you pop open a crown on a watch and you go to turn it with your thumb it's kind of hard to turn and so if

you're going to come up with a self-winding mechanism you need some way in which you are using mechanical advantage to wind something that's

already wound really tight even tighter yes so here we are in the late 20s right

around this time a British watch inventor named John Harwood comes up

with an automatic system for watches now interestingly that was n his end goal he was trying to create a waterproof system

just like Rolex was and the way that he went about it was he said oh yeah like we were talking about it's the winding crown that is the weakest link in the

element proofness of the watch what if I just start by eliminating the winding Crown can I do that and supposedly he gets inspired One Day by watching children play on a seesaw and that gives

him the idea for his method of how he creates something called The Hammer system of a hammer going up and down and hitting different ends inside the watch as the wrist moves around you could

imagine that turning a crank crank crank crank crank yeah so he invents this system and just like uh his Swiss counterparts who invented what became

the oyster system under Rolex he patents it now what he decides to do is rather than making a watch out of this he's

going to create a company that's just an IP company and he's going to license this self-winding IP to other watchmakers huh which he does and a

couple watchmakers out there take him up on it and incorporate it into their products however it doesn't prove too popular in the

marketplace because a consequence of how he designed the system the manual winding capability and the crown is eliminated enti

so if your watch stops if you don't wear it and you lose the charge in the main spring good luck getting it going again you got to wear it for days or whatever to just get the energy back in there and

then you can set the time set the time oh interesting so it's a pretty big flaw in this watch but because of how the

patent was granted at least in the UK he and his company end up holding the rights to all self-winding watch

technology wow that is Broad in Britain yeah no matter what the method is or at least that's my understanding brutal so Hans of course in Rolex sees this he

knows he needs an automatic system for the oyster to really unlock the potential of the product and fully break the wristwatch product for the marketplace here but his hands are tied

he can't do anything at least in Britain as long as Harwood has this p and Hans knows that ultimately the method that Harwood uses is not good

he's not going to license from Harwood because he knows it's an inferior implementation yep and then fortunately fate strikes and the market

does its thing and in 1929 harwood's company goes bankrupt probably aided Along by the stock market crash of 1929 and the entering into the Great

Depression Etc so finally the door is now open for Hans and Rolex to complete the product here yep and while we're here in 1929 just a quick reference point for folks there was an article

published at this time that said you could get a Rolex for as little as $25 even if you inflation adjust that it's like 450 bucks today or for as high

as $1,000 which is$ 18,000 rolex's top of their line today is a lot more than $188,000 and the bottom of their line is a lot more than $450 but that gives you

a sense of the type of wealth you would need in order to purchase a Rolex at this point in history it was a meaningful purchase but not a purchase

reserved for only the Elite Class definitely not Rolex at this point is not a luxury brand correct it's going to transform into one over the ensuing

decades but no now you know Hans was really really focused and his genius and contribution to the field was on creating the product of the wristwatch

and he wanted the wristwatch to be on every wrist in the world yep which he achieved so here we are in the early 30s after a couple years of work Rolex

finally cracks it and patents their own rotor quote unquote self-winding system which still to this day is the primary

method of self-winding across the entire industry this is a Perpetual Rotor at the back of the watch case that spins around both directions and captures

kinetic energy as the wear moves their wrist around and importantly unlike the hammer movement it spins 360 freely in either direction so it's not hitting anything yep one of the other problems

with the hardwood system was when the hammer struck each end it made a noise oh really yeah yeah you'd wear your watch and It Go like clack clack clack clack clack one of the initial marketing

points for the rotor system the Perpetual system that Rolex comes out with is the silent this of they call it the silent self-winding system oh that's really interesting and it's genius you

know you can imagine I'm sure people have seen videos or photos of a self-winding watch imagine a disc that sits around a center point and then you

cut off half the disc and so what happens is whenever you're swinging your wrist around or because it's a near frictionless system whenever you tilt the watch at all the heavy side of the

rotor Falls down due to gravity to whatever side is lower and so you're just constantly all day inadvertently spinning this Perpetual rotor around and

around and around and using that to wind the main spring yep it's an incredible Innovation and feet of engineering stacked on top of all these other incredible Feats of engineering that go

into mechanical watches when they first start you know you're adding a new layer to the movement when you do this in the back of the watch it makes the watch back protrude a little bit oh the bubble

back yeah yeah yeah these early oyster perpetuals that are first launched into the market are known by collectors as Bubble Backs now because the back of them sticks out a little bit onto the

wrist off of the lugs it's so cool and the other fun thing about this is it is legitimately an invention by Rolex Oyster was licensed the credit for how accurate they were was really all agler

Innovation this is the first time we're really seeing Rolex R&D figure out some brand new breakthrough contribution to the watch

World yep and once this is in place these are the three key pillars of Rolex technology and really all mechanical

wristwatch technology of quality from this point forward you've got the accuracy the chronometer Observatory certified you've got waterproofness element proofness via the oyster and now

you've got self-winding with the Perpetual Oyster Perpetual here here it is that's all here yep so in 1934 they

launched the full system the Oyster Perpetual chronometer the Bubble Backs known by collectors and for the first time they

introduce a new look for the watches a two-tone mix of Steel and gold for these new oyster perpetuals that they call

rasur really rolls off the tug right there on your wrist David right there not on my Daytona but it is on my datejust this is the golden

steel mix that is now just an iconic Rolex look and that's where that center link is the gold and the outer two links are the steel yep now you're talking about the bracelet there bracelets for a

long long long time are made by third party companies Rolex contracts them out but that look even goes onto the case itself oh okay the bracelet usually

Echoes the case but combining gold and steel within one watch ENC casement was a new look shall we say from Rolex at this time you know what else kind of carries through to today which is kind

of interesting Rolex and just most tool watches have fluted bezels the fluidness is because it makes it easier to grip so when you need to screw the back off that

was the original reason for fluting was to give you a screw head effectively to get leverage to pop it off yes love it so okay while we're in the early 30s just to Breeze us through a bunch of

other interesting stuff that's happening the first time the crown the logo the fivepoint crown starts appearing is

1931 1931 was a weird year because Rolex was just starting to figure out this perfect product mix and at the same time the world is heaved into a great

depression and the British pound is devalued so exports out of Britain drop by 2/3 crisis happens so Rolex is looking to

internationally diversify so they open new offices in Paris Buenos Aries and Milan they organize these trips to South America the West Indies China Japan they're really trying to figure out how

do we stabilize things while the world is in crisis but they've got the right product in Market yep I feel like there's an old um Sequoia saying or at least a Mike meritz saying that

recessions are the best time to innovate cuz coming out of the recession you're going to have the best product ready to hit the gas right and fewer competitors yep exactly I will say very

interestingly in 1932 Omega released a waterproof watch which is I don't know half a decade after Rolex this is considered to be the world's first dive watch no one talks about this today you

hear dive watch you think Rolex but Omega had the first dive watch you think Submariner yeah oh I've got some really really really fun World War II dive watch stuff in a sec oh great but before

we get to World War II okay in 1936 I feel like this is a big moment and kind of exactly what you were saying as your competitors fall off a cliff due to economic hardship There's an opportunity

if you have the right product that's working well in the market to kind of consolidate power this is when Rolex goes to egler and says hey we want to

take all of your production and so Gruen stops buying movements from agler this is where I think Rolex may have bought the shares back from igler but again we don't know in will never know cuz no one

at Rolex will ever talk about that and this is also when agler adds Rolex to its name the agler manufacturer of Rolex

watches yes so take us into World War II at the beginning of the war in 1940 remember Rolex is in Switzerland exporting to the UK which was still by

far their biggest Market gets cut off supply lines from Central Europe to the UK are cut off after France Falls and so

Rolex and all the other Swiss watch makers are like well shoot okay if we can't get to England we got to go find other markets to sell to it's like the beginning of Co when you know all these

companies were making up other products and doing all sorts of stuff this is my very favorite sidebar piece of trivia oh

I have no idea where you're going so do you know what Rolex did in Italy during this time I have no idea they're casting about

they're trying to find something their retail partner in Italy gets a contract from the Italian Navy to supply watches

to their divers and so this Italian retail partner comes to Rolex and it's like hey we got a contract for dive watches can you make dive watches for us H and Rolex is like yeah sure we can do

that we sitting on our hands here at our factories which is funny because this is like a decade and a half before the Submariner yes yes yes yes this is the first dive watch that Rolex makes can

you guess the name of the Italian retail partner oh I feel like it's going to be a I don't know car company no no no it's even more on the nose this is Panerai

this is the panai watch Rolex makes the panai watch so you know anybody who knows panai famous you know very Art Deco style dive watch they have two main models now the luminor and the radio Mir

yeah panai was a retailer before World War II they weren't a watchmaker whoa and then after the war panai kept going making these watches isn't that amazing totally amazing and this also

underscores another reason why Switzerland was such a watchmaking Powerhouse this is a very engineering heavy industrial thing and they didn't

have to devote any resources to the war because they were completely neutral and so all of their Crafts People and Machinists and everything can keep making watches yep and so here they are

selling to the Italian Navy on the axis side meanwhile the thing that they're most focused on is trying to figure out some way to start re-exporting to Britain selling to their old main Market

on the Allied side they do figure out later in 1940 how to get watches back into Britain they sort of launder them first through Spain and Portugal and

then through the straet of jalter get up to Britain huh this becomes critical because what is World War II that World War I was I mean World War I made the

market for the wristwatch right but World War II made the Precision wristatch Market super important if you're a soldier in the trenches in

World War I yeah you need to coordinate movements and time and whatnot if you're a military service member in World War II it is a very technical War involving a lot of Technology involving airplanes

involving aircraft carriers and synchronized attacks all sorts of things tanks synchronized attacks all this stuff stealth so the air Battle of Britain you know is such a key moment in

the war key theater all of these British royal Air Force pilots they're all wearing Rolex watches because at this point Rolex make the best wristwatch is

the most accurate the most weatherproof to all the elements you know you're going through all sorts of pressure changes going up going down you know these cabins quote unquote if you could call them that of World War II fighter

planes there's no pressurization in there these watches need to be able to withstand a lot of elements usually you're navigating by them you might be

flying in the dark wow super super important stuff again I would push back on it was just I would suspect Omega is the leading brand at this time Omega was

thriving in the 40s 50s even into the 60s in the Swiss Watch world yes that is definitely true Rolex weren't the only ones that were selling to both sides

here hm but nonetheless World War II is really changing the nature of what you need out of a wristatch and air battles are maybe the most

visceral but then you start to think about all the other stuff that went into World War II there's radio communications there's radar there's early Computing there's nuclear weapons

and Technology coming out of that there's scientists that are building all these things and time is like a really really important element for this stuff so you've really got this birth of a new

military use case but then soon to be transitioned to professional need for watches and for time in the world H so

interesting well coming out of the war is really when Rolex starts to figure out their product lineup I mean we talked about oh they had the perfect product at the perfect time with this

Oyster Perpetual officially certified chronograph well what that looked like in product form was all kinds of crap they all said that and that's how they

all worked but the cases were everything you could imagine it's not like you could browse on their website and see we make these six main families of watches with these sub variations underneath it

was far from it you look at these old advertisements and catalogs and you're like I don't even know what that thing's called because it just looks so different than everything else as they're coming out of the war this is

when they're starting to figure out oh a standardized product lineup and not quite yet but soon we're going to build brand around each one of these things

and who it's for and what it says about you if you wear this type of watch yes you are foreshadowing tool watches or sport watches a watch for a specific

technical use case or more accurately a watch that says something about you as the wearer that is the legacy of World War II to come on the product side but first

just on the market side as soon as the war is over there's no more European market Europe is in shambles oh but you know what

Market there is is America yeah you know who didn't have their cities all just destroyed and bombed to Oblivion and has disposable income and g. returning home yep you

know who is a top the New World Order now at least on the capitalist side I don't think Communists were buying a lot of Rolexes I'm sure there's some crazy stories about Black Market communist

dealers of Rolexes to Russia post World War II I'm sure that happened there must be I'm pretty sure Castro famously loved Rolexes I think he even wore two there's like some photos of him where he's

wearing two Rolexes amazing amazing hang I'm looking nothing screams communism like multiple Rolexes on your

wrist here it is he's wearing I think it's a Rolex GMT and a Submariner on the same wrist yes he referred to one as a up in case the

first stops working but that's extremely unlikely I suspect it's to keep Moscow time or he just wanted to wear two Rolexes on his wrist cuz he could yeah right exactly okay well the nonblack

market for Rolex is after the war if you're gonna go somewhere you're going to go to America and Hans and the company devise just about the most

genius you know three putt scheme to get there imaginable three putt scheme get this so in 1945 Rolex would never three

putt Tiger Woods wouldn't Rolex brand testimony yep okay so 1945 right after the war ends is also

the 40th anniversary of the founding of wilsdorf and Davis the Ruby Jubilee of the company for the occasion Rolex

launches their finest model yet the date just and this is the first modern Rolex still an iconic watch sold by the company today yep it's just beautiful

I've got one here in front of me for a lot of people if they don't picture a Submariner when you hear Rolex they picture a date just or a Daytona but we'll get to that yeah and launched

alongside the date just is the Jubilee bracelet which is the you know iconic beaded Rolex bracelet we all know now they name it the Jubilee Hans you remember he wants to get into the

American Market he initially wanted to call it the victory bracelet but uh his Swiss colleagues were like um that's not very Swiss we are

[Laughter] neutral so it becomes the Jubilee bracelet beautiful it goes great with a fluted bezel it just adds a little more

Pizzazz to the wrist right around the same time Rolex manufactures their 50,000th officially certified Swiss chronometer and just happens of course

that that model is the new date just so Hans decides that he is going to give this very special Rolex watch to the Swiss General

HRI guisan who led Switzerland through the war national hero in Switzerland the Dwight Eisenhower of Switzerland one might say what does that even look like to lead Switzerland through the war

that's a good question a lot of sitting well remember this is a three putt this is just the first putt here so guisong gladly accepts this

great watch well Rolex is really ramping production here now so it turns out you know a few months later they make their 100,000th chronometer that they uh have certified

here oh this one goes to Winston Churchill this one Hans goes to General guison you know newly christened Rolex confort and says would you please on our

behalf offer this to your dear friend Sir Winston Church there it is Winston Churchill accepts now Winston Churchill is a Rolex man well less than a year later Rolex makes

their 150,000 officially certified chronometer once again in the now you know new

top-of-the-line date just model and who does Hans go to for this one through not directly but with some influence of the

fact that his friend Sir Winston Churchill wor it he goes to General Dwight D Eisenhower American hero leader

of the Allied Forces architect of the Allied victory in this new world order and Eisenhower because his good friend Churchill wears Rolex says how could I

not accept and so now Dwight Eisenhower becomes a Rolex man and then a few short years later in 1952 Eisenhower becomes president of the United States of

America with his iconic gold Rolex datejust on his wrist at almost all times yes and this is the very first time that

Rolex kind of gets the idea of what all of their future marketing and positioning will be which is those who

command the world wear Rolex so at this time Rolex finally brings on a third party advertising agency the Jay Walter

Thompson advertising agency in New York Rolex and Jay Walter Thompson in collaboration after Eisenhower becomes president wearing his date just launch a

campaign in the US almost literally what you said Ben the tagline of the campaign is men who guide the Destinies of the

world wear Rolex watches they printed this yes that is on the advertisement all over magazines Across America and maybe the world too I don't know it's

incredible men who guide the Destinies of the world where Rolex watches Shameless so many things to say like obviously today that would be you know people not

men but it's also literally true you know you got Eisenhower you got Churchill you got Castro totally wearing Rolexes I'm going to save for later in

the 60s and70s some of their advertising campaigns but there are a few sentences that we just have to say do show up that is along these lines there's one that is

when a man has the world in his hands you expect to find a role Rolex on his wrist so this is Don Draper this is better than Don Draper a Rolex will

never change the world we leave that to the people who wear them oh I mean we could just end the episode here now that is brand positioning that

is true brand positioning and the fact that they engineered getting one on the wrist of the president of the United States is so genius and interestingly even though they started with Mercedes

GLS this idea of like human achievement and accomplishment and the top of their field they aren't doing that in this era it is about the people who command the

world and they later on come back to achievement and the people who are scientists and again I'll save it for the 60s and 70s but this is a very clear

positioning of those who command the world yep yep now the problem I guess with those who command the world as as

just absolutely gangster it is is ultimately you're talking about a small market now it's great aspirational you know it helps the brand Halo and

what not but more people especially as we enter the 50s and 60s want to be Arnold Palmer shall we say than uh want to be Dwight Eisenhower yeah one final

little product sidebar on the date just that I just love the original date just had the date window it's called the date just because it's a regular watch with a

little window on the dial that has the number of the date of the month in there in place of the three and you know if you're picturing one today you probably picture that magnifier that's sitting on

this the magnifier the Cyclops eye in Rox marketing spe of course so the legend of how that came about is hans's

second wife Betty wilsdorf metler his first wife Anna died tragically in 1944 right before the end of World War II and that is actually when Hans said up the

Hans wildor foundation and puts all of his ownership of the company into it famously he never had any family erors there was no one to pass the company to so he creates this Foundation yes so his

second wife Betty loved the date just and still to this day the lady datejust I believe is the single bestselling model in the Rolex catalog well yeah they have like eight watches

for men and one for women of course that one's going 50% are bought by women and you know women were submariners and stuff too but like come on yeah you're concentrating 50% of your sales into one

quote unquote model yes so Betty loved the datest but had a tough time reading the small numbers of the date in the window so as The Story Goes one day

while Hans is getting ready in his bathroom in the morning he's wearing a date dress and a drop of water drips onto it right above the date window and

it magnifies the I tell you can't make this stuff up but they made this stuff up they made this stuff up yeah yeah and he shouts I got it I got it it's like the

Eureka moment in the bathtub and that is the inspiration for the Cyclops window of the dates just H if you're at Rolex and you're listening to this and you

want to tell us no it really is true hello at acquire. FM we will happily come to Geneva and talk to you about it

yes H okay so Ben as you were saying though the just it's a dress watch it's a watch that you wear if you are commanding the world you're wearing a

suit and you are amongst other respectable people yes but what Rolex kind of does from 1950 onward is yeah of

course we make that but we want to make a watch that you can wear while you're doing your extreme activity that's going to look great when you show up to dinner afterwards too yep and that is the core

of the brand today which gets built in the 1950s under Andre sports watches it's sports watches it's the Submariner it's the Explorer it's the GMT Master

it's the Daytona the modern sport watches and like you said these are very different than what Churchill and Eisenhower are wearing yep so Andre

Hiner the second CEO of Rolex after Hans Andre joined the company in 1948 right after the war and he was a former lawyer

I Believe by training and he first goes to South America and runs the South American market for Rolex and then he comes back to headquarters in Geneva and he becomes the director of marketing so

he's the one who brings on Jay Walter Thompson he's the one who does the Destinies of the world campaign and then in

1955 I believe he becomes the director of watches and so bringing on Jay Walter Thompson revamping the marketing message opening up the America's market and

really the US market that's sort of his purview here and then later on he starts working with Mark McCormick and IMG which is the talent agency that we'll

get into for the testimonies oh what Andre realizes is that now here in the 50s and into the 60s ahead all the

Technology and Engineering and Innovation that went into Rolex in the 30s to perfect the product of the wristwatch that's no longer defensible you mentioned Omega but basically

anybody else certainly any other Swiss company can make a perfectly on parody watch to what Rolex can make at this point in time there's 30 Swiss companies

doing this yeah especially because of the atais all of the component manufacturers are outside the brand and so you just go around all the component manufacturers and Rolex is a little

different because they have agler but in General you can go around to find all the different tiny little shops that are making each of these components and buy it and make a watch totally so all the

stuff that Hans was a genius at kind of isn't G to cut it in terms of differentiation for this new era what

Rolex now needs to do is move beyond what the actual product is on your wrist to more what does it say about you that you're wearing it to the brand of the

company itself what a signaling is what it means about you this is the first step towards becoming a luxury brand and I don't know that Andre and they were

thinking about it necessarily as luxury yet and it's not really luxury yet it's much more lifestyle at this point in time it would later become luxury but

this is his real Real Genius so from 1953 to 1955 Rolex and again Hans is still

running the company he dies in 1960 but Rolex Hans Andre launch a whole Suite of wild new models very different than the

date just and the oyster perpetuals that we were talking about before this is the Explorer the turnograph the Submariner

the milous and the GMT Master these are what are then initially called The Tool watches yep but quickly morph into becoming known as the sport watches yeah

the industry kind of refers to them as sport watches or tool watches Rolex calls them professional watches which is kind of funny because it's like the opposite of what you oh a professional

watch you would think is like the date just but they're thinking about it more of like a professional driver a professional race car driver so that's their yeah a professional pilot yes

you'll continue to see this in everything that is in the Rolex universe is we don't want to be lumped into any sort of a category so we have to refer to something entirely different such

that we can't be put into a box like they don't make sport watches they make professional watches in the same way that there's something called the Rolex way Oh you mean like uh The Vision Pro is not reality like the Rolex way

there's this YouTube video they put out describing the Rolex way and they just list all the things that they're not it's not Limitless because that's too limiting everything in the Rolex

Universe needs to be described in a way that it's too impossible for you to describe it's just simply Rolex amazing

amazing ah okay so back to this Suite of really world changing tool watches or at least watch world changing tool watches professional watches David professional

watches I'm sorry first is the turnograph as perhaps foreshadowed by that really great name there what a horrible name that's the least

successful of these watches that they launch you're not going to be buying any turnograph from authorized Rolex dealers these days but David if you look at a turnograph what's the original one look like well it looks like the GMT Master

we'll get back to that in a sec so the key feature the key professional feature of the turnograph was it had a rotating bezel

around the dial around the face of the watch that you could use for timing different events and the way Rolex marketed this as this was going to be for International Business people who

were international phone calls and needed to time the length of the I never that's funny swinging a Miss swinging a miss not exactly really a romantic

lifestyle you want to be uh associated with saving Pennies on your I guess at the time it was saving you know $10 at a time on your longdistance calls but yeah

sure but it'll come back the next least successful one is the milal I love this watch I know this one is awesome this has a whole second life yes was designed

in association with the engineers at CERN in Switzerland the particle accelerator for scientist who are working while exposed to strong magnetic

fields and the idea was that this mil gal was so well protected from magnetic fields that you could wear it in these environments and it would still tell accurate time which you can understand

why this would be a big deal if you have a metallic hairspring that is the primary thing making your watch tick you walk into some of these environments that scientists are operating in and

yeah your watch is going to speed up or slow down yep so a little more romantic than uh timing international business calls in terms of the inspiration for

this but not a large market for people who are scientists or you know aspiring to work in strong magnetic field areas so they discontinu that after a couple

years but then they bring it back in 2007 it's awesome I mean it's got this like lightning bolt secondhand on it yeah it's so cool and the colors are great it's got this really fun orange

I've been contemplating whether I want to get an Explorer or a milous and you know it's effectively the same watch but the mil guest sort of has this very fun

scientific origin and look to it right o I could totally see you rocking either one it just feels me doesn't it yeah it does you definitely have got the Explorer you know you love exploring you

know backpacking you got that great iconic picture is that still is that picture of you and your dad up in oh yeah behind me in my home studio yeah back Iceland yep but I feel like the

milal might be more you I know both great watches oh both great watches okay that's number two and then the first really big one the Explorer Ben like you

were talking about which the story is so awesome for this so awesome so supposedly it is made in honor of Sir

Edmund Hillary and Tenzing Norgay Summit of Mount Everest the first human summiting of Mount Everest

1953 I think I believe it was 1953 yes and they wore an Oyster Perpetual up that was sort of a prototype of what the Explorer would be yep all of these tool

watches here sorry professional watches all of them they prototyped in partnership with various people who were living these Lifestyles doing these

human achievements now the legend is that sir Edmond Hillary and tensing nor were working with Rolex wearing Rolexes summiting Everest wearing

Rolexes and that is in the marketing today that is the lore around the brand today and importantly both of them become official Rolex testimonies brand

ambassador Partners afterwards yep so they will for the rest of their lives tell you how much they love Rolex however Edmond Hillary did not prefer

his Rolex he had a Smith's SW that he preferred to wear and I think the Smiths was the official Outfitter of the Expedition okay and Rolex was not so I

do believe both watches ended up on the summit I think that it's likely whether it was on wrists or in backpacks or what the deal is but it's just funny that there's super tightly associated with

Rolex is that summiting of Everest and like yeah they were interested it was sort of there yep but the Explorer designed for withstanding extreme

pressure changes being able to go up to the summit of Everest and still work fine it gosh imagine yet another modern Endeavor where timekeeping is critically important and means the difference

between life and death you need to rely on your watch when you're summoning Everest it's a really robust watch there's not a lot of moving Parts there's not a lot of complications

there's not a spinning dial easily read in the elements exactly yep so that's the Explorer he goes on to become iconic

extremely popular still to this day then there's the Submariner an equally fun origin myth story shall we say if you

separated Submariner from Rolex Submariner may actually be a bigger deal Submariner is its own whole franchise absolutely almost in the way that's like

what if you separated the Dallas Cowboys from the NFL who's the more important bra like the sub is if you're going to get a Rolex and you're intending to have

multiple you kind of should start with the sub because it's just so iconic you're right it is really its own world it was Sean Connor's watch even before started playing Bond and then he wore it

and yeah all right all right all right all right let's get into it so the Submariner is the Rolex dive watch the professional diving watch as we talked about not the first dive dive watch that Rolex made that would be the panai but

that's not what you know what you know is the sub is a great dive watch that Rolex makes and defines the category yes works and is waterproof down to 100 meters in depth not a lot of people who are buying these things are going down

to 100 meters but there we go although I must say I think this is an overlooked thing about this category that's 100 met in depth if there were no pressure

changes and you weren't whipping your hand around it's nice to have 100 m of depth so that if you're going 20 m in

depth and things happen you might at some given second while you're whipping your arm around or something weird happens underwater approach the limit even though you're actually far from 100

meters below and to that point I believe at some point Rolex starts actually testing their watches to significantly greater depth than what is advertised

for this reason that's correct most of them I think are a 10% extra margin of safety but I think the dive watches are an extra 25% yeah you don't want to be like oh I've got a 300 M depth watch and

uh get down to 300 M and think you're good but actually go to 305 yep you know a 100 meter waterproof watch is nice even just for going in swimming pools

and I'm not sure I would want a 10 meter waterproof watch it feels dangerous yep but it's not really about the waterproofness here

so around this time 1952 1953 much of popular culture is focused on a Frenchman named jacqu custo

probably uh Rings Bell to many of you and jacqu kusto was the first world famous undersea Explorer he actually invented scuba diving oh interesting

yeah he was a total Renaissance Man genius and in 1953 he's filming the documentary The Silent world in the Mediterranean Sea

that is going to go on to win the OS the Academy Award for best documentary I think in 1956 but the whole world is watching these exploits you know discovering the

depths of the ocean this whole alien world for the first time along with shc and he's doing so and going down in these machines while wearing Rolex

watches great so great now interestingly there's not an actual formal relationship between Jack and Rolex and actually Rolex was formally

working with another undersea explorer who uh didn't become nearly as famous but nonetheless jacqu was a Rolex fan was wearing Rolexes while doing all this

as was much of his crew and then when the movie comes out they're all wearing these Rolexes and it's important to remember for people who scua dive out there you have a dive computer these days I mean even I remember when I got

Patty certified even your very first few Dives you're not wearing a dive watch you're using a dive computer at this time this was a legitimate tool that you needed it's not going to tell you your

depth the way that a dive computer is but in order to know your total bottom time and in the same way if you're summoning Everest well even more so than if you're summoning Everest you really need a Submariner a dive watch if you're

diving this isn't cute this is an essential tool to complete this extreme task yes so you know that's great for marketing here but then

1962 the very first Dr James Bond movie Dr No comes out and as it is written in Ian Fleming's James Bond books yes because of course Ian Fleming himself

was a Rolex man of course James Bond wears Rolexes now canonically I didn't know this till doing the research did you know that at least according to Ian

Fleming Cannon James Bond's mother is Swiss and his father is British kind of like you might say Rolex

itself is oh interesting so Sean conry wears a Submariner in Dr No and then Conor I believe would wear

subs for all of his Bond movies and Ben like you said was in real life a sub guy himself I think that's right there is no bigger you know if you're trying to build a Lifestyle brand one of the first

lifestyle brands in the modern world like there's nothing better that you could do and this persisted from 1962 until 1995 yes with golden eye yeah when Pierce Brazen came and they wanted to

refresh Bond's brand image and they chose Omega for that one oh wow wow that's really charitable of you to the bond franchise there no it is no come on

Omega paid them a boatload of money for product placement they did eventually but initially it was not a paid placement really uh-huh I was almost certain that 95 was when they decided to

bid out all the stuff well let's put it this way if it was bid out Rolex would decline to bid because Rolex does not gaug in GH paid product placement well

that's I assumed the only way that Bond would stop wearing Rolex I mean I guess maybe you could make an argument that you're trying to reboot the franchise around Pierce Broan Pierce bronnen maybe

is more of an Omega guy than a Rolex guy there's some weird line that they used around trying to reboot him with more of a European modern flare or something come on no way I don't believe it they

freaking bit it out there's no way that James Bond is not a Rolex guy and certainly eventually Omega is paying a boatload of money to the James Bond franchise so much so that there's a bump

in Omega sales every five years when a Bond movie comes out a huge bump golden eye was when BMW launched the Z3 coupe right so yeah golden ey was totally product placement Central and now Bond

movies are like you know the whole budget's covered by product placement they only exist for product placement I don't know one of the

sources I found on watches of SPN n.com details apparently the costume designer reached out to Omega and was given for free a c master and there's a I think

even a quote there was no product placement incentive in 1995 whatsoever I went to them and of course they were interested but it was no more than helping us they gave us watches for

nothing it definitely turned into a backup the truck boatload of money thing but the Omega fans will insist that it

was a organic it first okay maybe that's right anyway the point is from 1962 until

1995 if you like James Bond and you wanted to have a little bit of James Bond in your life too then you wanted to wear a Submariner on your wrist yep it's perfect James Bond does a lot of diving

and then he goes right from you know diffusing the undersea bomb with the Bond girl to then popping up and going to this high class dinner after is all wearing the same watch the entire time

it's perfect it's perfect it uh super fun little Koda on the Submariner a few years later in 1967 do you know the story of the sea dweller which I believe

is still in the Rolex lineup to this day it is is this the one that's like the Super Sub that's like a Submariner but you can go real deep it's the Super Sub yes so Rolex develops this in

partnership with the French undersea exploration company comx and there's this issue where helium would get trapped in the watch in the Submariner

and the pressure would break it as you're coming back up and so they develop the sea dweller which is waterproof down to 600 M and has a

special helium release valve this is ridiculous no person who is going to buy these actually is going to use this stuff except for comx employees that are being issued them but

it adds to the romance it adds to the you know like this is lifestyle purchase okay if you're already taking us from Submariner to Sea dweller you got to take us to deep sea

challenge this is the ultra Ultra version yeah yeah all right go for it so they develop a watch this thing is so thick you're not putting this on your

wrist but they design a watch and they said well what if we take this idea of originally the Submariner and then the sea dweller and we make this thing called the deep sea and there was an

earlier version of this before Jam Cameron right yeah well the Cameron one I believe is the deep sea challenge which is a extra extra version and the

challenge is the one that's the 11,000 meter whereas the regular deep sea is just regular old 3900 M so you get the deep sea for 3900 M the deep sea

challenge to really get to the bottom the 11,000 M James Cameron on a man submersible takes the

sea dweller deep sea Challenge and it actually is I think all of those Brands they like include the sub brand with the parent brand in this thing down to the

marana's trench to the deepest part of the ocean and this thing is like clipped on to the outside of the submarine because it's useless to have it inside like humans would get crushed

by this pressure if they were on the outside but the watch keeps perfect time keeps all the water out all the way to the deepest part of the ocean amazing

and of course James Cameron testimony yes of course of course so that's going down to the bottom of the sea very

romantic lifestyle uh you know Association by the way isn't it interesting all these are in English all these watches have English names yeah what's the market here it's American yes

come on so take US Airborne David yeah so we've gone down now we'll go up that brings us to the G Mt Master the

Greenwich meantime master so in 1955 Boeing launched the 707 commercial

jet airliner based on a Air Force air-to-air refueling tanker design I didn't know that until this episode yeah

did I and the next year in 1956 PanAm the iconic American Airline begins flying InterContinental Jet flights with

the Boeing 707 for the first time and the Jet age for the consumer is born and along with it jet lag It's A New Concept you know if you traveled across

continents before you didn't move fast enough that you uh experienc jet lag so PanAm is worried about the effects of jet lag on its Pilots the pilots are you

know going back and forth all the time across the Atlantic Ocean or the Pacific Ocean or whatever and so they decide that the best thing to do is to keep the

pilots operating on their home time so let's say the pilots are based out of New York they need to operate on New York time even if they've just landed in London okay and the way that they're going to do that is they're going to

work with Rolex and develop a new professional watch for their pilots that can for the first time tell time simultaneously in two different time

zones amazing so Rolex takes the failed turnograph which isn't selling well but has the rotating bezel remember bidirectional rotating bezel importantly

cuz the Submariner is just one well maybe not at first but it eventually becomes just one so you don't you know screw up and do something you don't want to with it yep and they change the

markings on the bezel from 60 Minutes or 60 demarcations that it was on the turnograph to 24 hours and then they add in a fourth hand on the movement that

moves at a 24-hour movement and so all of a sudden you can now on one single watch face keep track of two different time zones

and the GMT Master is borne you are the master of time with this watch legitimately very very useful whenever

you and I travel for acquired I set the complication in the lower right of my Apple watch to be the home time because it's just really nice to keep track of home time in addition to where I am

right now totally so that's pretty cool and eventually they launch Tutone on the rotating bezel the most famous of which

being red on one half and blue on the other half and the pep is the Pepsi model yes so cool they do all these great limited editions the Sprite the Batman gray and black it's great the

community comes up with little nicknames for all the different color schemes that they do here super super fun now this is for air travel and Jet travel but of

course the Pinnacle of 1960s and 1970s romance up in the air is not air travel but space travel yep oh yes which brings

us to the Apollo missions for which standard issue from NASA is the Omega speed master yeah

which again I will say bolsters my case that in this 40s 50s 60s Omega was the Big Brand like Rolex had a Target in

mind to beat and that Target was Omega who was bigger yep but even though Omega was standard issue on the Apollo

missions not all of the Apollo Astronauts chose to wear their standard issue watches so if you go to Rolex

headquarters there is an incredible signed picture from Apollo 13 you know the Apollo 13 mission the Tom movie

signed by astronut Jack swager a character who's played by Kevin Bacon in the movie to my longtime friend Renee Jen who I believe was Rolex head of

communications at the time who enabled me to always be on time so Jack and I think maybe some of the other astronauts

too preferred GMT Masters and were their GMT Masters during the Apollo missions interesting yeah cuz like you said the uh Omega speed master famously is the

moon watch in many ways it's the big blemish in rolex's whole strategy of being the brand for people who accomplish the greatest Heights in human history but this is a great little way

to slide in and take a little slice of that history too yep and by choice by the astronaut's Choice much like Sean connory oh what could be better yes not going to wear this inferior

product now I'm sure this is rolex's version of history but supposedly NASA reached out to Rolex first because they

knew that test pilots preferred GMT Masters but there was a mixup in rolex's New York Purchasing Office that led to

this map of Omega being selected instead uh uh if you work at Omega please contact us and tell us what is the real version of this story because we know no

one at Rolex is going to call so let's hear at least Omega side of this yes okay so whatever the case you know this is all just building so much Legend and lore and romance and you know the

ultimate Lifestyle brand here and like I said earlier this really is the architecting of Andre heininger and we talked about the J Walter Thompson relationship but I had mentioned Mark

McCormack and IMG and starting here in the mid-60s with IMG is when they really turbocharge and formalize this testimony

brand ambassador part parip relationship and they are doing two prong here these professional watches are happening but they've also Advanced their sort of dress line yes they've come out with the

day date yes the president as it's nicknamed the president was so ironic that the first president to wear Rolex wore a date just not a DAT date right

but future presidents wore Day dates yes but anyway you back to IMG IMG was the first modern Talent celebrity endorsement agency and really Visionary

of Mark cormick to found it in 1960 so he brokered tons of celebrity endorsements and he works with Rolex and

they sign the big three quote unquote in the golf world first Arnold Palmer then Gary Player and then Jack Nicholas and for their whole careers I believe

probably their whole lives they are Rox men yep and that is effectively the blueprint for everyone from Federer to Tiger Woods forward yeah so Justin golf

you know if you go forward Tiger Woods ANUK soram today Scotty Sheffer Jordan spe Justin Thomas Brook Henderson Lydia Co you know not everybody but at least a

large share of the best players or Rox players well it's interesting because when you list them off like that yeah it sounds like a large group but I think the strategy is not a lot the strategy

is only the best yes a large share of the very best players and that goes for individual athletes but it also goes for which events they sponsor I mean I was talking to Ben Kimber at hinki and he

pointed out they don't just sponsor PGA Tour they sponsor the Masters they're not going to really Mess Around Much beyond that similar to tennis like yeah we'll do Wimbledon well and now they do

all four grand slams ah okay so yeah arguably tennis especially post Federer is even more iconic Rolex than golf is they partner with many of the top top

players in the world but feder really was transformational yeah think that's right I mean I don't think the feder Rolex relationship is quite like a Michael Jordan Nike relationship but

it's in that next tier of great athlete Partnerships and there's a couple really interesting things about Golf and Tennis specifically for Rolex one just the

overall brands of the sport you know mesh very well with Swiss luxury watch companies but also even going all the way back to the 30s and the wisdorf days

the Hans days of Rolex proving that you could keep accurate time while playing golf or tennis was like a really key marketing message because You' got the shocks impacting the wrist of hitting

the balls all the time think about that hairspring think about that delicate balance wheel floating there carefully ticking back and forth hovering the vibrations I don't really understand how

it keeps working perfectly yep totally it's also the type of sport where you can be an elite topof thee World Player for a very very long time as opposed to other sports I mean think about

Federer's career think about Arnold Palmer's career jach Nicholas you know these people had multiple Decades of dominance being at the Pinnacle of human

achievement yep that's right so that wraps up the iconic tool sport professional watches

Rolex I I I don't you there's you haven't said except for the model that both of us are wearing on our wrists right now the

Daytona really created a market yeah in and of its own yeah and completely changed the mechanical watch Market period yes the Daytona through a

complete accident of history as we shall see in a minute here created a phenomenon created the modern watch collector Market yes and all of the

Crazy Prices and auctions and Insanity that occurs today I think you can say really is all because of the Daytona it's one component of it David I don't want you to oversell I've got a lot okay

okay at least from the Rolex side of things yes the Daytona is what created all of it but before we tell that story yes now is a great time to think good

friend of the show service now we have talked listeners about service now's amazing origin story and how they've been one of the best performing companies the last decade but we've

gotten some questions from listeners about what service now actually does so today we are going to answer that question well to start a phrase that has

been used often here recently in the Press is that service now is the quote unquote AI operating system for the Enterprise but to make that more

Concrete service now started 22 years ago focused simply on automation they turned physical paperwork into software workflows initially for the IT

department within Enterprises that was it and and over time they built on this platform going to more powerful and complex tasks they were expanding from

serving just it to other departments like HR Finance customer service field operations and more and in the process over the last two decades service now

has laid all the tedious groundwork necessary to connect every corner of the Enterprise and enable automation to happen so when AI arrived well AI kind

of just by definition is massively Soph icated task Automation and who had already built the platform and the connective tissue within Enterprises to enable that automation service now so to answer the question what does service

now do today we mean it when they say they connect and power every Department it and HR use it to manage people devices software licenses across the company customer service uses service

now for things like detecting payment failures and routing to the right team or process internally to solve it or the supply chain org uses it for capacity planning integrating with data and plans

from other departments to ensure that everybody's on the same page no more swivel chairing between apps to enter the same data multiple times in different places and just recently service now launched AI agents so that

anyone working in any job can spin up an AI agent to handle the TDS stuff freeing up humans for bigger picture work service now was named to Fortune's world's most admired companies list last

year and fast companies best workplace for innovators last year and it's because of this Vision if you want to take advantage of the scale and speed of service now in every corner of your bus

go to Serv now.com Acquired and just tell them that Ben and David said you thanks service now okay so David the

Rolex Daytona o yes the instant worldwide sensation or

not so the Daytona unlike all of rolex's other watches is a chronograph or as call it a cosmograph yes because again

this is Rolex we can't use industry standard terms so what is a chronograph a chronograph is a very fancy term for a stopwatch however complicated you

thought a regular mechanical watch was now add in something like the Daytona where you also have a full seconds hand on the main dial that counts seconds and

then another dial to count minutes and then another dial to count hours all in addition to the regular watch function yes there are four dials on the watch

face of the Daytona incredible now it turns out Rolex has actually made a chronograph for a very long time this was the first tool watch that they

introduced way back before World War II before Andre heininger before anybody was thinking about this stuff and in large part it looked like this but there

was no craze around it yes so in 1962 Rolex becomes the official timekeeper of the then relatively new Daytona

International Speedway in Daytona Beach Florida and to commemorate this great moment the next year in 1963 Rolex officially starts calling

their chronographs which again they've been making for like three decades at this point daytonas they thought about L man because they were also very closely involved with Lama the race in France

but to the name Rolex this has to have international appeal and can't have silent letters that Americans can't pronounce what's better than Daytona I can look at the word I can say it out

loud and again like we've been talking about the market is America post World War II and what could be more American glamour in

1962 than Daytona Speedway Fast Cars movie stars 24hour race

yeah 24-hour race it's perfect and then a couple years later one of the true Leading Men actors of the day Paul

Newman stars in a 1969 film called winning about being a race car driver and after he stars in the movie well guess what he develops a hobby of

becoming an actual race car driver and his equally famous wife the actress Joanne Woodward gifts him with a

Rolex Daytona of his very own for his racing activities with the immortal inscription on the back drive carefully

Dash me you know signed me you again we've been talking romance lifestyle development the brand here it's iconic you can't get any more iconic than that

it's perfect yes you can totally see how this would set off an absolute insane craze in the market except to your point it doesn't right

away except it doesn't there's so many of these moments in Rolex history really in all the stories we tell where the company does everything in their power to align the Stars perfectly and it

doesn't work but then a butterfly flaps its wings several years later and all of a sudden it does say in Italy so 1969 is

when Paul Newman stars in this movie it's sometime you know in the next year or so after that when Joanne gives him this watch Paul Newman absolutely is Iconic at this

point in time he's being photographed all over the world he's a leading style figure he's in magazines and this is his watch he's wearing this watch and he wears it for about 10 15 years or so and

then one day in 1984 so long long long time later lots of History passes which we will come back to and one day in

1984 his daughter Nell has her boyfriend over and Paul asks the daughter's boyfriend does he know what time it is and the boyfriend replies I don't know I

don't have a watch and Paul on a whim says here take this one it keeps good time and gives the boyfriend the watch the Paul Newman Daytona I actually

didn't know this story swear to God this is true this watch sold at auction for the most money ever ever I think it was 17.5 million here take the one it keeps good

time and at the time the market such as it existed for daytonas the secondary market for daytonas it was like a $200 watch so you know hey I like the

boyfriend sure have a watch I'm done with it ah man to have been the

boyfriend because two short years later in 1986 for whatever reason

it is unknown a bunch of dealers in Italy start snatching up versions of the Daytona from the era when Paul Newman's

Daytona was made and it's important to say here in Italy there is a real watch culture this is true in various parts of Europe at this point in time in a way that in America there's actually not

watch culture they want to Market to Americans there's all this Rising wealth and people want to celebrate their successes and all that and they're trying but America doesn't have a watch culture the way that Italy had both a

collecting culture and a style culture which is why there are secondary Market dealers in Italy y so one rumor is that

around this time in the early 80s Paul Newman had been on the cover of an Italian style magazine wearing the watch obviously taken before he gave it to the boyfriend and maybe that was the reason

that people in Italy decided this is a cool watch nobody really knows and nobody has ever been able to loc that magazine cover so who knows well for whatever reason a

butterfly flapped its wings and Italians thought that the watch was cool so the dealers start buying up the quote unquote Paul Newman style daytonas which

is a specific style was made for a couple years by Rolex in the late 60s early 70s and it had like a art deco style face to it yeah and a very

particular color scheme that sort of featured red around the edges as well yes red around the edges around the track where the minutes and seconds are kept but also a very specific font yep

also we should say we haven't said yet that on the Daytona and really all chronographs there's a very cool feature which is around the edge and this sort

of gives the watch its signature design there is units per hour I don't know if it's logarithmic but may I should work out the equation in my head maybe it is logarithmic it starts at on the version

I'm wearing 400 and goes all the way down to 60 and what that means is if you press start and you drive one mile and

then you press the same button again to stop wherever the second hand is pointed around the edge of the watch was your

miles per hour for that one mile that you drove so if I was able to drive you know one mile in 1 minute then it's going to come all the way around it's going to be pointed all the way up to

the top and it's going to say 60 but you know it goes up to 400 because race car drivers that's awesome I actually did not know that that's what those you got to be kidding me you own this watch I

know I know I know well you know I haven't thought about this watch in 15 years yeah for anyone uh who's trying to figure out what's going on over in David

land David used to work in Investment Banking and this was a part of the uniform when you got out of college well here's the whole sorry so my dad is big into watches has been for a long time

starting probably when I was in high school and college he got really big into watches and watch collecting so like early before the market here in America yeah I mean that's before it took off in any way in the US totally

and I thought he was insane I was like why are you blowing all this money on watches which back then it actually wasn't that much money regardless I graduated I go to work at Investment Banking and back then and I'm sure still

to this day Investment Banking had a watch culture and my dad gave me a couple watches to wear one of which was this stainless white face Rolex Daytona which is an incredible piece it was an

Incredible Gift back then I was like oh this is super cool and all my colleagues especially the senior Bankers like who is this freaking kid right that this is not a I got my first bonus so I went and

bought a Rolex this was an IT watch this is not an analyst watch I don't know if it was necessarily A managing director watch but it was probably something that like if you made VP you would go get

something like this yes so it odd for me to wear it and uh paradoxically it actually killed my interest in watches and desire to wear them because I realized it was weird for me to wear

this watch and then I was like you know what I need to just stop so especially when I got to the West Coast I was like I should just not wear watches this is too much I need to get my bearings again yeah exactly exactly so then I didn't

wear watches at all you know nothing on my wrists until the Apple watch and then when the Apple watch came out I've worn that every day since until we went to Taiwan and we were like well we should do a little little Easter egg and we

broke out yeah the watches out of the safe so cool so the question going forward is listeners if you're listening to this a few months years in the future the question will be do I keep wearing

this do I go back to the Apple watch what do we do I don't know we'll see okay but what you're foreshadowing here though is the hype over that Paul Newman dial which to be clear I am not wearing

a Paul Newman dial trickled out into the rest of the daytonas it made any Daytona extremely desirable just sticking with the Paul Newman models here in

1986 prices for some of these models shoot to like $330,000 Plus in 1986 yeah for a watch that Paul Newman

gave away to his daughter's boyfriend two years before and was worth $200 Ben you're right this one event didn't create the global watch collecting and

investing Market period but it was part of it absolutely was part of it this was a huge moment of like oh wow these things aren't just purchases they're

Investments and you can trade in them yeah put a pin in that there's a whole world of 70s and 80s that's this almost like parallel universe to Rolex that

we're going to go into here in a minute before we do that it's worth resuming our history of Rolex advertising because

concurrent with releasing all of the professional watches Rolex expanded their aperture in their marketing it went from just men who guide the

Destinies of the world where Rolex to suddenly you've got these scuba divers and these pilots and these race car drivers now with the Daytona and they're wearing the professional watches for

their craft we can probably sell a lot of watches by selling that lifestyle yes so this is where the expansion goes from just commanding the world to human

achievement those who sit a top their fields and in 1967 to 1970 there's this great campaign they launched the if you

were campaign in a big I mean Google this we'll put some links in the show Notes too but Google this and I'm sure we'll tweet it so you can see it on our Twitter account big bold helvetica font

if you were flying the Concord tomorrow you'd wear a Rolex picture of the Concord go in supersonic picture of the

GMT master so great this is what these Pilots at the top of their field are wearing they stayed a million miles away from features and it was all lifestyle

advertising this is the person you would be if you owned this watch there's a version speaking at the UN if you were speaking here tomorrow you'd wear a

Rolex if you were climbing here tomorrow yes diving down to Great depths taming oil weires I think there's even one where they're like walking in a volcano

it's just this brilliant campaign that again this is the late 60s it's everything we've learned from the madman era of advertising completely the

opposite of the Mercedes GLS era we are leaning heavily into who could you be yeah and I do think this was the very

first sort of Chip of what made Rolex a real Challenger to Omega who had been kind of the standard big Swiss watch brand Rolex was really the one to bring

lifestyle advertising to Bear also I know I keep harping on this Oma thing Omega was actually worn by the soldiers in the bore war that Hans had recognized

so they had the history too they had the history too yeah yep those incredible ads that was really Peak Rolex lifestyle

ERA this kind of second era of Rolex of moving beyond the product to selling the lifestyle and the Daytona was part of that and then in the 80s when the Italian thing happened and the Paul

Newman thing happens and the collector's Market gets built it's actually I think the first real big move that Rolex makes

into the luxury World it did kind of create the one model in their lineup where it had real hype around it and that just stayed true for decades I mean

even in I don't know 2010 or something you could walk into a jeweler who's an authorized Rolex dealer and you could just buy something out of the case which you cannot do today yep you could buy a Submariner you could buy an Explorer you

could buy a GMT Master you could buy a date just but you couldn't buy a Daytona that's sort of from this 80s forward was always this spot in their lineup where

we we'll have to call you about that one today if you want to buy a Rolex of any model you go in and you put your name on the weit list and then at some point in time could be a couple months could be a

couple years you'll get the call that your model is available the Daytona is I think the only model where there is no weight list oh I don't think that's true

is that is that not true no it's impossible to say that because they work through authorized dealers and so it's not up to Rolex and it varies greatly dealer to dealer I think they're actually called

Rolex retailers now they changed it from authorized dealer but it's whatever the local dealers policy is interesting interesting at least historically it might be changing amidst the insanity

right now you know if you go browse the forums the lingo that I read is the Daytona is not a wait list it's a wish list Ah that's awesome like most of the

other models if you want one and if you get on a list at a authorized dealer at some point in time your turn will come up whereas with a Daytona it's like yeah you can express desire I have a few

things to say on this but let's wait till we get to the present day we have the entire watch industry is going to fall apart and then get rebuilt from scratch and we have that in between

uh where we currently are and where we'll end up all right let's go there all right take us back so this was a

whole side quest that I did this episode nice term look at us getting all gen Z David and I interpreted the assignment differently to okay well you're just

pandering to Jen Z right now do an episode on how how would I know side quest interpreting the assignment I'm sorry is this jenz lingo I don't even know I think it I'm pretty sure it is oh

anyway we interpreted the assignment differently of do an episode on Rolex David viewed it as go as deep as possible on the entire history of the brand itself the company the

relationship with agler and each of the watch models and I heard it as go fully understand the entire watch industry and contextualize rolex's role within it so

here it goes here's my best David Rosenthal impression for the quartz crisis and I have two huge thank yous for this section Ben climber the founder

and CEO of hinki I spent hours pestering Ben and having phone calls with him and I probably read 30 things on hinki I mean in the modern watch era it's the

definitive place to read about watch culture and secondly to Joe Thompson Joe is the journalist in the industry most recently he's the executive editor of

hinki but over the last 40 years he has written all the iCal pieces he was the editor of watch Time Magazine he's one of the only people ever to get an

interview with a sitting Rolex CEO he lived the courts crisis firsthand and was flying around to Geneva and Taiwan and Japan and Reporting on it live so

okay you've mentioned the courts crisis also known as the courts Revolution yes what is this all right so here we are in the early 70s the

Swiss are riding High they're the Undisputed Champs of watchmaking that's where we left our heroes here at one point the Swiss actually made up as much

as 85% of the world's total wrist watches 85% of the market they had this is in 1945 so it's right after the war the analogy here is like tsmc and Taiwan

making mechanical wristwatches is an extremely difficult specialized skill yes they made 19 million of the total 20 1 a half million that year another thing

to contextualize it is you can understand what is coming and how technology disruption will happen this

19 million watches produced was by 2500 individual companies 90% of which employed fewer than 50 people wow

completely decentralized means of production in many ways it actually the Taiwan metaphor totally extends it's like Switzerland was hinu Science Park and these places all sort of needed

together and collaborate yes yeah I was going to say the exact same thing and so this is an industry built on skilled labor fragmented across a ton of suppliers very little of vertical integration someone makes a movement

someone makes the hand someone makes the case and all this happens in one of the most expensive labor environments in the world yeah Geneva ain't cheap it's kind of amazing that there was this labor

intensive industry in Geneva all right so that was 19 1945 3 decades later in 1973 it's still going strong the Swiss peaked at almost 90 million watches made

in 1973 wow up from 19 million 28 years before they're now at 90 million watches handmade in this crazy production

process per year so we keep alluding to this quartz crisis but the quartz was not the first revolutionary new technology that was supposed to disrupt

mechanical watches there was sort of a halfstep along the way to a technology that turned out to be a detour that actually wasn't the future David do you

know what that is oh I would guess like digital timekeeping but that's quartz yeah yeah what else vibrates like a quartz crystal what do you think could

oscillate to keep time something radioactive a tuning fork Ah that's a great weird thing in history and part of this also comes from from Mark Bridge's

great research paper the whole Swiss watch industry had been marketing that you can judge the quality of a watch by its timekeeping and then suddenly this tuning fork watch comes out they're no

longer the best at timekeeping mechanical watches are worse than the tuning fork watch there's this crazy watch that comes out the boliva acutron

in practice though the acutron wasn't a disruptive technology in the sort of Clayton Christensen term it was a sustaining innovation it took the existing thing and made it a little bit better the watches still

required though hundreds of components and handmade craftsmanship in order to make it yeah so it's still difficult to make right so this meant that the existing companies would have to integrate into their own workflow to

produce it but there really wasn't a wide open window for some new entrant to use it as a disruptive Force that's the thing that you kind of need is can a new

producer come in and take a radically simpler approach like say a Japanese company right so quartz well we all think of like oh

quartz comes from Japan and Seiko and then that was this huge disruption of the switchwatch industry people had been exploring quartz technology for a very

long time and in fact the first quartz clock was created all the way back in 1927 do you know where David oh well I know the Swiss themselves were doing big

industrywide consortiums correct but that was in 60s and 70s in 1927 who possibly could be doing research with quartz technology to use

for timekeeping I have no idea it's in America cuttingedge technology

research Bell Labs Bell Labs yeah okay there we go in New Jersey the first quartz clock is created wow now

unfortunately in 1927 the Bell Labs quartz clock was the size of an entire room the eniac of clocks yes okay so

we've been describing the quartz crisis what is it well how does it actually work how do quartz watches function instead of a main spring that you have in a mechanical watch you have a battery

pretty straightforward instead of an escapement you vibrate the quartz crystal quartz has this crazy thing where if you apply an electrical current

and it's shaped a certain way they can vibrate at exactly 32,768 Herz that's right I remember seeing that number is weird this is called the pazo electric effect and

interestingly that was discovered all the way back in 1880 in Paris wow the other important thing you need to know about a quartz watch is it requires an

integrated circuit the modern quartz watch is dependent on using an IC to count the quartz vibr ation and transform them from

32,768 HZ to 1 Herz to tick one second at a time or if you're using a digital watch to increment the seconds by one each time so by the time you get to the

early 70s you've now got integrated circuits that's exactly right the first quartz watch that hit the market in 1969 from Seiko was dependent on the invention and miniaturization of the

transistor and integrated circuit before it could actually happen so that's why we're sort of stuck waiting from the 20s all the way to 69 before it can be used in a watch so really the whole thing is

Bell Labs exactly right and everything we've talked about so far is a manufacturing story it's a craft story it's an apprenticeship story this is a

technology story yeah so amazingly as you pointed out the Swiss did see this coming just like how Kodak famously invented digital photography in their lab the Swiss saw what happened with the

toting fork and they wanted to be ready so in 6 2 years before the Japanese debut of the SEO Astron there was a quartz chronometer in a lab at C which

is Switzerland's Electronics watch laboratory that was twice as accurate as a mechanical watch they just didn't actually have an impetus to be first to market right right why would we this is

really dangerous for our industry we've made it yeah let's keep this in the lab yeah so over to Japan the Seiko Astron is launched in 1969 you would not have guessed it was going to disrupt the

whole industry it cost as much as a new car and it wasn't more accurate it could be off by up to 5 Seconds a day so what's the big deal but just like

semiconductors they get on the learning curve exactly that's exactly right it's a technology story it's based on semiconductors so the price value curve that it would follow actually looked a

lot more like the early PC from the Microsoft episode we did the fact that it's in watches because that's the consumer need that's being filled actually isn't relevant for predicting

how much better it's going to get you should be looking at the technology so the courts watch starts at this Toyota Corolla price point comes down in price

a THX yeah it used way fewer parts and required very little knowhow to assemble it you could invest upfront in machinery and have very very very low variable costs and labor costs so for the first

time in watchmaking you had economies of scale and operating leverage it was a tech technology product in an artisan Market yeah so this whole thing once it gets going happens so fast and in the

early days the Swiss industry and a lot of makers including Rolex released their own oh courts models too yeah hold on to that for a second so here's how the

quartz Revolution went and the Japanese sort of think of it as the quartz Revolution the Swiss think of it as the quartz crisis by the end of the 1970s you could get a quartz watch for cheaper than a mechanical watch it was more

accurate so here in 19 79 mechanical watches are for the vast majority of scenarios functionally obsolete unless you are an astronaut or a pilot or an

adventurer who prefers a spring over a battery that could die there is no practical reason to ever buy a mechanical watch again and it's like the Olympics are being timed with quartz

time pieces right and interestingly Omega quartz at the Olympics interesting but obviously this is not the end of our story and mechanical watches would go on to be a better business than ever 50

years later very different but much greater in Revenue than ever before so there's this kind of wild thing that our beautiful mechanical watch hero

protagonist here is now obsolete functionally so there were a few iterations of how this went the American firms tried to make courtz watches with

uh LED technology the Hamilton Pulsar came out in 72 these were really cool and you look at them but in the long run they were a complete failure you had to

push a button to turn the LED on so it actually took both hands to read the time one to wear the watch one to push the button some companies followed into the market starting in 74 and will be

very familiar to acquired listeners National semiconductor Fairchild semiconductor TI got into this right yeah yeah yeah yeah there we go yep then

came the Stampede Commodore Intel HP Hughes aircraft dozens of companies flooded in WoW Hughes aircraft getting into the market wow yes and you know

these companies made integrated circuits and so they thought well we can make consumer products around them too because we make the internals but a they weren't great at building Brands these

were all B2B companies and B they were horribly commoditized this Market immediately became commodity had no barrier to entry and all the profits

immediately got arbitraged out so LED failure the next step is twofold one quartz movements powering analog watch faces and this started with the SEO

Astron this was the thing that the Japanese did first in 1969 and the other branch which every listener will know well is digital LCD watches with liquid Crystal displays

that ended up being vastly Superior to LEDs since they were always on and these also worked on a quartz movement Seiko Citizen and later Casio were extremely successful for a time making these out

of Japan so Hong Kong becomes the PowerHouse for inexpensive manufacturing of all of this along with Taiwan South Korea and Mainland China and so by

1980 just a few years in I mean think about this 69 the Seiko Astron launches 75 is when the Swiss are going oh crap and then within four years it's over

quartz completely ran the table so by 1980 Hong Kong was already exporting 126 million watches a year half of which

were digital wow Switzerland at Peak made 90 million and then boom a few years in Hong Kong has 126 million by 1981 the next year Japanese watch

exports surpass Switzerland Seiko actually was great at Brand building advertising messaging in a way that the American B2B semiconductor firms were horrible at and then

1985 just four years after Japan meets Switzerland Japan's exports are 3 3x Switzerland wow and the absolutely incredible thing is now that you all

know this this is the backdrop that the Paul Newman craze happens right into yeah so the Swiss Market's Global share

would fall from that 85 at Peak in 1945 to just 15% by 1980 wow the number of firms fell

from 2,000 companies in 1960 to fewer than 500 in 1980 just absolutely destroyed courts output accounted for

only 3% of units in 1975 By 1979 31% of new watches were quartz powered wow from

75 to 81 82 you just have a complete running of the table and at least for the old reason of why you would buy a mechanical watch there is zero reason to

buy that anymore zero yeah so this is like massively impacting the entire Swiss econom right yeah Extinction event for this huge industry for them there's a whole separate story about the founding of Swatch group and how many of

the Swiss Brands were sort of rolled together or a bunch of them went bankrupt or they got sold off to conglomerates but interestingly Rolex was independent they were owned by a

foundation they sort of had no shareholders they also managed to resist joining the sort of Swiss cartel that was all sort of colluding on what's our

national strategy here so they could sort of do their own thing I mean they watched this certainly happen they had a lot of fear around it but they weren't as caught up as the rest of the

Switzerland companies that were all super super dependent on each other the whole watch World by volume became almost entirely quartz and the market for time telling as a function went

entirely to courts full stop but a new massive Market emerged that had been lurking in basically Niche auctions which was watch afficianados who valued

pieces for their complexity their Artistry and their Rarity and Rolex figured out how to build this enormous bigger than ever before business in this completely New Market a of enthusiasts

who sort of Drive the excitement that's sort of the auction house world but then be in this lifestyle Aura of success and this is where we told it as part of the Daytona story because that's where it

belongs but the Italian Affair the Paul Newman Affair is the luckiest thing that ever happened to Rolex because this gave them the golden opportunity to do that right this is finally kind of clicked in

my head it's not that the mechanical watch made a comeback it's that there was an entirely New Market that it turned out to be the perfect thing for after their initial Market got wrecked

right I think there's also another level of nuance here too Rolex was better positioned than most of the other Swiss companies because they had already

transitioned to Lifestyle however that would not have been enough because eventually Seiko and citizen were also going to transition to Lifestyle

companies and that in and of itself what wearing your watch says about you isn't defensible in the long run against

technology disruption you know wearing an Apple Watch what model what style what band says a lot about you too I wear my AES band on my Apple watch that says a lot about

me but what is defensible is a luxury strategy and a luxury strategy expands to managing the entire market and overall brand management it's managing

the secondary market and Supply on it it's doing things like oh the Paul Newman craze is happening let's pull the model from the market it's vertically integrating to ensure absolute product

consistency it's instituting weightless it's killing or pausing your most successful products it's not changing your price in response to demand shifts a purely lifestyle company wouldn't do

all of those things and you know I can imagine like uh remember fossil the US watch company that is now basically bankrupt yep they were a lifestyle watch company but they were not a luxury

company yep yeah that was sort of the fashion watch craze where the courts technology enabled a whole wave of $25 watches where you could own five six seven of them and wear them with

different outfits that was an interesting market for like 20 years before technology kind of obsoleted that one to yep with the Smartwatch interestingly do you know what Swatch

stands for uh I always thought Swiss watch group but uh that's the common perception of it it's second watch oh these watches are so cheap you can have

a second one exactly there you go that is a perfectly viable lifestyle strategy yep these watches are so cheap you can have a second one and each one says something different it's a fashion

strategy but it's not a luxury strategy and it's still subject to a functional displacement like what happened with the Apple watch yep totally okay so we're at

this like complete demise of Switzerland here we're like thinking about how it could get better in the future but there's a whole parallel story which is

the Renaissance of mechanical watches how they come to fill this new market to be this perfect product for a new market but first we want to thank one of our

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time figuring out until really the end of our research process how did Rolex respond to the courts crisis yeah we knew that there was this transition that

happened to luxury and it was in response to the courts crisis but you go read all the stuff that's out there and nobody actually Chronicles this no one

connects the dots they talk about quartz crisis creation of Swatch group saving what's left of the Swiss Watch industry and then separately they talk about Rolex Through The Years building the

Lifestyle brand and all the race car stuff and the advertising but Rolex was in Switzerland during the courtz crisis right right connect these dots please

yeah and the end of the story you know spoiler alert is Rolex is doing probably 10 plus billion dollars in annual revenue way way more than any other

company in the space dude Rolex is 30% of the revenue in the entire Swiss watch industry right it's insane so there's a lesson

here yes in part the lesson is it is incorrect to describe markets by the products in them you should describe

markets by the job to be done and the market of risk-based time telling was no longer available to the Swiss it entirely went quartz but there was a

market for something different that the Swiss were great at if they were sort of set up and positioned correctly and managed correctly and I think that's the lesson here this isn't the high end of the watch industry and the low end of

the watch industry these are two completely different customer needs totally different things there's an arc to this story Rolex sits back they see what not to do they see what to do and

then they do it yes so here's my attempt at chronicling what happened and I would love feedback from watch nerds if there's anything that I missed here but this is how it seemed to me after

reading five books talking to Joe talking to Ben talking to all sorts of friends in and around the industry so there are three concurrent

stories here none of which are Rolexes there's the Omega story then there's an unlikely corner of Swiss watchmaking with Blanc Pon and then there's the

auction houses and once you get those you then kind of get the Rolex story so first is Omega they blew a lead in the nth that's the only way to put it as you

being my foil throughout the episode here being like actually David Omega was also big maybe bigger than Rolex the whole time totally so coming into the 70s they just had their watch land on

the moon in Apollo 11 they're the sponsor of the Olympics they're an iconic brand and Incredibly Joe Thompson tipped me off to this in a study conducted by Gallup in

1978 they asked the question have you heard of Rolex eight out of 10 10 Americans in

1978 answered no wow less than 20 years later 8 out of 10 said yes so Rolex did something incredibly right between 1978

and 1998 to go from 20% brand awareness to 80% brand awareness so over to omega as late as 1977 in the courtz crisis Omega is still

the third largest watch brand in the World Behind SEO the darling of the quartz Revolution and Timex which was the volume player on the American side of quarts so in many ways they should

have been Switzerland's most likely horse to ride this thing out but they reacted extremely poorly what did they do first a whole bunch of models what

did they do second go heavy into courts what they do third throw the kitchen sink at strategy like let just make a bunch of models BR of Bry points really

diluted the brand they licensed the brand out to other companies I mean from afar this just looks like Panic instead of thinking what are we uniquely best at in the world and trying to lean into

that Omega thought this quartz thing is like absolutely essential to get right it's the future so we have to switch all of our production to it and this is essentially what the whole Swiss industry did they either fell into this

trap where they went bankrupt or got rolled up brightling Hoyer you name it the only issue that the big glaring one here in hindsight is that courts required a completely different set of

competencies to do it well a totally different culture a totally different headcount and a totally different cost structure yeah like you're saying earlier courts is a fixed cost it's a technology business with fixed cost

leverage Swiss mechanical watchmaking is a variable cost business they happen to both tell time but the means of how they tell time the two types of companies that you need to build to get there are

entirely different they shouldn't resemble each other at all so the other thing that killed them is that they had these agencies locally and so Omega would

import their movements and then the agency could design their own case to suit the local market oh interesting so there weren't International standardized

models to build brand around interesting yeah yeah yeah that is a major luxury no no yes a Burkin is a Burkin people exactly Rolex by this point the late

'70s they're importing whole watches they've got their core 67 watches that people really find iconic and they're leading into this idea that you need one single Global brand and product line

it's so funny if you look at some of the real like Enthusiast type historians out there they sort of bemoon that Rolex stopped innovating after the golden era in the 50s where they introduced all the

sport watches right and it's like no no that's the point yes they got the core product lineup set and then they rode that horse once you create the Porsche 911 you should just tweak the Porsche

911 once every seven eight years and that way you can buy a 911 just like your grandfather bought a 911 and that I think is a huge piece of what Rolex got

right that a lot of other people got wrong so to close the Omega story this is crazy it's the company that governments and militaries wanted to work with it's the company that Rolex was trying to beat with all their

Innovative ads and positioning this is the first company to ever launch a dive watch before the Submariner and they rushed into here's how we fight the courtz crisis head-on when they were

just not built to be a part of that at all so this is the place where we see the Divide where Rolex becomes Rolex and Omega doesn't become you know they make cool watches but like it's not the brand

they pay a lot of money to MGM to be in James Bond movies right so that's Rolex sitting on their hands watching Omega and going okay don't do

that but of course Rolex had the cash to do it you know Rolex is a privately owned very successful very wealthy company where they could take two or three years and see how it plays out if your ownership structure is different or

you have debt or you're not as profitable you you don't have that luxury you don't have the margin of safety to do that so chapter 2 guy named

jeanclaude B he's an exec at Omega of all places resigns out of frustration this thing sucks they're so timid he's

the Morris Chang of Omega exactly so in 1983 be buys Blanc Pon which was popular in the 1950s but had kind of disappeared and he buys it with this idea that I'm

going to resurrect this thing as a mechanical only luxury brand that's not the way that the rest of Switzerland was thinking they were thinking how do we take our big bloated oldw World

Companies and write it out in this Tech transition he's like I'm just going to buy the brand the goal is to do limited production handcrafted watches and the

scarcity and the high cost to make them will lead to these high prices he picked up this brand again because everyone's panicking for nothing inflation adjusted I think it's like

$16,000 this is like the uh the Bernard AR no story buying Louis Vuitton out of busek that's exactly right he would later go on to sell it a decade later

for 60 million Swiss Franks nice which back then you know that was real money yeah so be comes up with this advertising slogan marketing genius to describe the essence of the brand it's

an old Brandy bot here's the slogan since 17 35 there has never been a quartz Blanc Pond watch and there never will be

yeah it's a great slogan because quartz is 13 years old 14 years old but he invokes 1735 you know for the first few hundred years it was impossible to have

a quartz block Pond watch perfect so the idea is if you want to buy a commonplace machine-made quartz watch go right ahead but if you value traditional craftsmanship you buy a Blan Pond we are selling champagne and caviar and they're

selling calculators over over there Rolex is watching this all play out and they're like oh that's the Playbook yes Joe Thompson has his great quote that it was a feat of jiujitsu to take the

weakness of the mechanical watch the old technology inaccurate labor intensive expensive to produce and turn them into strengths old world craftsmanships supported by these artisans in accord

with 400y old traditions to make these rare expensive masterpieces so Blanc Pon and be they should get a lot of credit for this move but in practice they had nothing to lose it's like a fun Hail

Mary to try this approach I don't even think be could have predicted how well this strategy would end up working for Rolex I think this was sort of a fun

demonstration okay Blan Pon the right strategy at small scale with nothing to lose chapter three auction houses the mechanical watch Renaissance really came

first from auction houses if you think about what auctions do they value things that are rare and for long time this meant vintage pieces old things mostly

fall apart that means the ones that are surviving we can pay a lot of money for them well mechanical watches even the new ones are becoming

rare the whole Market's going away companies are going out of business and you've got these few extremely high-end

producers like PCH phip that could fetch more than ever at auctions even new so Paddock is is the poster child for this they came out with this thing called the

caliber 89 have you heard of this this watch I am very familiar with pek but I have not heard of this watch so this thing you're not wearing it on your

wrist it is multiple pounds in weight like you hold it with two hands it's the most complicated watch ever made wow they required computerated design to

manufacture it the strategy in 1979 internally at Paddock was for our big anniversary celebration in 10 years so in 79 for 1989 we want to make the most

complicated watch ever made it was something like 30 complications this thing made people go nuts and at an auction house it sold for over $3

million Landmark High it gets mentioned on Saturday Night Live in a skit for who would pay $3 million for a watch completely High Watermark completely

kicks off this new craze of complication makers people see it and they think oh I have to add as many complications as possible to my watch they got a little goofy and interestingly Rolex never

participated in that no again they do their own thing yeah and they want to make best engineered extremely functional extremely reliable not the

most flare not the most artistic not the most any of that it it is the 911 that you could have bought 30 years ago is the 911 that you have today but the one

today is better engineered yep so this auction house story from 1977 to 1985 is essentially the only interesting part of

the mechanical watch world and then it sort of Sparks the idea that hey new mechanical watches especially these

crazy complication ones can be really interesting too and so right around 1985 that's the same time that the Paul

Newman dial goes nuts in Italy I really think a huge piece of this story is that the auction house market sparked the

interest in the new watches it totally totally did it like highlighted Rarity yep okay so we've got Omega what not to do we've got Blan Pon what to do at

small scale with nothing to lose and we've got the auction houses taking the used market for lack of a better term and sparking the new market so what's

Rolex doing well at first they explored quarts like everyone else but very carefully the oyster quarts the oyster quartz it's it feels profane to even say

that I kind of want one I actually think they look extremely cool yeah they're very angular they've got this integrated band into the watch phase I quite like

it but they poured a huge amount of Rd into quartz watches but they didn't productize most of it they did these small runs of this oyster quartz which was a very Rolex way to do quarts that a

lot of people have called over-engineered but they pretty quickly got to this idea that if they wanted to lean into mechanical as a differentiation even though it was a worst timekeeper and emphasized brand

Lifestyle the incredibly complex thing that was going on in the mechanical watch process they should just lean into that and the romance of it and courts just kind of violated their ability to

tell that story yep so there's a great passage in the book elect ifying the wristwatch which is Lucian tr's book says Andre heiner was a true Visionary

his opinion was that the originally very costly courts would soon be Bal this had already happened with transistor radios TV sets and pocket calculators top Quality Mechanical movements would

always remain expensive and exclusive due to the large amount of Highly qualified labor required for manufacturing these parts and assembling them the inescapable fact that a mechanical device can only tell time

approximately could easily be hidden by writing superlative chronometer officially certified on the dial wealthy people don't need an instrument that tells time they want a beautiful and

exclusive object on their wrist it's amazing it's kind of like this full circle moment back to the original wristatch Market which was as ladies

jewelry yes where part of the signifying aspect of it was I don't care about the accurateness of the time I care about its beauty and what it's says about me

that's exactly right the thing I was trying to dig on this is was this a risk that Rolex took was it

counterintuitive and I asked Joe Thompson about it and he said in the late 7s every watch reporter knew one thing mechanical watches were doomed every company told you that including

all those in Switzerland it was a tremendously ballsy move to continue emphasizing the mechanical watch but they also were like or or or Morris like well yeah I bet the company but I knew

I'd be right you know they took their time they waited they watched what not to do and then they saw the Playbook with Blanc pen of what to do yes and then they hit the gas and they were

starting to see what was happening in Italy as you described the other thing that was making it take off in Italy is the Daytona became part of a uniform like for young men wearing a bomber

jacket and a stainless steel chronograph on your wrist was like a look all right I need to go get a bomber jacket now yeah right midlife crazies here we come but yes I think you're thinging

about Jensen's exactly right I also think Rolex had a built-in hedge because of their independence and because of their cash position everybody else is

just going to do all the scrambly stuff fast they're all super reliant on each other and they're all overextended and Rolex is this incredibly conservative

company yeah we should say another word on that now so so in 1944 when hans's first wife died he created the wisdorf foundation he put all of his ownership

into that Foundation much like the Ikea foundations that we talked about on that episode the primary purpose of the

wisdorf foundation is to ensure the continued operations of Rolex it's even more Ironclad than Ikea because Ikea is this rats nest of all these different

structures and all these different Know Country foundations that they're in R is just one foundation in Switzerland the most Ironclad privacy Foundation friendly laws in the world now the

foundation is also a charitable foundation and disperses huge amounts of money much of it locally there in Geneva but make no mistake they are not responsible for shareholder return

profits you know number one is continued operations of Rolex they can have three bad years in a row and the CEO might not get fired yeah and they're playing Game

Y very Ematic of this in 1978 right in the middle of the quartz crisis this is when omega's throwing stuff at the wall they release the sea dweller 4000 more

of the same you know what should we do more of the same let's go down to 4,000 meters right so Rolex sort of had this built-in hedge they would have been in

great shape if they needed to go courts they had the brand they had developed the technology to do it well they had the product oyster quarts yeah they just sort of hoped it wouldn't come

to that and also as we've talked about it would require dramatic change at Rolex if it became a quartz company they really just wanted to be able to make their six watches and so I think if they

had gone quartz Rolex would be fine today that would be a way to build a good business but the way to potentially build a great business was to try this

crazy Blan pones strategy but at scale with one of the biggest and most successful brands in the world and I think the important thing is they

maintained the option to go play the other strategy that Omega was playing if they really needed to but they sort of just hoped it wouldn't come to that yep

and it didn't yep so by 1989 it's extremely clear that their strategy is working along with pek Philipe they had record sales that year record adits this

craziness Paddock was similar to Rolex in their strategy they had early exploration into courts but they came to the same conclusion our company is not going to be good at this so we either

need to Die Trying or we need to really lean into this Heritage handcrafted craftsmanship thing but it was actually an easier decision for them because

they're only making 9,000 watches a year at this point Rolex is making like a 100,000 yeah it really was as you say a

incredibly well managed but ballsy decision on rolex's part yeah PK also so at least now I don't know if it was the case back then they're in a very different part of the market than Rolex

they're in the dressat complication world yes listeners we've been lying to you this whole episode Rolex is actually not a luxury company oh interesting I

mean totally disagree that is my opinion and it's arguably not even a craft product it's an exceptionally well-made industrial product with exquisite

engineering and amazing branding but the luxury World of Watches it's autum RPG it's PCH Philipe these watches sell for

8 10 30 times as much as Rolex watches and they produce way fewer of them I mean Rolex is a industrial

engineered beautiful consistent reliable product it's not art or complications or fashion it's Mass I

mean this thing sells a million one a million two products a year I agree with you I think maybe our definitions of a luxury company are different if you were

to define a luxury company as the most expensive highest end items yes totally agree that is not Rolex that is pek that is some of the other low volume

companies the reason I think that Rolex is a luxury company extraordinaire is managing the market as opposed to participating in it to me that's what

Hermes does better than anybody else out there they manage the market they're in control they're in control and Rolex does the same thing yeah Rolex is in control Rolex is completely in control

they could sell their products for much much more than they do and they do not because it is the right long-term decision to do so and there's a whole

bunch of other elements to the luxury strategy that they manage with which really comes into the next CEO Andre Heiner's son Patrick who takes over in

1992 and if we look at l versus premium those definitions we used on the lvmh episode it is absolutely luxury you're not buying Rolex for the features right you're buying Rolex for what it says

about you yeah and they are a high volume luxury player again in comparison to a Patek or a aomar or something like that yes I think the burken bag is a really good comp for it because

price-wise they're actually pretty similar you you get a Burkin for I don't know 12,000 $15,000 like I mean an insane amount of money but relative to what they could charge or what the

secondary market prices are totally fair all right take us to 1990 so everything we've been talking about managing through the courts crisis and this transition to luxury the

auction houses the Paul Newman craziness in 1992 Andre retires and his only son Patrick takes over as CEO he

had joined in 1986 as commercial director right at the height of the Paul Newman craze and all of this that we've been talking about what Patrick really

did within Rolex was he vertically integrated the company he presided over most importantly the agler acquisition

in 2004 for rumored roughly a billion Swiss Franks Rolex buys agler and makes it officially in-house but the other thing that he did that people will talk

about he Consolidated all the factories every physical location where parts that went into Rolex watches were made whether those were in-house Rolex made

or a third party supplier from call it 30 different locations throughout Switzerland down to four four big massive Consolidated sites where they

own and produce everything in house this is super important and all in service of this luxury strategy of brand management and I owe a big thank you to James ding one of the co-authors of the best of

time which is a great Rolex history and he's actually working on a new book that's going to come out in October the Rolex Legacy he helped me understand this Ben what you were talking about a

little while back about what Omega did where you had the core movement but then you had different end models and cases and products in different regions around

the world yep that is the absolute opposite of what you need to do as a luxury company it can't be like this one's better than that one or different levels of quality or these imperfections

here and it's cute it's like absolutely not that is critically important because all the clientele that are buying these products are Global clientele they're comparing it against one another you

can't sweep this stuff under the rug in the watch industry because of Ben what you were saying that there was this history of all these fragment to different little suppliers who are providing all these different parts to

the different end Brands you had a wide variation in quality among products and Patrick said

we need to make sure every Submariner that comes in a Rolex box is of uniform quality so he shrinks the suppliers from

27 down to Just 4 yep Rolex bought their bracelet maker they started forging their own medals in house gold steel you name it proprietary stuff Beyond just

their famous 904l steel and they brand it Rolex nerds all recognize rasur and oyster steel and ever Rose they already had a lot of control over their future from before from their private ownership

but now they really do cuz production is also in their own hands Y and this also starts to build into the lore you know just like gmes has oh we have Artisans

that we train and we have our own schools and our own Pipeline and there's 8,000 people that work in ateles that we've developed in France Rolex now has

the same thing in these four Mega sites they have their own technology their own people their own machines in when was this 5 I think they invited four

bloggers Ben and James were two of them to come and tour the facilities yeah Ben climber has this unbelievable piece on hinki about his experience right and you read these pieces and you see the photos

and you hear them talk about all of our Machining all of our tooling we make in house custom and we've designed these facilities to be able to fit like

there's this one giant hallway and bner James was like why is this hallway so big like oh well we designed it so that the width of our biggest machine that we have we multiplied that by two so that

we can get bigger ones to the Future it's all about vertical integration and this creates that uniformity and that myth and that uniqueness of what you're buying when you buy a submarin or a

Daytona it is so true I mean after I read Ben's piece I kind of took a step back and thought huh Rolex actually is the highest quality thing y it's the

brand but I mean who else makes their own machine is going to open and close the clasp a thousand times in just a few minutes to test it right who else is

forging their own Metals who else makes all their own movements who else is quietly inventing new components of the watch and then not advertising them because they just wanted to make it a little bit better even though they kept

the reference number the same they're going to absurd lengths to make these things the highest quality engineered and produced products in the entire industry or in any other industry too totally so that's sort of the product

and production side and that's the story of Patrick's time as CEO in 2008 sadly he develops health issue and ends up passing away way too

young they transitioned leadership first to Bruno Meyer who had been the CFO and then in 2011 to Gian Ricardo Marini who was a 40-year Rolex veteran and had come up through Italy and this is kind of

weird to have two new CEOs in short succession over 90 years they had three CEOs y that kind of speaks to the ethos

of small iterative changes over long periods of time what other companies had three CEOs in the better part of a century yeah and I think it was just sort of a accident of timing that they

then had these two CEOs for relatively short tenure and just was because they were older but they were both long-term Rolex veterans and what they do together

through 2008 and the financial crisis I think is the other side the demand side of the equation that cements in my mind Rolex being a luxury player is the

financial crisis was huge for the watch industry in sort of a counterintuitive way and I remember I lived through this as a banker on Wall Street right out of college I graduated in 2007 and that

first year that I was on Wall Street before the crash was the height of watches it was sort of borderline okay for me to wear my Daytona because it was

good times you know but everybody was spending their bonuses on Swiss watches The Craze was on then the crash happened and all that dried up overnight you know

austerity was the name of the day and that really really hurt a lot of other watch brands who then cut their prices to try and save Revenue Rolex didn't do

that and zeroed out ad spend yeah Rolex didn't cut prices didn't stop sponsoring the US Open so this is another spot where if you're Rolex you're like well how long is this financial crisis going

to Last 5 Years what's 5 years it's probably more like 2 years we don't have shareholders I don't need to make my quarter I don't need to make next year we have enough cash cushion that we can ride this thing out so we're going to

make the right 5 10 20 years bets and this is all noise so interestingly Rolex actually massively doubled down on their

marketing spend in the US during the 2008 financial crisis well everyone else is not only cutting marketing spend but cutting prices on existing products in

stores to move inventory as you said the first time I saw this I was like who at Rolex I mean how did they make this decision how could you possibly make

this bet and then as you start to learn more about it it's kind of the obvious move y there's a secular thing that's happening which is the American watch

aici andado Market it really wasn't a thing until the early 2000s but it was really starting to take off y this is when Ben founded hinki exactly

Enthusiast blogs YouTube channels I mean not yet in 2008 YouTube channels but here's an example Rolex and other Swiss watch brands used to throw these events

to generate interest in their watches and it would be for one person we talked to called them old fuddy duddies who would show up or they would be for Chinese tourists and they would have

them in the Chinese language that's how small America's watch aici and auto market was in the early 2000s by 06078 it's really taking off and so it's just

the logical move to double down on this and in retrospect it looks like so ballsy but given rolex's unique position versus what everybody else could do the

opportunity is there for the taking advertise hard go get that new customer right so here's the thing this was the

easy half of the decision for Rolex was to double down keep going during and after the great financial crisis that's easy of course texbook Playbook the

thing to do when you're in a position like Rolex the hard thing was the watch industry did a hard bounce back up in

the next couple years once Zer kicked in in response to the financial crisis as craziest things felt in 2007 in the watch Market by the time you get to 2011

2012 2013 were Way Beyond that in excesses and so many of the other brands totally did this Whiplash seesaw thing where they were pricing really high

trying to become exclusive before 2008 2008 hits they Panic they cut prices they cut marketing spend now the market comes roaring back and all of a sudden they're raising prices back up again and

trying to cash in on the good times what does Rolex do they stay the course same thing they don't raise prices but they control Supply yep well they rise prices

slowly every year it's a modest price increase every year that kind of sets the floor and frankly if they do it over enough decades everybody just believes forever that these things are going to

appreciate because it's almost like they're the fed and they're guaranteeing a certain rate of return on these things there is this really awesome New York Times article in the last couple months

talking about this Dynamic how all the other luxury houses over the past couple years you know during the postco craziness really raised prices and price

gouged themselves out of the market once the reset happened and Hermes didn't and Rolex followed this exact Playbook over the last 10 years of not price gading themselves out of the market but

intentionally limiting Supply letting the secondary Market go nuts and then but keeping an even Keel for themselves and then now that there's been a bit of a reset they're stronger than ever I

think all right so this is a question I would was sort of had on my list to ask you a very very common narrative about

Rolex right now is they have burned all of their biggest fans these weight lists have gotten out of hand the authorized dealers are being

disrespectful they are intentionally limiting Supply have they gone too far in their unavailability I think it was a really good point one dimension where

Rolex historically has has been very different in their strategy versus heres or other luxury companies is they don't control the last mile of retail in the customer relationship they've always had

the authorized dealer model as we talked about so right now or at least until recent times these crazy weight lless things are actually sort of somewhat out of

rolex's control yeah in a way that Hermes or Louis Vuitton or Chanel or the like they're managing their own customer relationships Rolex does have their own stores and this was one of my really big

questions as I was doing the research like why it seems obvious they should have their own stores this works so well for lvmh and heres and etc etc why

doesn't Rolex do this historically at least the key difference between Rolex and other luxury houses is Rolex is a one category company heres can have

their own stores because they sell furniture and they sell ready to wear and they sell jewelry and they sell handbags so like even though in any one C category they sell a lot less of a

given skew like far fewer birken bags than Rolex sells watches the totality of all the products they sell allows them to support a retail a dedicated owned

and operated retail footprint n i don't buy this you don't buy this for a second okay well I do think this is changing now Rolex has 1500 authorized dealer

locations and if all 1500 of those were Rolex stores they would absolutely do a great job paying rent yes they don't need to sell a whole bunch of other things to lure people into the store to

well I think that's true now and I think that's why they bought buerer in 2023 okay that's all right let's have that debate and then let's come back to scarcity okay okay so why buy buerer

2023 they spend a rumored five billion do five five yeah that's what I read I mean nobody knows the the details of the transaction but to buy one of if not

their largest single retail partner the jeweler berer and they have a hundred-year-old relationship this was one of the first Retail Partners for

Rolex in the super early days and actually this Alliance plus the agler alliance helped them stay out of the

Swiss cartel so in many ways they have bruer to thank for their independence and their freedom while the rest of the industry was panicking so they've got this like tradition but the question is

everybody jumps to shouldn't they own own their own retail they own their own everything else should they own their own retail why what are the reasons well you there's control over the buying experience and to your point list

management y as weight list management becomes more important I think that becomes more critical yes that's legitimate there's eeking out every dollar of margin and there's getting

full visibility into data on customers which actually is interesting they they don't get that today they they like don't have their customers email address or names or addresses because that data

belongs to the authorized dealer Rolex doesn't actually know who's buying their product or who likes their product which is kind of crazy for a modern company of this scale and size well then the elephant in the room to me with all this

is all these authorized dealers sell other brands too berer sells Omega and berer uses the fact that they're a Rolex

dealer to attract those other brands and to attract the customers who will buy a bunch of stuff in the store once you have Rolex uh someone in the research put it to me you're a made man yeah but

historically Rolex has been like that's fine sell PEX sell Almar sell Omega in the same physical location will that

change now right okay so just walk through the logic tree Rolex mostly didn't need to take on the burden or the fixed cost or the complexities of owning

retail Rolex dictates terms to retailers on how their products should be sold displayed marketed they have exacting standard and over time retailers actually have less room to differentiate their own

brand and experience and increasingly you walk in and you're like oh is this a Rolex store and Rolex doesn't have to take on managing the store they have 16,000 employees doing 10 billion a year

in sales amazing this business is so efficient from a headcount perspective and everybody talks about it like it's craftsmanship it's high economies of scale production like yeah there's

people working on these things but there's a tremendous amount of machines and they don't have to operate the stores but they mostly get all the good

parts of uh highly controlled retail experience without having to also be in the very crappy retail business I mean industrywide third-party retailers make

a 37% gross margin after they mark up from the the wholesale price that's their margin for Rolex in particular it's lower than average cuz Rolex you

only get to keep 33 to 34% % I've heard that actually went down 1% this year Rolex kind of gets to have their cake and eat it too by not owning retail

stores and having all the benefits of as if they did at least over the last 30 years or so I think your points are valid about they are increasingly kind of wanting that customer touch Point U

especially as it comes to things like weight lists yep the thing about Rolex in pursuing this strategy until now at

least they don't necessarily do things for the gross margins you know this is a foundation owned company they do things for long-term strategic reasons and I

think if at least you buy the premise that if they were to operate their own retail locations they would be pushed by

customers to have more things in those stores than just the six or seven core Rolex models which you probably can't walk out of the store holding one of them anyway you're just going there to

sign up for you know a wait list which again is a very different experience than the Hermes retail experience you can't walk out of there with a Birkin but you sure as hell can walk out of there with a scarf or a piece of

furniture or uh you know Apple watch strap you know etc etc it is astounding that Rolex has had the discipline to remain just a watch

company imagine the opportunity to become a fully Diversified Luxury company Rolex jackets Rolex sunglasses Rolex fragrance Rolex you know you name

it Rolex luggage why are they not in the luggage business you could make 904l steel carry-ons right you know make ramoa look like Child's Play

here and I suspect that this is part of the reason not to have gone directly into retail yeah maybe I don't know I don't think so you think Rolex is going

to give into customers saying I wish I could buy other things in this store or ignoring the free money I could be way off base here but just like really imagine like okay what does it take to

operate these retail locations these days You're competing for physical space with lvmh so you are in the most expensive highest rent

highest end places on Earth Yep and again you may not necessarily care about your margins and maybe you can take that hit and they have tons of cash maybe you can even buy the real estate but just as

a shopper experience for the people that are now visiting those locations they want to go and they want to have an experience right and they walk out with product and so if there's a Rolex only store and all there is is

the six seven eight models there that you cannot walk out of the store with like what is it doing High high-end bonobos right yeah it's a highend bonobos except you have no idea when

you'll get the call right exactly now compare that to a berer where like yeah you can't walk out of there with Rolex but you can walk out of there with a you know I don't know a whole bag full of

tag hoers yeah exactly exactly and it's a non-exclusive market anybody who's a watch collector isn't just a Rolex collector or like just because you buy a maybe I'm sure there's some people but I

think for a lot of people who love Rolex they're also going to own a panai or they're going to own a whatever and that doesn't hurt their relationship with

Rolex yeah fair so the question kind of remains why did they buy buerer yeah so here's my supposition yes it will help

them improve their economics for watches that they sell through buerer but not why they did it yes it will help them improve leverage over other retailers but they didn't need that they already

do things like gee it would be nice if you wanted to remain a Rolex authorized dealer if you sunk a whole bunch of capital costs into rebuilding this part

of the store to make it better oh no no we mean you we would like you to do that we will get back to you this December if we're going to renew the contract for next year for you to stay a deal or not

um but let us know in those Renovations they have all the leverage all of it so I don't think it's like oh now we own this retailer and um they didn't need that at all yep okay yes it will also

let them have a tighter grip on watch allocation and the customer touch Point weight list management which I agree is a huge liability for them right now but they didn't need to own the ads to do that yeah they had the leverage to take

control anyway they could easily have said Hey in the contract for next year's renewal or putting in a clause that you are no longer allowed to maintain weight

lists on your own for customers we're centralizing that and if we catch you doing it you lose your license for the next year great point they absolutely could have done that now maybe they didn't feel that was ethical they're

like look it's the Dealer's business and we have to let them run their business but you could solve this without buying someone who represents 8% or whatever berer is of their total

sales I honestly think the biggest reason to do it was so no one else buys it berer is a 100-year-old relationship the family didn't have anyone to pass it

to they're looking to sell Rolex is a very private company they don't want anyone else owning an asset that has a lot of visibility into Rolex itself since they sell so much of rolex's

inventory they don't want a public company to own it and start reporting how many Rolex watches were sold that year through that that' be horrible for Rolex and I'm sure lbmh would have loved

to have own berer absolutely I mean they own Sephora you don't think they want to own berer yeah and berer also comes with um what's the turnau the American Retailer which I'm sure Rolex doesn't

really want to own turnau but here they are so I think it was so no one else buys it yeah I think you're probably right I do agree though I mean the reason that people are all up in arms about this I never got the call from my

authorized dealer and the whole weightless thing is because weightless were only really a thing for until honestly like 2015 for like

steel daytonas the rest of it you could just buy like it's this whole this new notion of having the privilege to go spend 7 to $20,000 on something and

getting told no by the local jeweler that's crazy most of the time they're going to say yes absolutely let me walk you to the checkout aisle so because

it's kind of a new motion the old way of doing it they basically didn't have the infrastructure to have a properly managed I know you are taking out the luxury strategy and you're showing me the page may I please remind you of

anti-law of marketing number six dominate the client and number seven make it difficult for clients to buy oh also number five do not respond to Rising

demand but honestly until 2015 like you could just buy a Rolex for most of them except for the ones that they deliberately wanted to use as hey this

one's hard to get I should just be able to walk in and buy a sub you know yes and so that's how customers feel because that's how it always was and then they each ad is using their own mystical

portal of weit list which really means how many Instagram followers do you have or are you famous enough for me to allocate one of the six that I get to sell this month to you and so it's a

customer hostile experience if Rolex was just put in the contracts guess what we're managing the list and uh we're going to actually manage it and we're going to publish how it works I think they could earn a lot of customer

Goodwill and they wouldn't have to go buy a bunch of retailers and and figure this whole thing out totally agree they absolutely could do that yeah I will say

I don't think Rolex wanted to be in the luxury business I think they wanted to be a Lifestyle brand I think they wanted to have fantastic engineering I think they wanted to continue making things a

little bit better every year they wanted to have the very best brand they could with customers but I think Glo luxury kind of happened to them yeah and they

didn't really have a good choice after the courts crisis yeah other than to do this uh I heard an anecdote that um richmont and in particular cardier

decided that they were going to start acting like a luxury watch brand and they sort of reconvened the watch industry around them in a luxury way uh

an example being to compete with basil world or the basil fair richmont started their own thing in Geneva and they said look the industry gathers here in Geneva now and we're going to be fancy about it

and no one's eating brst anymore on the show floor we're going to sell watches to customers with champagne and caviar and a presentation ceremony and so if you're not doing that guess what that's

what watches are now I don't think Rolex was the driver of that I guess is what I'm saying I think the industry went that way and they happened to be the most prestigious high volume player in it and so they're sort of trying to

figure out what it means to be an accidental luxury brand I can totally believe that I mean go back to Hans wil starf right like that was totally not his vision for the

company his vision was a Rolex watch on every wrist yep okay so now now that we're like over in scarcity land I want to revisit the question have they gone too far in their

unavailability well the main reason I honestly believe this that they didn't ramp production to meet customer demand isn't positioning it's not we're a

luxury brand we don't do that it is they don't want to destabilize the business Good Times come bad times come we do not

want to be the brand that ramped 20% in one year and is now slashing MSRP which lots of watch brands have to do and embarrasses their customers who just

bought it at full price and now suddenly it's 20% off like that's a horrible way to destroy your brand yeah cardier overproduced watches in 2016 and had to destroy hundreds of millions of dollars

of inventory this kind of thing doesn't happen to Rolex very incremental slow increases to production over time that's the thing that has served them well they never want to be anywhere close to the

line of what the real demand is there's sort of this business physics lesson here it's very hard for a business to ever get smaller than its largest ever

yes it's like a Down Round in Venture back companies yeah customers don't like it employees don't like it it's hard to shrink your overhead to rational new realities after bubbles pop it just

doesn't feel the same as when it was always your biggest best year ever yeah and I think Rolex just really doesn't want to ever be in a position of that so

they're like conservative to a fault on slow modest increases in production slow changes and when there's a bubble and a whole bunch of new fans of your brand

come in it's like an immovable object meeting an Unstoppable Force like they're just not going to meaningfully ramp the biggest thing they did do is they started this new production

facility construction that will be open in 20127 or something but even that I don't know that that'll be maybe 10 maybe 15% bump when that comes online but I think they're torn right now because they don't want to have all

these customers whose demands they can't meet but they also don't want to risk destabilizing the next hundred years yeah new demand is actually like a risk if you're taking a very long-term view

yes and managing valuable customers who want a long-term relationship with you and who are angry while you're trying to protect your own

stability yep is hard which coming back to the weit list I think this is the positive justification for a weit list making sure that those people who become

clients and buy your products and participate in your brand really want it and aren't just there because it's the hot flavor of the week and they're going to be gone next month right and Rolex

cares about that but not as much as like a PCH phelip I mean PCH phelip they want to make sure that they are appeasing the collectors and the true fan like Rolex I think they acknowledge that they're very

commercial they're here for the the the executive who got a promotion and the doctors and the dentists and the lawyers and the finance guys that's their bread and butter and I don't think they want

to like lose the brand patina with the that huge volume of material wealth in aggregate yeah James ding again put this

to me uh in a really good visceral way the typical Rolex buyer is not comparison shopping with a pot Tech or any other brand they are comparison

shopping with do I buy this Rolex or do I upgrade my 911 hm that's interesting one more rumor I heard and this should

totally justify Rolex isn't happy that they're not able to make enough watches like I really maintain this steel Daytona sure rainbow whatever sure those

can maintain rare but like submariners should be on shelves or at least two weeks later you should get a call about it I heard that in 2020 to 2022 they asked employees to come in six days a

week instead of five to meet demand wow so if that's true that's a pretty telling symbol about how they feel about it yep now is a good time I

think to bring up there's one more piece of Rolex the corporation and the story which for the longest time I think both of us were totally puzzled

by and when we were in Taipei to interview Morris in January we went into taipe 101 and we were walking around in the shopping mall we walked by tutor

well it was an authorized dealer that had both Rolex and tutor which I think a lot of ads or maybe all ads if you take Rolex you have to take tutor yes so what

is tutor tutor uh like the British royal tutor family is rolex's sub brand sort of technically

it's another company owned by the Hans wisdorf Foundation but in practice yeah sure this is rolex's sub brand and B to your earlier point if you're going to make an argument that Rolex does not

want to be a luxury company a textbook violation of the luxury strategy is to have a sub brand right and so we're like what the hell is this tutor thing why do they have it and if you look at the

tutor products a lot of them like are the Rolex products dude okay so tutor was started by Hans wilsdorf in 1926 with the stated purpose to be a more

affordable brand to Rolex while maintaining high quality standards and originally they actually were Rolex cases and bracelets but with off-the-shelf movements from a

third-party vendor ETA which is actually now part of Swatch group versus the ones that Rolex was getting from agler youd look at it and it would look like a sub

totally you walk into a tutor authorized dealer you go on the website and you're like wow that sure looks like a GMT master and that looks like an Explorer and that looks like a Submariner right

yeah even today it almost feels like knockof except that the Rolex knockoffs are shockingly good you go a decade owning a knockoff and not realizing it yep yep so for the longest time you know

I at least I think you were too like what is going on here and then we realized the real limiting factor to Rolex production is movements movements are the hard thing to make and all their

movements are igler movements you know now in-house Rolex movements tutor does not use agler movements does not use Rolex movements they use third party movements this is funny I hadn't had

this Insight yeah so tutor is kind of the release valve here they can ramp up production of the tutor quote unquote Submariner or GMT master or Explorer

whatever with third party movements and that's okay hm but what do you mean Rel lease valve like customers can't get a Rolex so they get a tutor I think that

probably rarely happens but to hans's original vision of I want everybody to be able to own a Rolex this is the way that they can have that happen I don't think that's it I

don't think they care at all about that here's my logic it is a shockingly low percent of rolex's production less

than 1% if that were true they would sell they would sell tutors in volume let's take a black Bay this is sort of

the tutor Submariner $4,000 most people don't know or care about the black Bay and if they walk in thinking they want a Rolex they're not

walking out with a black Bay they sell so few of these things so what are they doing I think it's kind of an innovation lab it's a way to protect rolex's brand

because if there's something something new and interesting that might be a fad that customers seem to be caring about in the watch World tutor can go and implement it and they can figure out how

to produce it if it's a flop that's fine the watch of fishing Autos who know about Tutor expect them to come out with weird stuff that flops but if it's

durable then Rolex might get it in 5 to 10 years with even more polish and thoughtfulness they've tested all sorts of stuff with tutor dial colors ceramic bezel

titanium watches a lot of these now are slowly making their way into Rolexes and I think the key thing is they can use

tutor to go and compete with Omega tag Hoyer in the midm market and tutor basically can punch up so that Rolex doesn't ever have to punch

down yeah yeah yeah I heard a great phrase that the shield protects the crown the tutor Shield protects the Rolex Crown which makes total sense it's so that they don't never have to risk

doing something dumb chasing a competitor with Rolex and tutor can always go figure it out I love it it's like we used to think about the lp show right it's our Innovation lab and we

still think about acq to that way this is like if this is something we find interesting but we wouldn't do it on the main show or it's we just don't have a place in our lineup for it yeah it makes sense and it still provides value for

all sides like it's still great for listeners it's still great for the guest it's still great for us yeah yeah but what is it it's less than 10% of our shows listenership it's a great

experimentation ground yep the real watch nerds will tell you that they actually love tutors even though it's a $4,000 watch the movements are incredibly high quality and I think

consumers actually might be getting a pretty good deal on tutor watches I mean if I go out tomorrow and buy an Explorer that's whatever it msrps for $8,000 or

something Rolex is making phenomenal margins on that thing tutor they don't sell that many of them so $4,000 price point that's only

$2500 wholesale for a very high quality movement and there's not a lot of them made so economies of scale are really low so whatever the fixed costs are there's not that many watches to

amortize those across and I think there's actually pretty significant upfront fix costs so I don't know I'm sure they're not losing money by having tutor but it's a great deal for

customers y you're totally right I like your rationale better than mine well we both had a lot of good conversations to try to figure this out cuz you and I were texting each other we were like what are they doing this is

the worst Luxury company ever yeah okay well to wrap up at least the history here level set us on today what is the company today all right first of

all no one knows yeah right but there's a lot of really good ways to guess and two great shout outs here one is to our good friend of the

show Arvin rnam he as usual did an amazing long form write up of the business of Rolex and he found awesome public sources of data we'll link to

that in the show notes secondly the industry report that everyone kind of refers to is this Morgan Stanley Lux consult report who sent us a copy in preparation for the episode so we did

our own ways of trying to guess at these numbers in the shape of the business today and then we kind of looked at the Morgan Stanley one and thought okay what's the most reputable well-connected person who's networking

with all the dealers coming up with I would bet all this is within 10 to 20% of right so I think they make about 1.1

million watches a year maybe a little higher margan Stanley said 1.24 so think 1.1 to 1.2 million a year yep sounds

right to me for Revenue think about it as around 11 billion in Revenue that they do in sales so the interesting thing is to start to look at market

share the share of the Swiss Watch Market that Rolex has by revenue is completely insane Morgan Stanley and Lux

consult estimate it at 30.3% of the whole Swiss watch industry no one else even comes close cardier and Omega have 7.5% each truly the number

two and three player are at what is that a quarter yeah the number two and three player are at slightly less than half of the scale of combined of Rolex yeah

exactly PCH Philipe is at 5.6% Again by Revenue PCH Fleet makes freaking expensive watches and they still only are at 5.6% one 16 of Rolex otomar PGA

is at 5% and then you just have massive fragmentation down from there Rolex makes something that isn't crazy expensive but it's pretty expensive and

they sell the absolute crap out of them on a units basis that was Revenue that we just talked about units they make something like 15 times the number of watches that pek FIP makes 22 times

autom rpga it's crazy people even talk about these Brands like they're in the same sentence just based on the volume of output yeah they're totally different

segments of the market yes in terms of price rolex's average selling price not rolex's price but what the retailers sell it for so around $113,000 aom RPA

is $48,000 vason Constantine is $38,000 pek Philipe $40,000 I mean totally different

categories this is part of my argument that Rolex really isn't luxury at all they have hit the sweet spot in the market if you think about a curve like an XY AIS they have found the sweet spot

where you can maximize Revenue where you just sell an absolute ton of watches that let people Express something about themselves but you stay away from that in sanity of the true luxury Market that

limits you to a very small number of production so they're almost like their own thing entirely Y and it's interesting right the secondary Market

really lets them do this I think yeah because even though the model lineup of Rolex has remained stable for so many decades now or relatively stable for so

many decades because of the minute changes in all the reference numbers in the models you actually have incredible scarcity and Rarity for for people who

care you segment the market yeah certain flavors and that can become the multi 100,000 watch market for Rolex the multi-million dollar watch market for Rolex they can participate in the same

thing that PK and otmar Etc are participating in just do it through the secondary Market or even special editions in the primary I mean you look at the rainbow dial Daytona oh the Emoji

watch right that thing is pretty baller they can do these extremely you know they play in pect Philip land both to your point in the secondary Market but

also in their sort of limited edition special watch Market yeah but I think if they weren't as strong a player in the secondary Market because obviously they don't really monetize that directly right I think they wouldn't then have

the permission to go put out these special editions that sell for couple hundred thousand in the primary market right the thing they've done so genius and beautifully well is to create

something that the the whole world knows about that everybody looks at as a sign of success that you've made it that you're like those divers and you're like

those pilots and you're like those explorers if you have one and because it's universally agreed upon AS Global wealth grew they basically just got to

index it yeah think about it right like I certainly don't want to imply that a Rolex is not a lot of money it is a lot of money that isn't accessible to the

vast majority of people yep however let's say you work a solid white collar job in America these days you get a big promotion you have a big life event you

have a kid Etc is it reasonable that you could purchase a Rolex it's right on the edge of unreasonable which is exactly where they need to be to have this Market exactly

if you make sacrifices you can probably do it yeah depending on what your salary is yeah I mean truly since the 1950s there is a wealth class that has emerged

doctors lawyers Finance people recently tech people if they can really figure out that market that absolutely can go buy a 10 plus thousand watch if it's the

thing they choose to buy yep like a Porsche a 911 is not that is completely inaccessible it is a impractical car for 10 times as much money y it's a pretty

sweet little market to have that it's this almost unreasonable thing that a whole lot of people can buy and to your point about the confounding of like luxury I still maintain that it is

managed in the same fashion as the world's best luxury Brands however it kind of sounds a lot like a BMW to me or a Mercedes a Mercedes or a

BMW again most people can't afford them and don't buy them or lease them but for a lot of people well beyond the 1% if it's something you really want in your life there's prob a way you can make it

happen yeah well most people Finance BMWs but nobody's well I think people probably Finance Rolexes that's yeah I think there's ways to finance Rolexes yeah it's interesting I did some

thinking about allegories to other categories like handbags or fashion or cars it's quite tempting to say that Rolex is Louis Vuitton and that Paddock is Hermes but Rolex isn't quite Louis

Vuitton that's not giving Rolex enough credit no it's not managed like lvmh at all yeah they are very careful stewards of the brand in a way that Louis Vuitton will slap it on t-shirts my best

comparison that I think I came up with is Rolex is Porsche and I know they're different categories of price but like cars are expensive things and you do need one anyway it's real scale

manufacturing with a highquality engineered product with extremely good margins differentiated by their brand you stick to six core models you iterate

and refine each one of them once or twice a decade the submariners the 911 you can buy what your grandpa had 50 years ago and it still looks like that modernized and it's actually a pretty

good comp to call pchf Ferrari yeah totally we don't care what you think we are making this for us we are making it for collectors it's very small volume production very small volume production

it's five times more expensive totally yeah and that's a completely different Market Ferrari Lamborghini you're talking a Million Dollar Plus cars is a very very different thing than an

$80,000 car right bottom line of what I'll stick to is Paddock is Ferrari and Porsche is Rolex and it's a really good business to be in yes yes I mean it's

kind of Ideal to your point they have found the ideal point on the curve here I think that's it they multiplied two pretty big numbers together instead of one big number and one small number yeah

and the way it manifests in watches is unique and different than other markets too 30% of the Swiss Watch industry other categories don't have this kind of

outsized winner even in handbags where Louis Vuitton is so I mean they print money print money somewhere around 20% I

think Rolex defines the category of watches heres doesn't do this Louis Vuitton doesn't do this Porsche doesn't do this those are all much more fragmented markets y totally and for

people who think we're like blowing smoke here of how is Rolex not a you know high-end luxury Rolex we were just saying average price of 13,000 you look

at Rashard m i mean this is like a 280,000 maybe 300,000 average price point Jacob and co uh 100,000 aumn rpga

that we were just talking about van Clee protectful Vashon Constantine Blanc Pon PJ these are all meaningfully more expensive average price points than

Rolex Rolex is the name you know but it's not the most expensive watch by a you could buy and there's 15 other BRS that are higher end y but success in

America in owning an ice watch is a Rolex yep I think that's what's so amazingly unique about this company yes okay so employee count they have about

16,000 people worldwide about 9,000 of those are in Switzerland I had a lot of fun trying to size this Market trying to figure out Swiss watches versus watches

the Swiss Watch industry is some like $35 billion wholesale before the retail markup across all players including the super high-end and Omega and Swatch and

everyone else Rolex does about 11 billion of that 35 billion which we've talked about holy crap but where gets very interesting is when we zoom out

from just Swiss watches Switzerland produces 2% of the world's watches 2% yeah and everything else is a $10 piece of crap and to put some real numbers on

on that Switzerland makes 177 million watches a year and most estimates are that there are between 700 and 900 million watches made in the world every

year 7 to 900 million including smart watches cheap $25 watches you have it so this 2% of units sold that happens in

Switzerland accounts for 45% of the dollars in all watches smart watches timex's all the stuff that's

made in Hong Kong and China I mean 2% of units are made in Switzerland and 45% of the revenue is captured there totally Apple alone ships way more Apple watches

every year than the entire Swiss watch industry way more oh absolutely estimates on the Smartwatch industry are like 80 million SmartWatches a year yep and I think Apple depending on the year

does like 30 to 50 yeah it's funny this 17 million watches that includes a whole bunch of swatches and fashion watches and you know Switzerland makes a lot of

Courts also so it is true that 45% of the dollars come from 17 million watches out of 7 to 900 million but it's actually even more concentrated than just that 17 million cuz none of the

courts watches contribute that much to the revenue yep to make that point specifically 86% of Switzerland's watch export comes from mechanical watches

that whole move in the courts crisis to lean hard into mechanical really really really worked from a dollar perspective so 40% of all watch Revenue in the world

came from Swiss Mechanicals Mechanicals amazing so then you start to look at net profit well Rolex has 30% of the Swiss market by Revenue but probably

even more by profit oh yeah it's totally an apple situation here Morgan Stanley and Lux consult estimate that of the $35 billion in total revenue for Swiss

manufacturers there's about 11.8 billion of total profit implying that the industrywide operating margin is

29% okay okay do you think Rolex has an operating margin of just 29% hell no and frankly there's a lot of people in this category who have negative operating margin they're these big conglomerates that are trying to get into watches

they're not generating a lot of profit there right now there are a lot of estimates between 30 and 40% I would bet it's way closer to 40% for rolex's

operating margin my best guess is that while they account for 30% of the industry's revenue it's in the neighborhood of 40% of the total Swiss

profit yep totally agree they're also so vertically integrated except for retail that you have to imagine that ultimately that would create a better profit

structure too has to be so then you get to balance sheet this is truly anyone's guess they're spitting off something

like three3 and5 billion a year maybe more maybe four yep and they've done call it 2 to three billion for at least a decade or two and so it's not crazy to

think that they've piled up $50 billion plus in cash even before investment returns it's totally an Ikea situation there's tons and tons of cash sitting

there and in Ikea we could see it in annual reports I have no idea what rox's assets look like so the Hans Foundation

of course doesn't publish any numbers publicly but they have said and people have estimated that they give away around 300 million Swiss Franks every year which by your numbers would be

about one tenth of the cash that the business is generating or less and still that makes them one of the most active annual dispersing foundations on the

planet it's unbelievable and it's a very broad base of philanthropic initiatives environmental science Arts and it's not like they're just doing things that help Rolex this is like a very legitimate

charitable foundation not to mention it seems like they're just giving money away all over Geneva yes this is the coolest thing about it a core part of the mission of the foundation that Hans

put in its bylaws is to help the city and people of Geneva and so I think they found sort of over the years come to a belief that the best way to do that

often is just giving people money if people need money family can't make rent have a health issue come up or something they can apply for Grants and they'll just give them money and they don't make

a big deal about it it's pretty interesting one thing they definitely do with their money again I think it's safe to just ballpark there's 50 billion

before investment returns sitting there but again plus or minus 50% they own some of the most expensive real estate in the world they own their own

buildings in Switzerland they own in the Bond Street house area in London some really really Prime real estate in Milan in Melbourne in Tokyo famously in New

York City there's a gorgeous building that they're building about a block from Rockefeller Center and Radio City Music Hall I mean the old Rolex building was nice this new one that's going to be done next year the architectural

drawings look unbelievable in Manhattan I mean they own a building in Manhattan hey you got to put the money somewhere right real estate is good

place as any they own a lot of real estate in Geneva they own a big service center in Dallas the school in Pennsylvania hilariously they just bought the building where Omega has

their flagship store in Geneva so Omega makes a rent check out to Rolex every month amazing that's not in the category of asset management but it is in the

category of spite I don't know yeah it's pretty funny yeah 100% safe assumption that there's a boatload of money sitting there y so that's the shape of the

business today the question is how would you value it If This Were a publicly traded company today you could look at it based on a sector multiple of other watch companies but come on applying the

Swatch multiple is not the right way to Value Rolex maybe PCH Philipe since it's also a vertically integrated very strong brand but it's privately held we have no

idea PCH phip is very Roxy in a lot of ways other than the fact that they're multiplying a number by a small number instead of two pretty big numbers you could look at conglomerates like lvmh or

richmont but there's too much other stuff in there I mean the Rolex is a pure playay mono brand with the leading brand in the sector there's only one comp for this

business there's maybe two with Porsche and Hermes but I think you're right that's Hermes I'm assuming that's where you're going that's where I was going yeah Porsche trades at 15x earnings

Hermes trades at 60x earnings and my best estimates on Rolex growth rate is actually in the same neighborhood as hermes's growth rate and hermes's margin profile is also pretty similar to a

40ish per operating margin yeah that's where this business differs from Porsche right I actually think if growth rates close and if the operating margin's

close and if it's a single premium brand that's the best in the sector is the same you totally could value it at what Hermes is valued at which is roughly a

20x revenue multiple or a 60x earnings multiple right but we have no idea what rolex's earnings are but I think you can kind of back into rolex's earnings being like in the neighborhood of 3 to four

billion a year yep pre-tax pre all this stuff I think but you're right maybe you just put it on the revenue multiple well okay here would be an argument for putting it on the revenue

multiple again not that you could ever do this because this business is never get a trade but there are a million things that Rolex could do differently to improve their operating margins and they're just not going too there's the long-term aspect of like well if they

were to do that then that would erod their positioning in the space right so all this to say the range is too wide to just give you a single number and say here's what I think Rolex is worth but

there are plausible scenarios all the way from 4050 billion to 200 billion agree before assets yep that's just Enterprise Value yep before any cash

they have in the balance he real estate who God knows what other Investments they have this is insane there's no way that this business is worth 40 I don't know if

it's worth 200 but it's worth 100 plus zero doubt in my mind and before assets I mean keep in mind market cap includes assets and so if this thing were to publicly trade listing with this assets

it's probably top 50 companies in the world yeah I mean again Hermes has a 292

billion Euro market cap and depending on what the assets are within X yeah there's a chance this thing's worth more than American Express or Goldman Sachs

or adobe or Pepsi or Disney or Qualcomm or AT&T kind of like the Rolex business better than a lot of those businesses all that to say this all

feels profane because GH they would never yeah can't trade this thing yeah I think the issue if I were to buy any shares of Rolex would be that I could never do anything with them because I

could never sell the shares well you'd have to ask yourself why am I getting these shares who is selling them to me right is it a fake which by the way we didn't talk about that and I don't think it's worth

much detail but I think actually for a long time the fake Market was great for Rolex M interesting just that Rolex certainly was and I I'm sure probably

still is the most faked certainly watch brand if not any brand in the world Y and I think that was good for them not so much recently cuz it raised awareness

while they were still raising awareness and then building The Prestige of the brand I'd say like '90s and maybe early 2000s probably a good thing yep you go to New York City to hope to get to Canal

Street to try to buy some fake Rolexes on your trip to New York I think that's totally right exactly it just adds to the myth in the legend yeah but now now yeah probably not a big deal it's also

so weird that these fakes are so good I mean you can go to like reasonably reputable online retailers and not be sure that you're getting an authentic Rolex I mean a lot of times it's like

the wrong movement in the right case or part of its counterfeit but not all of it all right should we move into analysis yeah let's do it all right power so this is where we use Hamilton

helmer's framework of seven powers to analyze what is it that helps a business to achieve persistent differential returns or what makes this business more

profitable than their closest competitor sustainably [Laughter] so branding quite the task for us here and should we just move on or uh just

for new listeners the seven options are counter positioning scale economies Network economies switching costs process power branding and cornered resources I think the interesting thing

is to stack them against who is their closest competitor and in some senses it's pefully in some senses I would say it's Omega yep in some senses it's Apple that

I completely disagree on I'll go to the mattresses on relics it's not a time telling device this is nothing to do with function totally agree however there's only so much real estate space on your wrist and most

people are not going to wear two things on each wrist right I've been dual watching all week one on each wrist and it's a little much oh do you feel a little funny feel a little funny you're

right it is competitive for RIS real estate and it's kind of irrelevant that they both tell the time yeah neither of them tells the time right one is a piece of craftsmanship on my wrist and the

other is notification center yes totally and fitness yeah yeah yeah that is actually a huge reason I wear my Apple watch and I've worn it every day

to bed for nine years same yeah just that instrumenting of both calories and sleep yeah same every day for years and years yeah okay so that's competitive

but interestingly I don't think about the prices of those since they don't achieve the same function I don't compare their prices so when you're thinking about what enables Apple's

profits versus rolex's profits I mean if I go buy a Rolex I will pay about 10 times more than I paid for my Apple watch yeah in some ways this is a silly

exercise because the whole point of the last God knows how many hours here is they actually don't have any competitors so there's nobody for them to counter position against right I think the

interesting thing is to think about in the 40s 50s and 60s what was the source of their power what activities were they performing that gave them power because

today is Almost Boring it's just branding I think yeah branding and just yeah category ownership yeah there just

is nobody else in 1985 it was interestingly like capital structure I mean why did Omega do dumb stuff and Rolex didn't that doesn't

really fit into this framework cuz that's not about strategy that's about tactics that's a failure of execution to make the wrong decision yep okay so yeah I think maybe the more interesting

question is rewind back to the lifestyle era post World War II when they're launching all the professional watches the sport watches was that counter positioning versus the rest of the industry I don't think so because I

don't think they were doing anything that the rest of the industry couldn't I mean they were executing really well on a brand strategy that was really cohesive with their product strategy

around the professional watches but I don't know that their competitors couldn't do that there was some structural reason why they couldn't I mean courts was counterposed against

Switzerland but I don't think Rolex was counterposed against other Swiss I think it was tactics yep good point I agree the only other one I could see on here is once they hit escape velocity in the

90s the scale economies is a big one I mean the reason why they truly are among the very highest quality watches in the world is because they throw their scale

economies around they do absolutely unreasonable things to engineer and build and test these watches that other people in the industry just can't yep

and their leverage over retailers you know too I think at the end of the day though I maintain uh we can debate the semantics of luxury products price

points Etc this company has managed like the best luxury companies and that Playbook sort of exists outside of seven

Powers I know it is the goal of managing a successful luxury brand is to manage for the long term and by the long term I mean like centuries and so you're

actually willing to sacrifice huge amounts of profits to do so oh right it would be wrong to look at this year's or even the next five years operating profits when analyzing a business like

this totally you almost want to have a worse margin structure at any given moment especially during good times if it strengthens your intangible asset huh

that's an interesting Insight okay Playbook Playbook if I were to pose the question to you how does Rolex have 30% market share of dollars when the next

highest only has 7 and a half% what's the main reason why are they able to have such a massive lead in this industry and maybe let me lead the witness with like a little bit of what

I'm stuck on when did Rolex actually take risk because typically outsize winners with outsize rewards come from doing something risky or

counterintuitive at the right time a lot of the time I think Rolex just made a rational decision and executed better than anyone yeah I'm

thinking about the you know the three putt to get on the wrist of Eisenhower or had really good ideas or the lifestyle marketing and yeah working with both Jay Walter Thompson and IMG

and the you know testimony yeah they just did better than everyone else and that Advantage compounded over time right it wasn't trying was it really a risk how they played the courts crisis I don't know they just they

looked around and they were in a privileged position where they had the resources and the structure to do that and same with 2008 did they take a risk not really they did the logical thing and they had the structure and resources

to pull it off to go hard into Marketing in the United States I think a lot of the time they just had resources and structure

that let them find these opportunities to do a rational logical lowrisk thing and continue to pull away from competitors maybe it's a little dangerous to speak for Rolex because

Rolex doesn't speak and nobody speaks for them but I suspect if they were to answer the question they would say some version of

continuity yeah not that there haven't been major changes and different eras of the company but but they have stuck with

a strategy and a positioning and a product lineup and a culture longer than just about anybody else yeah you know I was reflecting on the question the one

time I think they really did take risk was the riskwatch order from agler yeah yeah yeah that's not the answer to why they have 30% market share today but that was huge yeah that's kind of the

old Le real bet the company move and when they did that that huge order I don't think we talked talked about this it was the order that they placed was for five times the capital that they had

in the business God so either it was a multi-year order or they financed it and probably both yep and I'm sure agler extended them some credit yep huh but

yeah since then you know they they made really really shrewd decisions executed immensely well I think that's the answer feels very Swiss yes yes it does all

right another weird Playbook question I have for you occasionally they do these weird exceptions to the rule like the

jigsaw puzzle day date with the Emojis yes yeah the Emoji watch or uh Domino's Pizza

deal they've got just enough Whimsy is it Whimsy is it like it's not a cohesive weirdness that's the thing you look at Hermes and you're like oh all of the fun

that you're having is the same sort of fun this is like once every 10 years they make a befuddling decision that doesn't seem super impactful on their

strategy so I guess it was fine yep tutor with Tiger Woods as the spokesperson why would you blow Tiger Woods on tutor there just occasionally

these very odd like how did this make it out the door and things about Rolex and I don't really have an answer for how that happens y sometimes I think it works really well I don't know sales

numbers nobody does but the relaunch of the mil G awesome great decision yeah totally it's also funny that the way that they do product naming man the

milous used to basically be a Submariner and when they relaunched it it was basically an Explorer the only thing it has in common is the name and the fact that it can go up to a thousand gaus

similar to the Explorer 2 completely new watch different than the Explorer the GMT Master 2 basically a GMT Master exactly what is too mean when they

release a sequel to A watch hulc come the deep sea sea dweller is both a deep sea and a sea dweller their product

naming is confusing yes all right we touched on SmartWatches a little bit it's worth a minute of analysis here the Apple watch comes out in 2014 fascinatingly and I'm not sure if

this is counterintuitive or not I don't remember 2014 thinking about the watch industry cuz I didn't but was the best thing to ever happen to Rolex aom RPG

pek Etc a huge amount of awareness raised for the category oh now I wear a thing on my wrist oh I spent hundreds of dollars on the thing would I be open to spending thousands of dollars on the thing huh I never even thought about

that before I've had a a smartphone for a long time and so I haven't been wearing anything on my wrist uh yeah sure maybe oh other people I look up to are doing that okay yeah I guess I'm

potentially into going up one level even from a smartwatch I mean it was this very strange progression that definitely helped them however it destroyed low-end

luxury long jeene TSO tag Hoyer anybody that was making a quote unquote luxury mechanical watch between $500 and $1,000 why toast complete toast it

doesn't signal anything I spent the same amount of money on this obsolete thing that I could have spent on an Apple Watch why are you stupid it's funny there's a great New York Times piece uh

before the Apple watch that quotes a source at Apple as saying that Johnny IV was bragging around uh around the company about how the forthcoming watch

from Apple was going to destroy the Swiss Watch industry really well I guess the addition they really did think they were playing here right well it's

hilarious because he was both 100% spoton And 100% wrong he was spot on that like you were saying that sort of

lower fat end of the market in the Swiss industry to the extent it even existed after the quarts crisis this was the total final nail in the coffin but for the ti end like luxury Apple watch

Edition you know gold Apple watch get out of here right yeah it's crazy at Apple watch it's weird how they managed to decimate the low end but no one took

the addition seriously the Apple watch addressed a completely new market so high-end watch people weren't going going to buy an Apple Watch period but for all the new people who were willing

to buy an Apple Watch there was no reason to buy a $10,000 watch yep and for a small subet of those people who bought Apple watches it then became the

Gateway into the high-end mechanical watch industry and again because of the way the market works it doesn't matter that that's a very small number of people those very small number of people are spending a lot of money yep that's

exactly right the other thing that it destroyed is the fashion watch industry we didn't touch on this episode just cuz it was one more story that we couldn't fit in but the whole Swatch Swatch group

is an amazing story yeah fossil who else guess I mean in the 90s these quartz watches suddenly made $25 watches possible and like that market went

entirely away with the Apple watch the uh the Fossil watch stock went down 99% since the Apple watch came out yeah that product category doesn't exist anymore

yep you know it would be amazing and will never happen you know how uh car manufacturers except for Tesla have carplay and Android auto yeah there

needs to be Apple watch play for high-end mechanical watches never going to happen of course but I would love that I don't even understand what you mean by that wear

Rolex to get the fitness tracking oh oh that's funny the question is is there someone at Rolex who's working on this do they treat it the same way they treat quartz or do they feel entirely safe is

there a research lab somewhere that's trying to figure out what a Rolex Smartwatch looks like I'm sure there is and they're never going to release it unless they absolutely have to no those people must be Paras around the

building you know it brings up this interesting talking about SmartWatches kind of makes me remember this moment that we didn't talk about was when the smartphone came out and really when cell

phones came so think like the popularization of cell phones 200 2ish 2003 is and certainly by 2010 when smartphones were popular that was the

moment you didn't need to watch anymore yeah but in the very recent history pre 2005 you needed a watch everybody needed a watch and now it's just a thing you

don't need there's no more functioning Alibi for this category everybody needs a car yeah you can go spend a lot of money and buy a 911 but you have the functioning Alibi of I needed a car and

I wanted a a car I liked driving or like tell that to your spouse look I I needed this cuz I I need a purse I got to carry stuff with me yeah nobody for any reason

needs a watch it it has no functioning Alibi anymore and so it is a pure display of I feel like a better version of me when I wear this and that's the

only reason why I'm owning this thing and and like oh I love the gears and like and I do truly like I the engineering is so unbelievable to me but

it's a much weaker thinner Alibi than these other categories which probably also uh is uh no accident that it coincides with with

its real takeoff as a luxury item yeah okay so in the vein of a functioning Alibi here's a question I have for you

why did this become the status symbol associated with success this 200 geared steel thing that I wear on my wrist like

why not something else what was it about this object easy answer obvious it was for basically the entirety of the 20th century the only

acceptable form of male jewelry not to say that the women's watch Market wasn't also big and important it was but it kind of also

bled into the jewelry market in the man's world like like this is men's jewelry yeah you could wear your wedding ring and your watch the only broadly social acceptable form of jewelry for

men H that's interesting and for a long time it was well you need to have one yeah there's an alibi there's a functioning Alibi but there's not for jewelry for the Practical man who

doesn't need jewelry so I was a little bit setting you up so then the follow-up question is can a status symbol stay a status symbol even after you get a

hundred years away from the last time it had utility 30 to 40 years is one thing I remember my parent I remember my grandparent but but what about five

generations after anyone really legitimately believes that the utility of a watch is Justified right is there a

risk that this becomes a version of the home telephone or something like that at some point or the fax machine or of U I don't I don't think pieces of

Technology yeah maybe that's a bad analogy I'm trying to think of something else that had utility then became a status symbol

then we got so far away from its utility that it just failed to be a credible thing that people decided to use for their status anymore it just became too

thin of an alibi well maybe to uh my previous answer maybe over time these just become bracelets and jewelry H yep I could see that I don't know I don't know the real answer to this but I'm

trying to think of other I don't think it's happening anytime soon though right all right I've got just two more one we talked a lot about slow iterations and don't change the line too much the real

answer here is that it helps your customers feel smart there is Great Value in the fact that when I look down at my wrist and you look down at yours right now the thing that they're selling

today is pretty much the same thing and because of that it means I made a good decision 20 years ago when I bought this and of course I didn't buy this one and you didn't buy that one you feel really

dumb if you bought a turnograph yes and you'd feel really dumb if you bought the iPhone 3G and then two years later the iPhone 5S is out and you're like whoa

that was a dumb decision to buy that product or at least that now I own something that's not valuable it helps rolex's long-term value to help their customers feel like they made a good

decision when they bought the product yep so then the last one have you ever heard the phrase former Rolex

employee no I'm sure that's by Design yeah I only did once in the research you start working at Rolex and you stay there and it's a loyalty thing but it's also an incentives thing I think they

pay very well great benefits great perks you're at the best company in the industry this works really well for their secrecy and they're actually doing cuttingedge stuff it's not like you're just sitting there you know cranking the

machine every day that's right it's absolutely right although I mean I'm sure a lot of people are sitting there doing the you know final finishing of

their 10,000th Submariner they've done final finishing on oh yeah but it's constantly changing the parts that are going into it how it's done you know all

of it yeah yeah that's true all right quintessence time to land the plane ah land the plane I had this blank I often have this blank going in because I feel

like we sort of arrived there throughout the episode mine is Rolex is positioned

at the perfect point on the Curve Cur of price and quantity they are the most optimally positioned Supply demand curve company I think we've ever

covered that's interesting the curve being supply and demand I was thinking of the curve of units and price but I guess that's sort of the same thing as supply and demand

yeah I think it's sort of the same thing yeah that is certainly how you get 30% market share by Revenue it's certainly how you produce $10 billion a year making watches that makes total sense

and how you have a wait list years and years long for most of your models while also making over a million units a year yep they make so many people think they

are buying something very special and they are and they are and that's why I have great admiration for this company we've thrown a lot of missives here and there but we should just say like this

is an unbelievable fantastic company that makes a remarkable product and the strategy and execution by which they've executed them is best in the world ever

I have one more addendum appendix that I did write down ahead of time to my quintessence that I will say before I hand the floor over to you which is um there's no way to know for sure of

course he's been dead a long time so it could be way off base but as best as I can tell Hans wilsdorf seems like he was a really great dude and that's not

always the case of protagonists that we cover or Founders that we cover here on acquired like I mean sometimes we cover actual na but uh you know I could be wrong maybe he was a big jerk and and that's just

been lost to history because there's not that much out there but he seems like he was a genuinely good person I get the sense really loved and was devoted to both of his wives and then devoted himself to the company in the Legacy

even though he never had children and then putting the foundation together obviously was in very large part motivated by the long-term Legacy of the company but also like this Foundation

gives away 300 million Swiss Franks a year a huge portion of it just Direct giving money to people in need in Geneva in their Hometown like that's amazing

yeah he also made a star out of this secretary in London Mercedes clats in 1927 like he seems like a genuinely really good dude it's pretty cool you know people ask us every now and then oh

do you have to be a certain type of person to found a company like this and still yes well I think you have to be crazy but like sometimes people ask like do you have to be you know ruthless or

do you have to be a bad person whatever and like I think it's just on this Dimension it's just a microcosm of the world some people are good some people are not good well you just have to be extremely something and that extremely

something has to fit well with your product and your market and your timing yes but that something is variable yep all right I've got a quintessence and

then I've got a fun notion to leave you with I I know it's Blasphemous to put things after a quintessence but hey I did it you can do it my quintessence is that calling this the high end of the

watch industry or the middle end of the watch industry or whatever is just wrong mechanical watches are an industry today that serves an entirely different job to

be done than they ever served in the past and this is a new industry that has nothing to do with telling the time and is just goofy to compare to other quote

unquote parts of the watch industry like the Smartwatch the quartz watch the fashion like they look the same so we call them watches yeah they both occupy

RIS real estate right but we should Define markets by the actual job to be done for customers and it is so so so incredible that coming out of the courts

crisis this company found a completely new job to be done for their product and had kind of positioned themselves there the previous two decades with the professional watches the tool watches

and the advertising yeah could not agree more so here's the thing to leave you with Rolex inter inly is the watch you want when you start getting into watches

but then it's also the watch you end up at after you study the whole industry yes yes you go through these exotic steps along the way on your journey with more Artistry more complications

certainly you'll find more expensive price points but when it comes down to the most Exquisite engineering quality serviceability for a mechanical watch that is precise waterproof and

self-winding amazingly the brand with Mass Appeal that all the newbies want that sells a million a year is also the one of the highest quality yep a different version of this that I read

somewhere I don't remember where in the research was Rolex is a company that the more you study it the more you like it yes I didn't want to record this episode because it meant I was going to stop

researching I mean truly like I have loved just bathing myself in this industry and this company and their products well boy Ben do I have good news for you because if you decide to go

down the watch Rabbit Hole it is deep it is deep out there the watch product blogs and hinki and everything Beyond it oh I also came to this realization when you describe this curve like when you

start its Rolex and when you finish it Rolex and it's a company that owns its category and all that the comp is Apple if you go to rolex's website and you click any watch it looks just like an

Apple product page the named components inside the proprietary paracom hairspring akin to a neural engine a liquid Retina Display I mean their YouTube channel looks exactly like

Apple's high gloss promotional videos products whizzing through space plunging into water the product is both mass-produced and high margin there's a big brand premium but it's also the

highest quality Engineering in the industry their financials look so good because they found the spot on the curve that lets them multiply two large numbers together the large number of

units and dollars per unit you know billionaires have iPhones people buying their first smartphone have iPhones and unlike handbag or car categories the

phone and Smartwatch do have a single company that defines it Apple yep Rolex and apple are Mirror Image companies in a lot of ways totally well I guess we got to do Apple

now I guess so that is not going to be one episode no and in retrospect this one shouldn't have been either I don't know where we would have

broken it up though is the thing yeah H precourse crisis post but but here we are thank you listeners yeah thanks listeners this was a blast it really was

David I have one piece of trivia for you oh before car outs yes can it top my uh My panai Trivia though uh that was pretty good I'm I'm

pretty proud of that one Rolex has gotten so sophisticated in its manufacturing that they actually use ultraviolet lithography in making their

watches hell yeah it's not an etching silicon cuz God forbid they should ever get anywhere near a semiconductor it is etching a very specialized and precise

type of gear that in the Rolex Daytona ensures the teeth are perfectly meshed together so when you start your chronograph there's no jumping around

there's no accidental tick back it just starts exactly right oh that's amazing I actually have one more piece of trivia for you too oh L on me David what watch

company holds the record today for the watch that's gone the deepest in the ocean uh this is got to be a trick question right like I mean it of course Rolex it went down the but I'm assuming

no Omega but to rox's marketing ability guess what watch everyone thinks it is right wait how did Omega go deeper I

thought Rolex went down the trench so as you know the Rolex deep sea challenge happened in 2012 and in 2019 the Omega sea Master Planet ocean Ultra deep

professional went 20 meters deeper what did they do like drill a hole in the ground at the bottom of the trench I think they found a deeper part of the trench or something okay but this is

just this is the most classic classic Omega versus Rolex thing in the world if you technically look at something it doesn't actually sit at the top but for

all sense and purposes they do amazing yeah all right carve outs carve outs I just one between the incredible amount

of research for this episode and my entire family of ladies all being very very sick with the flu over the last uh week plus I have literally had zero time

for anything else in my life so I have a carve out that I don't think I've ever made a carve out before but maybe impacts my life more than like anything else and I owe an extreme debt of

gratitude to for entertaining my very very sick three-year-old over the last week uh which is Bluey so thank you so

much Joe Brum and the Australian Broadcasting Company for creating the most wonderful children's cartoon ever that my three-year-old and millions and

millions and millions of others out in the world will sit and watch and I can watch with her and will not make me want to rip my eyeballs out great my 15-month-old will be into that soon enough and I am sure I'll take your

recommendation oh dude it's so good it's so good oh great there is not even a comparison it is the greatest children's

content ever created H all right soon you're in for a real treat great I have two one is uh on the podcast armchair

expert David and I went and joined Dax and Monica a couple weeks ago to uh review the business of the NFL it was very fun to do a update to our episode

and to do it with Dax and Monica who are just great my second one is an app called 11 reader by 11 Labs I mean I'm sure it does more but the thing that I

use it for which is totally amazing is you either paste a link or the killer use case for me you paste in a you upload a PDF and in a very convincing AI

voice that sounds remarkably human it will read you something that was text I'm the person 15 years ago who was highlighting emails right-clicking and

using Apple's built-in speech thing on laptops to read it to me because I'm so much better at processing it information AUD than visually for this episode I had

so many PDFs to read as a part of my research that were not audiobooks that were not podcasts I mean I I willed myself to read two physical books because this freaking Rolex is a whole

pile of coffee table books is how people have published these there's no Kindles or anything available 11 reader totally saved my butt by letting me listen to a large amount of what I needed to

research so the app is just awesome if you like turning text into a very compelling human narrated voice nice I would say I have to give it a try but fortunately I think this is a great

strength of acquired is you have the opposite we have the opposite research consumption Styles I need physical hard copies in front of me with a pencil that I am writing on and I'm best on a 10- m

run listening to something and stopping to take notes along the way love it love it all right well with that listeners thank you so so much to our partners this season JP Morgan payments service

now fundrise and Huntress you can click the link in the show notes to learn more special thank you to all the Rolex efficient Autos buyers dealers and fans that we spoke with a few in particular

that we want to thank on air are Mark Bridge the founder and CEO of at presentes a jewelry Marketplace and good friend of David and mine Ben Kimber the founder and CEO of hinki Who Let Me Talk

his ear off and answer a zillion questions over text thank you so much Ben hinki rocks Joe Thompson executive editor of hinki legendary watch

journalist I even have in my inbox right now Joe is sending me more follow-up information that I managed to see just in time to get the right stats into the episode so Joe you rock thank you so

much a that's amazing thank you as well big thank you to James dling co-author of the best of time which is I think probably you know we went through all

the big coffee table books on Rolex and probably the best one out there regardless really really great I thought the Rolex story was good to heal by heel

yep yep that's a good one James was very generous with his time especially because he was right in the middle of crunch for his deadline for his next Rolex book the Rolex Legacy coming out

in October so thank you James and also uh thank you to sleepwell Capital on Twitter who like a year ago DM us and was like got to do Rolex and then

pointed us to a whole bunch of resources out there on the internet uh it was very very helpful and thank you to the over 100 people who have either in slack or in email told us to do Rolex over the years this is probably our most

requested episode yeah they're going to be at least a hundred of you that listen to this yes to Morgan Stanley and Lux consult for providing the industry research report was very helpful and

always to Arvin navaratnam at warly partners for his fantastic write up on the company that we will link to from the show notes if you like this episode

go check out lvmh heres or Porsche by searching in any podcast player listen to aq2 because we won't have another episode for another month so enjoy our

conversation with GE moous the founder and CEO of versell in the meantime and come join the slack acquired. fm/ slack

hang out with all the other smart kind members of the acquired community and you can sign up for email updates to make sure you don't miss Corrections or trivia in the future acquire

fm/ without listeners we'll see you next time we'll see you next time who got the truth is it you is it you is it you who

got the truth now huh [Music]