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We interview sustainability leaders across industries to learn what they are working on and how they are steering their companies toward a climate-friendly world.
Alex - 00:00:00:
Ben, welcome to Open Source Sustainability. Thank you so much for taking the time this morning to chat with us. We're really excited to get into it today with you and talk a little bit about the world of watches and sustainability trends. So thank you very much for joining us.
Ben - 00:00:15:
Yeah, happy to be here. It's a beautiful, almost summer-like Sunday morning here in the New York area, which is kind of hard to believe, but here we are.
Alex - 00:00:23:
Well, I guess to start off with, maybe tell us a little bit about, um, tell us a little about Hodinkee and, uh, and kind of, you know, how this fits into the sustainability mission here.
Ben - 00:00:32:
Yeah. Well, I appreciate the invite to be here today. And so Hodinkee was a blog that I started in 2008 really for fun. And this was during 2008, for those of you who might be a little bit younger than myself, that was the last financial crisis. And so a company called Lehman Brothers, which hasn't existed for about 15 years collapsed in 2008. And that sent the world of finance, which is where I was working into like total turmoil, like really like, you can't even fathom how crazy it was today back then. And so I was, low man on the totem pole. I was a kid. I was 24 years old working at UBS had been there less than a year. And they basically gave me the opportunity to leave with a severance and severance was not any golden parachute or anything like that. This was probably like, I think I said somewhere else recently, I think it was like $12,000, but like at the time I rent was like $900. So that was great for me and I was living with my girlfriend at the time and it was just like a very easy way of life. And I said, man, if I'm ever going to change my career, now's the time to do it. And I'd always fancied myself as a writer. And I said, man, I wonder if I can make a living as a journalist, like a proper journalist. And so I started blogging for fun about a Watch that my grandfather gave me, an Omega Speedmaster, really just to kind of get my chops in writing. And the blog started to get more traffic. And then eventually, the van editor in chief of GQ reached out and said, hey, you know, you're the first guy under the age of 50 to write about watches, effectively. You're certainly the first kind of like New York, LA type of kind of like coastal guy to write about watches from a different perspective of one where like, hey, this is accepting, this is democratic, this is fun and welcoming. It's not like some hoity-toity rich guy thing, which you want to write for GQ. And of course, I said yes. And I think the posts were, I think that was getting paid around $75 per post or something like that. But it was a way for me to kind of practice as a journalist. And I ended up writing or leveraging that into writing for sites called AskMen. GQ, Fortune, Forbes, Financial Times How to Spend It, Esquire here and there, really great publications. Ended up applying to journalism school in New York, got in somehow some way based on my Watch blog basically. Then after that, went off to the races, did two years of a master's degree in journalism at Columbia here in the city. Then in 2012, went full-time into Hodinkee. Back then, it was really a media business. We were selling advertisements. We quickly got into e-commerce in 2012. We started selling straps, like little straps for watches, which I was designing. Then from there, the site just got bigger and bigger and bigger. Then in 2014, had the opportunity to sell the business. It was a small three-person company to a big business here in New York. Instead of doing that, a friend of mine named Tony Fadell, who, created the iPhone and iPod for Apple and then Nest for Google. you know, just serial entrepreneur, one of the smartest guys I know, he'd become kind of a mentor and he's like, dude, do not sell this business. Like it's way too early. This is something way too special. Like, let me help you raise money. So Tony Fadell invested about half a million dollars of his own money. He connected me and helped me with a few other investors like True Ventures, who's an amazing, amazing venture fund in California. They did Peloton and Blue Bottle. amongst others, a guy named Kevin Rose, a guy named Tony Conrad from True Ventures kind of came on board. Google Ventures invested, John Mayer, who was a friend invested, and it kind of went off to the races to validate the idea that people would spend this type of money on the internet. And so around 2015, 2016, we said, hey, what if we became an authorized dealer for watches on the internet? And which was something that was completely foreign at the time. Nobody had done it at all. We became, we in fact accomplished that, which was not an easy task. In 2017, we became the first authorized to Watch this on the internet anywhere in the world, any language, etc. And that was really kind of like when the door kind of kicked open to saying, like, wait a minute, this could be like a substantial business or a meaningful business, not that it wasn't back then, but it was, it became an investment grade business since we started to attract the likes of Google Ventures and other folks like that. And so, you know, in 2019, we decided to go out and raise our series B. then of course COVID happened and we were actually supposed to close our series B in, in March of 2020, led by a group called LVMH, which is, you know, they own Louis Vuitton and Dom Perignon and, you know. Wealthiest man in the world, Bernard Arnault. They were supposed to lead our round and then COVID happened and they said, Hey, we love you. You know, but can you, can you wait a little bit? And I was like, I really can't just because the world is in total turmoil. Yet again, it's funny how that happens every now and then. And so we ended up doing another round with another group called TCG and LVMH did end up investing later on. And, you know, effectively, you know, we basically capitalized the business in a way where we could go out and acquire a pre-owned business, which is, you know, is applicable to the conversation today. And certainly, you know, we have grown this thing into, you know, what I would say is kind of like the archetypal content community commerce business. So if you Google content to commerce, like we are, you know, we are often the use-case study there because this began as a pure blog written by one guy in me in this case that then led into like really like a meaningful media property where we were making a few million dollars a year selling advertisements, which is still not wasn't easy then. It's not easy now. And and then we leverage that into a community of people that loved us and trusted us so much that they actually wanted to buy things from us. And now, you know, we still continue to say that we are a content community commerce community, of course, being like active comment section. I mean, the average story gets around 50 to 60 comments per story, which is like, you know, we're writing about watches. Like, what could you possibly have to say? Like, how much is there to say about a new Watch? Turns out people have a lot of opinions and they have a very high opinion of their own opinion. And so we allow them to give them the platform to kind of verbalize those opinions and debate and debate they will. But right now we do about $100 million in sales per year. between new watches and pre-owned watches. We have podcasts, we have blogs, we have YouTube channels. I just did a really fun video with Kermit the Frog yesterday that was on the site, which was really fun. But we do a series called Talking Watches, which hosts usually by me, the likes of Kevin Hart and Ed Sheeran, John Mayer, insert any semi-famous person here. And it's really fun because it allows people to connect with the space in a way that they wouldn't have otherwise. I think watches historically have a really kind of pretentious and very European kind of slant to them, that can be perceived as unfriendly. And I think, as some people on this call know, like both my parents are public school teachers. I don't come from a world of luxury at all. But I still appreciate the craft and everything that goes into it. And so Hodinkee has become the home for people that identify with that.
Alex - 00:06:57:
To tie this back to... I guess where you started your career at Hodinkee at the last financial crisis and obviously finished it, or I guess took that next step at another crisis with COVID. I was actually taking a capital markets final when Lehman Brothers collapsed and my teacher I remember was crying. So while we were taking a test that I think, I eventually failed, she was just in full tears, just crying as the markets were melting down.
Ben - 00:07:26:
Yeah, as I said, I just don't think anybody, I mean, you were there. But like, I just don't think people younger than us would have any idea of how crazy that particular timeframe was. I mean, really, like we, I had, you know, grown man grown women, my managing directors, again, I was, you know, low man on the total. Oh, but my boss is like being like, Oh my God, is this the end of all finance as we know it? And of course it wasn't, but it's like, it really was that that crazy of a time. And it was the perfect time for me to jettison into something else, like to really get so like, Hey, like, this is really not for me. And you know, a lot of it came down to just the humanity of it. And like the work was the work. I knew what the work was before going into it effectively. I didn't end up connecting with it, but it was more the lack of humanity. And that's not to disparage my former employer or finance in general, but at that time, it was a really kind of every man for themselves mindset. And so I saw people that had spent 20, 25 years at the company that I was employed at. just being treated as if they didn't matter at all. And like, of course, like these people have families, these people have colleges and more, you know, college educations to pay for and mortgages and things like that. All of a sudden, like they were just showed very little regard and that just didn't feel great to me. And so I wanted to do something entirely different. And so I did. And certainly the best decision I've ever made.
Alex - 00:08:40:
I'm with you. I quit my job at 24 as well and started my first company. The situations are funny because most people, I feel like, come to that realization a little bit later in their careers. This isn't working. There's something I'm interested in. I want to go after and do it. But sometimes it can take a global catastrophe to be able to spin a lot of people out earlier to go create things. And I am actually pretty curious with COVID how many folks have kind of done the same thing as they started to think about where they wanted to be. Now, we know we didn't start this to talk about entrepreneurship, but it is a super interesting story. So I want to get back into watches because you said something interesting to me, which is, you know, you didn't come from a background of watches or of luxury, maybe is the right way to think about it. But you mentioned that you were what drew you to this was something about watches being obviously an appreciation of the craftsmanship. I, for one, what interests me in the space is kind of the stories of it. I wear my granddad's Watch. I'm pretty sure he bought it for twenty dollars in the 70s. I think it's still probably worth twenty dollars today. But I love it because it's my favorite memory of him. And it's what I remember as a kid when he was helping me learn to fish, helping me learn to do things. I remember seeing it on his arm. Now I get to see it on mine. I can think about seeing it on my son's arm. And so for me, it's always been about that heirloom quality of things. And so, one of the things we're obviously going to talk about today is the sustainability story of watches, because I think historically sustainability and consumer goods or sustainability and luxury items are not, those are separate things. But that's changed a lot. So maybe talk to me first about how does sustainability fit in with Hodinkee's mission? What do you think broadly about this? And maybe talk to me about y'all's place in the world of sustainability today.
Ben - 00:10:33:
I think two things worth kind of mentioning first is like the definition of luxury is literally something you don't need right like it's it's it's something beyond your base necessity so you would think that like as you said you know that like the idea of something in luxury that is sustainable is kind of like it's not even more like it doesn't make any sense. But when you look at and I think to some degree that is an accurate thought, I think it's that that's a sound kind of directional thought. When you look at fashion, when you look at cars, right? I mean, like, you know, looking at a brand new electric. Porsche or an electric Tesla today, these cars cost whatever. And these batteries will have to go somewhere. And these cars will not be on the road in 50 years. We know that definitively. When you look at shoes, clothes, whatever, those will not be around in 50 years. I mean, I guess you could wear your grandfather's sweater or whatever from the 50s. But it would be difficult to maintain it for sure. Meanwhile, you look at watches and Jewelry. And I really view watches as a separate category from Jewelry for my own reasons. But I know a lot of people can't group them together. You're looking at, in fact, the most sustainable, the most long-lasting physical items that anybody can buy. And these are luxury in the sense that, yeah, of course, you don't need them to survive. And nobody would ever say that you do. And I would be the first among them. But these are luxury items that actually have incredible longevity and incredible respect for the environment. And these are things made out of effectively raw materials that are shaped, in many cases, by hand. Up until the 80s, they were shaped by hand, before CNCs, before CAD, et cetera. These things were genuinely shaped by hand. So it would be kind of silly to say that these are luxury in the sense that these are items that are short-lasting. And these items are things that will be kind of turned around quickly and thrown into a garbage dump. And then you have to go into the world to recreate. I've got a Watch on my desk that is from 1963. And by the way, it still works. And this is not a plant. This is just sitting here. But this Watch is 60 years old. And I think that's pretty remarkable that this thing is still around today. And so the idea of mechanical watches and items like this are really inherently sustainable in a way that I don't think many people understand. Then you come into the idea of actual premeditated sustainability within our own company and within some of our partner companies. You have things like Fairmined Gold, which are actually pre-determined and pre-designed to premeditated to be sustainable. And so you have Recycled Gold, Chopard, which is a partner brand of ours. We're an authorized dealer. Sells products and creates products out of Fairmined Gold. And they were amongst the first to do that. Within Houdini, sustainability has always just been kind of core to what we do. And it wasn't like we were set out to be a sustainable company. We just set out to be a world-class company. We wanted to be a company that treated our employees, our partner brands, and the environment in the world in which we live with the utmost respect. And I think we've done that. And that goes back as far as probably 2016. We began looking at the way that watches and straps and everything sold in luxury goods were packaged. And what you would see is you'd see a Watch that's about 39 millimeters in diameter, which is the size of your thumb or two thumbs maybe, being packaged in what appeared to be a briefcase. Really, let's say three foot by two foot rectangle with leather and steel and cushioning and all these kind of crazy facets, et cetera. And that just made no sense. It also, as a Watch collector, which you wouldn't be surprised to learn I am, what do you do with all this stuff? It just doesn't make any sense. And so I was living in Manhattan at the time in a tiny little apartment and I really had no room. I had to get storage units to put boxes for watches. And I was like, this makes absolutely no sense. So when we became an authorized dealer for watches in 2017, we actually went out and created our own packaging that was completely sustainable. We actually were the first people to do that. We actually asked the partner brands if we could not include their packaging. Some of them said yes, some of them said no. But to even ask that was kind of like, it was completely crazy. I mean, it was a totally foreign idea that people were okay with getting less than they were paying say five, six, or more thousand dollars for a Watch. And it turns out that a lot of people really wanted that for a thousand reasons. I mean, one of the reasons A is storage, like what am I gonna do with it? But beyond that we saw, and it really kind of escalated or became much more kind of a thing during COVID. You saw younger people buying watches, mechanical watches. And with that, you have people that are just more cognizant of sustainability and the environment. And so again, the idea of delivering a 39 millimeter Watch in a packaging that probably weighs 40 pounds and is made of stuff that we'll never use again, was almost offensive to a lot of people's kind of intellect and a lot of people's kind of ethical viewpoint of towards what sustainability should be and what luxury should be. I mean, if you have the air quotes luxury of being able to afford these things, you should be respectful about it. Like you shouldn't take advantage of any situation. And so we were the first and remain certainly probably the largest proponent of sustainability within the Watch category. Several brands have followed suit now and now you'll see small or small and big brands selling watches in something like this. I'm holding up my iPhone, but effectively imagine a little leather case like this that folds over on itself and you could fit a Watch in there. So we were among the first to do that. And I think definitely set kind of a standard there. But everything we do is really to be mindful of the world around us. And I think ranging from everything from the way that we sell straps. So the strap business for us is really, really, I should say was foundational to our business. So it was among the first things we ever started selling on the internet. And we ensure that everything that we source there is absolutely the most sustainable, the most ethical, the way that the leather is produced effectively. I mean, we all know where that comes from. We wanna ensure that the farms that we're using and everything that we're using are treated kind of the right way. And I think there's a lot of people in our world and kind of like the luxury world that like really just don't care about that. And again, I think for us, it wasn't a conscious decision to be, air quotes, sustainable. It was just more about being, having integrity in everything we do. And the way we treat our employees, the way we compensate our employees, the way we treat everything that we do, we just wanna do it with the utmost integrity. And sustainability falls right in line with that.
Alex - 00:16:39:
Yeah, we talk a lot on the show to people in all different industries, whether it's we've talked to Taco Bell and talked about Hot Sauce Packets, we've talked to Ben and Jerry's and how to feed cows better. And the theme that I keep hearing is not this like regressive idea of sustainability, where it's we need to reduce the value of what we have. It's actually more of a progressive view. And it's like this continuation of being smarter and being more educated on things. You know, moving from a packaging that's like this big to be able to sell something this big is not just wasteful. It's not even, to me, it's not even the smartest way to do things. There's a better way to operate and learning and understanding how to do these things can actually help improve the operations of your business. It can be more efficient for your bottom line. It can be better for a business. It can be better for the consumer. At the end of the day, it can be even a better experience because I agree with you when you get, when you buy anything, whether it's a Watch or an iPhone or anything else, it becomes comical to think how many boxes, I mean half of what I do it feels like is breaking down boxes.
Ben - 00:17:51:
Absolutely.
Alex - 00:17:52:
From anything. And so I love the idea of being able to look at it from that perspective because it's a better customer experience. Opening that Watch is a big reason.
Ben - 00:17:59:
It is. And that's exactly it. And I think you kind of touched on something we really studied. But when we were designing our packaging back in 2015, 16, it's like, look, I'm going to give the utmost credit to Apple because they deserve it. But their out-of-package experience is incredible. Before them, your phone was the phone or the product you were taking out of the box wasn't charged. So you spent, say, about buy your new MP3 player or whatever, and it's not charged. Like, that's crazy. And Apple changed all that. And so that's just one example. But the way that they handle packaging is simply remarkable. And so we studied what they do. We looked at what they do. It is reduction of packaging in the utmost of ways. And now they don't even give you the charging port. They just give you the cable because they know that, A, they can tell you that. And B, you probably have 25 of them sitting around. And I think that is, at once, respectful to the consumer and helps their bottom line in a certain way. And I think that is what people are looking for today. And again, it just became there was a generational shift in our industry. And my industry is both luxury but also actual e-commerce. We look at the Mr. Porter's and the Nike's and everybody in e-commerce and their benchmarks. And it didn't become necessary, but it became almost necessary probably by 2020, around when COVID came around, to really be a part of this movement. And again, we organically were. So we didn't have to change much. But we would be remiss to be what we claim to be a world-class company. And we've been nominated for most innovative companies three or four times, et cetera. Like, we just have to hold the mantle of this category, the Watch category, and the luxury e-commerce category. So respectfully, we want to make sure that we're pushing things always. And that includes, again, even just the diversity of the people within our company. Like, we just want this company to be progressive in every way, even though we're selling things that are, like, kind of by definition unnecessary and also by definition kind of antiquated. Like, nobody needs a Watch. Like, my iPhone tells better time than the IWC on my wrist. But we think it's important that people understand both sides of the coin in this particular case.
Alex - 00:19:54:
So we talked a little bit about packaging and sustainability. I want to pull back to another point that you mentioned, which is this idea of pre-owned being a more obviously sustainable choice. And you mentioned something that was interesting to me, which was younger people are buying more watches. And I'm curious, I've seen a lot, actually was reading the other day about kind of the, the blowback against e-readers and younger generations to move towards actual paper books and being able to actually pick something up and use bookstores are popping up all over the country and rare bookstores are popping up all over the country. And there's this push back to more of an analog world. And I don't know if some of that happens to be a drive towards a time that was more minimalist. Is it a pushback against everything that's coming? But I'm curious if we're seeing anything for that. And is that driving people back to a time where, you know, hey, I actually would value something that's older and that's already here versus something that's new and feels consumptive?
Ben - 00:20:55:
Yeah, I think I think yes, I mean, I think, you know, blanket statement, yes, 100%. But I think it's that coupled with several other factors. And I think, you know, COVID, we all we all remember all too fondly, or all too all too clearly that like, you know, the money that you may have been spending on that vacation to Hawaii or wherever with your wife, girlfriend, family. was now impossible to spend because you were sitting at home. You literally couldn't leave your house. And so the idea of assets, like physical assets, just became incredibly in vogue at the time. And it's not just watches. It was wine. It was collectible cars. It was trading cards. It was anything. So there's that coupled with this idea that all of a sudden these things see inherent appreciation, which is a fallacy. That's not reality. There's nothing that sees inherent appreciation. But the consensus was up until basically six months ago that if you bought, we'll say, a Rolex, a used Rolex at retail or around retail, that it would always go up. I know that not to be the case. I'm sure you do too. But a lot of people believe that you buy a Porsche, you buy a Rolex at the right price, it'll always go up. So you got to see a lot of younger, less educated consumers buying products like, I will say, Rolexes in this case. Then on the flip side, you have exactly what you said, which is this idea that you're just inundated with technology. You're inundated with digital ephemera nonstop. I mean, really to a degree that is, I mean, I don't think anybody would disagree that this is universally unhealthy for all minds, but in particular, young minds that are still kind of malleable. And all of a sudden you say, well, wait a minute. Instead of using looking at my iPhone, like here, I could look at my mechanical Watch. And by the way, it says something about me, which is something that always really stuck with me, even many years ago. It's like, okay, look, I wore probably a blue polo shirt like this that I'm wearing now when I was probably eight years old. I'm still wearing it. And I'll wear it when I'm 80 years old. This is who I am, and that's okay. But I have other ways of expressing who I am. And so you get to see, and there's a lot of people like that out there that might not be dressed in haute couture or some crazy look, but they want something that expresses who they are. And a Watch is a great way to do that. But back to the idea of kind of like this digital drowning really is what it is. And Tony Fadell, bring it back to him. I mean, he's been an advocate of that, which is amazing because he was in, you know, he created the iPhone and he's really very, very keen on limiting the time that in particular children have access to, to digital devices and, you know, we are a digital company, we are online very much. So we're opening our first store later this year in Soho, but we are a digital e-commerce seller, selling things that you don't need, but again, these items provide a functionality to you that is available elsewhere, but not in this kind of emotional way and not in this way that is actually helpful to your mind as opposed to destructive to your mind. And then, I mean, that doesn't even get into the fact of what a TikTok or an Instagram or whatever actually does to, to a young mind. And these are, we know this is not me speaking ill of them. This is fact, like they have been designed to suck people in and effectively change their mind to need them. It's a drug. I mean, it is literally a drug the way that it treats your mind. And so I think the idea of, as you said, analog paper books, you know, vinyl is really popular right now. Classic cars, which is something that's really popular right now. Certainly mechanical watches. It's not a surprise that like, when you tip so far to one direction of the boat, it starts to kind of tip too far. And all of a sudden, like you realize this thing might tip over. So you run to the other side. And I think something that I've always prided myself in is like, I'm always one of the first, or I try to be one of the first to run to the other side and kind of bounce the boat out, so to speak. And I think that's exactly what we're seeing with, with watches and as you said, paper books and vinyl stereos, et cetera.
Alex - 00:24:26:
Yeah, it's interesting. I've got three young kids and the oldest is just about to turn six. And I was always really nervous about bringing my phone out in front of him all the time because I didn't want him to be always looking at a phone when he turns 12 or 15 or whatever when we decide to get him a phone. but it occurred to me the other day when he was telling me to put my phone down that I don't think he's gonna do that. I think the way that he perceives it is a little bit of the way that when I was a kid, I perceived like smoking. You know, I saw my parents and said, oh, like how could you possibly do that? How could you live in the 80s or 70s and do this and absolutely know that this is bad? And I'm thinking like, man, I'm holding this phone and I'm looking at it all the time and it's directing all my attention. Like, this is kind of my version of that. We know it's not good for us. And so whether it's getting an analog Watch or moving back towards a regressive state of something else, it is a way to be able to kind of break free of that type of stuff and calm ourselves and kind of save the attention that we have for the things that really matter.
Ben - 00:25:22:
Yeah, I think that's exactly it. And I think I could go on a whole kind of diet tribe on other things like that. Like, I think sugar, like I think sugar to our children's generation would be like, what were you doing eating chocolate chip cookies and cupcakes and all that? I think alcohol is something that like, it is like, we can go back to sustainability shortly. But like, alcohol is crazy. Like, I'm not a, I mean, I drink socially, et cetera. I'm not a huge drinker. But like, it is verified to be horrible for anybody that consumes it. Why would we continue to do that? And I really believe, and we're already starting to see it. I mean, if you look at like, Gen Z, which is, I think, a generation probably a little bit younger than both of us, these younger folks are just not drinking the way that we probably did at their age. And things shift so quickly. And I think you're right. I think the idea of digital consumption will really, it's a necessary thing. You need to, you know, having Google Maps on your phone is a great thing. That makes life easier for sure. But living and breathing on Instagram and TikTok and other things like that, that are, you know, in some cases, you know, in arguably kind of designed to kind of treat your brain as if it's almost like a, it's part of their life source, like, they need your brain, they need your or anybody's attention span to continue to grow. So they're, it's fuel for them. So yeah, I think it's, as you said, the idea of like, kind of regressive, concepts like what we said, mechanical watches, etc. is really kind of a, it's, you know, in many cases, like, you know, we would never take any credit for that at all. Like, this is just something that's happening in life. But I do think we provided a nice foundational kind of platform for people to get really excited about it and kind of foster their love for these things.
Alex - 00:26:55:
Absolutely. Well, I want to talk a little bit about, because obviously you're an expert in the Watch industry. You've seen a lot. So talk to me a little bit about some of the watches that you see on the market today, whether they are on the pre-owned side or as you mentioned, kind of a premeditated green. What are you seeing? Do you have any watches that you like? We'd love to hear a little bit about some of the green watches that you like on the market today.
Ben - 00:27:24:
Yeah, that's great. I think, like, first of all, you know, as I mentioned, in 2021, we purchased a company called Crown & Caliber kind of more in your neck of the woods than we are down in Atlanta, Georgia. And it's an amazing business that a, you know, what we try to do is look, we are a for profit business, just like, you know, 99% of other businesses out there. We want to build something that is financially and fiscally sustainable while doing good. And I think like those do not have to be mutually exclusive. And so this business solved a lot of problems for a lot of people. And a big problem when you own a Watch is like, okay, let's say I'm having a child or whatever, I want to buy a new car, or I need a new car, or my dad gets sick, you need to sell that Watch. And so buying a Watch is pretty easy. You go onto our site, you go to a Watch store, you just put in your credit card and buy it. Selling one is actually very, very difficult. And so what Crown & Caliber now Hodinkee does is we think the best way to buy watches from consumers. So if you say, hey, I've got this old Omega or Rolex, we have a process on Hodinkee now. We can give you effectively an instant quote. This is all automated. We'll ship you a FedEx label that's insured. And as soon as we get it and verify that it's real or whatever. We'll send you a check. And that's amazing. And I think like a process like that didn't really exist short of going into your local Mom and Pop Jeweler and hope that they would, a, have the the ability to buy it and B, you know, actually want it. So we, we purchased the business in 2012 and now the majority of our revenue comes from pre-owned sales. And we're starting to see all of the things that we've been talking about for the past 30 minutes here, like all of the things kind of coming to a head coupled with this inherent kind of demand spike in washes where you can't a lot of these watches at retail. Like they just don't exist in supply demands and stuff. And all of a sudden pre-owned is in fact the most popular way to buy a wash today. And so not only is it the easiest, but it is also the most sustainable. And that is absolutely a factor in a lot of people's buying decisions here. And so pre-owned is for at least for the past two years has been foundational to our business. I can really change who we are as a company. It's a lot, bluntly speaking, it's a lot more labor intensive for us. There's a lot more involved with it. We're buying and selling, as opposed to the modern business where we're, we're getting stuff directly from manufacturer and shipping it out, but it allows us to feel better about A, what we're doing. And B it provides an amazing service to the consumer. So that pre-owned is a big, big part of the Watch industry today. And the growth that you saw, like all those Bloomberg headlines and Wall Street journal headlines of like. Rolex prices outperform S&P 500 and all that. That is purely based on the pre-owned market, 100%. which is interesting, that that is now kind of like the centerpiece of where like the mainstream media covers the Watch category. And then in terms of people that are being really thoughtful about it, by people I mean brands in most cases, Chopard, as I mentioned, is probably, not probably, is definitely the kind of global leader for Fairmined Gold in the Watch and Jewelry category. They are working with things, and they're working with silicon as opposed to using kind of traditional raw materials as well that is a little bit more sustainable than your typical kind of oscillating weights. And we won't go down that road because it's a very nerdy one. Breitling is doing a lot with their straps. We see a lot of people pulling away from a exotic straps are because of something called Sides makes them very difficult to get them into the United States. And also it's just like it's just not humane and not sustainable at all to continue to produce exotic straps is what I mean, like alligator, crocodile, etc. So you know, quickly people moved away from those sort of exotics into calf, which is far more available. And then from there, people have moved into actually sustainable recycled, almost kind of like a nylon style straps. That includes the one that I'm wearing right now on the side of you see. And you know, the strap business, I mean, Rolex alone produces a million watches per year, right? So there's a lot of straps there. So we're talking about, tens of millions, if not hundreds of millions of watches going out, new watches going out into the world each year. So think about the straps required for that. So it's just a massive kind of shift in what people care about. to say that, okay, we're no longer going to put leather straps on those whatever 100 million watches that are made every single year. You also, and this is kind of might sound silly, but it's actually true. The most popular watches in the world right now are those on bracelets. So ones like this that have a kind of a metal bracelet like that.
Alex – 00:30:45:
Yeah.
Ben – 00:30:45:
And of course. No straps involved there. So, no leather goods at all on those watches. And in this Watch, which is a nice one, the package that this Watch came in was literally a cube about the size of a baseball and the idea that a Watch of this caliber, which is a relatively high one comes in and a product like that. And it's synthetic leather. It's not even real leather, which is by design, of course. You're starting to see brands like this is a company called Audemars Piguet, um, Patek Philippe, really, really high end brands, pay attention to things like this that they just weren't paying attention to at all. I mean, not only 10 years ago, but three years ago, it really, I think COVID changed everything because the consumer of our products, I mean, even on Hodinkee, the average consumer on Hodinkee, the age went from 35 to 30 in three years. So as we all got older, our consumer got younger and those are the consumers. So if you talk about the people that are reading our site, you have people even younger still and so we just have, we and the entire industry just have to kind of be aware of what's happening in reality. Otherwise, again, as I've said five times, nobody needs this stuff. And I think people would very happily just say, all right, if these guys aren't going to respect the things that we care about, I'm just going to go not buy a Watch at all, use my iPhone and spend the money on a vacation to Hawaii, as I said.
Alex - 00:32:58:
What's interesting about that is, as I'm hearing you talk about it, These are just really interesting stories to learn about. Like there's a lot of education in this. And I know that as you mentioned, Kada Hodinkee got it started as a content platform. It started as a blog of telling stories of these things. And the sustainability story of this, whether it's Fairmined Gold or a Recycled Strap or the benefits of a metal strap or a silicon versus, and it was an oscillating weight, that's just a fascinating story for people to learn about. And I think part of the reason that I'd like, like I said, I mean, the reason that I have the Watch that I have is because it has a story element to it. I get to learn about it, I get to think about it. And I imagine there's a lot of opportunities on the Hodinkee site to be able to learn about the sustainable choices that they can make that align with their views and how they want to tend to tell their own story. What kind of resources do you all have and dedicate towards educating a consumer on the different options they have and what this might mean for that impact on the environment or the resources that we have?
Ben - 00:34:08:
Yeah. Look, Hodinkee publishes five stories a day every day of the week. We have thousands, thousands of stories on everything you could want to potentially learn about watches, including the most sustainable and green choices for watches. I can send you a link to that later. I should mention also that there's another company out there called Rolex, which I'm sure most of us have heard about. Their watches themselves are relatively sustainable, no use of leather, no use of things like that that could be considered anti to this movement. What they also do is they support and Rolex has incredible means. I mean, the biggest Watch company on earth by far, they support ocean initiatives to an extreme degree. They actually partner with the likes of James Cameron and just mega names like that to support people that are doing incredible work towards the sustainability of the oceans in particular. Rolex is such a forward thinker in so many ways and they've become this dominant player really not just in watches, but in brands in general. You know by thinking so far ahead on things like this.
Alex - 00:35:11:
That’s great. And it's great to hear that these gigantic, I mean these are huge companies are thinking about this not from a perspective of This is a flash-in-the-pan moment and it's a quick response to what we do But these are like fundamentally changing the way that these watches are manufactured and how these materials are sourced These are big big supply chain decisions
Ben - 00:35:30:
Yeah, I mean, for a brand like Rolex and Breitling and Chopard, no doubt. But I think even for a company like ours, and we are dramatically smaller than any of them, but it's just become kind of part of our DNA. And if you asked, and this is on us, but if you ask most of our employees that have joined us in the past two years, how does Hodinkee's packaging differ from another retailer's? I don't even know that they would know another way, because they step in and they say, okay, they see the packaging that's like this instead of like this. And they're like, yeah, that makes sense, because this is the year 2023. Yep, it just is common sense. And I think if they were to go into a more traditional retailers operations and see the way they handle things, I think they'd be shocked and granted, a lot of our employees and a lot of our co-workers are younger, they are slightly more progressive. I don't want to say anything is taken for granted for, by what we do. But we've been doing this for so long. And it's just a part of who we are that it's like, there's just no there's no optionality here. It's not a profit driver. It's not. It actually does save us money here and there. But like, that's not why we do it. Like, we just do it because it's the right thing to do. And I think that's, you know, an amazing way or that's the optimal way to run any business, like just feel good in my bones, feel good between my thumb and forefinger. And if it does, then you should do it.
Alex - 00:36:38:
Where do you think this is going? You know, 10, 20, 30 years from now, how do you think the Watch landscape will change? As as we think more about climate change and and resources, whether it's water, or rare minerals or whatever it might be? How does the Watch industry change in the future? In your opinion? What do you think?
Ben - 00:37:00:
Yeah, it's a good question. I mean, I think all the things that you just mentioned are very much a part of the equation. And then the other part of the equation, which is like, the just is part of the circular economy, which is people, the real reels, and sites like ours that are buying and selling pre-owned watches, nobody needs to buy brand new stuff anymore. You can buy stuff that has already been made, it has been lightly enjoyed by somebody else, and it doesn't change a lot of your user experience at all. The other thing that the other kind of X-factor driving factor in our world is that the market for watches has gone dramatically upmarket. So quartz watches, which are battery-powered watches, which produce waste, obviously, because there's batteries there, those were and are the majority of watches on Earth. Since the creation of the Apple Watch, and I always bring it back to those guys, they know what they're doing. Since the creation of the Apple Watch, the market for quartz watches, which again, like the watches you'd see at Walmart or Costco or something like that, or less expensive, has been decimated in a great way. And what I mean by that is those watches have really no, I don't want to say no place in the world anymore, but a much smaller place than they did pre-Apple Watch. And so if you look at a company called Fossil, which is a great American story, and Fossil, they make fashion watches, mostly quartz, they were trading at around $90 a share before the Apple Watch. I haven't looked at the share price recently, but last time I looked, which was probably two years ago, they were at about $7 a share. And this is, again, nothing against Fossil at all, but it just shows you how big of an impact the smartwatch world has had on quartz watches. Then you have our world, which is high in mechanical world, and things are moving away from quartz watches in such a material way that now we basically only sell mechanical watches, so watches that don't require battery in any way. And so with that, you have smartwatches, there's a lot of them, but when they're made by Apple and Samsung and companies that are very progressive, the risk of waste is dramatically lower than you would have from a Fossil or from a lesser company like that. So all of a sudden, I think just inherently, that coupled with everything that you mentioned plus the circular economy, I think the Watch industry in general is going to be far more respectful of the environment and far more sustainable than ever before. And a lot of it is premeditated, a lot of it is through thought leaders such as yourself, and a lot of it is just the inherent nature of how people are consuming products today.
Alex - 00:39:25:
Yeah, I totally agree. And I think with y'all's acquisition of Crown & Caliber, I feel like the story that I'm hearing is if you're going to buy a Watch, buy one that lasts. And if it doesn't, you have a place to put it. And there's a market now to get it back out there and at a fair price and a place where you know it's going to find a good home. And you can feel comfortable about what you're purchasing as a continuous use case for generations to come.
Ben - 00:39:52:
That's exactly it. That's always been the goal is tell stories and create the emotional connection to these things that last forever. And again, the Watch that my grandfather gave me will be with me forever with my daughter or with my son, whoever down the road. And that's just an amazing thing from a sentimental perspective. It's also an amazing thing from a sustainability perspective. The thing, and to be clear, I could sell all the other ones and just have the one Watch that my grandfather had. And it would work just fine. And it would require very little maintenance, very little servicing from now until really in perpetuity. And that is a pretty remarkable thing about the Watch category.
Alex - 00:40:25:
I totally agree. Well, Ben, this has been a great conversation. I sincerely appreciate you taking the time to come chat with us. I've certainly learned a lot. I appreciate you sharing your story. I think for listeners, head to Hodinkee. Learn more about the sustainable choices you can make in watches, obviously in pre-owned, but also in terms of this premeditated more sustainable options. I really appreciate it. And Ben, thank you so much for joining us today.
Ben - 00:40:52:
It's my pleasure, it's a lot of fun.