The problem is that if you're competing in a global market for luxury, your value proposition can't be relative only to your costs of R&D and you can't say that your R&D and tooling up costs are being passed onto the consumer for a product that isn't competitive at its price point. You're competing in a global market and your value prop is going to be evaluated relative to the global market. I think lots of folks will understand and even want to underwrite startup and development costs, but as Lotus points out that doesn't scale. And appealing to folks to please understand that R&D and tooling up costs are high and that those costs are built into the price structure is totally understandable, but it's a subtler form of flag waving but flag waving nonetheless. I don't know what the solution is really.
Good points. I suppose it's all 'flag-waving' at some point (though that quote was in the star spangled banner sense of the word).
We've seen brands start low and move upmarket and others (including these guys) start high and move down. Not sure there's a right or wrong answer. I wonder if, say, Cornell had done just the dial on its own (with Zach S.), and it were $3k instead of $6k, would that be a more compelling 'value prop'? It's not in the ethos of what they're trying to do, but...baby steps.
he might be better off sticking to the high end resurgence line. his peers are brands like qin gan, that’s the clientele he should be cultivating. at that level, no one’s looking for a value prop, it’s all prestige.
I was thinking about qin gan a lot while writing this. such a beautiful watch. I even looked back at my notes from when I did the hodinkee write-up on QG. He has just one apprentice, while Shapiro has a team of 10+. I think their long-term aspirations are very different, hence the diverging strategies.
I had the pleasure just last week to attend a tour of the J.N. Shapiro facility, hosted by Los Angeles-based Neighborhood Watch Club. Josh introduced his team and the layout of the operation, then basically set us free to wander around to each station as his team went about their work, encouraged to look over their shoulders and ask questions about anything we wanted. The operations ran the gamut from a state-of-the-art CNC machine producing individual lugs, to a hand-operated, century-old rose engine. His team of watchmakers was surprisingly young but educated in their crafts, and each conveyed a genuine enthusiasm for what they were doing.
It's up to each individual whether a watch is "worth" $70K+, but now I certainly can appreciate why a watch like the Resurgence must *cost* that. These people are artists. Also, the ability to interact with the team that makes these watches is very valuable, and a great differentiator from other high-end watches. To anyone considering a watch in this price category, I highly encourage you to take a deeper dive into J.N. Shapiro's process.
not that you need to cover all of them (and the fact that you could miss some is a sign of growth for US watch making!) I feel like Weiss watches out of Nashville deserves some credit for helping bring back American watches. He makes cases, dials, hands, etc all in house with American materials and has releases every few years of a fully in house built movement. Again not that you needed to include everyone but Cameron Weiss is making good looking field style American watches for under $3k. Feels like a bigger step in spreading this out wider. RGM and Shapiro do beautiful work but are still only making a handful for very exclusive clients.
One thing that I hope will be interesting is if American watchmakers can eventually build distinct "styles". To me Shapiro has done that in his dial patterns, you can look at a shapiro case and dial without the logo on it and know it is one of his watches. Though at a much lower price, my critique of the Cornell Watch Company is that so far is that their watches look like other people's watches. Their first model looked like a RGM (which is probably fine, because they worked on it). This newer model really reminds me of a Naoya Hida. While there are obvious differences, one of the major design choices of Naoya Hida in their homaging of vintage pateks is their use of german silver. I'm not really calling them a copy cat - the watches are different enough (this isn't a San Martin situation) - but it seems the story of "made in a america" really has to be important to someone to buy that watch, where as for Shapiro and others, they stand on their own despite being made in America.
I feel like this comes up every few years. There was the Shinola controversy, the guys with the pocketwatches made into wristwatches, Weiss watches, Ameriquartz, and RGM and ? Ball in the background, but somehow I feel like US or semi US made watches have ended up as a very niche product and never enjoyed a high level of cachet or popularity even compared to British watches. Roger W. Smith spoke about his British watchmaking alliance at the NAWCC this past weekend and maybe something similar would help US made watches
Yea, the contrast to Britain is interesting to me. I think the legacy of British watchmaking lends itself more to today's watch industry, whereas the U.S. story that is basically producing millions of pocket watches is harder to translate into something that makes sense for enthusiasts today.
I guess Hamilton and Bulova are out there with American heritage/styling but Swiss and Japanese ownership. You’re a Chicago guy, can someone do something with Elgin??
The problem is that if you're competing in a global market for luxury, your value proposition can't be relative only to your costs of R&D and you can't say that your R&D and tooling up costs are being passed onto the consumer for a product that isn't competitive at its price point. You're competing in a global market and your value prop is going to be evaluated relative to the global market. I think lots of folks will understand and even want to underwrite startup and development costs, but as Lotus points out that doesn't scale. And appealing to folks to please understand that R&D and tooling up costs are high and that those costs are built into the price structure is totally understandable, but it's a subtler form of flag waving but flag waving nonetheless. I don't know what the solution is really.
Good points. I suppose it's all 'flag-waving' at some point (though that quote was in the star spangled banner sense of the word).
We've seen brands start low and move upmarket and others (including these guys) start high and move down. Not sure there's a right or wrong answer. I wonder if, say, Cornell had done just the dial on its own (with Zach S.), and it were $3k instead of $6k, would that be a more compelling 'value prop'? It's not in the ethos of what they're trying to do, but...baby steps.
consumers will pay for the product and they will pay for the brand.
when it comes to a $26k steel watch with a generic case and caliber, what is the consumer paying for? the brand.
is the shapiro brand strong enough to move the planned 36 pieces per year? it probably is.
what if it was a 100 pieces a year? highly unlikely.
a 1000 pieces? not a chance.
ya. + shapiro has sold enough watches at enough different price points that i'd bet he knows what volume works at what price.
he might be better off sticking to the high end resurgence line. his peers are brands like qin gan, that’s the clientele he should be cultivating. at that level, no one’s looking for a value prop, it’s all prestige.
he can’t compete with rolex or cartier.
I was thinking about qin gan a lot while writing this. such a beautiful watch. I even looked back at my notes from when I did the hodinkee write-up on QG. He has just one apprentice, while Shapiro has a team of 10+. I think their long-term aspirations are very different, hence the diverging strategies.
I think this is right - Shapiro wants to eventually build a watchmaking school.
correct
Thanks Tony! Loved this article!😉
great, thank you!
I had the pleasure just last week to attend a tour of the J.N. Shapiro facility, hosted by Los Angeles-based Neighborhood Watch Club. Josh introduced his team and the layout of the operation, then basically set us free to wander around to each station as his team went about their work, encouraged to look over their shoulders and ask questions about anything we wanted. The operations ran the gamut from a state-of-the-art CNC machine producing individual lugs, to a hand-operated, century-old rose engine. His team of watchmakers was surprisingly young but educated in their crafts, and each conveyed a genuine enthusiasm for what they were doing.
It's up to each individual whether a watch is "worth" $70K+, but now I certainly can appreciate why a watch like the Resurgence must *cost* that. These people are artists. Also, the ability to interact with the team that makes these watches is very valuable, and a great differentiator from other high-end watches. To anyone considering a watch in this price category, I highly encourage you to take a deeper dive into J.N. Shapiro's process.
not that you need to cover all of them (and the fact that you could miss some is a sign of growth for US watch making!) I feel like Weiss watches out of Nashville deserves some credit for helping bring back American watches. He makes cases, dials, hands, etc all in house with American materials and has releases every few years of a fully in house built movement. Again not that you needed to include everyone but Cameron Weiss is making good looking field style American watches for under $3k. Feels like a bigger step in spreading this out wider. RGM and Shapiro do beautiful work but are still only making a handful for very exclusive clients.
true, definitely not comprehensive, Weiss certainly at the top of the list.
Focused on Shapiro & Smith/Cornell because they had releases in quick succession this month!
One thing that I hope will be interesting is if American watchmakers can eventually build distinct "styles". To me Shapiro has done that in his dial patterns, you can look at a shapiro case and dial without the logo on it and know it is one of his watches. Though at a much lower price, my critique of the Cornell Watch Company is that so far is that their watches look like other people's watches. Their first model looked like a RGM (which is probably fine, because they worked on it). This newer model really reminds me of a Naoya Hida. While there are obvious differences, one of the major design choices of Naoya Hida in their homaging of vintage pateks is their use of german silver. I'm not really calling them a copy cat - the watches are different enough (this isn't a San Martin situation) - but it seems the story of "made in a america" really has to be important to someone to buy that watch, where as for Shapiro and others, they stand on their own despite being made in America.
I’ll take a cheaper, domestic Naoya Hida any day of the week. To your point though, originality is challenging.
I feel like this comes up every few years. There was the Shinola controversy, the guys with the pocketwatches made into wristwatches, Weiss watches, Ameriquartz, and RGM and ? Ball in the background, but somehow I feel like US or semi US made watches have ended up as a very niche product and never enjoyed a high level of cachet or popularity even compared to British watches. Roger W. Smith spoke about his British watchmaking alliance at the NAWCC this past weekend and maybe something similar would help US made watches
Yea, the contrast to Britain is interesting to me. I think the legacy of British watchmaking lends itself more to today's watch industry, whereas the U.S. story that is basically producing millions of pocket watches is harder to translate into something that makes sense for enthusiasts today.
America also doesn't have a George Daniels...
I guess Hamilton and Bulova are out there with American heritage/styling but Swiss and Japanese ownership. You’re a Chicago guy, can someone do something with Elgin??
"The hands are sculpted (not stamped)"
by sculpted, I'm assuming you mean machined?
yep, thanks