From time to time, we get emails or hear stories of our very own readers and members accomplishing big things. Take for example Jake Kassan and Kramer LaPlante of MVMT Watches.
In less than 3 short years, these guys have not only started one of the fastest growing modern watch companies out there, but also disrupted the watch industry itself, and also the traditional methods of business economics. It is our proud pleasure to share the story of how two college drop outs, went on to create one of the largest lifestyle watch brands out there.
How did you two meet, and how did the idea for MVMT Watches come about?
JAKE: Kramer and I were college roommates, but ironically enough, we both ended up dropping out pretty quickly. We both had past experiences in other businesses, ecommerce, and so forth. Some friends in college started crowd funding businesses, we saw those take off, and we wanted to get in on that and figure out what we could do for ourselves.
Kramer originally started a crowd funded wallet company that raised $100,000. Seeing that level of success, we wanted to explore other products and see what might have potential. The two main crowd funding platforms are Kickstarter and IndieGoGo. When trying to identify what the best product was to launch on a crowd-funding platform, watches came to mind.
We were young and couldn’t really afford to buy the $300-$400 watches. It wasn’t feasible for a broke college kid. After doing some research, we found that we could create a quality watch similar to the watches that you buy for $300 or $400; but by selling them directly to our consumers online, we were able price them at around $95. So that was our pitch.
Our company is called MVMT Watches. MVMT Watches offers high quality well designed watches at an affordable price delivered straight to you. Using our marketing backgrounds and Kramer’s previous experience on crowd funding on Kickstarter, we ended up launching a campaign on IndieGoGo and raised $300,000 in about 50 days.
We actually got denied at first using Kickstarter and became discouraged, because we thought we knew Kickstarter much better than IndieGoGo. But we ended up going for it on IndieGoGo and used all of our tactics and ideas that we had about the industry and crowd funding.
KRAMER: Yeah, given my previous success on crowd funding, we were obsessed with that platform. It was a matter of observing what people were gravitating towards on crowd funding platforms and us being watch fans led to MVMT being born.
We wanted to be able to purchase affordable watches that appealed to a modern generation, but there was just nothing that was in our price range. It was either too cheap and not very appealing looking, or it was way too expensive and we just didn’t want to pay that much. We molded the two and took the best aspects of everything to combine it into one successful campaign.
What was the moment that you decided to move forward in starting a watch business?
KRAMER: Jake took the initiative after seeing my success with a previous Kickstarter campaign with making wallets. We were both entrepreneurial, we were college roommates, and we drove off each other (for example, I would always be super curious about what Jake was doing with his former companies). Jake thought, “You know, I need to do something like that too.” I remember him messaging me, “We need to do watches.” And I said, “All right, let’s do it.
The beauty of crowd funding is that it doesn’t take a lot of capital to start something. All it took was our time, a little bit of money, our entrepreneurial passions, and our drive to want to be successful and make money. It was almost a no brainer to at least try it. We weren’t investing hundreds of thousands of dollars into a manufacturer coming up with some crazy new technology. It was something that we could try, and if it did fail then we could do something else.
What is the difference from a business standpoint between Kickstarter and IndieGoGo?
JAKE: From our experience, Kickstarter wanted very unique and new ideas. It couldn’t just be a watch design. They wanted a product that was more innovative versus IndieGoGo that had more flexibility. If the market really wanted your product then KickStarter would let you raise money. I think with some of these products coming out that IndieGoGo started to take market share from Kickstarter, because Kickstarter was so strict.
Since then, Kickstarter has definitely loosened up their guidelines and are starting to accept more ideas. We see watch companies basically modeling our same practices on Kickstarter often, but even with all these companies popping up, it’s not just the idea of our brand that is the reason we are successful. We have a marketing background, ecommerce background, and really knew how to structure everything to become successful. That was the main difference between the Kickstarter and IndieGoGo platforms.
KRAMER: I think back then as well, Kickstarter was getting probably three times the traffic than IndieGoGo, so that was really the main thing that we worried about. But even though there were way less people visiting IndieGoGo, I think it worked in our favor.
Do you have any tips from your experience on how to create a successful crowd funding campaign on IndieGoGo?
KRAMER: I think one is to get obviously as many family and friends involved with your campaign as quickly as possible. Also, having a smaller goal. Not only is it going to make you look more successful if you reach that goal, but for someone to see your campaign and see that you’re almost to your goal as opposed to having $1,000 raised out of a $50,000 goal might be scary. They’ll conclude that this campaign probably won’t reach its goal, and they don’t want to waste their time and money when it’s most likely not going to happen.
JAKE: For us, we raised about $15,000 on IndieGoGo in the first 20 days, and then the next 30 days is where we actually saw a huge increase. I don’t know if their algorithm is exactly the same now or how it has changed, but 2-3 years ago projects that were still ongoing and still making money because they were around longer were pushed up to a popular list. As campaigns ended, they would be removed and you’d be pushed up.
Kickstarter was structured differently so you would find that in the first few days of the campaign is where you make the most of your money; however, with IndieGoGo it’s actually as campaigns ended, you get pushed up and actually make the majority of your money towards the end of your campaign.
So I would say longer campaigns for IndieGoGo was another secret. We did a 30-day campaign and decided to extend it, and had another campaign for 20 days after that. The first campaign raised $220,000 and the second campaign raised $80,000. We wanted to maintain that level of growth the entire time and stay one of the top campaigns.
Is there anything you did differently for the second campaign once you saw the progression of your first campaign going well?
JAKE: We actually reposted the same campaign; the reason for that is because we didn’t have a website ready, and people were still interested in buying watches. So we said, “Okay, our 30 days are up, we made $220,000, let’s just have another campaign even if we only make a few thousand dollars. That’s great.”
One of our growth areas was when we got featured on the home page of IndieGoGo twice for two campaigns. The first time, we made $30,000 the day we got featured. Getting featured again on the second campaign helped us grow to $80,000 in a matter of 20 days.
Another tip for people: if you do have a successful campaign, no matter what size it is, you should have a website ready to start selling the day the campaign ends or even before that. You can use something like Shopify. There are so many other platforms now that you can get a store set up really quickly. The day that our campaign ended, we sold four watches on our website and consistently sold watches every day after that. If you don’t have a website set up the day your campaign ends, you’re losing money.
How were people finding out about your website to purchase the watches? Did they use Google or was it a link you provided on the campaign page when it ended?
JAKE: It was both. We also had people who wanted to buy the product before the campaign ended to see if we would be successful. Even though we didn’t have the watches available yet, we were still able to sell four watches on the first day on our website completely preordered. This was months before watches were even going to arrive.
Why watches specifically? Was there an indicator you saw that showed watches being more popular than other manufactured products?
JAKE: It wasn’t solely the fact that we saw a good market for them. We just liked watches to begin with. We couldn’t identify with any watch brands at the time that targeted our demographic at an affordable price point. After doing some research on the watch market and Kickstarter, we found that there were very few people offering what we wanted to offer. We saw an opportunity on both sides of the spectrum: something that we identified with, which is great because it’s easier to sell to your demographic if you are the demographic, and then also the fact that it was a great product in the crowd funding community in general.
What was the process of getting the watches made and getting people interested in your product?
KRAMER: We started out with six samples. That was it, nothing more. We used those samples to launch the campaign and to structure our page with videos showing what they looked like and how they worked. We actually had the real samples that people could see. We did the prototyping and the design and had the connection with a manufacturer. All we needed was the money to start production.
JAKE: Some people ask us, “Do you have CAD or Photoshop experience?” To be honest, I only have a little bit of Photoshop experience that was self-taught. Basically our process is drawing initial designs and sending it to our manufacturer; then they come back with a rendering as an included service. I think we got lucky being able to go back and forth on samples as well. If we get a sample that we don’t really like, we can send it back and ask them to revise it. For our first batch, they happened to get it right the first time, and the watch looked great.
When we started the company, I was in credit card debt. We put every dollar we had into this to see if it could be successful. It was a somewhat calculated investment; if the watches weren’t good, then we were screwed.
How do you keep the momentum going from the crowd funding campaign to the actual manufacturing of the product?
JAKE: We actually placed our first order before the campaign was even over so that watches were already on their way. That’s another huge difference between IndieGoGo and Kickstarter: you get the money upfront with IndieGoGo, but with Kickstarter you get paid at the end of the campaign. We were able to utilize that money and place a down payment on our order.
KRAMER: We also sent out a survey to all our backers prior to the campaign ending so that we could get an accurate inventory count. Since we only had six different styles initially, it wasn’t too difficult to structure the inventory. We were able to get our deposit in just before the campaign ended, and that allowed us to decrease the time between preorders and actually having the inventory.
JAKE: I think another cool thing that we did was making people a part of the journey of starting something, even if it’s just a little piece of contributing. Every step of the way we posted content on Facebook such as pictures of the molds, pictures of our samples in the factory, etc. You got to really see the growth of this company from the beginning. For us to be as successful as where we are now, I think it’s pretty cool for the 4,000 – 5,000 customers that we have to literally be the reason that we’re here today. They helped start MVMT Watches; therefore, we try to keep them up to date with emails to show them what we we’re doing so that they have a little piece of it as well.
How long did it take you to scale past the crowd funded dollar to $1 million?
JAKE: A lot of it was press; we reached out to a lot of press. In the beginning, we had some money that we raised from the watches, but we kept investing that money back into inventory so that we can grow as fast as we could. We spent a few thousand dollars with a PR firm, but it was horrible. We tried another marketing agency, but it was also pretty unsuccessful so we tried to stay away from agencies for while and learn marketing on our own.
We got some good press being featured in GQ, AskMen, Playboy, and a few others that have done really well for us. I think giveaways on Instagram were another big secret.
Finally, learning how to acquire customers via advertising; it doesn’t matter what channel you use to do it as long as you can figure out what works. It could be Instagram. It could be paying for presence in certain areas, but once you can pay and make profitable money, I think that’s how you start to grow.
KRAMER: With the success of our campaign, it created free advertising that we could push like “MVMT Watches raised x amount of money in this amount of days.” It was press that we didn’t have to pay for at that time. It was just interesting products that people wanted to post about.
JAKE: We were 22-year-old college dropouts, so that story and then doing $1 million in our first year was something that we wanted to expose to other people. Not only was it inspirational for others, we ourselves were amazed that we were in this position. Our story, our mission, and goal was to kill the retail market that you see with so many other watches; stop overpaying for products that you just shouldn’t be overpaying for. I think in this generation, we learn that you don’t need to pay hundreds and hundreds of dollars for a product that just doesn’t cost that much to make.
With so many online retail giants like Amazon, you don’t need brick and mortar retailers, so we went the opposite way and built our business online. Now, retailers are coming to us; we’re in Urban Outfitters, on JackTrends.com, Nordstrom.com, and people are reaching out to us. We’re okay with that and are going to pursue that, but we were born online and 95% of our business is from our own website.
What process did you use to get your prototypes right the very first time?
JAKE: Kramer and I both have experience manufacturing other products in the past, so we were able to sift out the good manufacturers from the bad ones. One of the most important aspects of dealing with a manufacturer is that the communication has to be clear. If they don’t understand what you’re saying and you don’t understand what they are saying, then it’s not going to work out. That’s the key factor, having a good line of communication.
If you give them designs and they come back with good drawings, then you know that they know what they’re doing and they understand what you want. It’s unrealistic to think that someone their first time out of the gate is going to be able to show something that is 100% perfect, because you don’t have the resources like flying to China and doing everything in person. But you can still do a great job and have a really high quality product using Alibaba. Alibaba gives a lot of information about manufacturers now such as where they are located, any certifications they have, and their response rate.
KRAMER: Also, if you can get a reference from a manufacturer that manufactures a product that you’re familiar with (whether it’s a different watch company or a product that’s similar to what you’re trying to do), that’s a big thing because they are doing something that you’re modeling your business after. It would be ideal if you can work with someone that you’re aware of or familiar with.
How do you prevent other companies (or even your own manufacturer) from using your watch designs since most manufacturers are located in other countries where an NDA wouldn’t necessarily mean anything?
JAKE: If they are going to do it, then they are going to do it. I don’t think there’s any way to really prevent it from happening, but Ferrari taught me this: they talked about having the first tier of the market being the manufacturer of the brand, and then there are the third tier markets that are going to be sold unbranded and cheaper on eBay.
If we do see any type of fraudulent activity, we can reach out to eBay or whatever sites it may be and let them know to get the listings removed. We haven’t really experienced it all that much, but hearing experiences from other friends in the brand space it’s difficult to prevent from happening. If people are selling items at a swap meet, then there’s nothing you can do about it; the person who is going to go and buy a watch for $20 isn’t our demographic anyway. There’s no way around it.
KRAMER: The only reason that’s happening is because we’re successful. If we were selling one watch every month, then it wouldn’t be happening. I think it’s inevitable at this point, because anyone can go on Alibaba and buy anything.
JAKE: They are not going to take over your Google ranking. They are not going to sell on Amazon. If they sell 20 watches in a year, that’s what they are going to do; but you can still get them removed off of the marketplaces and websites, or take legal action. But for swap meets you’re not even going to know about it, and it’s not going to hurt your business.
KRAMER: I think also, to go back to your point, if it’s our own manufacturer, I don’t think that’s really something that we worry about just because they want to keep our business. They don’t want to risk losing it. If we were to find out that they were doing that, then it would obviously change the relationship we have with them. There are definitely other manufacturers out there that could do the same thing.
JAKE: The manufacturer knows that if they go behind your back, they are risking a huge relationship. It’s just not a good way to do business. Unless you get in bed with a bad manufacturer off the start, I probably wouldn’t worry about it too much.
How did you guys get into entrepreneurship in general? Did you have entrepreneurial parents?
KRAMER: For me it was always the challenge and the opportunity to make money that fueled me. In high school, I tinted windows to make extra money, and I pretty much tinted every car at my high school. I saw that the product itself only cost me a couple of dollars, and I could make $100 profit off of it by tinting a car. My parents weren’t entrepreneurial at all. They still don’t understand the things I do and why I do them, but it’s just the challenge and seeing the opportunity. I like nice things and entrepreneurship seems like the way for me to buy nice things.
JAKE: My dad was definitely a big inspiration for me. He had started other businesses himself, so that was a good soundboard. Although, when I told him I wanted to do watches, he wasn’t necessarily the most supportive because it sounds crazy when you want to start a watch company. I had started other companies in the past like a t-shirt company in high school, which ended up turning into an ecommerce brand. I also opened up a store in a shopping mall.
I found Secret Entourage in college, and dropped out after my first year because it wasn’t for me. Even though I felt like college wasn’t giving me any value, I still lived there because I wanted to have fun and party and be a kid. I did all that, but still kept thinking about what was next. What was that next big idea? I always knew I was entrepreneurial, but it wasn’t until I found Secret Entourage that I realized that there are other people who have the same mindset. I’m a big fan of law of attraction.
I remember I used to go on SE’s website or Tumblr/Instagram and just go through the quotes or read some of the articles. At that time, I resonated with the community and learned what entrepreneurship really was. That sparked something inside me to think about the big picture to start something huge. I didn’t know how I was going to get there, but I was going to hustle and figure it out. That’s just the way you do it; and not looking at past failures as a failures, but instead looking at them as something to work off of and actually benefit from. I failed starting the ecommerce business, and I used that to start a new company. Looking at the Secret Entourage community helped me understand what an entrepreneur was.
Can you give us some tips that you have for how to make a partnership work, especially being two young entrepreneurs?
JAKE: We’re open-minded. You can’t have a thick skull or a one-track mind. If Kramer has an idea or I have an idea, we will have an ongoing conversation about it. We have to bring concrete facts as to why this is a good or bad idea. If I disagree, I try and explain why I think it’s a bad idea versus a lot of people who let emotions get in the way. That’s the culture we have promoted here at the company too. We’re college dropouts, so we’re not qualified in the traditional sense to be running a multi-million dollar business. We make the effort to discuss ongoing situations or conflicts and work together to figure out what the best direction is.
KRAMER: I think we got lucky. We both grew up wanting to make money, and we’ve got a good partnership with each other. Jake is really good at acquisition, sales, and marketing; and I am better at handling the operations, customer service, fulfillment, and the manufacturing. It has been a good balance where I handle one side of the business, and Jake handles the other. If we were 10 or 15 years apart, it might be a different story as far as what ideas we think are good or not, but we’re both young and close in age. We’re in the same place, we’ve learned this together, and we built this together so we’re like-minded as far as what’s good and what’s bad.
JAKE: We also like to consider ourselves very data driven. We try and test things like if there’s a picture that I like and a picture that he likes that we think would look good on the website, then we’ll test them both and see which one does better. We base our decisions more on the facts versus opinions.
We obviously don’t need to seek advice for every little thing, but if it’s a significant and important issue then we have the conversations. As long as you’re not narrow-minded and stubborn, and you’re open to see how things work, then you can have a successful partnership. We learn from our failures. Even if we both make a bad decision or just one of us does, it’s okay because now we know for the future and we don’t hold it against the person. It’s just okay that didn’t work. Let’s move forward.
KRAMER: It’s trust too. I trust Jake. We both trust each other. We both realize that we think similarly so that we’re not in each other’s hair. We handle our own sides of the business with our teams of people that go through decisions together as opposed to just Jake and I talking about it. I think we’ve been lucky, but being entrepreneurial, being the same age, and starting from ground zero to working the way up the ladder together and as a team have really helped us. We think the same way, so if one of us has a good idea, the other person probably thinks it’s a good idea too.