A Decentralized Mechanical World

If you follow technology at all, you’ve surely heard the term ‘decentralization’, describing the movement of control of certain activities in our lives from centralized authoritarianism to a distributed network. The technology enclaves are celebrating it and the movement has become widespread into multiple facets of everyday living. Considering you’re on a watch website, reading a post from a watch company founder, you guessed it – decentralization has planted its seed in the centuries-old industry of high-end watchmaking.

This doesn’t come with its own sense of irony – in otherwise traditional circumstances, the high-end mechanical watch industry wouldn’t normally be exposed to such revolutions in history (at least not in a direct technological sense).

For decades, the high-end watch industry has been dominated by a few, large, vertically integrated brands. I need not name them here; if you’re remotely interested in high-end watches, you know them well. These brands have established monoliths in their collection and as such, their entire brand, in terms of market exposure, is hoisted upon them. We know them well – the stainless-steel sports models that are made of unobtanium and trade for double retail, at the least. The household brands, thru sheer timeline of existence, heritage, tradition, and consumption, have cultivated collector attention and dollars into the lion’s share of the proverbial pie. The market share for decades has been centralized to these brands. It makes sense after all – we’re a cautious species. We like assurance in our decision making, so much so we’ve augmented our decisions with insurance. It’s understandable – it’s tough to justify spending $60,000+ on an independent brand that might not be in existence 10 years down the line.

This mentality has governed our industry, not only in part by collectors/consumers, but by every market participant. Established brands endlessly and minutely reiterate tired designs, smaller brands create derivative copies with outsourced movements and lower pay-to-play, industry-wide marketing pushes monotonous [insert played out dial color] variants, and the collectors - left with depressed optionality within the entire price spectrum of offerings, end up settling on something with decent value retention and popularity. We’ve run stagnant. We’ve let our cautious nature bleed into an industry that is inherently anything but cautious. Logic has taken ahold of the unequivocally illogical.

Say what you will about the nature of high-end watches, at the end of the day, they are pieces of art. Art isn’t objective and as such, there is no realistic metric to measure its dimensions. One may make the argument that price relative to complication is a metric but it is flawed as marketing and hype can offset the absence of complication. We’ve all contributed to the self-fulfilling prophecy we’ve found ourselves in. We vote with our dollars but evidently, the time for change has come. Enter decentralization.

I am of the mindset, ‘if you want change, put a dollar behind it.’ The market seems to be adopting this mindset more and more every day. New, tiny independent brands have begun to sprout up everywhere, at every price segment, and for very niche groups of collectors. You now have a brand that produces watches with Grand Feu enamel dials for under $3,000, a feat that was traditionally associated with a price tag 10 times that amount. Brands like the aforementioned have been able not only to exist, but thrive, because of the change taking place in the industry. More independent brands means more optionality. Optionality means more competition. Competition means more creativity. Creativity is rewarded by the market. Our industry is shedding its former monolithically lined skin and evolving into a more diverse, eccentric, and competitive market. Competition breeds differentiation by way of technological innovation. In my view (at least for the next few years, maybe decade), the industry will continue down this path on an exponential scale. Market participants will create new brands, test for traction, iterate if need be, grow controllably, and nurture their own respective collector base. The market will accept and reject based off value propositions, community involvement, design, and, most importantly, vision.

Then it becomes about proper business management. Reinvesting into operational capacities, research and development, asset acquisition to decentralize reliability away from third party manufacturers, hiring and maintaining the right employee base, treating said employees fairly and well, being honest and righteous.

This is a truly incredible time for the high-end mechanical watch industry. We are living through its evolution and are the ultimate administrators of its destiny. Brands should be willing to turn their risk on, experiment, create, introduce fresh designs, reiterate, cultivate passionate consumers, and sculpt the industry that has given all of us so much joy.

Talk again soon,

AJB