In July of 2013, MIT grad Hyungsoo Kim had an idea for a watch that could be read by the blind but still appealed to design geeks. “We talked to around 20 potential investors, and none of the conversations really lasted more than five minutes,” Kim said, laughing. “Because we had three things that they want to avoid the most.” Those things were a lack of ownership of his intellectual property due to creating open patents as opposed to closed; a dedication to donating a portion of his proceeds to charities benefiting vision impaired communities; and the oversaturation of the fashion watch market.
Before his campaign, Kim went out of his own pocket to produce a prototype and market his campaign. He wasn’t even able to pay his staff. But on Kickstarter, his first design, the Eone Bradley, became an instant hit, raising $594,602 dollars — nearly 15 times his original $40,000 goal. Now Eone now has its own online shop, a distribution network, and the Eone Bradley has won a Red Dot award and is on display in the Design Museum in London.
Eone’s story is a picture-perfect example of how the Kickstarter concept can help a watchmaker with great intentions and a unique dream. But as Kim and other watchmakers have noted, in recent years as the website has grown in popularity, the Kickstarter watch industry has grown murky. A search for “watches” on Kickstarter reveals over 2,000 projects, and many projects that have hit their goals multiple times over.
“By 2014, the platform had exponentially more volume…That volume makes the platform more attractive to fraudsters, and helps them blend in with the crowd more.”
Chris Vail, creator of Lew & Huey watches, also launched his first crowdfunding campaign in mid-2013, when the platform began its rapid expansion — between 2013 and 2014, the number of projects on the site increased by nearly 51 percent. “By 2014, the platform had exponentially more volume,” he said. “That volume makes the platform more attractive to fraudsters, and helps them blend in with the crowd more.”
Sketchy projects and scams happen. In 2013, the “Montrex Watch Project” blew past its $7,000 goal, garnering a grand total of $60,000 from backers. Months after the watch was to be delivered in June of 2013, updates on the account stopped. No backer ever received a watch. (The project’s founder was also behind a project that claimed it could manufacture tourbillon watches for $250; hard to imagine, considering that currently a $15,000 tourbillon from Tag Heuer is considered “cheap.”) More recently, the campaign for the CST-01, “the world’s thinnest watch” created by a company called Central Standard Time, surpassed its $200,000 and raised over $1 million. After several setbacks in production, Central Standard Time declared bankruptcy early in early May, 2016, claiming only $30,000 in remaining assets and $891,563 in liabilities.
Whether or not the CST-01 was a carefully crafted scam or merely a botched project is unclear, but it does highlight the fundamental flaw with “buying” watches over Kickstarter — backers aren’t buying anything. According to Kickstarter’s “Trust & Safety” page, “People aren’t buying things that already exist — they’re helping to create new things…Some projects will go wonderfully, and others will run into obstacles.” Kickstarter also states that it “doesn’t evaluate a project’s claims, resolve disputes, or offer refunds.” For CST-01 backers, that’s over a million dollars in cash they won’t see again.
A recent study showed that 9 percent of all successfully funded Kickstarter campaigns fail to deliver on their final project. From an investor’s perspective, that’s not so bad. But from a watch buyer’s perspective, it’s a nearly one-in-ten chance of not getting a product you’ve paid for.
“We look for unique, quality, bank-for-your-buck types of projects that we think our members would appreciate…Our members are sophisticated and knowledgeable, and if there’s ‘more sizzle than steak’ they’re going to point it out quickly.”
There are still things consumers can look for to keep from being duped, namely project starters who communicate often. “One of the many challenges that we had at the time was assuring our backers that we were legit,” said Kim. “Communication was the best tool we could rely on. We emailed our backers almost every week, updating them on what we were doing and how things were progressing with production at our manufacturer in Korea.”
Potential buyers can also look to the forums like WatchUSeek, where forum administrators and knowledgeable users vet (and help promote) various campaigns. “All start-up companies who post [at WatchUSeek] are reviewed prior to being granted an introduction thread in the start-up sub-forum,” says Brad Bokkean, an admin for the forum. “We look for unique, quality, bang-for-your-buck types of projects that we think our members would appreciate. We consider project viability and shy away from those who set unrealistic goals…Our members are sophisticated and knowledgeable, and if there’s ‘more sizzle than steak’ they’re going to point it out quickly.”
Yet as the crowdfunding medium has grown, some campaigns have found another way to reassure their backers — the product already exists. According to Sholom Chazanow of LIV Watches (whose most recent campaign brought in over $1.1 million worth of backing), when his campaign went live, his watches were already fully developed, with polished prototypes. While the brand used the proceeds from the campaign to fund production, the biggest asset of Kickstarter for LIV was building brand recognition. “At the end of the day it was an avenue for us to gain a huge amount of exposure and brand awareness…you show off clearly who you are and why you deserve to exist, and why someone should buy your product.”
Chazanow says that without leveraging the marketing potential of Kickstarter, he wouldn’t have cultivated the kind of fanbase he needs to compete with the likes of big, affordable brands like Seiko and Hamilton. Yet for some, like Chris Vail, the increased role of marketing on Kickstarter raises reasonable concerns.”It used to be the platform was a way for people to crowd-fund startups or products they believed in,” he said. “I just think the rules of the game have changed quickly, and significantly. Now if someone asks for my advice regarding a Kickstarter project, I tell them to plan to spend some money on marketing…that’s money most of them don’t have, or can’t spare. What happened to that ‘grass-roots’ sort of ethos?”
“A lot of campaigns get feedback like, ‘Is it possible to use this color?’ ‘Can you add that to the watch?’ And so we played with that. It was really an organic growth together.”
With the Kickstarter watch market saturated, some young brands are looking to avoid the trouble all together. Young watch modder-turned-watchmaker Nick Harris is doing just that for his upcoming Orion Project. “I was asking for input on [Kickstarter] and everyone seemed on the fence about it,” Harris says. “Kickstarter is its own climate. There are also constraints: if you don’t meet your goal you don’t get your money, and you also have to wait until the end of the campaign…I’m going to watchmaking school in the fall, so waiting an entire month or two months it seems like it would add to my deadline and make it harder than it is. I think that you have to relinquish a degree of control to Kickstarter.” Harris intends to fund his venture through a preorder on his website.
Still, even in an oversaturated market occasionally filled with uninspired watches, money grabs and flat-out scams, there is some good to be found in Kickstarter for micro brands. “What happened was not actually what we expected.We ended basically tweaking the design as we got feedback from our backers,” says Karim Elgarhy, who has started three brands — Helgrey, Redwood Watches and Rossling & Co. — via Kickstarter with his brothers Nadim and Terry. “A lot of campaigns get feedback like, ‘Is it possible to use this color?’ ‘Can you add that to the watch?’ And so we played with that. It was really an organic growth together.” The Elgarhys’ latest campaign, an open-heart dress watch, recently launched and met its $24,500 goal 43 minutes after going live.
So just as the world of watches on Kickstarter can be turbulent and dangerous, when used to its intended effect — helping sincere microbrands make interesting watches available to buyers — Kickstarter can help invigorate the affordable watch market. It’s a market that rewards the wary, who do research, look into the background of project starters, and browse watch forums for advice. “I see crowdfunding sites like KickStarter and Indiegogo as a double-edged sword,” says WatchUSeek’s Brad Bokkean. “They have provided an accessible platform for passionate, lifelong ‘Watch Idiot Savants’ to realize their dream of creating their very own dream watch. These types of campaigns are few and far between, but they’ve brought some real gems to our community.”