How does an entrepreneur with no formal business education build a (profitable) company?
Andrew: Hey there freedom fighters. My name is Andrew Warner. I’m the founder of mixergy.com, home of the ambitious upstart, and home to interviews from entrepreneurs all over the world including I think today we’ve got an entrepreneur from the Netherlands. In this interview we’re going to find out how an entrepreneur who says that he didn’t have much formal business education ended up building a successful watch company.
Jordy Cobelens is the founder of TW Steel, a Dutch watchmaker known for its big and oversized watches. I invited him here to tell us how he built up the company.
This interview, like so many others here on Mixergy, is sponsored by this gentleman right here, Scott Edward Walker of Walker Corporate Law. I’m holding up the mug because this is my revolution in advertising, mug advertising. You’ve seen audio ads. You’ve seen billboard ads. Now, Andrew Warner is revolutionizing advertising once again with mug advertising. I’ll tell you more about Scott later on.
For now, Jordy, I want to welcome you. Thanks for doing this interview.
Jordy: Thank you for having me.
Andrew: Did I get it right? Are you in the Netherlands in your office?
Jordy: Yeah. I’ll put this phone on silent so we don’t get disturbed.
Andrew: I appreciate it.
Jordy: Yeah, thanks for having me.
Andrew: I said founder. But, technically, truthfully, you are the co- founder with your dad.
Jordy: Exactly, yeah.
Andrew: Before you started working with your dad, what’s your earliest memory of him?
Jordy: My earliest memory, of course, goes back to my childhood. When I grew up I think my father was always very passionate about a lot of things. He was always an extremely hard worker and somebody who’s not scared of taking a little bit of risk.
My dad operated a lot by himself. That’s when he operated best. I think that’s also where he and I are the most different. Of course, now with TW Steel we have so many employees. It’s not really my dad’s world. That wasn’t his ambition.
I always remember my dad was an extremely hard worker. The one thing he always taught me is with money you make money. He always said to me, listen, save, make sure that you always have money. Because when an opportunity arises and there’s an opportunity for you to invest in something then you want to have that cash. You should only rely on yourself to have it. Being an entrepreneur is sometimes doing things that other people don’t understand. If somebody doesn’t understand it they’re not going to lend you money. But, if you have it yourself you can do whatever you want. It gives you certain freedom.
My dad was never a big spender. Of course, everybody likes nice things. But, back in the days we didn’t have a lot of money. Even when he made some money he was very careful at spending it wisely.
Andrew: You said that he liked to operate on his own and he was a hard worker. Before you were a teenager, what was the work that he did largely by himself?
Jordy: My dad used to be a distributor of some watch brands in the Benelux. He stopped with that. Then, he started to go into advertising. He worked for several magazines selling advertisements, newspapers. Now we have the Internet and everything. But, at that time everything was still done in print.
He started to develop his creative side into not only selling the ads but also making sure that when he sold something also putting the ads together. I think that led to him taking the next step in his career starting his own advertising agency where, again, he started to work for watch brands. He worked for the Swatch group. He did a lot of advertising campaigns for a lot of different companies. Then, he was on the other side of the table when he was dealing with the magazines and the newspapers.
Andrew: I used to go and work at my dad’s office back when he manufactured women’s clothing in Manhattan. Go figure. There was a time when you could do that. I remember just watching him and wanting to work there. Did you do that before you started officially working with him?
Jordy: Yeah, no, absolutely.
Andrew: What kind of jobs did he give you growing up?
Jordy: Well, my dad was always really tough on me. You don’t get anything for free in life and by just helping him around, cleaning things up . . .
Andrew: What do you mean by tough on you?
Jordy: No, I mean, he was always like, “Nothing comes for free in life.” If you work for something, then you need to earn something. If you want something, you’re not just getting it, so he . . .
Andrew: He didn’t give you an allowance every week. He said, “You earn your own money by working for me and then you can just buy candy.”
Jordy: Exactly, yeah.
Andrew: Did you ever feel like, “Come on, dad. Your job is to take care of me. You buy me the candy. I need you to nurture me. I don’t want to have to work for it yet.”
Jordy: No, I think when you’re a kid, everybody wants to get things easy, of course. But because I was brought up that way, it was always like certain extra errands that you have to do, whether it’s to mow the lawn or do something. You just have to be part of the household. I mean, my dad, why should I do nothing and get everything?
You’re a family and you work together so everybody has to have a task, and it wasn’t like that I had to work the whole weekend or something to get a couple bucks. But I had my things to do as part of the family business. Office-wise and work-wise speaking, I always went there. Of course, when I had to do presentations at school, because my dad had an advertising company, of course, I always went to his company. I think I was . . .
Andrew: You said you had a professional ad agency help you design your presentations for school.
Jordy: There were some presentations that were at a level that not an eight- or ten-year-old can make them.
Andrew: I see.
Jordy: But the thing was, when I came to the office, I was always nice to the people and they always liked me. So I always asked them when my dad wasn’t there. Of course, my [??] helped me out. And they always wanted to help me out and they always wanted to help me out, so definitely had some killer presentations for school.
Andrew: Right on.
Jordy: But yeah, it was just a good experience and I just loved helping my dad clean up or whatever he wanted me to do, because I just had an interest for what he was doing.
Andrew: Then you were 15 years old and that’s when you first got into the watch business.
Andrew: What did you do at 15?
Jordy: Well, my dad, at that time, he stopped [??] at the advertising agency. He wanted to do something completely different. And he then started to do watches again. He saw an opportunity. He started a new watch brand. And I just had an immediate interest from a sales point of view. I think also, at that time I was still in school and I started to take some watches to school and show them to my friends. And all of a sudden, I ended up at their parents’ home and they liked the watches, so they started buying something.
Andrew: You mean your friends’ parents were your first customers of the watches.
Jordy: Yes, yes, exactly.
Andrew: I see. And unlike selling candy or newspapers to neighbors, when you sell watches, there’s a big markup. So you were making a good amount of money then on each sale, right?
Jordy: I was making a good amount of money, and I remember that at one stage, my parents were asked to come to school and the supervisor said, “Listen, I’ve got some bad news. Your son is dealing in stolen goods.”
So my parents said, “What? I mean, he’s selling these expensive watches here, and it’s impossible that he gets them in an honest way.”
And my father said, “Well, that’s my company and he sells them,” because they were quite expensive pieces. But my friends, their dads and their uncles loved the product and I was able to offer them a good deal. And so then, of course, got some of the kids interested as well. What I did immediately was like, “Okay, listen, you bring me a sale and I’ll give you some commission.” So at that time, when you’re like 15, 16 years old if you . . . $10, $20, $30 bucks, it’s a lot of money.
Jordy: And I was making a good profit on the watches. The one thing about that . . .
Andrew: I’m sorry. The one thing about that?
Jordy: Yeah, the one thing that my dad did from the very start was I had to buy the watches at the same price that other sales people were buying it. I didn’t get any benefit or a lower price. I mean, I was treated exactly the same. He put targets in place, like with the other sales people. Okay, listen you sell so many pieces they’ll give you a bonus. It incentivized me of course, to work even harder.
Andrew: Did you like that or did you feel, again, I’m not one of your employee’s dad, you should just be hanging out with me?
Jordy: No. Because I was like, yeah, business is business, you know what I mean?
Andrew: I think that’s the way I would be too actually. That’s the kind of relationship I like.
Jordy: I mean, my dad was extremely fair…
Andrew: Plus he’s treating you like an adult. That’s the part that I would like.
Jordy: Yeah. Exactly. It made me feel responsible and it made me also feel like, listen, I did this by myself. This is something that I did. It just made me feel good about myself.
Andrew: And then you took what you learned there and you started JC Records when you were nineteen. What was JC Records?
Jordy: In that time in between I finished high school. Didn’t go to university. I mean, I have to be honest, I was making some good money and I was like, I want to do business. I was fairly good at it, so I was like, this is something that I just want to do. I was doing watches for a couple of years already and my dad started a new watch brand. It was more suited to the traditional jeweler trade.
I was doing the sales rep function. I was 18-years old and it was not the most exciting job in the world. I was like, I just want to do something completely different. I was a hobby deejay for several years and I wanted to take that to a more professional level. I started my own record company when I was 19 called JC Records, which for me…
Andrew: Did you make money in that business?
Andrew: Can you make money in that business or is that just a fun project?
Jordy: Oh, no, I mean definitely you can make a lot of money.
Andrew: How do you make money in the record business?
Jordy: Because I started my own record store. It was a specialized store just for deejays. I started selling vinyl and equipment. I did for whole clubs, full equipment, the whole interior, everything, so yeah, it was a very, very, good business.
Andrew: This was in the early 2000′s?
Jordy: I started that ten, eleven, years ago, 2002, 2003.
Andrew: Then you saw an opportunity that got you to start this watch company. What was that opportunity that made you say, this is our spot?
Jordy: Well, I was performing all over the country, playing a lot of clubs and I saw a lot of people and the one thing when you monitor a lot of people when you’re going out; drinks, bar, clubs, they’re put on their best clothes. I mean they put on their best outfit, their most expensive outfit, they’re trying to look their best. The products that they’re wearing that’s what they love the most. I saw that a lot of girls were wearing big watches.
I mean there weren’t any big watches available at that price point, but I saw they were trying to wear the bigger watches available, guys as well. There was just not something out there. You saw some jewelry that was getting bigger, but there wasn’t a watch brand out there that was really offering that style, that look and feel at that price point. I saw that there was a gap in the market and spoke to my dad about it and asked him to design a couple pieces.
All of a sudden TW Steel was born. It’s a very, very, simple project. I mean the whole concept was created in 30 minutes. We had four steel cases we called it The Watch in Steel because it was TW Steel and there was four steel cases, so…
Andrew: Doesn’t TW stand for The Watch?
Jordy: The Watch.
Andrew: The Watch Steel?
Jordy: The Watch yeah, The Watch in Steel, because there were four steel cases.
Andrew: The Watch in Steel. The first watches you made, the watchbands were leather, but the watch face steel, right?
Jordy: Exactly. Yes. The cases were steel.
Andrew: How did you know to do that? How did you know what the design…I understand how you figure out the size, but when it comes to the design did you go back to your dad’s experience and his sales people and say this is what sells?
Jordy: Yeah. I think sitting with my dad and coming up with the design, I mean, yeah, where did the design come from, it just happens. We feel that oversize this, boom, yeah, I mean, hook round, yeah and the design was just created and we liked it. Then we thought, yeah, okay, this is something we can work with.
Andrew: I’m looking here at my research at the first watches and there’s something like, it’s even 20 or 22 watches, I can’t figure it out because there’s TW1, TW2, et cetera, but TW1 is also TW21, so 20, 22 watches.
Jordy: Yes, a different size.
Andrew: So different sizes for the same watch. Why come out with 22 options, instead of just one at first? I don’t understand the watch business that’s why I’m asking.
Jordy: We started with four, TW1, 2, 3, and 4. After that we made different executions, of course, of the same design.
Andrew: I see. So the same watch face that started out with the black band, later on, also had a variation with a brown band?
Jordy: With a brown band and then in yellow gold, and then with the tachometer on the basal and with stones and with all different…with white strap, all different kinds of executions.
Andrew: Okay, the design the actual creation of the watches was in your dad’s hands. You were the guy in charge of sales and marketing. Right?
Andrew: You don’t have a huge amount of money; you didn’t raise funds for this, did you? Did you ever raise money for it?
Andrew: No? And you told us earlier that that’s part of your dad’s philosophy you shouldn’t have to depend on other people…
Jordy: No. Exactly.
Andrew: …you should have your own budget.
Jordy: Yeah, I made, not a huge amount, but I made some good money before that and I saved up and invested into TW Steel. I invested it into the stock because I ordered stock. I didn’t do any marketing. I just did a small little brochure. I didn’t need to do photography. I just took the first pictures, the designs, the drawings from the computer with the little brochure. I had zero cost.
Andrew: Who’d you take it to? You had the watches. You had brochures that you made yourself. Who did you take those brochures and watches to, to make…where’d you make your first sale? Let’s start with that.
Jordy: I mean of course, I had a pretty big network from before…
Andrew: From being a deejay?
Jordy: No, no, no. From being in the watch business from I was fifteen. By the time I did that for several years, I had at one stage, ten or eleven people working for me that were selling the watches for me. I had quite an extensive network that I could reach out to.
Of course, I had deejays in my store, known deejays from Holland. I gave them some product for them to show it off and started to ring some of my old friends that I used to work with in the past. There was one, he was a distributor in Holland that I talked to and I asked if he could represent the brands and he then started to target some of the jewelry stores and all of a sudden it started to get some traction.
Andrew: You said that you gave out watches to deejays so that if they wore it, than other people might want the same watches that they have, but I’m picturing a deejay, people might notice her watch or his watch, in this case. To then make the connection to who made it and then to make the connection further to where I can go buy it seems like a couple of big leaps. Did it work out that the deejays wearing it, did they actually translate to more sales?
Jordy: I think it’s always difficult to relate it directly to sales, but several of the deejays, I mean, they’re interested in making money as well and I had several deejays that I gave some watches to. All of a sudden, they started ordering watches as well. It was like, hey, listen, I got a buddy, he wants to order some product…
Andrew: They became sales people for you?
Andrew: And they were earning a commission as well.
Jordy: They were earning a commission as well. When you’re talking of watches for two, three, four, five euros, so hey, let’s say four, five, six hundred dollars, I mean, ten percent, twenty percent, thirty percent, it’s good margin that they were making. It was a nice added business that they didn’t have to do anything for. They were coming to my store anyway to listen to all the records and pick out the new music, so for them to just pick up a couple of watches and sell them, it was an easy job.
Andrew: I just don’t tend to think of deejays as being willing to sell because I think that…
Jordy: No, but it was more that the request came. I mean, it wasn’t like I gave them watches and like, go out and sell, but they would be standing in the club and the club owner would come to them, “Oh, that’s a nice watch.” “Yeah, it’s this new brand and, you know, the owner is from this record store where I always go.” “Oh, oh, I mean, can you hook me up?” “Yeah, of course, yeah no problem.” So the next minute it’s like, “Oh, that guy wants a watch, yeah okay, perfect.” I said, “Here, your 50 bucks for you or some free records like…”
Andrew: I see.
Jordy: Okay, oh yeah, they never thought about that, but all of the sudden they’re like showing it to people, you know, “Look at my new watch, look my new watch.” It started, you know, sometimes people don’t realize that they can make money off of something but when you actually put them in that position and say, ” Hey, here’s 50 bucks, here’s 100 bucks.” and they’re like, ” Oh. Oh wow, oh thanks, yeah, alright that’s great.” I mean, you motivate them.
Andrew: Let me see what’s next then. So you go to them, you also went to the Dutch distributor that you told us about.
Andrew: You also went to stores. Did you go store to store and make sales in the beginning?
Jordy: No, I mean I had the distributor in Holland, he did that, yeah. So he started to go to the jewelry stores and started to sell the watches, yeah.
Andrew: I see. And the distributor is someone who you met from before when your…
Andrew: Dad was… when he did promotion for watches.
Jordy: No, no, no, it was actually somebody that did some repairs for some of the other brands that my dad was doing. So somebody that we knew for quite a while and he was also involved in the process of the style of TW Steel when we went to him as well and said, ” What do you think, do you think you can sell this? ” So, you know, and he immediately picked on it, picked it up and started running with it.
Andrew: This was… what year was it you guys launched?
Andrew: How do you incorporate when you’re in the Netherlands, what’s your corporate structure?
Jordy: What, right now or back then?
Andrew: Back then.
Jordy: Yeah, I mean, you know, there wasn’t, pretty much. Yeah we had…
Andrew: It was just a partnership, a handshake agreement, between you and your dad, you didn’t go out and get a corporation or anything.
Jordy: No, I already had a limited company that… you know from my record company, so I just started, you know, selling it through that, yeah. And, you know, that was the first, because it was nothing, I mean it was a couple watches, and it was a side project, you had fun. You know, we’ll send out some watches and maybe we sell them and maybe, you know, within a week or within a month or within six months, we don’t know. But, we saw an opportunity… it’s like, you know, let’s just go for it.
Andrew: Let me use that as a jumping off point to quickly thank Scott, Scott Edward Walker of Walker Corporate Law and someone in the audience said, ” Hey, Andrew do you have a case study, an example of what Scott’s work because what Scott has done .” and I do. Mighty Text, Mighty text first got together with Walker Corporate Law for their $2900, all you can eat, startup package.
Then they used them for convertible note, seed financing, then their stock option plan, that’s the idea behind Walker Corporate Law, they help you get started and then they’re there for you later on for the more critical parts of growing your business.
So you can go to Walker Corporate Law, which is what I recommend, walkercorporatelaw.com, or, apparently, Scott is willing to give out his phone number and e-mail address here, and so I’ll do it. Phone number is four, one, five, nine, seven, nine, nine, nine, nine, eight. E-mail is Scott@WalkerCorporateLaw.com.
Frankly I don’t expect anyone to write down a phone number while I’m talking here, I’m just reading it out because I can’t believe that he wants people to call him, I never want anyone to ring my phone. He does, and I’m saying it out there because I’m as surprised as, maybe, the person listening.
More importantly, if you want to contact him the e-mail address I use for him is the same one he wants me to hand out, which is just Scott@WalkerCorporateLaw.com. Alright. You then decided to sell online. At what point did you go online?
Jordy: [??] way later.
Andrew: Way later.
Jordy: Way later.
Andrew: So here’s what I found out actually then. Did other people start selling your watches online?
Jordy: Yeah, of course, I mean, you know, online is something that we can’t go around, it’s…
Andrew: So you were selling to others, they then took it and made it available online?
Jordy: Yes, and it was mostly jewelry stores that also have an online platform.
Andrew: So, what I see, or saw, back in the early days of your side, you used to say that you don’t take responsibility for watches that people bought online. The warranty only covers watches that are bought in stores, but not… why, what was going on there that made [inaudible 0:04:40]?
Jordy: No, no, no, what we… we said that from unauthorized retailers.
Andrew: I see.
Jordy: So anybody that is authorized to sell it, I mean that’s no problem but the thing is that we want to control our brand. We want to make sure that, you know, people that buy TW Steel will get the right experience. And, you know, we also want to protect our dealers because these are people that spend a lot of money on rent, stuff, you know, I mean, you know, they built their brand, from their store, over years and years of hard work.
And we don’t want somebody to, you know, in a backroom, have a small computer with zero over costs taking advantage of the hard work that has been done by these jeweler stores that we’ve built such good relations with. So, we want to make sure that we protect them, and we don’t want, you know, somebody taking advantage of the hard work that has been done.
Andrew: You know, I’m reading, “The Everything Store”, the biography of Jeff Bezos, the founder of Amazon, and they had a similar issue. Where big, well known, respected brands didn’t want to sell their apparel and other related products on Amazon because they didn’t want Amazon dragging down the price of their products and making them into commodity products. It sounds like that’s…
Andrew: What you’re saying here. If you allow anyone online to sell your product it’s a race to the bottom to see who can sell it for cheaper.
Jordy: Exactly, yeah.
Andrew: And that’s why you hold back, from the beginning.
Andrew: I did see though that your watches are available on Amazon right now, is that through you or someone else?
Jordy: I mean, there are some official resellers that sell them on Amazon but, I mean, you know, like every brand that you have, you know, people that, you know, they’re still internet frauds. That [??] if somebody goes to a jeweler and says, ” Hey, listen, you know, here’s cash money I want to buy ten pieces but at a high discount and they put a very [??] margin on them and put them online with discounts [??] it’s very difficult to control that completely but, you know, we have a department doing nothing but scanning everything. Buying products online, seeing who it comes from, and, you know, we’re closing stores down and we’re closing distributors down.
Andrew: You are looking to see who is selling your stuff, who is selling fraud…
Andrew: And knockoffs of your stuff. You have people who buy it and then you take them down, how do you take them down if they’re in the U. S. or if they’re in China…
Jordy: We just…
Andrew: And they’re not in the Netherlands?
Jordy: [??], you know, we have partners in every country. So if something comes from country X we go to the distributor and say, ” Listen, we found out [??] this product has been [??].” We scan it, because there’s a, you know, each watch has an identical code. It went to the jewelry store, it ended up on the internet, so they now can go…
Andrew: And it’s now on them to take it down, what do they do to take it down?
Jordy: Yeah, we’ll go to the jeweler and say, “Listen, this is what we discovered.” They’re probably shocked with the warning first. It depends, a little bit, how serious the situation is, if it’s a, you know, if it’s, if [??] see, you know, dozens of pieces or hundreds of pieces then of course we know that, okay, listen this guy’s not going to stop, then we terminate the agreement with them.
Andrew: Speaking of partners in the per-interview that one of your problems is finding the right partners.
Andrew: A lot of people talk a big game but don’t deliver, give me an example, I don’t understand how that plays out.
Jordy: [??] Yes.
Andrew: Do you have an example?
Jordy: Yeah, sometimes you go to a company and they say they they’re very experienced in the market and they’ve got great sales people and they’ve got this grade. They’ve got all the marketing experience and, you know, they present you with the plans and it looks good and it’s a big corporation. It turns out that their sales people are not focused on your brand, and they’re being instructed to focus on other brands that they, maybe, have a better deal with or something like that, and that’s hurtful for the business, of course
Sometimes, companies are too big, sometimes they are too small, sometimes there are small companies that do extremely well and big companies that preform very bad and vice versa. So the management of the brand in that particular market is so crucial for the development of the brand. I mean it’s really who is…
Andrew: And is that management of the brand, how much of that is in the distributors hands and how much in your hands?
Jordy: I mean it’s… how a brand performs is one hundred percent up to the distributor because, you know, the product works, so that’s no question. I mean, how successful it is is very, it’s… one hundred percent up to the distributor, and of course I have to say it is also up to us to manage the distributor the right way. We provide them with all the tools they need to…
Jordy: A good example was in Australia where we had a distributor and the turnover was very, very, low. We changed it into our own subsidiary office and we’re doing 50 times the turnover.
Andrew: What is the biggest thing that you’re doing differently to increase sales by 50 times?
Jordy: Focus, right stores, dedicated sales team, nothing else, but TW Steel pushing, pushing, pushing, everyday; opening kiosks, shop-n-shops. We just opened a flagship store in Sydney. I mean, those kinds of things that’s what’s driving business.
Andrew: What gets people to come to those stores? Is it a lot of advertising? Is it…
Jordy: Yeah. Advertising is crucial. If you’re product is right, advertising is absolutely crucial.
Andrew: What about what you called, I don’t know if you still call it that, but one of your early moves was to get ambassadors. You had Tommy Robredo…
Andrew: The tennis player.
Andrew: How important is that?
Jordy: I mean, it gives the brand identity. It gives the brand a voice. By have somebody at that level speaking very positive about the brand it touches the people, has more emotion to it, and works with events. The ambassador program works extremely well for us.
Andrew: What do you pay someone like Tommy Robredo to wear the watch, to talk about it at events?
Jordy: I mean, of course, you know unfortunately, in contracts we have a confidentiality clause, so I can’t disclose exactly what we pay him, but it depends on the profile of the ambassador. Tommy Robredo was good at what he does, but he wasn’t the best performing in his segment, but it still cost us a decent amount of money. It also depends on how much of their time you’re using. If you want to have ten appearances a year, yes, of course, that costs more money.
Andrew: Let’s see what’s next. Oh, here’s the next thing I want to talk to you about. Your dad worked best alone and at this point, you guys have been working together maybe two, three, years. What’s it like when you’re so social, you’re hanging out with deejays, you’re good in front of a crowd and your dad prefers to work by himself?
Jordy: My dad always worked from home. He did what he had to do. It worked perfectly. I mean, I was running the business and he did the designs by himself and that was the perfect scenario.
Andrew: Who leads the design? Is it you telling him, hey, look dad, I value your design eye, but frankly I’m out in the market place I’m talking to the distributors and what they’re asking for is X and what you’re creating is Y.
Jordy: No. I mean we have so much respect for one another that we hear each other’s opinion out. There’s never been a moment…If he tells me no, no, no, listen I’m a 100 percent convinced that this is what we need to do, I’m like, okay, well if you’re that convinced and vice versa. If I tell him no, no, no, I mean, I really think we shouldn’t do this, then he’s like, okay. It always goes; we never have any arguments about that. It always goes very smoothly.
When I speak, of course, when we create a new collection and I visit some key retails and get the feedback. I mean that’s feedback directly from the market where you need to listen to. It’s not then me saying it, but it’s the people in the business, in the trade on the floor saying it as well.
Andrew: I come from a very digital world, Jordy, where if you have an idea you can test it by creating a landing page, by even AB testing a landing page, so you have a couple of variations of it and you see what people are most drawn to. Then after that, you can create the product the landing page promised. After that, you keep testing and testing and testing.
Frankly, I’m going to be looking at the stats for this interview to see how well does this do verses my other interviews. Should we do more watch interviews based on that, so everything is testing. You are in a hard product business where you can’t create 50 different variations of a watch, test it to figure out which one is the one you should be selling, how do you know then, what to make and what to invest your time in? You’re smiling, this is an issue.
Jordy: No, no, no, it’s interesting. It pretty much comes down to the knowledge that you have of the watch industry, certain trends that you see happening, color-wise. We do test. If you introduce a new collection we use different executions and you do test then what works best.
Jordy: By putting them into stores and seeing what works best.
Andrew: So you make small batches and then you put them into stores around the world and you see how people react?
Jordy: Yeah, I mean you just do different executions. It’s business instinct and experience that you know, OK, well this type of product it will just do well. Of course, sometimes you are wrong, and most of the time we’re very right.
Andrew: You know what, I think I learn best through examples. Do you have a specific example of a watch that you made that was the wrong one? If you can talk about that and why it was wrong I think I’ll have an understanding of your process.
Jordy: Now for example, when we did the Formula One deal we did it with Renault F1. Renault F1, strong name. We made some designs and we put Renault F1 on the dial and when we put it out on the markets, the immediate feedback was OK, listen, people love the design, but they don’t like the fact that it has Renault F1 on it.
They’re not buying the watch because it has Renault on it, they buy the watch because it’s Steel. All of a sudden we’re like, we should never do that again, it should be TW Steel and that’s it. We changed it very quickly and solved the issue by not having it on the dial, but it’s the feedback from marketing.
Andrew: I see that watch right now. TW Steel is big under the 12, underneath that in small it says Renault F1, F1 in a yellow box. It’s so subtle. How did you know that, that was the problem people had with the watch?
Jordy: That’s the feedback that we have.
Andrew: What’s your feedback loop? Is it the store that’s giving you feedback or do you have a way.
Jordy: It’s the people on the ground that tell the store managers. Store managers tell the distributor, and the distributor tells us, of course.
Andrew: I see it, by the way, on Amazon where it has two very positive ratings, both from Amazon verified purchasers. So it still is a system where you have to go back to the store. Maybe even the distributor talks to the store who talks to the customer. You don’t have a direct connection to your customers.
Jordy: No, but like I said, it’s a lot of experience as well. A lot of partners that we work with, they’ve been in the business for 10, 20, 30 years, so they know what sells and what doesn’t sell. If you show it to your core group of partners, they know what’s happening around the world. They’re all experienced, you can make good judgment calls. It’s mostly the minor, little things that we’ll decide, like putting it on the dial, not on the dial. Those kind of issues is what we’re facing, but it’s not like when we introduce something that the product is just absolutely not working.
Andrew: By the way, speaking of Amazon, I do see a TW Steel store essentially. The seller is listed as TW Steel for the watch that I saw earlier and I click it and I see a bunch of watches, that’s not you though?
Andrew: That’s Amazon essentially lumping all your watches together and saying it’s sold by TW Steel. And from my experience buying other products from Amazon, some of these could be real, some of them could be fake, right?
Jordy: Everything’s possible.
Andrew: Does that piss you off that Amazon is doing that?
Jordy: I need to look at the example. The thing is, we have to be realistic as well. Amazon is a business. Amazon’s interest is making money for Amazon. I don’t think they want to hurt the brand on purpose but they have to run their business the way that they want to run it.
Andrew: Look at this though, I’m looking now at Canteen Black Leather Dowl Watch and the top review says this, “poor construction” all bold capital letters. “The watch looks good and fits very nice, except for the fact that it fell apart after three months. The hands became loose and move around freely inside the case, not a quality watch by any means, I want to return it, but I cannot because it is more than 30 days” and then the person goes on to talk about how he feels he got ripped off. In my sense, it my experience having researched your watched that’s probably not your watch, right?
Jordy: No. I mean, could be. I mean listen, we sell a lot of watches, so I’m not going to say that we never have any issues with warranty. If you sell the amount of watches that, we do. I mean, you also have…overall the percentage is very low, below standards because our product is of the best quality available. Certain things happen and there’s nothing you can do about it. I mean, we receive wonderful emails here at the info at TW Steel, where everything is collected, but you also have very negative stories. I mean, it’s something that we have to deal with it.
Unfortunately, we can’t make everybody happy. If someone buys a watch and it breaks down after 30 days or 60 days, I mean, I would be pissed off as well. We really want to help them out as best as possible to fix the problem for them, to do anything possible to get them excited again. Sometimes it turns that you lost the trust of a person, which is understandable. That happens. Like I said, we’re very fortunate that in general the percentage of returns is very, very, low so pretty much every body that buys from TW Steel is a very satisfied customer.
Andrew: At the top of the interview, I introduced you as an entrepreneur with very little formal business education,…
Andrew: The only reason I picked up on that is because you happened to mention that to April and I thought that’s a strange thing for an entrepreneur to notice. Does that ever affect you in business that you don’t have formal business? No.
Andrew: What made you say that, that one of your challenges is that you didn’t have formal business education?
Jordy: Did I put that as a challenge?
Andrew: Yes. You said, yeah I guess so, “never had a business education from sold from a young age.” Do you ever feel like, I need to understand how an income statement works, how a balance sheet balances, what the cash flow…
Jordy: My thing was, I’m very good with numbers.
Andrew: You are?
Jordy: That was my thing from very early on…
Andrew: Who did the books when it was just you and your dad getting started?
Jordy: I did it myself, but of course, we had an external accountant, bookkeeper that would make the year accounts. I mean, I could read them. I know how it works, but I mean, it’s not my specialty. When I started with TW Steel, I used to do everything in Excel; stock reports, sales reports, everything.
Andrew: And you managed it all yourself?
Andrew: How much of your money did you invest in the business?
Jordy: We never discuss any financial…
Andrew: That can’t be a secret, where just talking about a few thousand dollars over a half a decade ago.
Jordy: Yeah, I know of course, I know what you mean. I mean, I can tell you we did, first order of 1,200 pieces divided over four models of 300 pieces of each, besides the stock, I invested maybe, maybe, 10,000 something like that, maybe 5…
Andrew: 10,000 or so. And then the stock your dad invested, that was his…
Jordy: No, no, no, no. I invested in the stock as well only…
Andrew: So it was 10,000 plus the cost of manufacturing those watches?
Jordy: Plus the cost of the stock.
Andrew: I see. How long did it take you to turn a profit?
Jordy: A day.
Andrew: A day?
Jordy: From day one yeah. I mean…
Andrew: Uh-huh, because?
Jordy: From day one, we were profitable, yeah.
Andrew: I see because essentially every watch that you sold was sold at a profit and you don’t take the expense of the watches that are manufactured until they sell?
Jordy: Yeah, I mean, of course. I think it was something between five and ten thousand bucks that I invested in the beginning for brochures, promotional things.
Andrew: How long did it take you to earn your first million in sales?
Jordy: Good question. Six months.
Jordy: And it went quite quickly. Yeah.
Andrew: Because of the distributor?
Jordy: I think because I had distributed in Holland but when I saw that was successful I started to go internationally of course and started to reach out to other distributors. I started to travel, visited some trade shows so I started to expand quite rapidly after that initial success.
Andrew: Did you celebrate it?
Jordy: What? With my first million?
Andrew: Yeah. The first big milestone?
Andrew: No. What did you celebrate? What’s a milestone that made you say let’s stop and take a moment to have some champagne or something?
Jordy: When I sold in my second year. Because is in my second year, in that year I sold 100,000 watches.
Jordy: It was more over in that particular year, in that year alone, I sold 100,000 watches, well I sold more but by the time it reached 100,000 that was a reason for a small celebration.
Andrew: And how did you celebrate?
Jordy: Not extremely big. We just had a nice cake and just realized what we had accomplished but I mean for me it was great because I was looking for more, I was focusing to do more things and the big celebration was when we existed for five years. That was the really first big celebration.
Andrew: Why was that a big celebration?
Jordy: I don’t know. The company was doing extremely well. We grew very quickly and it was just a nice way to reward ourselves for the hard work that was done.
Andrew: So did you have any big challenges. We talked about the challenge of finding the right partner and that’s tough but alright. We talked about the kind of challenge of a lack of a formal education but frankly you could run your business from Excel from the beginning and then you had a team of people who helped you later on. Was there any big challenge along the way or is this just an easy ride into success?
Jordy: No, I think running a business it’s an everyday challenge.
Andrew: So what’s the bigger challenge because it seems to me like this was easy.
Jordy: I mean, in the beginning it was because when a product is hot of course it’s easy because it sells but you know making sure from a logistics point of view that it’s right and then making the right decisions of hiring the right people, moving to a new office and you know getting all of that hassle sorted, making sure that everybody is motivated in the team, that the distributors get what they need, managing them the right way because it’s great to sell, let’s say, 100 pieces to a client but if you know that you can also by doing it better sell 120 or 130 that’s a challenge so every day is a challenge.
How can you increase the business? And I think that’s being an entrepreneur, it’s never like great you know business is going well but you want to make sure that the business keeps on going well because if you sit back and think that this is going perfect trust me there will come a point that it will go backwards.
Andrew: Did you ever go backwards?
Andrew: No. What do you do to keep the team moving forward? Is it constant quotas or sales goals so that you know if you did 100 last month, you’re going to do 150 this month?
Jordy: Yeah. Sales goals. The development of the company. We had to stop with directed company when TW Steel was just expanding so quickly. I relaunched an entertainment company 2 1/2 years ago with one of my best friends which is a talent agency for DJs and producers where we do a lot of events, we started off very small with a couple DJs and we now represent about thirty or thirty five DJs and we do about 200 events a year.
We have our own record label again. We have our own events department, publishing, we do everything in house. I started a new watch brand last year besides next to TW Steel and we’re about to launch a new jewelry branch.
Andrew: And both those businesses are without your dad, just you?
Jordy: No. No. No. Well, the entertainment company, my dad has nothing to do with it. The other watch brand my dad designs for that. And the jewelry that’s also something that my dad has involvement in now.
Andrew: I see. What’s your revenue now?
Jordy: We unfortunately don’t discuss any figures but it’s…
Andrew: Are you over 25 million at this point?
Andrew: You are.
Andrew: Alright, let me do a quick plug here for Mixergy premium because I think it connects to my final question for you. Mixergy premium, of course, as you know, hopefully by now, is, and I’m saying to you, Jordy, but mostly also to the audience, if you like this interview we have over 800 interviews with proven entrepreneurs in the vault, available with Mixergy. Entrepreneurs who talk about how they built their businesses, the big challenges along the way, many of them talking about their failures and how they overcame them.
The reason that everything we do, including the courses that are also available at premium, everything that we do is story based is because one of the things that I’ve found is that when you tell someone what to do, it just bounces right off of them. Especially we entrepreneurs, we don’t listen when we’re told. But, if you share a story, the story is relatable, the story is memorable, and it just implants itself in the listener’s mind, in your mind if you’re a Mixergy premium subscriber.
All these stories that we’ve collected here on Mixergy will be implanted in your head and when you need them those experiences, that other people had to suffer to earn, will be there and available for you to use, to guide you as you build your business. I always talk about how, one of the reasons why, when I wanted to sell to a big client, in the beginning of my career, why I knew I could just barge into their office unannounced.
Why I could just do something dramatic like bring them a big check and say, ” I want to partner with you and I’m willing to pay for it.” and all that is because the story of Ted Turner going into those cable companies offices, unannounced, and really doing things like dancing up on their desks. Or kissing their feet, those stories were implanted in my head and when it was time for me to figure out how to sell they just came out and I said, “Ah, you can do something dramatic like just pop into someone’s office.” So, that’s the idea behind storytelling, everything that we do here is guided around story telling.
If you like this format, if you agree with it, go to mixergypremium.com right now, sign up for premium, because you’re going to hear stories of proven entrepreneurs who tell you what they’ve learned. If you don’t agree with it, perfectly fine, you don’t have to sign up, but I think you’re wrong. Go to mixergypremium.com, either way, go sign up, I think, and I think you’ll see how effective these stories are, the quality of the entrepreneurs we get is, it’s hard to get, but it’s important to bring to you.
I don’t want you to get the guy who says, “Lucky me, I just earned a thousand dollars. Lucky me, I just started a business.” Anyone could start a business, I want you to learn from the best of the best. So, go to mixergypremium.com right now, sign up, and if I’m wrong, if you disagree with me, I’ll give you your money back, guaranteed. Guaranteed. Alright. Final question for you is this…
Andrew: Jordy, April asked you what books you recommend, and here’s what I’m seeing: Bios. Steve Jobs’ biography, Richard Branson biography, and you said biographies in general. Why biographies of entrepreneurs?
Jordy: I don’t know, I mean it’s just, that’s real life, for me. You know, that’s what, you know, real situations, I mean, you know, I’ve read a lot of business books about, you know, and it’s theories, you know, and I, you know it’s, I think it relates more to people and people need to get, I mean, and entrepreneur, you know, you have it in you or you don’t have it in you. But, I think by reading something like, you know, a Richard Branson, like, you know, a Steve Jobs, I mean these are people that, you know, it explains their life story and people can really relate to that, you know? I mean, if you read business theory, you know, and you read certain cases…
It’s just more case by case and they can use that when they have an issue like that. I mean if you start a company and, Okay, listen, I need to do a huge logistics expansion or something like that, and you read a book about logistics. I mean, that’s something that you can particularly then use in practice but if you, you know, you’re in school, you’re young, you don’t know what you want to do, you know, and there are so many opportunities out there in the world. And you read a book like, you know, a Steve Jobs, or, like, a Richard Branson and it shows you, you know, what these people have done, you know, to get where they are today, and following their dreams, and just making things happen.
I think it relates more to people, and I find it just fascinating to read those kinds of things because, yeah, I mean, for me there’s more emotion in it and I think in a lot of ways, you know, with business, you know, it requires a lot of emotion, passion. To do something, you know, to work that many hours, I mean, you know, not to… I mean, if I relate it to myself, the amount of things that I had to give up to get where I am today, you know, I mean it’s a lot, you know. I mean I travel very extensively.
I missed pretty much everybody’s birthdays. I missed a lot of things, weddings, and it’s great, being on Skype sometimes, look we’re at the party, but you’re still not there and when you hang up you are by yourself in a hotel room again. You have to be entertaining every single night when you’re with clients and when you’re with people because that’s what they expect from you, they expect you to motivate them and to tell them what’s happening around the world.
You have to push yourself and its depression and the motivation and the drive that keeps you going. It is hard. Being an entrepreneur is not easy. In the end your responsibility, you have no one to go back to and say, “Okay, can you please deal with my stuff?” It’s in the end, you, and everybody comes… In the end when there’s a problem that they can’t handle they come to you and it’s up to you to solve it. It’s a big responsibility, but that’s also the beauty about it.
Andrew: You said that one of the reasons why you read biographies of entrepreneurs is that they inspire you. They make you feel like, yes, that person could be me. Who’s the one entrepreneur who inspired you the most growing up, that made you say, “yes, that’s a path that is available to me?”
Jordy: When I grew up it was my dad, for sure. He inspired me the most. When you’re at that age you’re not really thinking about business, biographies and those kind of books. I think after that, the two people, definitely Richard Branson and Steve Jobs. Those are people that I think I have so much respect for what they accomplished. What happened to Steve Jobs was horrible. I think the world could have learned so much from him, with his development and everything that he does.
I think the world really lost a very, very special person. He changed the world. He gets so much respect from me for what he did. He created something that was so revolutionary. It sometimes didn’t make sense. If you look at, for example, i pad. If you would do a market research, people would have said, “I’ve got a phone and a laptop, why would I need something in the middle?” When it’s brought out, it’s not something that you need, it’s something that you want to have. I think that’s just extremely clever, extremely clever.
Andrew: Well, you built something extremely clever and inspiring yourself and I hope that someone out there who just heard this interview will be as inspired by your story as you were by Steve Jobs and Richard Branson and all those other entrepreneurs who you read about and my hope is that they will find a way to say thank you to you. If they want to connect with you and say thank you directly what’s a good way for them to do it?
Jordy: Just write an email at email@example.com, and I will definitely be more than happy to answer any questions that they have.
Andrew: Well thank you for doing this interview. Thank you all for being a part of it. Remember, if you got anything out of this interview, any other interview, any freaking blog post even online, we are not just sitting in the audience of life, we are participants. So if you got any value out of anything, find a way to say thank you, find a way to connect, and not just sit back and take it in. Connect, interact, build and then hopefully when you do all that, you’ll come back here and do your own interview.
Jordy, thank you so much for doing this interview. Everyone out there, thank you. Bye.