Good business means more than a glossy finish and a pithy mission statement. We speak to five founding figures about how best to build bridges and teams and the importance of being armed and ready when opportunity comes knocking.
We founded HYT in late 2011 and showcased the product for the first time at Baselworld in 2012. When you introduce something innovative to the market, one of the biggest challenges is setting up face-to-face meetings so that buyers and retailers can see and feel the product. That’s the only way that they can see just how different it is.
Travelling the world and hosting meetings has required a lot of energy over the past four years but it was crucial to the success of HYT in the early days. I would guess that in 2012 alone I travelled to about 30 countries, from Latin America to Asia and the US. Recently I flew from Zürich to Hong Kong and back in a day, in order to meet an important buyer. I got on the plane like it was a bus, with just my computer in hand. I could have left it four weeks until my next trip to Asia and saved a bit of money but sometimes you don’t want to lose that momentum.
The watch industry is currently in a tough period, mostly because of two events in the past few years: firstly, the conflict between Russia and Ukraine – and the ensuing sanctions – have meant that there aren’t that many wealthy Russians buying high-end watches anymore; the other thing is the anti-corruption law introduced in China two years ago – suddenly the industry lost about 10 per cent of its global sales.
As the c0-founder of a company going through challenging times, getting out there becomes critical. To have an employee who embodies the company going that extra mile and who can give confidence to a collector can make all the difference. When you’re a small company you need credibility. People need to trust you and your product and therefore being able to get in touch with the CEO or the guys who created the company is very important. That’s how we managed to have a tremendous year in 2015 while other brands were struggling.
Difficult times are also the best times to start something new or invest. The worst moment to launch a brand is when business is booming. During a boom, if you’re an entrepreneur with a new idea wanting to order movements, parts, cases and straps, there’s a waiting list of two years – there is no spare capacity. It’s much better to do it now when the market is low. There are a lot of opportunities in the watch industry right now and the people working on new projects are doing the right thing.
HYT secured €21m of capital this year for further investment in r&d because we feel that now is the right time to take market share. When it’s tough people tend to reduce investment and expenditure but if you have the financial platform to do it, it’s actually the right time to be more visible, invest in marketing and in new products.
It’s also the right time to rethink the business. A downturn pushes brands to ask important questions: do we need a distributor? Is now the right time to embrace selling high-end watches online? There is a great opportunity to challenge the conventions of the industry. For now though, I’m still travelling the world. Next I’ll be doing a tour of the US, travelling from Los Angeles to Miami to New York, meeting collectors and buyers.
Monocle comment: As the founder of a company, you are the essence of the brand. You need to get out there if you want to get the brand out there – and that goes for when you’re just starting out and when you’ve hit a rocky patch.
The writer: Perriard is the co-founder of Swiss watchmaker HYT, makers of the first and only wristwatches in the world to include pressurised liquid in the movement.
What makes a city business-friendly? In Stockholm’s case it has a lot to do with innovation and education but it’s also about diversity. We’re ranked high among European cities when it comes to technological innovation and start-ups. We’ve found that a dynamic job market with lots of competent people to recruit is more easily achieved if politicians believe in lifelong learning and make education a priority. Well-educated inhabitants fuel innovation and companies, which is crucial for a society’s development.
That starts as early as nursery. We’ve recently given full-time nursery access to all children in Stockholm, regardless of whether their parents are employed, unemployed or studying.
I’m also a firm believer in a dialogue between politicians and companies; I welcome their input. From businesses’ point of view, solving the housing shortage is the top priority in Stockholm because right now some employees struggle to find affordable homes. I’m sure we’re going to succeed in fixing that but it requires even smaller municipalities around Stockholm to work together and do their part in building.
Another thing Stockholm gets right is the work-life balance. Our welfare system is a good way to attract talented people to the cold north. In Sweden you can combine family and a career. We’re not even allowed to work around the clock. We’re required to have time off and I believe that leads to better results at work.
Entrepreneurship is important for a city. New ideas and innovative companies make people grow, increase their individual choices and lead to greater personal freedom. When we have growing companies and more people at work, we also have possibilities to invest in other things such as culture and sports. There’s a dynamic between those things; they’re all linked together and, in my role as mayor, I know it’s vital for Stockholm’s economic development. And given that we count for a third of the country’s GDP, if Stockholm is doing well, Sweden is doing well too.
- Build more housing.
Stockholm suffers from a housing shortage, which leads to soaring costs and employees struggling to find affordable homes. We’ve increased our target to 40,000 new flats by 2020.
- Invest in infrastructure and public transport.
This is important in order to keep a city growing. We are approving a fourth runway at Arlanda Airport in an effort to increase the number of direct flights to and from Stockholm.
- Make yours the smartest city in the world.
This means investing in IT. Stockholm has invested in an extensive competition-neutral fibre-optic network for more than 20 years.
- Invest in schools and education.
Our aim is to make Stockholm a world-leading knowledge region. This starts at nursery.
- Facilitate growth.
Create services for new companies and ideas, such as Start-up Stockholm, where budding entrepreneurs get free consultation.
- Increase investments in business programmes.
We’re working on this through our organisation Stockholm Business Region, through which we invest SEK100m (€10m) annually.
- Make sustainability a priority.
A commission for social sustainability has been created to analyse what the city is already doing and to suggest much-needed policy changes.
- Work with other institutes.
We co-operate with Stockholm’s chamber of commerce and we’ve recently appointed a director of innovation to increase the co-operation with the academic world.
- Make it easier for people to achieve a work-life balance.
We offer childcare and pre-school outside of normal daytime hours for parents who don’t happen to work nine to five.
- Embrace cultural diversity.
We’re creating meeting points between migrants and native-born Swedes to improve integration.
Monocle comment: Being a business-friendly city is about more than just generous tax policies. Companies, particularly small and medium-sized enterprises, want their employees to enjoy a high quality of life. Anything a city can do to deliver efficient transport, low crime and top-notch public services helps.
The writer: Wanngård is a member of the Social Democrats and has been the mayor of Stockholm since 2014, as well as a city councillor since 1994.
In recent years there has been an increased emphasis on branding and yet, despite this, a savvy approach still eludes many companies. I’ve seen established brands worry about whether “heritage and tradition” translates into “old and stuffy”. There is constant pressure for heritage brands to remain true to their roots, while at the same time convincing contemporary culture of their relevance.
A striking example is Burberry, which was being dismissed by its core market and yet, at the same time, was embraced by so-called “hooligans”. In an attempt to entice new customers it lost sight of what it was known for: the signature trench that had made it famous.
In response Burberry required a complete rethink. It took resolve to ignore critics and embrace intelligent design, as the company doubled down on promoting its signature garment while also giving its classic look a contemporary twist. And it took a total understanding of the vision and an absolute belief from the whole company for it to work.
The result was a shift of perception in the market, where glamour and restraint leveraged the essence of the brand. It reinvented itself as a brand that is both timeless and of its time.
The big challenges for heritage brands are relevance and innovation. How do you innovate while retaining your tradition? It comes down to ensuring that the brand is clear about what it stands for and what its long-term objectives are. It takes confidence to withstand shifting trends while remaining true to your history.
The first pitfall when trying to reinvigorate a heritage brand is measuring oneself against others instead of being clear on your positioning and benchmarking that against your customers’ expectations. It is vital to deeply understand your customer – knowing the language and media they use, as well as the status and value with which you provide them. Heritage brands have an advantage over newer brands because they usually have a loyal, sometimes multi-generational customer base. This offers a continuous validation and a rich narrative that they can leverage. Finally, there is a temptation – and pressure – for heritage brands to pursue the style du jour but this dismisses history for veneer.
A rebrand is driven by many things, including business strategy, product development and design, but it all comes down to positioning. Shallow or mixed messaging will damage a brand. No matter what, a cosmetic approach will likely have little impact. Branding needs to be holistic and genuine. It needs to deliver on its promise; it needs to respect history and embrace the future.
Monocle comment: Many brands are keen to play up their heritage credentials – some before they’ve earned the right to. But successful branding isn’t about spin: it’s about clearly communicating what the company is about.
The writer: Finn is the founder of TheSumOf, an independent design studio that focuses on brand identity. He has more than 20 years’ experience working with brands such as public broadcaster SBS.
Before starting my business in 2004 I worked for a large global corporation. I learnt a great deal during my time there, including the kind of business I didn’t want to be part of. I saw the “coalface workers” – people at the frontline doing the bulk of the organisation’s work – kept in place and not promoted. The ones who excelled at their jobs were seen to be too valuable where they were so they got stuck in the mines.
Too often the mediocre were promoted out of those roles and into management. This was especially true of the affable yes-men who didn’t pose a threat to the very top brass. It created a top-heavy organisation staffed by ineffectual nice guys, where change and development was virtually impossible. That experience provided valuable lessons when it came to shaping my own business. We promote our best people and make sure we recruit even better people to fill their shoes.
That’s not to say that I don’t value the nice guys. I have a no-arseholes policy, no matter how brilliant they may be. We give a great deal of our lives to our work. It should go without saying that our work is much better – and more successful – when we’re surrounded by people we like, respect and want to spend time with. It’s not just about recruiting talent; it’s about creating a team of people who enjoy each other’s company and work well together.
I’ve made mistakes over the years. I’ve employed people who look good on paper and say all the right things in an interview but fail to measure up. I have fallen for these charmers in the past so I’m now very careful to understand what their ideas for the role and business are, which is more important than whether or not they agree with everything I say.
Recruitment is time-consuming and expensive so it makes sense to do it as little as possible. But a successful business shouldn’t be afraid of hiring. As well as promoting from within and offering a career path, we bring in people with different areas of expertise and fresh approaches. It’s hard to develop a company with a closed clique that can’t welcome challenging ideas. This is how I’ve crafted our small team of 11 at Rare Tea, by bringing in key people to augment our expertise as we expand into new areas.
I left the corporate world because I wanted to work for an open-minded and agile business that welcomes ideas and innovation. I also wanted to work in a business that I could be proud of, where an ethos of respect and strong relationships extended beyond the internal team and to external partners. As such, we build direct relationships with farmers, guaranteeing prices and harvests – a practice that is at odds with the industry norm of operating through faceless brokers, which too often leads to the exploitation of undeveloped nations for the highest profit.
Our business model hinges on the idea that we will thrive together with our collaborators – from the farms to the hotels, restaurants, bars, cafés and homes that we supply. This not only gives me a reason to leap out of bed every morning but gives my team a reason to give their all. And they do – because we are working for more than salaries: we are building something together.
Monocle comment: People are the trickiest part of any business. They need to live and breathe the brand but micro-manage them and you might smother their creativity. It’s essential to welcome new ideas and approaches while at the same time making sure everyone is working towards the same goal.
The writer: Lovell is the founder of Rare Tea Company, which supplies tea to hotels and restaurants, including Claridge’s in London. She also launched Rare Charity, returning a percentage of her revenue back to farmers.
Spotting business opportunities begins with the gut. Before establishing The Union Group with my three partners I launched an English-language bookshop in Jakarta. There was little market research to suggest that this would work: Indonesia was (and still is) a non-English-speaking nation with a famous aversion to reading. But I felt a yearning for this offering and took a crack at it. Luckily the concept was a hit.
In growing our hospitality footprint with The Union Group, creating a recipe for success has become more methodical. The process starts with the location, thinking about what concept is most needed there and what the customer profile is. Then we try to match the location with the most suitable concept. We have a list of them that we are passionate about and that we think can work well in Jakarta. By covering all these bases it means that when an opportunity comes up we already have a business that’s tailor-made for it.
Much is made of the opportunities in the food-and-beverage industry in developing nations and Indonesia looks like a win-win on paper. The upper middle-class is growing fast and the cost of labour remains affordable but it’s an industry of contradictions too. We Indonesians are hungry for new ideas but protective of our culture. Trends move quickly here but you have to take the time to consider business moves. It’s exciting to be an entrepreneur but it’s patience that builds success.
Many of the lessons we have learned can be applied in cities across the region. We’ve passed the tipping point and for a hospitality business to succeed, its offering needs to be world class. But the market’s growing sophistication hasn’t forced us to change. A food writer put it best when he said that The Union Group just likes to do normal things well. That has been the backbone of our success.
Getting the basics right is also a big factor in allowing us to be versatile with our offerings but remain trusted as a group. The key to keeping a hospitality group fresh is the talent you are able to attract – this might be a chef, bar manager or barista. Our job as restaurateurs is to provide the best setting for them to shine in and this means making sure the management, infrastructure and staff perform perfectly in the background. This takes on extra significance in attracting talent to a developing city such as Jakarta, which remains exotic to many people.
Southeast Asia is a diverse business region but the proliferation of young hospitality groups like ours pushes everyone to raise their game. This makes it harder for foreign entrepreneurs to move in but those that do will be struck by our open-mindedness. However, this is still Indonesia and your customers will be proudly Indonesian. Here’s a tip: no matter how interesting your menu is, always put a rice dish on there. There will always be one Indonesian in the group that is craving their comfort food. Things might be evolving here but a taste for homegrown flavour will always remain.
Monocle comment: Though market research and preparation are important, playing it safe isn’t always the answer. Spotting an opportunity sometimes calls for sussing out a need before the market even knows it needs it.
The writer: Hutabarat earned his entrepreneurial stripes when he launched English-language bookshop Aksara. In 2008 he formed The Union Group, one of Indonesia’s best hospitality brands.