The Business of Watches [010] Ming Executives Ming Thein And Praneeth Rajsingh Talk Design, Manufacturing, Pricing, And What's Next For The Innovative Brand

25:23I mean, you know, I know a lot of people have 3D printers. In filing, I think a lot of, okay, there's a lot of, it's a deceptively simple product, right? Knowing what we know, going through the development of this, there are things that kind of work. There's not many things that work in the way that that works. so I can make something that's 3D printed and on the face of it ticks all the boxes and is functionally similar. Will it feel the same? No. There's a lot of fine tuning that goes into this. I mean, the links look the same, right? But there is camber, there is taper in two axes, and I think maybe only 35 to 40 % of the 1700 give or take components in this are the same, which means everything else is different.

26:141 ,693 components. I forget because someone messaged me and they said, how come in one post it's 1 ,700 and the other it's 1 ,693? Okay. So approximately 1 ,700, but 1 ,693. I mean, I had to draw all of them. I blanked out somewhere around 1 ,500 and stopped counting. But you filed that away. Yeah, I filed that away in the trauma cabinet. But I mean, the thing is, you can take it, you can look at it, you can have some idea of how it works. But there is a deep understanding of both kinematics and the materials behind it that makes this a reality. So let's get back to what is your plan for it? Because obviously, people are very interested in this product.

26:58It's about a thousand francs, I think, for the - 1500. 1500. Sorry, thank you. I mean, we're making as many as we can. Once we fulfill the back orders, we'll open orders again and proceed. I understand our suppliers also working in a way to make the production cycle a bit more efficient, whether it's through positioning things on the bed or I don't know whether they're looking to another machine, but those things are not cheap. I mean, talking millions of francs here. But there's also a two-year lead time to get the actual machine. And there's a two-year lead time to get the actual machine. So it's not so straightforward.

27:24We have explored parallel sourcing and it turns out it's not that straightforward either. So there's some expertise required in machine setup and parameters. We've discovered ourselves even just 3D printing with filament. Jason is the expert on that. We will do a short version and a straight lug version. Obviously, we have no watches with straight lugs, but straight lug versions because there's been so much demand for this for other brands. We will offer it to our AHA partners. Straight lug, I mean, could you actually be a supplier to other brands outside the AHA? Yeah, I mean, if they want it, absolutely.

27:56Otherwise, if the customers want it. I think for us, obviously, we want to prioritize our customers. Yeah. and then are friends at the AHA. So those are like priority one and two. And if you manage to get, do you get enough bracelets out? But you know what? I would say our customers and AHA also includes potential straight lug customers because we've got customers who've got other watches. So making a 20 straight makes sense. It's not so straightforward to make different widths for the simple reason that that taper means that a lot of the components will change. It's not a simple scaling problem because some things, if you scale any smaller, you can't print them anymore.

28:31You've dropped below the tolerance threshold. Interesting. So yeah, this is 20 to do 20 to 18 is... Going up to 22 is sort of okay-ish, but then the whole buckle system doesn't work. So it's not that straightforward either. So you have to scale part of it, but not all of it. To drop to 18, forget it. That's basically a redesign. How quickly can you get there in steel? You did talk that you may be able to do it. We thought it would be straightforward. It turns out it's not straightforward because the way the powder fuses is different for different materials. There's also the, because the process is basically a bed of metal powder that's fused by laser.

29:07Yeah. The final aesthetic impact and the way it looks, you're not going to see a huge difference between steel and titanium. No. And this current poly mesh, for instance, I know Ming wanted to try a version that was polished. Right. It can't be polished very well because the link shape, there isn't a flat surface up top, right? So mechanically, there isn't an easy way to polish it. So if you want to do something in steel, then the only reason to do it would be if you could do a different finishing, in which case he has to completely redesign the entire bracelet. For the tolerances of steel, working with steel and the process.

29:38And for that finishing and for all of that. So these are all in exploration. Yeah. I mean, I've been telling people this might be a little arrogant, but who cares? I compare the poly mesh to the first iPhone. Wow. That's a statement. It's a new genre of product because it doesn't use, you know, it's not hand stitching, it's not machining, it's using additive manufacturing, but we're only beginning to explore what additive manufacturing can do. Who knows where we'll be 10 years from now with fifth generation or 10th generation. So that's what I mean by like, it's a whole new genre. I think that there've been other brands that have used additive manufacturing for cases, for dials, for, I mean, you know, even Halton Richards did it at one point, even Apple is doing it with the latest generation of Apple watches.

30:19But what they're not doing, I think, is trying to push the limits of that. Maybe for resolution and finishing, yes, but in terms of really exploiting material properties, hard to say. One of the reasons Polymerch works is because when you sinter the powder, every time the laser makes a pass to fuse additional powder, it actually puts the whole thing through an annealing cycle. So it's basically like heat treating something, but you're not heat treating it once. You're not heat treating it twice, which is normal for metals. You're basically heat treating this for every layer. So it's being annealed 200 times.

30:52What it means is that this is a 400 Vickers strength bracelet for the average person everybody asks how strong is it because it feels quite delicate we put this through a lab test buckle the two ends and basically pull until it broke it failed at about 100 kilos of yield strength so about a thousand newtons but it's not the bracelet that failed it's the spring bar every spring bar will fail at that point every strap bracelet whatever has a spring bar it'll fail the poly mesh did not fail so so we don't know what the yield strength is, but we know it's above the spring bar. 100 kilos. You have to revolutionize the spring bar next.

31:30So this brings you... Backward compatibility problem. Well, but the other reason for my iPhone analogy is that also kicked off a whole new wave of like development on smartphones and communications, right? Yeah. We know for a fact that since we've announced this, several of our partners have gotten inquiries of like, hey, can we do this? Can we do that? So there's a lot of other people thinking about how they can apply additive manufacturing. It makes our lives harder. and this is a risk we accepted going into it but it also means I think hopefully in the next five years you'll see a lot more interesting things coming out using additive manufacturing as a process No, we have more interesting things.

32:05We have stuff too but I'm saying someone else might find an application outside of straps, bracelets, accessories that uses that, right? I don't know For the record, what I would like to do is integrate the case and the bracelet in one piece. So Polymesh integrated with the case, the whole thing is one piece Seamless, but this presents a whole bunch of problems yeah what's what's the major issue there you have to finish the case extremely precisely in order to fit the movement and dial and everything else and have water resistance but post-processing that is going to be super hard because what are you going to do with the loose bits of flippy poly mesh like so exactly like this you know like the 1970s uh gold watches i don't know what they call these yeah yeah these are great if we try to print it like this transition from the case to the bracelet yeah finishing that because 3d printing still actually i'm not worried about that.

32:51My concern is that finishing the inside of this so that it fits the movement precisely is one thing. The other thing is you can have tooling to clamp everything in place, but the two bits of polymesh are going to flip around. They're going to be damaged by whatever tooling is going on, whatever machining is going on, and all of the effluent that comes off that. So conceptually, it's doable. Engineering-wise, from a design point of view, it's doable. Execution part is another headache altogether. And the execution part is a headache. Actually, one of the products we look at very closely is the Apple Watch.

33:21Sure. Does that mean I can expense this? I thought you already did. No, I didn't, but I'm going to now. Is that the Ultra you're wearing? It's an Ultra 3. Ultra 3, nice. But what we've since discovered is if you're someone who only values the best manufacturing process out there in the world, the Apple Watch is probably the best value out there. It's not even best value. The Apple Watch is insane because you look at the two examples I come back to. The bracelet that they do, not the millennials, not the mesh, not the new mesh thing, but that the titanium, or no steel, it's a steel bracelet where the links have got built-in quick release, right?

33:54The finishing of that is insane. They have anglage on the little button that's used for the quick release. And it's$180 bracelet? It's$180. I mean, from a manufacturing point of view and a finishing point of view, like my jaw is on the floor. From a design point of view, it's so-so because it lacks a half link and it's not super flexible, all of that. But just from a production standpoint, it's insane that they can do that. But what we also realize is Apple makes how many millions of them? Exactly, exactly. So they have a machine specifically to do one thing. I mean, the other thing is if you buy a mid-range Apple Watch, you get a sapphire crystal, which doesn't seem like a big deal until you think about it a bit more because it's a rectangular sapphire crystal that's curved in the corners.

34:30That means that's a machine sapphire. Even if they've got a way of making blanks roughly the right shape, they still have to post-finition machine. Which if we had to make it in our quantities with our traditional supply chain, it's a 6 ,000 franc at cost component. Yeah. Wow. Yeah. But you get that in a$500 Apple Watch, which is insane. Again, how then do you think about ramping up? You know, is that, you know, at all? I'm not going to make a hundred million bracelets. I mean, it's not going to happen. But I think what I'm saying is we have to work within not just the constraint of it hasn't been done yet with the seamless case bracelet, for instance, but we also have to work with the constraint of we're probably going to make, let's say, 2 ,000 watches over the lifetime of that product.

35:12It's still a drop in the water of someone like Apple trying to crack that problem, because they could probably do it in a year or two, because they could build machines around it. They could build a whole supply chain around it. We have to work within a lot of existing constraints. Same thing with the PolyMesh, right? We had to do that within a lot of existing constraints. So, you know, we're talking about it. I have a solution. I have a solution. So, I, we'll talk about this. We're seeing the process unfold in real time here. Yeah. Yeah. People ask, actually, people ask a lot about the whole design inspiration stuff.

35:44And they're like, well, you know, is this inspired by X, inspired by Y? I mean, sometimes I'm just observant. Things chunk around in the back of my head for weeks, months, sometimes years, and eventually it comes out as something. And then you're like, oh, maybe it was a bit of this and a bit of that and a bit of something else. There is no direct translation. I think this is the mistake that a lot of people make in understanding how design works. it's a mistake that's propagated by 99.99 % of the industry where you see some guy scribbling on a bit of paper and then magically that's a finished watch I mean I've seen that you have but it's useless because you can't take that and then productionize it very easily it's like a concept car sketch right maybe it's useful in expressing an idea and a line and then there's some translation but most of the time when that happens everything's already been designed and they're actually just sketching from memory right this is not a real time process that is not how it works.

36:35So part of what, you know, we were talking about there, though, is investing in machines, you know, at cash flow, or not cash flow, but access to capital kind of issue. Are you considering at all changing the structure in terms of the ownership of the business? I'm sure you've been approached. What does that look like? I'm a terrible CEO because we have been approached, and I saw every conversation was don't put money in watches. But if you have to put money in watches, give us the money. We talked about this on the car ride over Andy. The watch industry is unlike anything else in your career covering hundreds of businesses.

37:09You probably know this. I actually do struggle to find a good investment thesis for this industry because it really is driven by passion, irrationality. It's not really like a booming industry. It will continue to survive. It'll continue to be people doing the right things and hopefully one of them will continue to do well, but it doesn't really leave space for someone to just come and put in capital. the way the rest of the world expects. No, I think there's a cognitive disconnect. I think the reason why it doesn't work is because people from the outside look at this and go, oh, you know, there are six-figure watches, right?

37:40There must be a lot of money in this. But the reality is there isn't because the cost of production is so high. You're making very few units of something very precise, which means the unit cost is astronomical. Exactly. I mean, I think that is something that the consumer doesn't understand. When you're not doing it at a significant scale, indeed. I mean, the cost of manufacturing, the cost of development, the cost of materials, etc. It's more the cost of development than anything, actually, because you have to amortize all of that across your production run. If we're doing a special project with 20 watches and inevitably there's some new tech in there, it means that those 20 watches have to eat all of the R &D cost and spares, right?

38:20That's not trivial. I mean, that being said, we still do need access to capital and banks will not give it to us. I was in conversation with a few banks in Switzerland for just an overdraft of credit line. And the reply I got was, well, if you're willing to put in 200 ,000 francs in deposit, we'll give you a credit line of 200 ,000 francs. I'm like, well, that's kind of useless. If I have 200 ,000 francs, I wouldn't need a credit line. And again, I was like, is this in the interest of building a long-term relationship? And, you know, within a year, you'll sort of release someone. Like, no, you just got to leave it there.

38:50And because it's Switzerland, you don't make any interest on it either. No, exactly. Yes, you don't. So that clearly doesn't make sense. I think what we found is we found a way to do, I call it project financing, but it's a way where you have to be a qualified investor. And I think also a watch enthusiast and someone actually genuinely enjoys watches. But it's been successful for us where people who believe in the brand and want to support us have been able to sort of help us realize new projects by funding it. Interesting. It's like special projects on our largest scale. So previously what we did was a subscription model where we'd find individual customers and say, look, this is roughly what we're going to build.

39:22This is roughly what it's going to cost. you know we need some of that money up front to fund r d and then at the end of it you get a you get a unique that's a subscription yeah subscription but what we're doing is on a larger level a single qualified investor may take the entire project and it's a larger project run it's not 10 or 20 watches they take the entire project say we'll fund this we get our return out of the sale of the watches uh and you know there's all the cool folks at uh at ming and and and I'm sure a watch out of it. And so, yeah, it's a very specialized, and that's not equity in the company.

39:55It's not equity. That's equity in the project. I mean, it has to be priced in such a way, going back to the business side, it has to be priced in such a way where, yes, the project carries risk. Here is the rough timeline. You know what your risk-free return on capital is over that timeline at the moment with interest rates is not great. But, you know, you also know that it's not a very big amount of capital where you can't go and do a megaproject somewhere else and see multiple X returns. You're not going to go and find something that you're going to list, but nor is it something so small that it's like I can only deploy 50 grand and it's, you know, a limited kind of thing.

40:28But what we like to think is that you have both involvement in the process, which a lot of people like. You can be a patron of the industry in that sense. You help to bring something new to life. And at the same time, we'll give you a decent return. Interesting. As a business, we can price in that return as well. How much, I mean, how many projects have you done? Can you give us a sense of how much capital you might have raised for these specific projects? Restructured this this year. We're just doing two pilot projects now because I also want to actually see them to completion before I take on more capital.

41:02But in terms of interest, everybody we talk to likes this model. And the big advantage is for an investor. And for us, we retain our independence. We retain sort of control on how to run the project or the brand. So you've touched on a very important point, which I think bringing in external equity investors creates. If we bring in an external equity investor for the amount of money that makes sense, that allows us to run a bunch of projects, right, which would have to be the case because this is a one-shot deal kind of thing. It would also mean that we would have to cede control. Exactly. And then at that point, there is this Schrodinger question of, if I cede control to you to get the capital so that I can do the projects I believe in, you may then say, you're not allowed to do those projects because we don't like them.

41:48And then if the whole thing doesn't work, whose fault is it? That should be a game show, whose fault is it anyway? Whose liability is it anyway? Well, this is the question. I think it's called the legal system. And the last bit, the last reason why this really works for me is traditional debt is a problem for businesses like ours, especially in industries that have long lead times, huge working capital commitments and requirements. Because if every quarter I have to send out an interest payment, or if I'm on the hook for a big bullet payment on the principal at some random time in the future, you have timing mismatches.

42:20Because a product may be like two weeks delayed, but today is when you owe sort of principal payment. Yes. And it creates weird mismatches, which are, they can be navigated, but they create unnecessary friction when we want to be running the business. Now we know how on time this was industry. Yes. It's always amazing. It always amazes me that for an industry that makes things that measure time, everything is delayed. Yeah. But with project financing, it's linked to the sale of the product. So what helps me as a business is you're not, you know, sitting on fixed costs, fixed leverage. But it's like when we sell a watch, everyone gets paid out.

42:54This is interesting. that. I mean, yeah, it's project finance. And gives us the flexibility to launch the product when the time and the product is ready. Is anybody else did you take inspiration or cues from anybody? This is born out of financial necessity more than anything. I've learned in the 80s in this business, I used to think I wasn't a creative. I've learned in the 80s in this business you can be very creative with finances. Well, you need to be creative with finances in many ways. this is the perpetual entrepreneurship problem as well right if you're conservative you may not take the risk you need to be successful and if you have undeployed capital that's not efficient either but if you deploy your capital fully you know you're very close to running into a you're running off the cliff if you run out of money suddenly something happens you know we talked extinction event away from yeah no exactly yeah yeah and that's uh not a position that uh risk that one wants to take.

43:52You know, we talked a couple of years ago, I mean, obviously you had your great boom and a huge run up 2021, 2022 to 23 because of, you know, some supply change, production issues, these kinds of things. You know, you had a tough year, I think, you know, where revenue came off quite a bit. Where are we now? What does it look like in terms of, you know, revenue and the top line as well? And what kind of volumes, I mean, you know, I don't know how comfortable you are, but talking about what kind of volumes we should think that coming out of Ming now? 24 was tough. I think for everybody, 24 was tough because basically the world restarted in full.

44:28The hype train was going a little bit too fast and had a minor derailment. 25 looked like it was going to pick up again. So Q1 was good. And then Trump happened. And then, you know, basically, we landed up in uncharted territory. And, yeah, so how does that look then? you know yeah for the business i mean obviously yeah i mean changes we were all trying to figure out yeah how to work around how best to work around this and i i think in the course of that we've we've learned a lot about international tax and customs law a lot of companies have now entities in the us or they're using entities for transfer pricing we've made strategic partnerships of retailers which i think was in hindsight a very timely decision whether the 15 thing actually happens and i understand it hasn't been ratified yet it has not been ratified right so maybe it's not going to happen.

45:20We have to plan for a situation where things continue to be where they are. You know, whether that means we need to change the business structurally or whether it means we need to put prices up to absorb some of the tariff. I don't know. At the moment, we're absorbing the tariff. It's not great. And that has an impact. Has a huge impact. Either you sell something and you absorb the tariff or you don't sell anything. It's like, at this point, cash flow wins up, right? Well, there's a few impacts. There's a very obvious profit loss impact. But part of the reason why we haven't passed on the tariffs is because, like we said, we don't know what the reality of the situation is.

45:53And the last thing I want to do is say, hey, guys, tariffs are 39%. We're going to pass on half of it or whatever because we absorb the other half. And then a month later, find out that tariffs go down. And then you have to like, and rolling it back is fine because from the outside perspective, like, okay, you guys followed the market. The problem is the people who supported you in that interstitial space, they're not feeling great i don't blame them but as a business i also can't go back and be like oh here's a refund because we're not going to get the refund from no there won't be a refund the thing is it for that period in which you bought it things cost more right which i suppose you can say that's fair but it's also flippant and uh not the smartest way to treat your largest no it's not supporter base and community base so we made the decision at least until 31st of december to to absorb the tariffs.

46:40Yeah. Beyond that, we will have to make adjustments if things don't get ratified and adjusted downwards. You're gonna have to make a decision when we're there on pricing. We'll push it off as long as we can. Will you treat the US with the tariffs as a separate market or? Unfortunately, yeah. Well, because we do for everyone else. If you go on our website now, it's pricing excluding VAT duties and tariffs. Right. So if you're buying in, you live in Geneva, I mean, where are you living in Geneva? So if you buy a watch from us, you would pay the 8.1 % VAT. if somebody in Germany were to buy a watch from us they would pay the 20 to 21 % VAT on top of the listed price on the website yeah right so it's in that sense it's consistent customs is not something we can control because if it was we wouldn't be in the business of making watches to be blunt sure right and to price a product where everybody pays the same internationally that's nearly impossible some brands well it's possible no it's possible if your margins are so high that you have that padding it's not possible for us I mean how should I think about if you want to talk generally about, you know, margins for a business of your scale and size and all the innovation in R &D that you're doing in terms of the product as compared to, you know, traditional watchmaking brand?

47:50Less than half, I would say. Maybe even less than that. I don't know what the traditional watchmaking brands are because a lot of it's very opaque. True. But from what we've been able to discern, just knowing where components come from and knowing what our components cost and what our suppliers tell us vis-a-vis cost of components and difficulty manufacturing and all that, I would say we're less than half. How are you feeling? I mean, obviously you started the alliance and, you know, that was in part the intention of that was to, through scale, have better access to components and suppliers. How is that going?

48:23I've heard from a number of CEOs this week. I mean, you know, we know that the component suppliers, these are the people who are really suffering at this moment. How is that for you right now? Is that an issue? It's a tricky balance because most of the component suppliers we work with, they've been at least post-pandemic and with the new structure and everything else, we're quite happy with. And my conversation as always, especially when times are tough, I know brands are, especially some of the larger brands, they just cancel orders or they're like, hey, we're going to pay you in 180 days, not 30 days, deal with it.

48:58And suppliers basically have to carry that brunt. 24, 25, I definitely had to have those conversations, right? Because previously, when things were growing great, I'm like, invoice comes in, you're paid in seven days. But I've gone back and said, hey, like, you know, this is summer, for instance, is a very lean period for the industry because everything's shut. You're not really selling watches. So over summer, I went to summer suppliers and I said, hey, like, this is what, and what the industry does, and this is what makes it tricky, is they'll deliver stuff in advance in summer and everyone's trying to collect cash.

49:26Or this year with the market going down, I was placing orders with an anticipation of a certain lead time. We had some of our partners cut that lead time in half. Yeah. And components would show up three months earlier. And I think my approach is always concrete. I'm saying, A, I can't pay you for something three months before scheduled. That's not how cash flow works. Right. You know that, I know that. Right. So, like, this isn't going to happen. But also in instances where a lot of orders came in a certain month, I would go to them and say, hey, here's what I propose. like in 30 days, I'll pay down two thirds of what you've delivered.

49:59And the rest will pay down in 45 days. And I was going in being like, I feel bad doing this because they've sort of delivered on the commitment. And the feedback I would get is you're one of the only brands who does this. Most brands go, you know, if you don't like it, take a hike. And I think this is part of what hurts the industry because the industry is famous for when things are great, things are delayed. When the industry is in a bad shape, things are delayed. Because brands and suppliers are always against each other. Yes. It's adversarial. It was adversarial. Well, I'm going in and saying like, hey, I'm not a big enough brand to have like five suppliers for the same component.

50:32You're the only person I work with. Yeah. Right? And you can track this because we tell you for most of our models, you know exactly how many we make and you're delivering the components. Like this isn't, there isn't any, you know. But we also believe fundamentally that in every one of our relationships, there's a win-win scenario, right? We want to work as partners with our suppliers. you're not a supplier in that sense. Without you we can't do it. And we like to think that even though we're a pain in the ass when it comes to the level of demandingness on components and processes and everything else we like to think that A, we push you to the point that you can expand your capabilities B, we give you a chance to show off what you can do and we're happy to tell people where the components come from we're happy for you to tell people that you make components for us even though we can't give you a larger order at least we can help you in other ways.

51:21right hopefully that hopefully sure we find partners yeah and i think it'd be a different relationship 50 of the partners we work with end up in that camp so over the years we've got these this cohort of people that we worked with and we just continue working with them because it's consistent right when things go up and things go down they're like hey you guys are reliable so we will also make sure that we sort of take care of you um and of course there's always partners you try and do this with and i guess they're too used to a certain system and they They're like, oh, this is too good to be true.

51:50And so that is what it is. But that's how it's been for us. And last thing, I mean, you know, so much of the focus in the industry lately or the concerns and worries about the industry is, you know, sort of an entry level, you know, Swiss-made watches or high-quality watches, and that the demand and that business proposition for that kind of product is suffering and everybody's simply premiumizing and moving upscale. you have a huge range in terms of your your prices um for your products but you know i would i would argue i would actually not agree with that tell me because if you say go to omega for example right you can you can buy everything from 2 000 bucks quartz to you know the was that speedmaster chiming repeater thing that's like half a million dollars i mean that's a much bigger that's a much bigger spread than we have sure that's a much bigger spread and i think from a product standpoint i I want to have an upgrade path for customers.

52:48So I want to have a growing path where you come in, you see something you like, you understand why you like it. You come back to us because we've got something above that and above that and above that, right? Rather than losing a customer to somebody else because we don't provide that product, I'd rather give you that option. And yeah, I mean, I guess at this point, this watch, the 3702 would be your entry level around 3 ,000 francs. Are you interested in, and do you see it as a challenge to go below that price point. For sure. Tell me, what are you thinking about on that side? I need to start this by saying the first watches that we made, we sold at$900 and it was far too low because we didn't understand how the economics of this industry worked.

53:31When we ran the math at the end, when the dust settled, we paid$1 ,300 for components because we had to remake stuff. And that doesn't count the cost of running the business. At that point, even just transaction costs, PayPal for fees and FX, 9%. Right? And that's not counting personnel time. Honestly, if we'd priced that properly, according to industry margin, it should have been a$4 ,000 to$5 ,000 watch. And we have been trying to price correctly and sustainably ever since. and arguably I would say that what we price at our entry level now represents much better value than the early stuff because there's a lot more technology a lot more refinement that goes into it we didn't have we didn't have a full sapphire ceramic dial back in the day right we didn't have a decorated movement you know the case finishing was nowhere as nice but all of these little things that we need to learn along the way and figure out how we can make it efficient so we can offer that product at a lower price point also I think there is an intangible value of curation.

54:37Now, that's going to sound a little bit fluffy, but to me as a designer, it's what can I take away from the piece but leave the identity of the brand intact? So earlier on, you mentioned that when somebody sees you wearing a minimalist, they know straight away that it's one of ours. But why is that? It's because everything that is a nice to have and a sort of, you know, I want to make it better and more special and everything else, Every one of those elements, you know, we have to carefully consider, is it necessary for the identity of the watch or not? Right. And that is why it's the minimalist, because that's the bare minimum that we can get away with.

55:15And you look at it and go, that's one of yours. Do you think you can make a product below that price rate? I mean, the true entry level in this watch. There's a couple of trade-offs with that. Without getting into the branding marketing side is also with Ming, for instance, now we're talking about how many events we've been doing this year. You know, I won't get into the full economics of it, but between we were at Time to Watches, which is the adjacent thing to Watches and Wonders, and Dubai Watch Week, just between these two fairs or events, where we didn't have very big booths, right? We had the second to smallest, like just one level above the smallest booth you could have.

55:48It cost us both exercises, including travel, everything else for the team cost me 130 ,000 Swiss francs. Wow. And so, and that's just... Just these two events, two weeks of the year. Yeah. Right? And we've been at Watchtime New York. We've been at the Milan Watch Week. We've done private events. I was in Open House LA. It's a big cost. It's a huge cost. And I understand and I agree that part of what makes independent watchmaking enjoyable for a lot of supporters is the ability to meet the brand for the offline experience. But the offline experience has a very tangible cost. And you have to be able to pay that somehow.

56:22And we need a team now that needs to travel, that needs payroll. Inflation is a very real thing. When we get paid? Well, no, the team gets paid. We don't get paid. We get founders equity. Yay. Right? So that's sort of what determines where the entry level is and what's sustainable. In terms of coming in lower, anything's possible. The question then becomes, what are you trying to achieve? What are we doing here? And why are we doing it? But what is that product meant to be? I think that's a bigger question. Because if you're talking about keeping all of the things that make the main brand what it is, there are some things which you just can't do.

57:01Right? There are some components which are just too expensive, no matter how many you make, they're just too expensive, right? There's no way, for example, we're gonna do entry-level Polymesh. It is what it is. Does it mean we haven't considered doing a subsidiary brand? We have. What can you tell us about that? Why do you find that interesting? And what do you think you can bring to a subsidiary? We've seen others do it, obviously. What we would do if we were to do this, is take a very different approach to the main brand. the main brand is very serious, right? Everything we do is very serious.

57:32And I think maybe along the way we have put ourselves down a path where we can't be fun. Right. And this whole exercise should be fun. And that I think is a bit that's missing. I think I think a lot of the industry takes itself far too seriously. Far, far, far too seriously. Our sales included. Yeah. I mean, you guys take yourself very seriously. And then, but I would like to, I would also like to have another outlet where we can try new things when it comes to marketing. We can try new things when it comes to product. We can try new things when it comes to just doing really silly shit. And not to sound flippant about this, but also not care if it bombs.

58:10Because now with Mink, we built something, like I said, larger than us, right? It's not just thinking about what we want. It's thinking about we have a team to take care of. We have long-term customers to take care of. 18 ,000 watches ship. We have a very real responsibility. And because these are watches, when you pay 60 ,000 francs, you know 90 000 francs of even 3 000 francs there is an expectation and we have to consider that with every decision we make so i think for us as well it's nice to have something to do where it's like we just like this idea if it doesn't work so be it screw it let's do it how far along are you on this fun project and when might we uh hear more i think i think we're nearly done baking yeah we're nearly done baking well actually we are done baking it's like cooling off now yeah They're too hot to touch.

58:55Sitting in the window, so. Just some icing left to put on. Yeah. Excellent. Well, that's something to look forward to. There's a lot to look forward to next year. I think it's not just that. I mean, we have... Have you seen that? It's not a video. We can talk about this. You can. Just don't talk about the dot. There's no branding on this, right? So this is not a Ming. This is what you're wearing. This is not a Ming? It's not branded a Ming. It looks like a Ming to me. Which is interesting you should say that because we've never done anything like this before. It took me four years to design this because certain elements of it had to be gotten right.

59:32Firstly, there's the way it flows, right? If you have a small wrist, most of the time it doesn't work. If you have a large wrist, I mean, you can't have the same design work for both. So again, back to the kinematics of this. It's something that, you know, just the ergonomics were already complicated. But then there's the whole problem of how do you make it not look like anything else that already exists? How do you make it look like one of yours? We have very strong design codes. I mean, how would you put a flared lug into an integrated bracelet? It's integrated. Well, it seems you've kind of done it.

1:00:04Exactly. Exactly. Which, this makes no sense to anybody listening, but you're looking at it and it is, right? And I think we've gotten to the point where I cannot put branding on the dial. We've slowly disappeared. You wanted to get to the point where the design code is recognizable enough that whether there's branding or not on the dial, you know what it is. All of the new stuff, we hide it. We do our best to hide it in little elements in various places to the point that now we don't need it. Well, that's an achievement. When will we see, what are you calling this? Starfield. Starfield. When will we see this?

1:00:43Oh, wow. We want to call it Windows 95, but apparently that's IP protected. Oh, this is quite something. I'm looking at the case back here and I'm seeing what appears. Don't describe it, please. Thank you. Thank you. Thank you. We'll see it in more detail later. There we go. I'm seeing something. Yes, you're seeing something. You're seeing some things happening. The name makes sense. Yes, exactly. And I mean, and there's this. Yeah, you just took off one of the links. I mean, this I think we can describe, but like. micro adjust in one millimeter increments times four on both sides. Toolless adjustment, patents pending, positive engagement.

1:01:20So once it's in, it's in. It doesn't come off. Wow. You are indeed focusing on the engineering side of things lately. And that is why he's allowed to experience the next Apple Watch. This is going to be great. When are we going to see this? In the next two to four months. Yeah. Q1. Call it Q1. Q1. Fantastic. What's the material? Steel for the... So the first one will be our launch edition. We're only doing 20 of them. Okay. And then we'll, of course, have a production version and other special editions of it. Can I ask what am I seeing here on the... You can ask. I'm not going to tell you on air.

1:02:00Yeah. But look, the magic is honestly in the way it wears. You need to try it on. May I? Yeah, absolutely. The magic is in the way it wears because, again, we're back to kinematics of bracelet and everything else. But did you see this as, you know, you felt you had to also tick off the integrated bracelet? No, we would only do it if we could do it right. How long have you been working on this or the idea of an integrated bracelet? It's like four years. With flared blokes. More than four years, I would say. Oh, wow. It's symmetric, so left or right first, it doesn't really matter. Too big, too small?

1:02:33No, it's perfect. That wears quite nicely. And I see... It's easy if you take it off to do that. You can expand it without opening it, but it's easier to take it off to close it. So, yeah, I mean, I should think of Ming not only as a watchmaker, but as a bracelet expert and designer and manufacturer. It is a lot harder to make a bracelet than a watch because there's so many more pieces and they have to move. If your watch case moves, you usually have a problem. You do have a problem. And so, yeah, from what little I've learned about the industry, One of the pressure points has been, you know, quality made bracelets from Switzerland or wherever.

1:03:16And there hasn't been a lot of innovation on the bracelet side. So I think we're all looking forward to that. Ming and Praneeth, thank you very much for welcoming us here. And we appreciate it. No, thank you for the chat. Thanks for having us. Great. Have a great one.

1:03:35And that's the business of watches for this episode. We hope you enjoyed. Please head on over to Hodinkee.com where you can join the discussion and leave any comments or questions about this episode or the business of watches in general. Who knows? We might even answer your question on a future episode. Thanks for listening and see you next time.

1:04:11Thank you.