How This Detroit Startup Got People to Pre-Pay for a Watch Called Shinola
After founding and working at FOSSIL for 26 years, Tom Kartsotis was looking for the next chapter in his career. He decided to visit Detroit in 2011 to see if it would be possible to build a watch factory there with the idea that this factory would create jobs by making watches for other watch companies.
His coworkers at Bedrock Manufacturing Company didn’t know what to expect. They were pleasantly surprised by how enthusiastic and supportive the Detroit community was about the idea. The team became convinced that the concept was possible.
The factory was built out and opened in May of 2012 and for the next nine months, Bedrock’s Swiss partner, Ronda, began to train dozens of manufacturing employees in Detroit, many of whom came from the auto industry, to manufacture intricate watch movements. In March of 2013, the team felt certain that the workforce in Detroit could, in fact, make a product that could be competitive on a global scale.
The next step was to make a watch. The factory needed something to show to their future customers. They ordered the parts for 2,500 watches that would be produced under the irreverent brand name of Shinola. An ad was placed in newspapers where consumers were being asked to pay $550 four months in advance for a watch that nobody had ever seen or touched under the brand of a long defunct shoe polish, Shinola.
The Bedrock team did not think that many of the watches would sell, but they hoped that by placing this order that the workers would begin to start making a real watch and that would lead to orders from other companies. They were astonished when the watches sold out in eight days.
The team realized that there was a massive appetite for what Shinola was producing -- beautiful products made in America that lead to world-class manufacturing jobs. Shinola had $80 million in total orders in the first 18 months after its launch, the kind of momentum that most companies can only dream of.
They began sourcing leather and other materials as fast as they could from Florida, Maine, Illinois and other domestic suppliers. Fast forward to today, and Shinola sells watches, bikes, journals, leather goods, apparel, pet accessories, footballs and other lifestyle items at retail locations across the country. The company has over 500 employees, almost 400 of which are based in Detroit (including one Venture for America Fellow). It is not yet profitable but hopes to be in the next two years.
I first met Tom when we were both speaking at the same event in the Midwest. I heard pieces of the story above -- and it blew my mind. Tom is the humblest, most down-to-earth entrepreneur I’ve ever met. You literally can’t even find a picture of him online.
He started Shinola not as a money-making venture, but as a project to see how many American jobs he could create. When I asked him about it, he shrugged and said, ‘We did it for sport. We did it to create jobs and simply to see if it was possible.’
I’m proud to say that several Venture for America alums are following Tom’s example in starting companies in Detroit. Banza makes chickpea pasta and has almost 30 employees in its Michigan factory. Castle helps property owners manage their properties digitally and employs 25 plumbers, handymen and contractors. Ash and Anvil makes shirts for short guys.
But no one has impacted the national conversation around the Detroit manufacturing revival like Shinola. Shinola wasn’t born of a government policy or tax incentive -- it was born of an American entrepreneur’s desire to build things in America again. They’re meeting a demand that no one knew existed -- creating great products and providing hundreds of jobs to people that need them.
I visited Shinola’s Detroit showroom last year, and I bought a Brakeman watch. I love it. I used to wear a Swiss watch -- I haven’t worn it since.
Andrew Yang is the founder and CEO of Venture for America, a New York City-based nonprofit organization focused on placing top-college graduates in startups for two years in emerging U.S. cities to generate job growth and train the next generation of entrepreneurs. He is also the author of Smart People Should Build Things.