Timing Is Everything This heir to a watchmaking dynasty struck out on his own. Now he's the one to watch.

Why would anyone abandon an incredible job at great financialrisk to start a business? That's what critics and naysayersasked Carlo Crocco when he left his family's watchmakingdynasty to start Geneva, Switzerland-based MDM Geneve, manufacturerof the exclusive Hublot watch.

Crocco turned a deaf ear to the critics, convinced he could dowhat they thought impossible. The result is a company that producesone of the world's most distinctive watches. This year,Crocco's company will rack up sales of $22 million. But gettingto that point was a study in perseverance, conviction and enormousrisk-taking.

When Crocco decided to leave the family fold in 1976 at age 32,almost everyone who knew him was convinced he had a few screwsloose. As scion of Italy's premier watchmaking family, theMilan-based Binda company, Crocco had it made. In fact, until hedefied tradition, no family member had ever left the firm.

It's easy to understand why. Founded by Crocco'sgrandfather in 1906, the time-weathered company was as solid as theRock of Gibraltar. Today, Binda controls the largest watchdistribution network in Italy. Like his parents, uncles andcousins, Crocco grew up in the business. He had become its topmarketing and creative person, and was destined to take the helm ofthe sprawling multimillion-dollar empire. But Crocco had otherplans.

The need to go off on his own became an all-consuming drive hecouldn't deny. "Growing up in a watchmaking family, therewas no question about what I was going to do for the rest of mylife," he recalls. "When I told my uncles I was leaving,they thought I was crazy."

It was no snap decision, either. "I agonized over it,"Crocco says reflectively. "But when I compared the pros andcons, I felt I had no choice. I had been working for myfamily's business since graduating from college. I loved thebusiness, but I had my own ideas I wanted to test. I wanted to makemy own statement."

Not only was Crocco bent on starting his own company; he decidedto relocate to Switzerland to do it. "If you're going tobe in the watch business, Switzerland is the place to be," hesays.

Crocco's most important reason for setting up shop inSwitzerland was to create a unique watch that would enjoy worldrecognition. "My vision was to produce somethingdifferent," he says. "I envisioned a timepiece thatflawlessly merged Italian styling with Swiss craftsmanship."Watch connoisseurs know that's as close to perfection as anyonecan get. If Crocco's plan worked, he'd capture thehearts-and pocketbooks-of fickle, fashion-forward Europeans.

Taking His Time

Making his vision happen took four years and $4 million, some ofwhich was Crocco's, the rest borrowed from banks. Crocco sparedno expense creating the right product. He built a small factory andhired a battalion of top Swiss designers to execute his ideas.

In 1980, Crocco's creation was born, and MDM Geneve wasformed. He dubbed his watch the Hublot (it means"porthole" in French) and introduced it atSwitzerland's prestigious Basel watch fair. "Thewatch's nautical theme implies adaptability," saysCrocco.

"Most handcrafted luxury watches are heavy and meant to beworn only on special occasions," explains Michael Goldstein,vice president of MDM America Inc. "But the Hublot's mostdistinctive feature is that it can be worn at state dinners or theopera, yet is also suitable for playing golf and deep-sea diving.This made it unique."

Guaranteed to be water-resistant to a depth of 165 feet (and upto 1,000 feet for professional divers' watches), the Hublot wasmade to take a beating. But the watch's most distinctivefeature, according to Crocco, is its band. It's not made ofgold, silver, leather or exotic skins like lizard or ostrich.It's made of rubber.

The idea struck Crocco on a flight from Paris to Geneva."Absentmindedly, I began to color in my watchband with a black[felt-tip pen]," he says. "When I realized what I wasdoing, I loved the effect. I knew a black strap would smartlycomplement the black dial of several of my models and also contraststrikingly with the dials of other models without competing withthe timepiece's lines."

Yet Crocco quickly discovered great ideas are easy to come bybut difficult to execute. He estimates it took almost $1 million inresearch and development costs to come up with the perfect rubberwatchband. In the end, though, it was money well spent. The resultswere startling and revolutionary.

Crocco developed a tempered rubber that is virtuallyindestructible. "Unlike conventional metal and leather bands,[the Hublot band] is resistant to chemical deterioration," hesays. "It absorbs body oils and conforms to the shape of thewearer's wrist. And it has zero weight, making it ideal forsports and virtually any activity."

The biggest challenge: inserting steel plates into the ultrathinstrap to hold the watch securely. When all was completed, thelightweight timepiece and sleek black rubber watchband added up toan exquisite watch that retails for $2,500 to $60,000. Preciousstones knock the price up considerably.

Clearly, Crocco was breaking the rules-and at first, manysnobbish watch dealers thought the rubber watchband was heresy.Eventually, however, the watchband came to be viewed as a key toCrocco's personality, a symbol of the reason he went off on hisown. Wrote one journalist, "The rubber strap capturesCrocco's penchant for originality and endurance, his contrarynature and his zest for bucking tradition."

Unique as the finished product is, Crocco was ready to pull hishair out when no one showed up the day he debuted his watch at the1980 Basel watch fair. "I was nervous, to say the least,"he chuckles. Like any anxious entrepreneur who has just investedyears of his life and a pile of money, he began entertaining secondthoughts. Was his watch too far-out for the world's top watchdealers? Or maybe the Hublot was too far ahead of its time.

Thankfully, Crocco's anxiety was short-lived. The second dayof the fair, a few people trickled in. By the third day,Crocco's little booth was buzzing with activity. It took awhile for dealers and buyers to discover the Hublot, but once theydid, the elegant timepiece became an immediate topic ofconversation.

"That was the beginning of the story," Crocco says.Orders followed as the Hublot turned in a stunning debutperformance. But the real work lay ahead. The next and mostcritical step was marketing the product. Although first-year saleshit a respectable $2 million, Crocco wanted more. "It's agood feeling knowing you have a unique watch," he says,"but if you can't break into the luxury watch market,you're doomed."

Marketing Maven

Just as Crocco knew what he wanted his watch to look like, healso had definite ideas about how it should be positioned. Tocapture the attention of well-heeled buyers, he pinpointedexclusive jewelry stores. "Image is critical," hestresses.

The distribution of the watches was also important. Rather thanturn the distribution process over to a wholesaler, Crocco set upoffices in key European cities and set his sights on breaking intothe U.S. market.

Once the distribution machinery is in place, it takes time,patience and lots of high-class selling to launch a luxury product,according to Goldstein. "This is not a fast-buckbusiness," he says. It requires a subtle blend ofsophisticated marketing and advertising, superior service andlow-pressure selling. And even if all those factors are workingtogether, it still takes about five years to build relationshipswith exclusive jewelry stores.

"The watch market is crowded," Goldstein adds."There is plenty of competition in all price ranges." InCrocco's market, the very high end, that means facing offagainst formidable superstars like Rolex, Patek Philippe, VacheronConstantin and Cartier.

Getting retailers to commit to any watch line takesarm-twisting. And persuading an exclusive watch dealer to plunkdown hefty sums for a pricey watch that may be difficult to sellrequires the patience of Job. "You can't blame retailersfor being skeptical," says Goldstein. "We were askingthem to invest thousands of dollars in a watch they'd nevertested."

Most exclusive jewelry stores didn't know what to make ofthe offbeat timepiece. Some felt the rubber watchband was absurd, aradical break from tradition. In short, "many dealers wereafraid of being pioneers," says Edward Suhyda, thecompany's western regional sales manager for the United States."They were afraid of going out on a limb."

Nobody understands the dealer mentality better than Suhyda.Prior to joining the company, he owned a jewelry store in the Ft.Lauderdale, Florida, area and was the largest Hublot dealer in theUnited States. He loved the watch so much that in 1994, he asked tojoin the company.

The key to the Hublot's success was committed salespeoplelike Suhyda who believed in the product and could walk intoexclusive jewelry stores and make a compelling presentation."Selling the Hublot was a two-step process," Goldsteinrecalls. "First, we had to convince retailers to try it. Oncethey were convinced, we had to teach them how to sell it to theircustomers."

Americans were a particularly hard sell. Crocco introduced theHublot to the United States in 1984 but didn't make realinroads until 1990.

"Breaking into the States was an uphill journey all theway," Crocco says. "In the mid-1980s, the American marketwasn't ready to understand the concept. Even after potentialbuyers got past the quirkiness of the rubber strap, they didn'tunderstand the watch was a long-term investment. They couldn'tsee spending a lot of money on this watch when they could buy asturdy Japanese watch for much less."

"Most Americans were unwilling to buy the Hublot because ithad no track record," Suhyda concurs. "They'd heardof Rolex, but they had never heard of Hublot and were skeptical.They mistakenly thought they were spending a great deal of moneyfor a rubber watchband. We had to explain to them that they werespending a lot for the watch, not the band."

Crocco wouldn't give up. Building his family's watchline had taught him that a sophisticated publicity campaign usingslick print ads in top consumer and trade magazines wouldeventually work. In 1993, he launched a marketing campaign to letpotential buyers know that an impressive lineup of the rich andfamous proudly wear Hublots. The list includes King Carl Gustav ofSweden, Prince Albert of Monaco, Giorgio Armani, SylvesterStallone, Candice Bergen, Elton John, and former New York Knickscoach Pat Riley.

By 1985, the Hublot was enjoying well-deserved recognitionthroughout Europe. But just as sales hit a steady upswing, Croccodiscovered an unforeseen problem: Counterfeit knockoffs of theHublot were popping up all over the place.

Imitation is said to be the highest form of flattery, but Croccowasn't amused. The Hublot knockoffs put a serious crimp insales. Although Goldstein says most were "cheapimitations," some of the copies were so good, it was hard totell them from the real thing. Stopping the counterfeiters was along and expensive process. It took a few years and eye-poppinglegal fees, but Crocco prosecuted and put the counterfeiters out ofbusiness.

Dreams Come True

Today, the Hublot is a hit worldwide. It's been quite aride, but Crocco's dreams have come true. Looking back, he saysit's an incredible feeling to find out your instincts wereright. It took longer and required more money than anticipated tolaunch his company, but the end dramatically justified themeans.

"Early in the process, I learned that you can't giveup, no matter how tough it seems," Crocco says. "If youlove and believe in what you're doing, stick with it. Thingswill turn around." This elegant entrepreneur, heralded as the"watchmaker's watchmaker," is living proof ofthat.

Contact Source

Bob Weinstein is the author of eight books and a regularcontributor to Entrepreneur.