#351 The Founder of Rolex: Hans Wilsdorf

Hans Wilsdorf, founder of Rolex, revolutionized the watch industry through relentless innovation and strategic marketing. He began with the precise, waterproof, and self-winding wristwatch concepts, overcoming industry skepticism. Wilsdorf's marketing genius included leveraging notable events and personalities to amplify Rolex's prestige. His insistence on quality and branding transformed Rolex into a symbol of excellence. Even after his death, the Hans Wilsdorf Trust ensures Rolex remains private and focused on quality, embodying Wilsdorf's vision. His story underscores the power of belief, persistence, and strategic branding in building a timeless legacy.

• The book "Rolex Jubilee" is a rare, four-volume history of Rolex, first published in 1946 with only 1000 copies.
• Volume one was written by Hans Wilsdorf, the founder of Rolex, detailing his personal story and the founding of the company.
• Hans Wilsdorf was born on March 22, 1881, and became an orphan at age twelve after the death of his parents.
• His uncles decided to sell the family business to fund boarding school education for Hans and his siblings, teaching him self-reliance early in life.
• Hans attributes much of his success to the self-reliance instilled by his uncles and his education, particularly in languages.

"I was born on March 22, 1881. My mother's early death was soon followed by that of my father's. And at age twelve, I was an orphan."

• Hans Wilsdorf's early life was marked by tragedy and the loss of both parents.

"My mother's brothers decided that it'd be wiser to liquidate the prosperous business which had belonged first to my grandfather and then later to my father, believing that in this way, we children could be better prepared for life without having to call upon anyone for help."

• His uncles' decision to liquidate the family business and fund their education was pivotal in shaping Hans's future.

"Our uncles were not indifferent to our fate. They made me become self-reliant very early in life. Looking back, I believe that it is to this that much of my success is due."

• The self-reliance taught by his uncles was crucial to Hans's later success.

• Hans attended a boarding school of excellent repute, where he developed a liking for mathematics and languages, which later played a significant role in his career.
• At age 19, Hans began working in the watch industry and continued for the next 60 years.
• Initially, there was no wristwatch industry for men, which Hans would later help to establish.

"Just as we're placed in a boarding school of excellent repute, where we received that sound education so necessary to the man who has to make his own way in the world, I showed a particular liking for mathematics and languages."

• Hans's education in languages and mathematics was foundational for his career.

"At the age of 19, he, Hans, is going to start working in the watch industry at 19, and he will do so for the next 60 years, until his death."

• Hans's long career in the watch industry began at age 19.

• Hans worked as an English correspondent and clerk for a Swiss company, Kuna Cortan, which exported Swiss pocket watches.
• His multilingual skills were crucial for handling business correspondence in different countries and languages.
• This experience gave him a deep understanding of international strategic marketing.

"Kuna Corten, it's a Swiss company. All they do is they export Swiss pocket watches. The watch industry, like 99, maybe more than 99% of the watch industry at this time in history is pocket watches."

• Hans's early work involved exporting Swiss pocket watches, which dominated the watch industry at the time.

"This helps him get a really good understanding of international strategic marketing."

• Hans's role in handling business correspondence provided him with valuable insights into international marketing.

• At age 24, Hans founded Wilsdorf and Davis, which later became Rolex.
• Initially, they were not watch manufacturers but purchased watches from Swiss manufacturers and sold them to retailers.
• Hans's belief in the potential of wristwatches for men, despite industry skepticism, was a driving force behind Rolex's success.

"I soon gained confidence in myself, and in 1905, at the age of 24, I decided to set up in business, feeling that my training and education had prepared me to stand on my own."

• Hans founded his own company at age 24, confident in his training and education.

"Wilsdorf and Davis was. They were not watch manufacturers. They purchased watches from Swiss manufacturers and then would sell them to retailers."

• The initial business model of Wilsdorf and Davis involved buying and reselling watches.

• Hans was a collector of pocket watches and saw the potential for wristwatches for men, despite widespread skepticism.
• Wristwatches were initially considered unmasculine and impractical, but Hans believed in their potential.
• World War I played a role in popularizing wristwatches for men, known as trench watches, used for coordinating battlefield movements.

"For men, the wristwatch or the bracelet watch was an object of derision. The idea of wearing a watch on one's wrist was, at this time, thought contrary to the conception of masculinity."

• Wristwatches for men were initially ridiculed and considered unmasculine.

"Prior to World War one, wristwatches for men did not exist."

• The wristwatch industry for men did not exist before World War I.

• Hans faced several challenges in promoting wristwatches for men, including concerns about durability, dust, water, and accuracy.
• Despite these challenges, Hans remained determined to develop and popularize wristwatches for men.
• His belief in the wristwatch's potential led to innovations that addressed these challenges.

"The mechanism required by this type of watch must of necessity, be small and delicate, and could therefore never withstand the violent gestures of the hand and arm."

• One challenge was the perceived fragility of wristwatch mechanisms.

"Dust and water would rapidly spoil the mechanism."

• Another challenge was protecting the wristwatch mechanism from dust and water.

"Accuracy and regularity of working could never be attained with such small, so small of a movement."

• Ensuring accuracy with small movements was also a challenge.

• Hans's vision extended beyond merely creating a product; he saw the wristwatch as a revolutionary change in the watch industry.
• He believed that wristwatches would eventually replace pocket watches and become a significant market.
• His innovative approach and relentless focus on solving problems were key to Rolex's success.

"My personal opinion is that the pocket watches will almost completely disappear and that wristwatches will replace them definitively. I am not mistaken in this opinion. And you will see that I am right."

• Hans's visionary belief in the future of wristwatches was unwavering.

"The task I undertook meant the overcoming of enormous difficulties. He just laid out all the problems that were preventing other people from doing this. And yet today, after 40 years of striving, it seems to me that I have surmounted them."

• Hans recognized the significant challenges but remained committed to overcoming them.

"The wristwatch was bound to bring about a certain revolution in the industry. It would have to cause an increase in sales, not only on account of its novelty, but also because by its very nature, it called for more frequent renewal, more exposure to damage than the pocket watch."

• Hans saw the wristwatch as a revolutionary product that would drive increased sales and industry growth.

These comprehensive study notes cover the key themes and ideas discussed in the transcript, providing an exhaustive overview of Hans Wilsdorf's life, the founding of Rolex, and the development of the wristwatch industry.

• Hans Wilsdorf's understanding of human psychology transformed the wristwatch into a fashion accessory.
• Placing the product visibly on the wrist increased its spread and desirability.

"The wristwatch is the type of product of which each individual likes to have not only one, but several."

• Explanation: Hans recognized that making the wristwatch a visible accessory would increase its appeal and demand.

"I had very early realized the manifold possibilities of the wristwatch. And feeling sure that they would materialize in time, I resolutely went on my way."

• Explanation: Hans's foresight and belief in the potential of wristwatches allowed Rolex to outpace competitors stuck on pocket watches.

• The concept of the "highest order bit" from computing is applied to business, emphasizing the most significant factor for success.

"In computing, the highest order bit, also called the most significant bit, is the bit position in a binary number having the greatest value."

• Explanation: This analogy highlights the importance of identifying and focusing on the most critical element for success.

"You got to have passion, because if you're doing anything that's worthwhile, it's so difficult that if you don't love it, you don't have passion. You're going to quit."

• Explanation: Passion is essential for enduring the challenges of worthwhile endeavors.

"I think actually, the highest order bit, it's belief. It's belief in yourself, and it's belief in your idea."

• Explanation: Belief in oneself and one's idea is crucial for overcoming obstacles and achieving success.

• Ted Turner's belief in the potential of a 24-hour news network led to the creation of CNN and his success.

"Clearly, the companies for whom the economics of a 24 hours news network would have made the most sense were the big three broadcasters."

• Explanation: Turner saw an opportunity that established broadcasters missed due to their lack of belief in cable.

"He had a belief in cable. And the crazy thing is, like, there's a great description of this."

• Explanation: Turner's belief in cable television was a key factor in his success, despite lacking the resources of his competitors.

• Hans's strategic investments and partnerships were crucial for Rolex's success.

"My interest had been roused by this innovation, as the mechanism created by Eagler had proved very successful from a technical point of view, as well as being accessible in price."

• Explanation: Hans recognized the value of innovative watch movements early on and leveraged this knowledge to advance Rolex.

"After founding my firm in 1905, I go and place an order with Egler. This was the first step forward in our climb to success."

• Explanation: Partnering with Egler was a pivotal move that set the foundation for Rolex's success.

• Hans's innovative marketing strategies and brand-building efforts were instrumental in establishing Rolex.

"I decided to launch the Rolex trademark by means of an intensive advertising campaign."

• Explanation: Hans's commitment to advertising was key to establishing Rolex as a leading brand.

"Rolex was effectively the first people to have real marketing dollars put behind a watch. Rolex did this in a concentrated way, and they have continued to do it in a way that is simply just unmatched by others in their industry."

• Explanation: Rolex's sustained and strategic marketing efforts have kept it at the forefront of the watch industry.

• Hans experimented with various brand names before settling on Rolex, demonstrating the importance of iteration and learning from experience.

"He had Unicorn, Rolco, Elvira, role Watch Company, Falcon, Gen X, Lonex, Rolex, Rolexis, Lexus, Hoffex, and Wintecs."

• Explanation: Hans's numerous attempts at branding reflect the trial-and-error process in finding the perfect name.

"It was time to think of giving our watches a name of their own, a trade name, what we would call a brand name."

• Explanation: Hans realized the importance of having a unique and memorable brand name for long-term success.

• Rolex's decision to maintain advertising during the 2008 financial crisis solidified its market position.

"Rolex did not. Rolex put the pedal down and it was really 2008, 2009, 2010, which really elevated Rolex in the United States to a level that it is today."

• Explanation: Continuing to invest in advertising during economic downturns can provide a competitive advantage.

"If you speak to them directly, meaning Rolex, the company directly, they'll credit that period as a turning point for them in the US."

• Explanation: Rolex credits its sustained advertising during the financial crisis as a crucial factor in its long-term success.

• Companies that maintained or increased advertising budgets during recessions captured more market share during recovery periods.
• Example: Rolex did not cut back on their ad budget during the 2008-2010 recession but increased it to gain brand recognition.

"It's tempting during a recession to cut back on consumer advertising. At the start of each of the last three recessions, the growth of spending on such advertising has slowed by an average of 27%. But consumer studies of those recessions have showed that the companies that didn't cut their ads had, in recovery, captured the most market share."

• Cutting back on advertising during tough economic times can lead to a loss in brand momentum, which is harder to regain later.

"It is much easier to sustain momentum than restart it."

• Hans Wilsdorf, founder of Rolex, insisted on selling watches with the Rolex brand name, not the retailer's name.
• This strategy took years to implement fully, initially facing resistance from retailers.

"I'm gonna wholesale my watch, and you're gonna put my brand name on it, not yours."

• Ensuring the Rolex name was visible on the watches helped build brand recognition and customer demand.

"Customers would demand Rolex branded watches, and the retailers would have to come to him."

• Hans Wilsdorf focused on three main principles for Rolex watches: precision, waterproofing, and self-winding mechanisms.
• Achieving these principles took decades, with significant milestones like the first waterproof watch and the perpetual movement.

"I want the watches to be precise, I want them to be waterproof, and I want them to be self-winding."

• Hans Wilsdorf sought certificates of performance from independent testing establishments to validate the precision of Rolex watches.
• The first Class A certificate for a wristwatch was awarded to Rolex in 1914, enhancing its reputation.

"Rolex achieves the first Class A certificate ever to be awarded by an observatory for a wristwatch."

• Using social proof in advertising, Rolex emphasized being the first and only brand to achieve such precision.

"The Rolex still remains the only wristwatch in the world to gain certificates at Q."

• Hans Wilsdorf acquired a patent for the world's first waterproof seal for a wristwatch in 1926, leading to the creation of the Rolex Oyster.
• The waterproof feature was exclusive to Rolex, adding another layer of competitive advantage.

"The waterproof case was finally created in 1926. This invention was applied exclusively to the Rolex watch."

• Marketing strategies included leveraging events like a swimmer wearing a Rolex Oyster to demonstrate its waterproof capabilities.

"On November 27, 1927, I reserved the front page of the Daily Mail newspaper, at a cost of a ton of money, for an ad proclaiming the success of the first waterproof watch."

• The development of the self-winding "perpetual" watch was another significant innovation by Rolex.
• This feature ensured the watch would run without interruption, a longstanding challenge for horologists.

"The creation of the perpetual watch, whose movement is self-winding and guaranteed to run without interruption."

• Hans Wilsdorf associated Rolex with high-profile individuals and events to enhance the brand's prestige.
• Notable endorsements included Winston Churchill, Dwight D. Eisenhower, and Chuck Yeager.

"Men who guide the destinies of the world wear Rolex watches."

• Rolex's marketing emphasized its association with extreme achievers and exclusive quality.

"Rolex, the masterpiece of watch craftsmanship, sold exclusively by quality jewelers."

• Hans Wilsdorf's approach was to continuously innovate and acquire new technologies to maintain Rolex's market leadership.
• This strategy included buying patents and integrating them into Rolex products quickly.

"He would buy the inventions of other watchmakers and then combine their ideas with his efforts."

• The rapid acquisition and implementation of new technologies, like the waterproof seal, set Rolex apart from competitors.

"He buys the patent in July, 60 days later, he already owns the patent."

• Hans Wilsdorf's meticulous focus on quality, innovation, and strategic marketing established Rolex as a leading brand in the watch industry.
• His principles of precision, waterproofing, and self-winding mechanisms, combined with effective branding and endorsements, created a lasting legacy for Rolex.

• Hans emphasized that the waterproof watch was a prerequisite for the development of the perpetual (automatic) watch.
• The waterproof case allowed for the consistent functioning of the automatic watch.
• Hans believed the perpetual watch represented the future of watchmaking.

"Without the waterproof watch, the perpetual could never have been discovered."

• The waterproof feature was essential for the evolution and reliability of the automatic watch.

• Inventing a self-winding watch was a long-standing goal in the watch industry.
• Many famous watchmakers had attempted to create an automatic watch but failed.

"Inventing the automatic wristwatch that could wind itself was the dream of the ages in the watch world. For centuries, many famous watchmakers had tried to perfect the automatic, or self-winding watch, but none were successful."

• The automatic watch was a significant milestone that required overcoming numerous historical challenges.

• Simplifying products for consumers can drastically expand the market.
• Steve Jobs' approach to creating user-friendly personal computers parallels Rolex's innovation in watchmaking.

"For every one of them, there were a thousand people who would want the machine to be ready to run. In other words, if we can make this easier, we can expand the market by 1000."

• Making products more convenient and user-friendly can lead to exponential market growth.

• Hans Wilsdorf's career spanned 60 years, during which he significantly contributed to the watch industry.
• He was a pioneer in recognizing the potential of wristwatches for men.

"I entered the watch business as a young man at 19 years of age. That was 60 years ago, when wristwatches didn't exist. Wristwatches for men didn't exist at all."

• Hans played a crucial role in the development and popularization of wristwatches.

• Hans established the Hans Wilsdorf Trust in 1944, ensuring Rolex would remain private and focused on quality.
• The trust's bylaws prevent Rolex from being sold or going public.

"In 1944, Hans set up the Hans Wilsdorf Trust, which owns and controls Rolex. To this day, he brilliantly set up the bylaws of his trust so Rolex could never be sold or made public, so it would never have to worry about catering to anything but making timeless watches."

• This structure ensures that Hans' vision for Rolex continues to be executed long after his death.

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