The Business of Watches [002] Sylvain Berneron On His Company’s Work Philosophy, Business Structure, And Future Watches¶
Published on Wed, 17 Sep 2025 15:00:00 +0000
The man and designer behind Berneron tells us why he's turned down millions in investor funding and why he's making so few watches, even as demand soars.
Synopsis¶
In this in-depth episode of "The Business of Watches," host Andy Hoffman sits down with Sylvain Berneron, the French designer-turned-independent watchmaker who has rapidly become one of the most talked-about names in haute horlogerie. Recording from Berneron's new 650-square-meter headquarters in Neuchâtel, Switzerland, the conversation explores the brutal realities of building an independent watch brand from scratch.
Berneron discusses his unconventional path—from working at BMW's design center in Munich to senior positions at Richemont and Breitling, before launching his eponymous brand in 2023. His debut piece, The Mirage, featuring an all-gold shaped movement and case, stunned collectors and is now allocated three years out. Rather than simply creating beautiful watches, Berneron is methodically building a sustainable business with a twelve-year plan to reach 600 pieces annually—a production level that would place him among established independents like F.P. Journe and MB&F.
The discussion reveals the intense personal sacrifices required: Berneron invested his entire life savings of one million Swiss francs, worked seven days a week for four years without proper holidays, and navigated the constant tension between artistic vision and financial survival. He details his innovative approach to company culture, including a transparent salary grid with only a 3x multiple between lowest and highest paid employees, and an equity-sharing program that allows all employees to become shareholders after three years.
Berneron explains his deliberate production strategy of adding only 50 pieces annually with each new collection launch, prioritizing sustainable growth over short-term profits despite having demand for five times his current output. He's declined investment offers up to 90 million Swiss francs to maintain creative freedom, viewing his company as a "moral structure" that should provide meaningful employment and contribute positively to the local economy. The episode concludes with Berneron's philosophy that true artistic expression in watchmaking requires personal endangerment—putting yourself at risk for the sake of creation—and his conviction that maintaining human values and company culture matters more than producing the absolute best product at any cost.
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Transcript¶
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| Andy Hoffman | This episode of the business of watches is brought to you by Panorai. 2025 marks the year of the Luminore, a celebration of bold Italian design, technical innovation, and the legacy of Panorai's most iconic collection. Welcome to the business of watches where horology meets high finance and each tip tells the story of markets, margins, mishaps, and mechanical mastery. I'm your host, Andy Hoffman, Senior Business Editor at Hodinky. In this series, we dive deep into the global watch industry, a place where centuries-old craftsmanship intersects with billion-dollar valuations, executive brand strategy, and investor speculation. From Swiss valleys to Silicon Valley, we trace the movements shaping this uniquely resilient sector. Just how big is the business of timekeeping? Well, some estimates place the entire watch industry from ultra-luxury maisons to smartchesw andat micro brands at north of $100 billion globally. But behind that figure is a complex web of legacy, innovation, and ever-shifting consumer tastes and demand. This is the podcast for collectors, analysts, watch buyers and sellers, and anyone who's fascinated by the intersection of wristware and wealth. Because if time is money, then money is most certainly time. So let's get down to business. From relative obscurity just a couple of years ago, Sylvain Berner's name is suddenly on the lips of the world's top collectors of independent watches from Singapore to London and Los Angeles. Berneron is a bit of a different breed. He's French, not Swiss, and he's not a watchmaker by training. Rather, he's a designer, one with a clear creative vision, plenty of ideas, and a burning need to express himself through timepieces. He worked at BMW for years before indulging his passion for watch design and joining Richemont and then Brightlink, where he helped George Kern revive the Swiss brand. In 2023, Bernard stunned the watch world with his first piece, The Mirage, a unique, time-only shaped dress watch with an all-gold-shaped movement and spring bars to boot. Collectors went gaga over the details in the original 38mm Mirage is now fully allocated for the next three years. Burnerall followed up with a 34mm piece that's also next to impossible to get, as there are only 24 being made per year in each variation. Along the way, Bernerall developed a reputation as a mercurial, sometimes emotional artiste who had poured his life savings into creating a watch brand that bears his family name. And for his next creation, Berneron got complicated. A new collection called Quantiam to follow the Mirage. We just got to see a prototype of the innovative yet classic in design Quantime Annuelle, an annual calendar that features never before seen elements in the platinum case. For more than a few collectors, it was the most impactful and impressive piece they saw at Geneva Watch Days, an event bursting with novelties. What's so interesting to me about Berneron is that he isn't just conjuring a series of stunning watch designs, he's building a new brand and a company. And he has a plan. If it succeeds, he'll be producing more than six hundred watches annually within a decade. That's more than some of the stalwart indie names like Grubble Forcey or Max Booser and Friends make right now. Bernard isn't just thinking design. He's thinking how to make his designs a sustainable business. That's what we focused on when I visited him at his new company headquarters in New Chatel a couple of months ago. Here's our in-depth conversation with Sylvan Berneron. Sylvain Berneron. Good morning. Welcome to the podcast. We are at your fairly new atelier and office facilities here in Neuchatel. Tell me about this space that we're in. |
| Sylvain Berneron | Good morning, Andy. Thank you for being here. I'm looking forward to this discussion with you, uh, because business is probably my second passion, not business as such, but entrepreneurship I should say is also a big passion of mine alongside watchmaking. So we are, as you said, in our new uh headquarters located in Chatel, Switzerland, and we uh moved in this new office a little over a month ago now uh it's six hundred fifty square meters which is a bit ridiculous now because we are only uh six people working in it as we speak. Uh but I'll have I think the the the chance to explain why we took this decision later in the discussion, I suppose |
| Andy Hoffman | . Absolutely. And you know what kind of atmosphere feel facilities infrastructure are you trying to create with this space and why did you choose this |
| Sylvain Berneron | space? It's a multi-layered decision I took in consideration three main things. First was the the macro level of the decision is where do you locate the company from a logistic and strategic standpoint. So we are for those who knows the the region close to the Panera headquarter on the high bankings of of Neuchatel, so to speak, which is very convenient for us because we are in between the Neuchâtel train station and La Chautefon, which are the two places which we visit the most. So clients and friends and employees can access to the main train line which goes from Zurich to Geneva, which is a very strategic point that we want to reach from the company through public transport. That was a must for me. And the second is also reducing the distance, the driving distance to the various suppliers that we work with. So that's why we are locating in this uh street precisely. So that was taken into consideration carefully. The second point is the uh architecture of the building itself. I know many collectors like the romantic approach of having a old barn or an old farm or something to make a watchmaking atelier. Keep in mind 21st century watchmaking at the levels that we operate now, the independence requires almost a clinical uh working method, which means uh I need a very stable building which I can load up to a tonne to a square meters to have machines, benches, all the equipment that needs to be extremely s not only stable, uh but, silent, climatized, uh dust proof, uh, etc. etc. And then you cannot have these conditions simply in old buildings unless if you spend millions of renovating |
| Andy Hoffman | As you say a lot of people have a romantic idea of what an atelier um should look like. It should be an old barn somewhere uh on a hillside. I mean, I'm not you know, we don't need to give your address away, but we're in basically in |
| Sylvain Berneron | an industrial park. Yes, indeed. We are in an in industrial park right next to the forest. Uh it's not a massive uh industrial park like you could find close to an airport or something, but uh you have Paneray right next to the street, we have pharmaceutical buildings on the other side. So we are still as, you said, in in an area where you have I think a couple of thousand of people working uh in in modern buildings. We are currently sitting on the third floor of a building which has uh close to four meter ceiling heights on each floor. Uh so it's quite a big space. Uh but as I said, I I am more confident to bring collectors in a modern structure where they can see that the infrastructure is suited around the quality of the manufacturing rather than having uh yeah, the romantic is the world, but uh romantic place to be in uh and my watchmakers would uh complain because uh it's shaky, it's dusty and you have to redo the the work twice, three, four times, which is the reality, frankly. When you when you do when the building doesn't meet the requirements, it heavily diminishes not only the productivity, but the quality and then and you pay it every day, every day, every day. So I've been ruthless when it came to to the decision. I had uh nicer looking buildings, even one in a nicer looking area and when we made the testing and I asked how much we could load on the structure if we had a lift to come with the machines up, etc., it wasn't good enough, so we declined. Interesting. And the third layer uh was also for me to have a space which we could uh start from a blank piece of paper and build uh where the different rooms would be in the surface, uh, which we had the chance to do here. So we started from uh 650 square meters really blank floor. And Marie-Elix, my wife, is an architect, so she help is not the word. She did the work, frankly. So she came up with the the the um flow plan distribution. She asked me lots of questions on what's basically the the life cycle of a watch within the surface? So it basically enters uh as components, has to be quality checked, stored, uh assembled, etc. Then we have an office space. So we basically split it the surface in two areas. We have a watchmaking atelier leaving side by side an office space where we have uh communication, design, technical office operations legal finance and administration slash uh clientelling. And for me it was very important to have these two spaces live together. Because it has to be said that in the modern era of watchmaking, more often than not, unfortunately, the manufacturer is somewhere and the headquarters is somewhere else. I've lived it in my previous jobs. Uh and that can create a lot of friction because uh people don't see each other, people have wrong assumptions on what others do who most often do not do. And I and I thought I didn't want to do that in the company, so I wanted to make sure everybody could uh exchange uh during uh lunch or breakfast or whatever and then and I think it's uh especially considering the the delicate nature of the the product we make, I think it's very important to have people well connected and close together. |
| Andy Hoffman | Indeed. And it's that, you know, part of your I think you know you've said in the past, part of your frustration with the sort of mainstream big brand you know, watch industry is that there is a disconnect between the executive side, the marketing side, the corporate side, and then those who actually make the product. I mean, you know, talk more about |
| Sylvain Berneron | that. The more I think about it, uh because in my career I worked in the car industry before, so it's funny because as as my career goes, I keep reducing the scale of the organizations that I work in. My first job was uh working for BMW in Munich. I was 19 years old and I entered a facility where we were, and that was only the research and development center, not the headquarter, not the manufacturer. It was so RD was eleven thousand employees from over 80 countries or something. Insane. It's like a city in a city. Then I went to Richmond where you go down to a couple thousands of employees. Then I went down to to Brightling where it's a thousand employees. And now I'm on my own where we are basically a bunch of guys uh digging very hard uh uh uh as a bench of uh three men basically so I had the chance to experiment to see different sizes of organizations and there is no deny that the the bigger the organization is, the more people lose connection to the head of the organization, so to speak. Some companies do it better than others. I think BMW was exceptionally brilliant at keeping the workforce uh involved and and motivated and aware of where the management wanted to go. It was not so much the case at Richemont, but it's also probably because they have north of 20 different companies to handle, so it's that also probably makes it a lot more hectic communication-wise. But uh at the end, when you lose that connection between uh management, workforce, R and D, etc., I s I think it diminishes your ability as an entity to to elevate the the level of the product that you're building no matter what it is whether it is chemicals cars watchmakings so in our case uh we really want to perform Yeah, at the highest level of of 21st century independent watchmaking. Therefore, uh we use the the the commando technique that I used to call so the watchmaker can uh talk to the guy who made the plans uh and say look this component doesn't s uh suit my my my needs can you please uh make a beavy and so that when you reorder that works better, etc. This is it's truly connected in in the highest form of speed that we can possibly have because the guys work right next to each other. And and not only is more efficient, I could add that it is also in our case a matter of survival, even. Because the the reality of setting up uh an independent watch brand in the twenty first century in an independent manner is an extremely brutal exercise. Brutal. Yeah brutal to to uh now I come to a conclusion. I had this discussion with my daddy will make you laugh, but because I was complaining about I basically started from a very naive posture of this, this and that are wrong in my current position. I know I could fix this and I embarked in the adventure of fixing those problems without reason realizing that I had a massive structure behind me before loads of resources, loads of time, loads of possibilities to mess it up and then still fix it because you have the brand power, the manufacturing power, uh, and I'm referring to my previous job at Brightling. And once you leave that structure to fix the problems that you have identified to make the watches that I make now, you end up having another set of problems which you which I didn't think about before. Cash flow, brand reputation, traction on how to build a company which is uh attractive enough to to hire people from other big companies. Me as an entrepreneur, I like to believe that I'm quite resistant to stress and to social pressure. But I give you an example. If you work at Rolex, do you really want to quit your job to come and work for Bernard. There's not a lot of ex Rolex employees around. You see, and and and that is because uh and I truly understand like like social pressure, we all know this when you're at lunch on Sunday with your your stepparents, for example, you want to make sure they can see that you are in check with yourself and your family, etc. etc. So entrepreneurship is not for everybody, which is why I actually you have the product and there is also the infrastructure side of things, and I and I spend a lot of time and energy to build Berneron, the company, to be a fast but also very attractive place to work at and uh we'll elaborate on that later on. But uh coming back to your point, it is brutal because you are on your own, you start from a very naive perspective of I'm gonna solve these problems. And my dad so, I was complaining to my dad on the phone about that, and he said, Yeah, yeah, remember when you were a kid, you were naive, as you said, but the funny thing is you are also surprisingly stubborn to finish. And the brutal aspect that I described is this. I'm sure Ben, who founded Olinky, will relate to this deeply. ship on the sea and once you you set sail you go either the ship goes under or it stays above the water but there is no oh sorry I changed my mind I want to go back to shore you're out there. And this is I believe what most of us and I include myself in this uh young entrepreneurs vastly underestimate uh when we start and I and I think it it's a good thing in a way because otherwise nobody would start if we would consider all the risk too carefully. I should mention, however, that despite uh the cash problems, the the struggling to to find the good people to surround ourselves, uh, the long work days, uh, if not work years, because I've been working seven days a week for the past four years. I've never regretted that choice. I should mention that. If somebody listens us talking right now and thinks, oh, I should I'd like to venture into no matter which type of business it is, it's not done yet, but I'm I'm starting to see a new life in which we have the freedom of action, the freedom of of finances, the freedom of time management, which is deeply fulfilling, but there is a price to pay for that and and from my experience, it looks like for me the price to pay was five years, it would soon be five years of complete sacrifice and delayed gratification. Yes, frankly. And uh and it's not always easy when when uh I have to let uh my wife go on holidays two weeks in the middle of the summer and I'm punished to stay home and get the work done, or uh when it's uh New Year or Christmas, and I can basically just come two days to have Christmas, go back and spend the new year working, same for all the weekends, same for all the family events and birthdays and stuff like this, it's uh it's tough and it it increases the pressure because you can clearly feel that the time you've sacrificed you will never get it back. Uh that people judge you for it. Uh family is sometimes very hard. Like for example, my stepmother goes like, oh, so you so you decide not to join the birthday of your stepbrother or you decide not to join blah b blahlah. And it is true. I may I do make these decisions. You decide to let your wife go on holidays alone. That's and it's a sacrifice. And and and when these things happen uh because I'm not that kind of man to to to be frank, I'm not some sort of a workaholic monster who will sacrifice everything just to to to have a nice business. It's really not what I'm working for. But I'm I'm trying to illustrate for the audience now that you start as an entrepreneur. I'm married I've been married for six years now. I'm planning to have a family. I have multiple hobbies like cycling and hiking and running. Things that I like to do as much as I can, like everybody else. Uh watchmaking is of course a big passion of mine, otherwise I would not be naive enough to to to do the project that I'm doing. But it's just to say that I never agreed to that situation. It falls on you. And as I said, either you agree to in a temporary manner sacrifice yourself and your balance to keep the business rolling, or you would want to keep the balance and only God knows what happens. I didn't want to figure it out, frankly, because and I had this discussion with Maria. I was like, look, we have two options. Either I go in a weekend with you, and the work won't be done, and I can't tell you how hard it will affect the business, but I can tell you that it will affect the business, especially because in these days I was doing it all alone. So I had like 500 emails sitting on the mailbox and it and we are Friday evening. The week is is gone. I've done uh the supplier files, I've done the quality check, I've done uh a few pictures for the communication, and I still need to handle the invoicing, the accounting, the emailing to potential prospects. I'm like, look, if I don't do this, sure I can go in a weekend with you. But if I don't do this, uh some people are have been waiting for three, four weeks to have a an email answer. I think we are crossing the line of it's no longer a business, it's just maybe a failing entrepreneurship adventure |
| Andy Hoffman | . It is brutal and it's a sacrifice and it is definitely more challenging and difficult than you expect it to be because the outside perception these days with the way that the industry has changed is that anybody can start a start a watch brand and can easily source parts um uh uh and components from suppliers and slap their name on the dial and they've got a brand. So tell us why that isn't so easy because you're building perhaps a you know, not just a a a a watch brand. I mean you are building a r a real business here with a long term |
| Sylvain Berneron | outlook. M mentioning on the the the perceptions that we have, it is true that I think twenty first century globalization improvement in all the manufacturing capabilities that we have around the world, what you mentioned is true. If you come up with I think you'll need at least six figures, like a hundred thousand, a bag of a hundred thousand. Uh you talk to Chinese manufacturing companies through maybe a black label company in Switzerland, you can probably slap a few watches together and have, like you said, a watch brand rolling. However, I would be very careful with that statement, because when you do that, you do not own a business, you do not own a watch brand. You are effectively only a client of a black label manufacturing watch company. That's all you are. Owning a business, in my opinion, at least, is a very different thing. It's when you start to own intellectual property, when you start to own technical plans, when you own what we call capacity orders at suppliers. That's what I'm currently doing before the watchmaking holidays. I go to my various suppliers and I basically lock at their facilities a bulk of hundreds, if not thousands, of hours of machining. And I go to them and say, okay, I need five hundred hours from you, I need uh two thousand hours from you, blah blah blah. And we sign these cut-down papers. There is no excuse next year that oh sorry, I forgot, oh, I can't deliver. Uh so that has to be done. Then we have uh a watchmingak workshop where we have the tools, the competencies to assemble, etc. To me, this is when you start to own a business. Uh being able to move watches from Hong Kong through a website uh and products that you've seen once uh because you they had the courtesy to send you a prototype is not being a business owner because from a day to another if these guys snap their fingers your business is gone and and that is also I think the the the why I want to warn a lot of people about the this romantic again. I think the watchmaking is probably the closest to what I know is probably closest to to the classic car business where you have a lot of people who come in, whether from the collector side of things or the entrepreneurship side of things, with decent means to start, and more often than not they they get burned because uh the reality is a lot sneakier or harder or or more uh brutal than than than than it seemed to be in the first place. Yes. And and like the car business, uh watchmaking is extremely cash intensive. This is why it can be heavily contrasted very quickly. Uh especially in my case. But it is the same if you start a small business. But I will talk about uh my independent business where we actually not only make the casing but we also create the movements that moves with it. We have this very proud statement of saying that we make one movement for one watch and I do not uh repeat a movement in two different designs, which for the people who know a little bit about watchmaking is like basically making a caterer. Yes. Every watch that you make is built from the ground up, including the train of gears, the base plate, the bridges, the case, the dial, etcetera, and and all these components are bespoke to one another and cannot be swapped, which from an industrial perspective is is the most ridiculous way of doing it. It's the most costly, the most the least time effective. It creates stocks, it creates uh higher pricing per piece because the quantity is lower. So you could not do worse. But in our case, it's like when you you build Ferraris, right? You're not here to cut corners. Our goal is to build the best products that we can we possibly can. And I always tell to the team that we should not fall into the trap of trying to make it easier or smooth. Uh that's the wrong course to venture on. If it's painful, if it's sticky, if it's slow, uh if it needs to be redone because the end result is striking, then this is the path we have to walk on. But and that's the discussion I had in my career before as a designer. As a designer, you often get you often end up in a conflict with engineers or people from the supply chain, manufacturing people, et cetera, where they try to simplify your work to make it more basic so that it easier to produce, easier to assemble, etc. etc. And I used to make fun of that and I say, look, yeah, well you're right let's do that let's simplify it to the point where we can basically just just blink an eye to make it appear and and you'll explain to the customer why the product is so basic and it's still very expensive, but I hope you'll be there in the sales room to explain them how long were your holidays or how easy your your past year has been, because that product is a is an absolute uh it's delicious to manufacture because it's so easy. Yes, it looks like crap. Uh but please, as a customer, understand that this has been so easy to make, right? Uh, and this is when to me you turn the whole thing upside down and we should not forget that uh a company uh is here to serve my clients, my customers, the collectors are not here with me every day, but I'm wat ach enthusiast first and foremost. Most of my guys here are, and we wave the flag of watch collecting for them in the building. Because if you don't do that, then you start to disconnect your company from from your your customers and and sometimes I think in the modern watchmaking uh industry uh we are on the verge sometimes of of breaking that link with collectors. I hear too many other stories of collectors being treated very badly uh in various uh sales points. I hear too many stories of after sales watingches be locked for 18 months for God's sake and uh before they come back. Uh we are talking six-figure watches, huh? It is mental to me that that and that happens when you've been making way too much money way |
| Andy Hoffman | too easily for way too long time. But I wonder it's interesting. I mean, obviously you've gone on out on your own to do a you know smaller volume, uh higher value, unique product. Did you ever aspire or consider um continuing to move up the ranks in the corporate world, the corporate watch world? Do you think you could run a large industrial watch manufacturer established brand and do different things with it? |
| Sylvain Berneron | So multi-layered question. My initial goal was to climb up the ranks. Uh, in my corporate career I went as far as uh chief product officer at Brightling. I had a team of 60 people handling uh movement development, casing development, product strategy, uh product design, prototyping, split it across three different locations, uh values ages and genders, all of the thing. I think once you manage that type of scale, you can manage a few hundreds, if not a few thousands. I'm not sure if it's very different. Do you |
| Andy Hoffman | think it is possible to make compelling, interesting, high-quality |
| Sylvain Berneron | product in that. Coming back to your initial question, my initial goal was to climb up the ranks until I would be in a position to make the decisions. Right. Until I realized that even although I was effectively chief product officer I had very little impact on the because the truth is and it sounds very silly, the people who make decisions are the ones who pay the money. At Brightling, the shareholders make the decisions, not me, because it's not my business, it's not my company. It took me fifteen years to understand. So once I understood it very clearly, this is when I decided to go on my own, because I was like, look, I'd rather have my hands free and make small decisions on my own rather than having to beg somebody to take bigger, braver decisions. So that's why I decided to leave. I like to believe that I could, of course, uh lead a bigger structure to braver decisions. Uh the people like uh Mr. Hayek senior or Mr. Beaver are great example on on how people can become uh industry captain leaders and then you know for example M,r. Hayek senior was a visionary. He's the guy who found the ins industry sitting on its back and flipped it uh upside down and then get it back moving again. It requires not only to be brave but to have a vision and and to have also these guys had a good understanding of of people. And this is a factor, for example at BMW, this is where I picked up this culture. There is a deep and profound respect of each people expertise and each people as individuals. And you can feel it. I was 19 and I felt it You felt respected and valued as an employee. You have this very Germanic way of reminding you that you are Mr. 19 intern. And so you should not be too too proud because this is obviously not your success. But if you are here because you own the badge, then you are one of us and we will teach you. That was so uh liberating and so encouraging and so aspiring as well for for the the young guys that i was that i was and although i'm no longer working in the car industry i'm trying to to keep that culture here at Berneron to make sure everybody has a perspective in his job, has the right tools, uh feels listens, uh feels encouraged to to go one step further and and and do uh something or perform at a level that they would not even consider if they were not backed up by the company |
| Andy Hoffman | . Um how do you though, you know, what is your proposition though to attract people to come and work for you. You haven't had a proper holiday in in five years. You've made huge sacrifices. It's still a very small team. How does how what is your pitch to attract people? So |
| Sylvain Berneron | uh the non weekends, non-holidays, rhythm is my own and only privilege. No one in this company except me had to work uh during weekends or uh had no holidays and stuff like this. Technically it's not true because Hugo and I worked over a weekend during Watches and Wonders, but he did recover these days later on. I am extremely strict on that because I think if you're not able from the get-go to print a good rhythm, there is very little chance that you will find it back on the way. So I don't want I don't even want to start with this. Uh but my proposal is the following. On one hand, the people we hire are people that are very good at what they do. So most of the time, the complexity of our product is something that speaks to them. It's sort of the next level, if you want. So whether you're a watchmaker, an engineer, uh sales guy, uh logistics design, communication, you get that I don't like this phrasing, you get the chance, it's not a chance, but you you get the opportunity to to work on the top of the food chain in in terms of of product. That's one thing which is in itself quite motivating for most people. But second, I've also worked in the corporate structure itself. So what makes Berneron SR, regardless of the watchmaking, very different from other companies, is we've implemented two main rules. The first one is we run what I call a responsible salary grid, which means we have a public salary grid in the company which has a multiple of three between the lowest and the highest salary. Everybody in the company knows this grid. It's composed of eight layers. So the two first layers, S1, S2, you are what we call a collaborateur, which means an employee with a beginning set of skills. You are S1, S2. Okay. Then if you climb up S3, S4, you are considered an expert. So you're somebody with minimum five years of experience, uh really in deep possession of uh valuable skills, which is the the core, I should say, of our industry. People who have tremendous dexterity, understanding of mechanics, patience, and we forget that way too often then if you climb up one step then you get you you get into uh always a little bit more problems as i said uh so if you go five, six, then you handle pin management positions. So if you are salary five or six in your company, you at least manage one person, and then seven, eight is uh director's position, so you handle at least multiple people. You are responsible of one part of the PL uh for the company and if something goes south uh you'll be one of the people that I will be extremely mad at. You're responsible So that's the salary grid. The numbers are public. Mean |
| Andy Hoffman | ing what? Everybody in the in in the company |
| Sylvain Berneron | knows uh who is where on the grid and it's all fine. And and they know their their actual salary or they know the percentage uh they know which if they are S one, S two, S three, uh which number they are, they know how much they make because the salary S one goes with one |
| Andy Hoffman | So it's transparent in in that way and and there's no uh and you could think those |
| Sylvain Berneron | that it would be problematic, but all of a sudden when people know that there is if you're at the bottom, you know that the top guy makes three times what you make. And that is swallowable for anybody. Because you go like, wait, this guy works twice as longer than I do, he has probably ten times the problems. It's fair if he makes three times what I I make. When can go home and just forget about it. So that's cool. When you go in big companies and you see people leaving at noon and say you know they make a hundred times what you make, this is not cool. Uh and I am Gen Y. I think Gen Z following us is even more aware of this. And they haven't even started that they had enough of this shit. Yeah. So so that's one point, the salary grid, with the multiple of three. So if one day I wake up one morning and I go, Oh wait, I'd like to I've worked very hard, I'd like to make more money, I'll raise my salary, and I'll have to bring the salaries, the the the bottom salaries up to respect my rule of three. |
| Andy Hoffman | Fair enough. I win everybody wins. So that incentivizes everyone in terms of output in that compensation. But there are other ways that people can participate as well. Exactly. And I'm and |
| Sylvain Berneron | I'm and I'm coming to it. And and so that mentality that I picked up comes from the the military. I'm from a military family, and something I've been taught is if you want to have a group of people operating, doing something very complicated, very risky, very dangerous. They have to bond together. So it is the only you |
| Andy Hoffman | can do this. You can't how do you get well that that's interesting. So yeah, I mean I I would agree with that. And and this, you know, sometimes things like the military or sports teams do something called hazing, which is put people through terrible uh experiences together. Exactly. And it's |
| Sylvain Berneron | be to bond them. Yeah, and it's when your life is threatened that you start to behave and that when you start taking responsibility, because trust me, if you put ten guys in the deserts with a limited amount of resources to do something very difficult, you cannot mess around. And your the the world of mouse all of a sudden has tremendous value that you can turn your back and that guy ain't gonna shoot you or drop you like a stone when you leave. Same uh and the military comparison is a bit uh violent, but same applies to build cathedral, for example. You have stonemasons, uh wood guys, painters, the guy who make the windows, etc. You bring the best people, they bond together around one objective, and this is how you achieve great things. And the corporate world, in my opinion, has completely broken that, the modern one, because you enter as a young guy and the promise you get is work your ass off so that we management can make the money, it won't last for very long, in my opinion. So that's why we have this the responsible salary grid. And also after three years of being in the company, everybody has access to the capital of Berneron SA, the corporate structure, from 0.2% up to 6%, depending on the salary grid that I mentioned. So if you are S one, you come out of watchmaking school, you come in or company, you will make S one salary and after three years, you will have the option. I won't give it to you, you'll have to pay for it. Yes. To acquire 0.2% of the company. And the way this is set up, uh, in order to be fair, is that the price is locked from start to finish, which means if you come in 15 years, the price of 0.2% will be the same as today for one reason. Because if we don't lock it down, in 10 years uh the shares will be simply unaccessible to normal people because the value of the company increases. If if things go well. It will. Or we'll die trying at least. But uh let me touch wood for a second. Yeah, here it is. Um but the So the value is the value. The valuation is locked. Yeah. Uh and and the and people will say, Oh wait, how did you do that? That's the fairy tale? No, we actually have a tax deal with the Canton of Neuchâtel to lock the price of the shares of this company uh through two conditions. One, you cannot walk away with it. So if you lose your job or if you quit this company, your shares will go back in the main pool so that these shares can be given to the next guy. Otherwise I will dilute the capital of the company and it will no longer exist. Uh and the following guys will lose this opportunity. So second, the the your shortcut. So you buy them back? Yeah. You buy them back. Yeah. And you buy them back. Yeah. Because the price is not me, the company is a yeah. So you basically recover the money you've given. And but the money you've placed in the company through these shares, I always insist in so that people had to pay because I wanted them to feel at a lower scale the sacrifice I had to do. I don't want to give dividends to people who haven't paid even a single buck. I want you to, you know, put down on the table 30, 50, 60 G's, just so that you feel it, the commitment, and all of a sudden it means something to you. And all and it is a great investment because uh with the projections we have you recover that investment uh the first year and then it pays almost double, triple every year so because you own the shares of a company and you get the straight dividends of your work. So if you are S1 you have zero point two percent. If you are a director you have six percent of the of the business and it goes in between depending on your salary. So And then the the the |
| Andy Hoffman | payout for that or the the monetization of for that equity interest is through the the dividends then. Exactly. Which are which |
| Sylvain Berneron | are linked to so every employee becomes then a shareholder in the sense that he or she has a fixed salary of thirteen months and then the year after, so in March, once we've closed the the the the PL of the company, declare the taxes, we do pay dividend, we allocate. I don't know, I put an example, it's not uh these are far from being true numbers, but let's uh I wish it would be, but it's not. Let's say we have 10 million of dividends that we want to split. Let's imagine the company made 10 million a year. The way this will work is the following. You have the people and you have the company. The people take five out of the ten. Out of these five, we split it between each of us, but I want five to remain in the company so that the company can have the oxygen to still develop new calibers and buy machines, etc. etc. And this vision, I explain it to my guys all the time, that the company is not here with us. In French we call it a person morale, which means a legal entity, but we have to consider it it. It it is a living entity which needs money and needs time and needs all these things. To be fed and watered. Yeah. Yeah. Which is why people ask me, Oh, you don't have kids yet. Sometimes I laugh and I say, Yes, I have a five year old uh struggling uh business, which is like raising a kid |
| Andy Hoffman | , frankly. But I'm fascinated how planned and structured that all is I mean, how many employees do you have right now? It's still quite small. |
| Sylvain Berneron | Uh from a legal perspective, we are nine, but uh we are only six in the surface. We have we have uh two more people coming, uh and that's nine with me. I don't include myself in the in the workforce uh because legally I am not for an anecdote I should also mention uh to anybody who wants to build a business. For example, when I rented when I say brutal, I give you two examples. I signed a paper to rent that surface. Uh it is a commercial structure, which means the lease is a decade, 10 years, you cannot compress it. And it says responsible Berneron S A, co-legal responsible Mr. Sylvain Berneron, which means if my company goes under, they will come and knock on my door to say you still need to pay the lease, my friend. And then I brought this paper on the table show to Marie Leaks and I was like,, Look this is serious business. And she was like, Oh, you're sure, blah, blah blah, can't you go around it? And I was like, Well, I'm afraid I have to do what I have to do. But if it goes under, we'll have a very, very big flat. To live in. So that was one one brutal example. And it wears on you, right? Because when when I don't think about it every day, but when you go to sleep, you're alone with yourself, you remember you're like shit. I signed that cut down paper. Yep. And I have to pay these 10 years of lease regardless of how many watches I will sell. That's one example. Second example, even more uh insulting. We've contracted uh an insurance as every uh rigorous company should do in case people get heavily injured. Uh if somebody has a stroke or you know the the sort of life havens that nobody, none of us want to think about. But if it happens, our company will be able for two years after the incident to provide to the employee 80% of the salary. This is I think from an American perspective for you guys it's like ovni level, uh like like uh uh irrealistic level. But uh in Switzerland these kind of things uh exist. We took it very costly insurance insurance yeah excluded me from that contract okay you are you are you are not covered if uh I am not and and it says on the paper black and white for Berneron SR blah blah blah this insurance at the exclusion of Mr. Sylvain Bernard so not only I get to pay and I don't even get to get the service it's insane. And and that's sort of treatment as an entrepreneur is thrown at your face very often. Indeed |
| Andy Hoffman | . We're proud to have Hannerai supporting the business of watches. For this episode, we're spotlighting the new PAM 01574, a Luminar GMT power reserve in a sleek 44mm black Ceramic case. It features a sandwich dial, dual-time functionality, a 3-day power reserve, and Panerize new click release strap system for easy swaps. This reference represents Panorai's forward-thinking approach to its Luminar collection, combining heritage, high-tech materials, and bold design. And it's just the beginning. Expect more exciting Luminar launches throughout 2025. Alongside the depths of time, a historical showcase taking place this October at Casa Panorai, Madison in New York City, and this November at Panorai, Miami, Design District Boutique. Experience never before seen archival pieces and exciting novelties up close. Learn more at Hanorai.com or check the show notes. Thanks again to Panorai for their support of the business of watches. Now back to our chat with Sylvan Berneron. I want to talk about, you know, obviously you have done a lot of planning in terms of your all of this business plan, how many employees you're going to have by this point, how the uh compensation will be structured, and then in particular production and the size of your production. Obviously with the success of your first watch, The Mirage, you could sell a lot more how many, you know, are you remind us how many you're making, how many you've sold, and and and um and tell me why you you just don't make a whole bunch more because you could probably sell them. Mm-hmm |
| Sylvain Berneron | . So starting from top to bottom uh, last year we've delivered forty-eight watches, forty-eight mirages to our clients as we committed on. Uh delivering in time is for me fundamental because it's part of the reputation of the brand. We have a launch sequence which is crafted very carefully, where we will launch one product per year, every year, for a sequence of 12 years. So it's the first chapter of the brand. Going further than that would be uh too dreamy, I think. Uh but uh so that's what we locked in uh in terms of numbers, in terms of people, uh in terms of logistics, etc., we formulated a strong and reliable hypothesis around that scenario. Uh every year, when we launched a new product, we increased the annual production by fifty pieces due to the addition of this new product. Right. So there's fifty of each new product each year. And then make two references. So it's technically twenty four, twenty four of each yeah and why I say fifty and not forty eight because every time I keep two pieces in stock for after sales etc etc. So but from an industrial perspective I ramp up by fifty pc every year my manufacturing capability uh or sales or order book growth by fifty pc etc uh have been called uh short sighted or small sinking with that. Currently we have an order book full for the next three years on the four references we have for sale, so the entirety of our portfolio is sold out for the next three years. Do not give up, however, uh anybody who wants to be part of this, feel free to send us an email because Hugo will take your contacts and we will inform people who are on the waiting list before we even release something publicly. We we try our absolute best to offer a good familial cordial service to everybody who wants to interact with us. But coming back on the manufacturing side, why fifty per year? Uh first because in twelve years I will go up to twelve times fifty is at six hundred pieces, so I will be north of six hundred pieces, which for an independent brand uh is no small feat. Uh in comparison, Francois Paul Joon to m the last numbers I've heard is making nine hundred mechanical watches. Nine hundred man, yeah, that's a |
| Andy Hoffman | yeah. I've heard the same number indeed um yeah you know uh mb and f four hundred around uh yeah maybe ye |
| Sylvain Berneron | ah so so that would place Bernard in a decade in amongst the the the the solid pillars of the independent watch scene. Uh but that's not even the the the goal because as you mentioned, the traction we had this year, I could have pushed two hundred pieces out of the doors, it would have said no problem. But so why not? Yes, why not? There is one reason for that. Next year we will deliver the Mirage 34, so second chapter, another 50 pieces. If something goes wrong, hm, let's imagine the because when you're an entrepreneur you are on your own, which means you have to double check yourself all the time because no one else will do it for you. So I'm always thinking I've been very fearless in terms of creativity but very cautious in terms of setting up the infrastructure because yeah I don't want to play with these things. It's people's lives and and and families and stuff so I don't wanna do something stupid. Uh so let's imagine the worst scenario. We forgotten something, it goes wrong and the fifty watches they all break after we delivered them. Worst case scenario, all of them. Nightmare. Nightmare, indeed. But controlled nightmare, because I I know I have to ship these 50 watches back to me. And on average, if you take the two weeks of Christmas and new day off, I have one watch to fix per week. I can tell to my guys, look, we f it up big time now. We have to take responsibility. We will take turns, we will fix these things, ship them back. We can still manage. If you make that mistake and you push 200, 300 watches out of the door, you're dead in the water because you will be effectively submerged by a wave of after sales that will prevent you from manufacturing what you have to deliver this year and you create what we call a huge cash hole in your operations where you end up fixing stuff you invoice year minus one, and that stops you from invoicing year zero you're currently in. You're dead. You're dead. And I surely do not have a mattress of twenty, thirty, fifty million laying somewhere so that I can uh swallow that |
| Andy Hoffman | kind of thing. And and and and and then the other question then speaking of mattresses and people with the ability to swallow them, I presume you've been approached by uh persons interested in investing uh in this business, outsiders. Talk about that and and what do you say? Well |
| Sylvain Berneron | we are regularly approached whether from you have two types. You have the romantics like me, so that's collectors who truly come from a place of care and want to help us uh by offering uh sometimes tremendous means and i always tell them look the the if you want to help us uh your support through uh taking one of our allocations is is frankly the best you can do. Uh your uh patience, uh your um understanding if something goes wrong is what we need as a support and keep in mind that effectively because uh if you take an allocation from us let's imagine now you want a mirage for 2028 Hugo will send you an allocation proposal and and to transform that allocation will require from you to pay a 50% deposit three years ahead, which is already in itself a huge commitment from our clientele to us to make these watches. I revert back to the cathedral uh comparison that I make. It is the most sincere and admirable form of commitment that you can do to tell to somebody, here is my money, I give it to you now, and I give you three years on top to make the amazing things that you said you would do. It creates even a bond that when we have uh collectors who visit us here now. I I've heard it twice now and it always moves me very deeply. They go like oh I'm so happy to see where my money went. And and it it moves me very deeply because I I take great care into spending that money very carefully into stuff that makes sense that would create more jobs, have a positive impact on the region around us, and the industry, etc. So so it is it is uh very cool. I think I I've I've moved away from your initial question |
| Andy Hoffman | . Well i it I mean you've explained that you know the way you're generating cash flow obviously and funding things is you know through those those deposits. It's one of the ways. But yeah, you were talking about the investors. Indeed. Why not why not uh have you been approached by um you know brands entities. Tell me what you can uh who and why, you know, is that something you would consider in the future, um taking on an outside investor? So |
| Sylvain Berneron | we had collectors as, I said. I can get you that money. I was like, no, thank you. Uh we had family offices from mainly Asia and UAE. That's interesting, looking for sort of alternative asset uh economy investments. They come and say, look, uh we are willing through a strategy of diversification to allocate you ten, fifteen, twenty, twenty five, thirty million of Swiss francs. Keep in mind I think this is attractive for that kind of family offices because Switzerland is one of the most stable countries when it comes to politics and and and fluctuation of money of uh currency, yes. And then you have the the upper level, which are private equity firms, three of them contacted us. One of them is is uh well known. I should not mention because I think he uh would be yeah giving uh problematic information. But the the biggest envelope we've been offered is uh 90 million suisse francs. Wow. But sounds that sounds like a payday. Yeah. Yes and no. Because uh uh with it comes the pressure and the expectations uh and me no longer have my say into how and when we do things. And let's not forget that I had endless resources at my disposal uh just over two, three years ago at Brightley. We had hundreds of millions, we could do whatever the F we wanted. Sure. We just decided not to. Why? Because when you have so much money at the table, you don't want to lose it. So if I sacrifice five years of my life, delay five years of gratification. with my marriage, my hobbies, my potential family, to end up in a place where I put again a ton of money on the table, which stops me from taking my own decision. But on top, I'm linked to this with my own skin and my own family. I mean it would be the worst decision of my life. And I explained it to these guys. I'd like look, freedom uh and risk taking is what I'm after. So if you're willing to give me, and that's what I told them, if you're willing to give me 90 million and let me play with it, then we can have a discussion. If you want to give me 90 million to type me to my desk and tell me what to do, then we can't have that discussion. No way. And of course guess what? Do you know anybody on earth who will give you 90 mil to play with? No. So that discussion ended quite quickly. Interesting. And they were like, because obviously they try to to convince you and and and and and to to make it happen. No, but you you you'll still have uh you still retain uh you still make the decisions, blah blah blah and I quickly give them examples. Like how about uh I want to make uh this weird idea uh and I'll ask you to spend five mil upfront and they would be like yeah we would have to see a business plan and maybe to link it to an order book or something and I'm like no you don't understand I'm telling you to spend the money three years before the world even knows about it. And this is where most people move out of the equation. We are about uh to release a very complex annual calendar in September this year. I've started to develop this movement two years two years ago, right when we launched the first Mirage. Yes. And the suppliers were telling me, Sylvain, don't you want to wait to see how the first one plays out so that you can adjust? And I told him, no, these are two different projects. They have their own merits on their own. I want to move them in parallel because I want to keep the narrative alive. This is also something that has to be considered. And it's probably the hardest part for me, is how to make sure I surround myself as a business owner, to have people that I can trust to handle the growing side of the operation so that I can stay clear-minded on the vision for this company. This is so hard to achieve because every day the business drags you down because that guy didn't deliver, that bill is missing. You know, the the uh air conditioning is not working today. That's probably why uh the audience hears a few uh tooling noises in the background. We are currently fixing the air conditioning in the surface and that's the daily operations of any small structure, which is heav |
| Andy Hoffman | ily distracting to build the business further. So is is the business aspect simply a necessary evil or do you find as a designer, as an entrepreneur, as an intelligent, driven person, does that, does the business part and success at that and innovation in that, does that not motivate you as well though? The daily business is very |
| Sylvain Berneron | important because it's basically making a lot of small but important decisions. Yes. Uh it sounds silly. You're the decision maker, obviously, here. Yes, and and and I'm very well surrounded so so so my guys they know where which decisions they can make and which one they can't. I give you a s uh simple stupid rule each watch that comes out of the workshop i want to have it in my hands and see it i take it i flip it back up i'm not the one doing the quality control by any means because i do not have the time neither uh the skills for that matter in which we operate. Uh but I see every watch that leaves out of that workshop. When it comes to monetary decisions, Hugo and Fabien can make decisions up to a certain back envelope of cash, and we align very often uh the management of this company to make sure that we build a company culture and we we call it bon sens in French, which means you should handle this company like if it was your own uh family. You spend the money like if it's the farmer's way, frankly. Yeah. An egg is an egg and and then you don't just drop it or forget it. You make sure you get make good use of it. So this is what we try to do. It sounds all very simple. It is much harder to achieve than that because every day you get distracted, things get delayed, uh the human factor is also very hard because building long-lasting relationships is no small feat. As a brand, I'm trying to develop a good sense of hospitality towards our clients but also and don't take offense if you're a collector at Berneron sometimes even more towards the employees the hospitality we want the people who come and work here to feel good, to know that if they are sick, if they need to escape for family reasons, blah blah blah, they can do it and they are in a safe space because only when you have that backing you can then go and take a risk in your own discipline. So that let me ask you, I mean, |
| Andy Hoffman | what from your perspective now, maybe it was different when you started, but what are you building here? Is it a company? Is it a watchmaker? Is it a brand? It's not a brand |
| Sylvain Berneron | . I'd like to believe that it is first a team. I I like the human aspect of things. Like and I keep telling to my guys, if you ever want to leave, let me know, I'll help you to take your next job. Uh and what I'll miss the most is your presence in the compan,ies it's not your your your time or your skills or whatever. I've been working for fifteen years now in various companies and when I look back, what I remember the most is not the projects, not how many we sold, how much we failed or blah blah blah is the people that I did it with. For me at least this is crystal clear. I remember the guys who who put me in huge trouble, threw me under the bus when they had the chance, and I remember the guys who I sweated hard with and and we overcame the challenges. That's what I'm trying to replicate here. And funnily enough, the good experiences are often linked with good product and with good success. But it's a it's a consequence of it. So if by chasing a commercial success you believe that being an asshole is a good excuse, I think you're gravely mistakening uh the path to take, in my opinion. Uh I think good products, good company reputation is the bottom line of a well top line executed set of values and well planned operations strateg |
| Andy Hoffman | y. But I mean, you know, when you're running a business and it, you know, you are the primary investor here whom you've talked to invested over a million francs of your savings. Sometimes I forget into this. Thank you for reminding me money that you had saved over uh over your corporate career. Um sometimes you have to make tough decisions. You have to let people go or you have to tell a supplier that um what they have delivered is not good enough and and you you're not gonna pay for it. I mean um how are you balancing you know that part of it? It's not just you know creating a bond with a great team and having a |
| Sylvain Berneron | you know success. I think the the the the the best way to to describe how we work is to give you a few examples. So as you said I've invested a million Swiss francs uh with two installments of five hundred thousand uh splitted across a year in this company that was four or five years ago now, which frankly was all the money I had, all of it. Even had to ask my wife the permission to do this because we've been married for a few years and she he's entitled not to decide what I do with my money but at least to know that I'm not planning to spending for example in a common uh real estate project or something. Sure. So we had that discussion. Thank God she she agreed. Now, Bernard SR still owns me that money. I don't want to, I could take the money out. I don't because I want to give as much oxygen to this infrastructure as I can. So I leave my money in. It has no interest. So it's not like I'm biling interest or something non-even. It's it's like free given money on the side. And if we were to go down at some point, which will happen, I'm I'm I'm I'm ready to dance in the rain because one problem will happen, whether it will be tariffs, it will be war, it will be market collapse. I have no idea. We have ways to go through. One is by the way we operate, keep in mind I have zero stock. The watches that I manufacture have been allocated in advance. Yeah. That in itself is already a huge safety because I don't produce stuff that has no client in front of it. Huge safety. Second, if something was to go wrong, I would reunite anybody or everybody around the table, remember who has kids, who doesn't, blah blah blah, and I would offer the team to find a solution, depending on everybody's needs, to adjust our salary temporarily so that we can go through and we don't have to fire people. Again, very old school way. If you are in the mountains, you have supply, limited supply of water or something, you split it across the age group, the gender, and who is more thirsty. That's common good sense. So I would be super happy to do that. I can't force it on anybody from a legal perspective, but if people would agree, and I think uh when these times come, people uh show often very good solidarity. I like to believe in in I'm a true I believe in the positive nature of humankind. Like like I don't know anybody who takes pleasure in in letting somebody else's starve doesn't exist. So I would try to solve it this way. That's when that's if we have a problem, we can also go to suppliers and say, look, I'm having a cash hole. Can we delay some payments. Right now for the record we do the opposite. I'm paying in advance some suppliers to help them. Okay. Yeah, be it di because of the current sort of state of the uh of the industry. Indeed. So I've been helping already some suppliers cash wise. And the last thing like you said when it comes so that's fixing a problem. And also fixing a problem is sometimes being extremely firm on our positions, quality, for example, is an endless fight. So you can have this year, uh last year receive a hundred wheels which are perfectly finished and up to the tolerances, etc. You you reorder the same order one to one and this year for some reason the person changed or uh the the goal was not as good or whatever. But the quality is not there, and um ruthless in this case. I I do not we have a quality procedure whether it is in and it's okay or if it's not and it goes back and I'm sorry. And I say it in the most polite manner that I can, with the most compassion, etc. But there is no uh and sometimes suppliers a try, huh? Because for them it's dry loss, keep in mind. It's like, what do I do with this wheels? I want send send. So of course they try to push you and make you feel guilty, etc. And I tell them I crack a joke and I tell them again, if you're willing to come with me to the collector and explain him or her why the watch is not precise or why it keeps spiking because you didn't want to redo the wheels then then I can accept this wheels. And often they say, Oh no, I let you do that part. And I say, then I can't take the wheels, I'm sorry |
| Andy Hoffman | . Interesting. And so you've uh you've you've had to have at least one of those conversations? Yeah, two this year. |
| Sylvain Berneron | Two this year already. Two this year already. Yeah. And it's not pleasant but uh we always try to find a way uh a a dignifying way to do it, right? It's not about judging somebody and then trying to cut heads, it' iss also something in the corporate structure attributes sometimes. I won't give names or brands, but I found the the attitude of solving problems by putting the responsibility on one person and to make him or her pay the price of everybody's mistake very unfair. We are a company, we are a team. If there is a failure, it's everybody's problem. It's not his or her because he or she forgot. Yeah well maybe he or she forgot because you've been an ass with him or her uh fifteen minutes later, or maybe he or she has a sick kid or something. It's more complicated than that. And if every time when someone makes a mistake we threw that guy under the bus to say you f |
| Andy Hoffman | well. So And and that and that makes people fearful and too careful and they don't uh And |
| Sylvain Berneron | they don't perform the way they could. And it's hard. It's very hard, very, very hard to sort of because uh I'm an individual as well and I'm trying to sort of represent Berneron S. R. The person morale. The moral structure. And that moral structure, not me. I'm I'm a I'm a very I can be I can show a lot of anger sometimes. I'm very impulsive. That's my creative side speaking. So I have my downsides. Like everybody, and Hugo and Fabien know how to counterbalance me very well, which is why it works between us. But I'm trying to represent the moral structure to be the bigger guy. So if the company has to lose money because I don't know, somebody forgot or we broke this or broke that, then the company will lose money, it's fine. What I don't want to lose is the reputation of of the comp |
| Andy Hoffman | any. When you um maybe before as you were you know planning this venture or perhaps during in and now who have you looked to for inspiration or instruction? I mean, are there models or blueprints you're following, whether it be in the watch industry? I mean obviously I think MBNF and you know what Max has done is I see certain similarities in where you're you're you're trying to go and obviously there are some successful independent you know watchmakers here who have built significant businesses or, you know, have you looked outside for both business and you know creative inspiration and guidance? |
| Sylvain Berneron | Yes, of course. That's another topic, but I think creativity, for example, is never X ni low. I think true creativity is actually a mix of various inspirations that you've gathered together and which you reiterate in your own formula. But coming back, this business is inspired by uh I would say three main fields. First is my education, my family. As I said, I come from an old school military family for the anecdote. When my dad learned because I didn't tell him that I decided to quit my job to make a watch brand, my brother told him this is we always work like this. It's a rebound structure, right? I never say something to my dad, my brother tell him and if my brother does something I tell to my dad. This is the way we work. Okay. Always been like this. It's a bit weird, but this is how it works. So my dad calls me and says, huh, I I hear you you're making a watch Brian, right? Yeah, yeah, sure. Tell me a little bit about it, blah blah blah. And at the end he goes like and I and I hear you're using your family name on the dial. Is that is that right? It's like yes. Uh may I ask why? I was like, well it's my family name, it it's what what else do you want me to do? He was like, I'm not questioning uh he said I'm not uh arguing with your choice. I just simply want to remember you uh that it's not only your family name. And that was the end of the discussion. He didn't go further. That was enough to just you know so I I take it very seriously and and and a gentle reminder. Yeah and and and that so that part of the influence is basically the farmer way or the good sense, you know the the the father providing for his family sort of uh the good care that influenced me deeply here sometimes to take irrational decisions just because I think from a human side of things they make more sense. I will gladly drop a bag of money if I can keep my values intact and and walk proudly Sunday afternoon at the at the local market because I know I didn't break a family revenue stream just just to to hit my mark and uh excel shit. That's first thing. Human values first and foremost. Second in terms of performance, you have a lot of guys you that you can find on internet like Simon Seekin, uh Gary Steinfeld, or I don't remember exactly his name. You will find a lot of and if you enter these two streams, you will rebound through multiple uh entrepreneurship podcasts that will uh and you find common common traits that comes back, uh uh sacrifice, delayed gratification, belie |
| Andy Hoffman | ving. Does that mean staying positive or yes. Believing. |
| Sylvain Berneron | But but the hard part is the following. It's like making something new requires a lot of courage, which is why it's risky. But being stupid is also very risky. And that's the the the whole challenge of this. It's like you have to evaluate the risk. Am I being brave or am I being stupid? All the time. And the more efficient your business is, the closer you are to the brave side, but also the closer you are to the sun, to the stupid side of things. Because I'm sorry, making from ex Nilo a gold full gold bent watch including a bent gold movement in it in small series with no financial backing is a very stupid idea. From the risk-taking perspective, it is very stupid. But it is at peak between brave and stupid and and due to the reception it received, at least for this bet, I'm happy to report that he was obviously on on the brave side of things more than the stupid one. But and the problem is if you lose and you cross the line just one meter too far, you lose big time. I could have lost my millions that I invested. I could have had this watch is made, be the laughing stock of not only the local industry, I would have savaged my uh existing professional reputation, which was for me a concern, right? I had a good position at Brightling. Should I risk it all to potentially lose it all? So yeah, that's the risk, uh the taking risk side of things. Uh but coming back to your question, I said my family, I said the the entrepreneur culture as a whole that you can find on YouTube, Insta, and on all the various platforms, even the books. You can read a few books, uh The Infinite Game, Simon Sinek, another book that I remember, which was which were the seven characteristics of people who generally achieve what they begin with. And you again, whether it is sports, entrepreneurship, any other projects that you want to tackle, there are common traits. And most of the time it is having a vision, gathering the resources to do it, coming up with a plan, executing the plan. And the hardest parts for me, for example, are patience and and staying committed. Me, for example, when it when I commit to something and it starts to go south or to shift into something else, this is often where I struggle. To not pull the plug or or to to readjust too quickly and this is when for example Fabien and Hugo helped me a great deal because they they have they are engineers uh and they have business educations and they can quiet my creative fire, we which is my worst enemy because I come up with the ideas, but it diminishes me in the war side of things. When it's tough, I tend to uh escape the the trenches when Fabian Hugo say look Sylvain we committed we sign now you stay until the end to see how it unfolds interesting yeah and and they have to tight me |
| Andy Hoffman | on my chair and close my eyes. And is there anyone or a company in the in the watch industry that you take inspiration from or that you see as a model in some ways of |
| Sylvain Berneron | how to do things? Oh uh I'm happy to report that uh Max, Emilian Busser uh I uh we see each other every year. He had the the the grace to share his experience with me, to give me advice. I'm a good friend with Simon Brett with Gsefde Reciapi, Recep Reciapi, Gael and Flow of Petterman Beda. The indie space has that decency and that uh because we've all sweated very hard to to grow our own businesses and and and it's funny because the the once you've passed that point you, find people that are truly deeply kind. Say don't we are not compet |
| Andy Hoffman | ing in any way with your own. That can afford this level of of price for a watch, are you not competing uh with them for the same risk? Frankly, not not the way that I see |
| Sylvain Berneron | it because if you would talk to Max uh for example, he would tell you that he's fighting against his himself. He wants to challenge himself to go higher and to move his product higher, and so do I. Me, I received a strong artistic education. The challenge for me is to is to uh achieve a strong level of personal endangerment through creativity. This is true art, by the way. When I hear people telling me oh the the art of watchmaking because you you did guillochet on on the part this is not art it's called craftsmanship it's very different and and so I'd like to rectify that uh art is can be achieved through dancing, sculpting, singing, architecture, whatever, drawing. And it's the act of putting yourself in danger for the sake of the artistic act. Yes. That's art. Nothing else is. If you're a good dancer, you practice the craft of dancing. That's not art. The art is putting yourself out in front of 500 people to perform that act. That is art. And the and the problem with art, as my mother taught me, is all you can do is perform that act. The feedback is out of your hands. The way people will react is out of your control. And this is is where the personal endangerment and this is where is the value of the complete operation. If you're trying to control the output you're no longer doing art and if you're no longer doing art people will likely m don't care anymore. Because if I was to play a song or to sing something that I know you will already like, it's not very exciting for me and it's probably very boring for you because it means you've seen it already. But it still makes me might make me feel nice |
| Andy Hoffman | . Yeah, yeah, yeah, yeah. But the the so that but that is interesting. I mean, so if if making art is literally putting yourself in some kind of danger for artistic expression, um is business can business be |
| Sylvain Berneron | art? I would agree, I I would argue uh that there is the art of business the same way that there is the art of war, definitely, and that for example I can tell you that the the the risks that I've taken in front of some of our suppliers, which warned me from a very kind place of mind. They told me, Sylvain, this is professional suicide, I don't believe in it, please reconsider I don't want you to get hurt blah blah blah and I said you know what I appreciate your concern I truly do I take it as a hug but I will do it anyway. Here's my money. Please trust and and and trust the process. Trust the process. Yeah. They did the components, although they were not believing in it, just for me. And now I come a year later and I order more and stuff. And that created a form of respect, a bond, the true meaningful relationship and a will uh for them also because the the suppliers are deeply rooted in the industrial landscape so most of the time creativity is not there right for them it's oh or not in the in creativity is there because they constantly refine the processes and and and find ways to to do better things uh but not in the risk taking levels that that we do on the product side like for example like Max uh and I don't want to speak too much under his name but but uh I'm I'm sure that Maximilian uh is not trying to to fight with anybody. He's f fighting with himself. When you see the orological machines and stuff he's trying to move people, push himself forward. I'm trying to do the same. The result outside, I would almost be sad to hear that my product takes sales away from other people. And if that happens, I would even be willing to help one day. If that would to happen, if somebody would come and say, oh, you launched this and I want bankrupt because of it. I would be like, look, here is some cash, maybe we can work it out. I'm I'm truly not trying to to offense or to attack anybody. We're just a group of guys bonding together through the exercise of making the best object we possibly can A.aron Powell Do you how much do |
| Andy Hoffman | you believe, I mean, what would be the most satisfying outcome for you that you know you end up achieving um great financial success and you are comfortable for for life and per potentially your the generation afterwards, or that you create that you think achieves the level of artistic um expression that you've been trying to achieve? Or are you going through an exercise here to demonstrate that art can be a commercially viable endeavor. Because I think about you know you you when you talk about your family, you know, background and your your father was a tech engineer, your mother was an artist. Correct me if I'm wrong, but she didn't um you know did she make money as an artist? Uh yeah |
| Sylvain Berneron | . No, no. My my my mother had a job. She was an an amateur painter, uh had a deep sense of art, but at her period it was not considered a career path to be a painter. But coming back on what would be the best outcome on the long run first and foremost, what I'm interested in is is the moral structure that I told you about. I'd my dream would be that Bernard SR would be a structure which uh on one hand provides uh employment, good salaries, fulfilling jobs for God's sake, it's not about just a paycheck. Uh in a local business structure which we can also supply jobs for our suppliers around us so we become a true uh deeply rooted uh local economic player which has long-lasting and honorable relationships with this supply network. That would be my dream. A company with a good reputation that plays a decent economic role in its region. That for me as a business owner would be true success. I'd like that company to be strong enough so that the people who work in it have a balanced life, they can have family, they can have hobbies. For example, we have uh uh um employees are entitled to take uh five additional weeks of unpaid uh uh holidays if they want to pair it with the existing five weeks of paid of paid holidays if you want to do I don't know cycling trip visit your cousin in in Australia to do whatever the life is not only a nice work. That's a nice benefit. And and we're trying to do these things because I'm deeply convinced that if people show up to work uh feeling safe, feeling fulfilled, to do something they want to do, uh you you get rid of all the BS of clocking your times having to check if people did the work well or not blah blah blah. People come here because they want to. And that's the the the most efficient way for everybody to do it. I didn't set up a business to have to be a nanny of twelve adults. I'm not interested. Not at all. So so the the moral person, so being a good actor in the canton is is is one thing. Uh provide jobs so playing a role in the economic landscape as well, making amazing products that I would say in the in the global scheme of things is I give you a counterexample. On my desk bed, I would not be pleased to have achieved the best watches if I smoked everybody on the past to achieve that. I would not be fulfilled with that. I would even say it's the opposite, that rather if I had to choose, thank God I didn't have to sacrifice uh until now, and I'm not planning to, but if you would push me against the wall and say quality of the conditions for your people or quality of the product, I would choose the people. I'm sorry. Because I'd rather quietly close this company and to keep my values intact rather than having to to cross that line and become a monster just to make money. Not interested. And and and I do not have a set of hobbies expensive enough to have to do these things, right? I'm not in in the the pursuit of having a collection of Ferraris or whatever. Uh I I don't need that. I would be very proud if I can make one of the the the best watches in the world in a way uh which i hope could be an example used especially by gen z to show them and say look there is a different way to do it, you do not have to sell your soul to the massive corporations. There is another way. I me |
| Andy Hoffman | an, you know, last thing, because we've been chatting for a while. Do you think that great artistic expression, great product, you know, if we think that watches can be an R or can be art, can that come out of what it exists as the traditional Swiss watchmaking corporate environment. |
| Sylvain Berneron | Yes, I I I think it does and it rememb remembers me a discussion uh I had it was a few years ago with a Turnalist. She was not from the watchmaking industry. She came from a more uh global information society newspaper. And she gave me a kick, sort of saying, Oh, Mr. Bergeron, you seem to be a decent individual. Why may I ask? Why do you use your brain for such a sterile and surfacing and develor? Like what you do is completely useless. Luxury is not needed. The world needs bright minds like yours to solve problems, real problems, not the shitty uh sparkly things that you're making. And I uh I remember I took offense on that day because uh uh as a matter, as a designer, I I spent a lot of time thinking about it. Yes, making jewelry, because it's effectively, it would be naive to think that we are making useful tools these days, it's no longer the case, it's jewelry. Is useless. Absolutely useless. We are not solving starvation, not solving conflicts, not s solving environment problems, etc. etc. But these objects use very little resources in terms of volume. Very little resurs. A miraj is uh fifty five grams of gold. So it's not the end of the world. Although these fifty grams have been leveraged through four hundred hours of combined skilled labor, that labor is paid, generates salaries, revenues, tax income, when we sell the watches also generates tax income, which reverts back to the economy and makes the society run. So I told to that girl because she was a bit uh hippie like it can be sometimes like you know like luxury is useless. I was like if I sell a hundred thousand dollar watch, twenty thousand goes in the pocket of the government, which you can build a bus stop, uh or stuff like let's not forget that. Like luxury is not the devil, at least not the way I'm doing it, with highly paid labor in Switzerland, uh with people who actually like their jobs. And we as a human society have to find a way to occupy people, and and if the future of humanity is making jewelry which doesn't hurt anybody and makes the the tax roll payment uh efficient, I think it's it's it's not a bad way to end, is it? Like s I'm I'm I'm I'm yeah, I don't solve starvation, but maybe the the the millions of uh tax revenue and VAT that the all production we gener'llate will effectively solve some of the starvation. So by rebound. So I think it would be a deep mistake to try to make people who have the means feel guilty of buying luck |
| Andy Hoffman | I think you make a a a fair argument indeed and uh it can certainly bring people pleasure into So to ans |
| Sylvain Berneron | wer your question, uh I think art and watchmaking and craftsmanship and and and uh I see it as a true way forward for human society in the watch industry, in the luxury industry. And as a fact, that's also probably why this industry has been quite stable over the years. It's not uh if you compare, for example, to the modern car industry, which is on the verge of a massive transition, uh, jewelry, on the other hand, has been stable since centuries, even before we make watches, we used to make crowns and necklaces and neck braces and stuff |
| Andy Hoffman | . So it it's interesting. That outside shareholders are not conducive to running the best watchmaking business, and that private or company-owned entities are the best at that. Where do you think I mean when we're talking about watches, what do you think of Rolex and and and I mean what role they exist because when you talk about existing in a in a society, I mean obviously they play a quite a role in Geneva and Switzerland. Few people know the f |
| Sylvain Berneron | ull extent of Rolex. Like uh from a business standpoint, Rolex no longer makes money with watches, they make money with buildings. Uh we have that common saying in in in the Canton of National of Geneva that a third of the real estate of the Canton is owned by Rolex, uh which I believe is to be true. Let's not forget they have the Hans Wilson Foundation, which to my knowledge pays back to the community north of hundred and fifty million Swiss francs per year. I think more. Threeree fo fourur hund hundredred? Th? Yeah. Okay. That's mega. I think the the that has to be admired. In terms of business, it is a vastly different set of operations. You have the two formulas, either you do s high quality, low volume, or you do higher volume, lower quality. Uh I'm not saying Rolex watches uh are not qualitative. For the volumes they operate, they are at the highest echelon of quality, which you can operate at that volume. Let's keep that in mind. Now let's not pretend by any means that a Rolex watch can rival with a high-end independent watch in terms of craftsmanship by any means. Yeah. So simply because the the and it's a matter of number of hours of labors combined in one product. |
| Andy Hoffman | But I mean how much does the structure of it being a trust foundation inform what that entity is in terms of its role in society and and and I'm just wondering what, you know, because you you talked so much. |
| Sylvain Berneron | I mean to be transparent, I I declined twice to work at Rolex. And it was back in the day. Now she retired. It was Maria Christina Calvani. She was the head of uh creation. I declined twice because. And it was a matter of perspective, as we discussed earlier. The perspective she offered me was you join us, creative team at Rolex. For two years you won't do anything because I need to wait until your blood gets green, she said. And after two years you slowly start making hands and dies and stuff. Frankly, I had too much creative fire in me to to even dare with that sort of perspective. I think Rolex is the main difference between what I do and what they do is one, the scale of the operation, of course, the magnitude for the record Rolex produces in 30 minutes what I produce in a year. Yep. So there is no comparison whatsoever. And the second is the risk-averse side of things. Rolex is an extremely calculated, well sought out, risk-averse operation, probably because they have a million watches to move a year, uh, a few thousand employees on their payroll, and I cannot blame them for that. Uh so you really have the two sides of the coin. We are uh the pirates, as uh Jean Frederick uh you used to call us, and I'm very h |
| Andy Hoffman | appy to be a pirate. I'm a happy pirate. But I mean, you know, I guess the question is what I'm trying to get at is that you know what will the structure do the structure of this if it if the business plan Where will you go? Where will you go? I mean and and what will the structure look like? Would you take on a an investor, a strategic investor like MBNF has with Chanel or Jorn has done. I mean, yeah. It's it's too |
| Sylvain Berneron | early to say to me the the best I'd be happier to split uh the investment across four or five families that are integrated into the business. Uh for example, Hugo's family, Fabien's family, we gather three, four families together, a bit a bit closer, like AP has it. They had the Piggy and the Otmar family, so a few families linked together. I think it is very important to have skin in the game in the sense that the people who have the money are in the business every day. My biggest enemy is detached shareholders. People who gather the benefits although they do not work in the company. Exactly. Because you come every year and you demand from a structure benefits and you don't know that structure because you haven't worked in it. And I think this is what drives modern corporations in in a very wrong path in my opinion, because the the of course the shareholders they paid a lot so they want more benefits. I I understand that. But if you haven't spent a single day in the business, how could you possibly understand the needs of that same structure? And I think you have to have the two sides of the cone in order to make uh enlightened decisions. |
| Andy Hoffman | And so we know that you're gonna do your you're calling it an annual calendar, a complete calendar the calendar. Annual calendar and we've seen you know some of uh what that will look like And then how far down the line, you know, and I know you've got another watch in, you know, basically planned out after that, how far down the line product development wise, are you if we talk about that twelve year plan to get to six hundred We have the reci |
| Sylvain Berneron | pe and the cost structure, the cost objective planned until two thousand thirty-five. Each year I know I want to make that's the recipe of the watch. So I do not have the design locked in yet, but I know the recipe of the watch. I can already tell you. So this year, twenty twenty five, we launch we kick off our second collection which is called Kantium through an annual calendar which is a Kantium annual. That will be the start of the second pillar within the brand, which is our second collection, more traditional, more technical, uh, the equivalent of what is a Calatrava collection in the Patek portfolio, for example. And in two years, we we will launch a third or third collection, which will be named Fiasco, and is centered around uh jewelry concept that I've been wanting to work on for a decade already. Uh so it still will be a collection of watches, but center |
| Andy Hoffman | ed Ye |
| Sylvain Berneron | ah if fiasco means a big mess, uh effectively. When you'll see the watchful, you'll understand. It is uh I should not say too much, but it the goal of that collection will be to allow the wearer to display the two sides of a person. I think we both of us have two sides. the professional uh handy, the the handy who behaves, who you know, who is well anchored uh in in the world, and we all have the the the crazy Andy, the one who is uh full on passionate in his hobbies, who is probably singing, dancing, I have no idea. All of us have these two sides, same God. Uh and I'd like to capture that through an object we which allows you to display to see. You know, in Batman you have this character, I think it's Harvey Dent with the two double faces. I'd like to to work on that topic. I already know how it looks, etc. But uh the problem with this project is it's another movement again, very complex, and and uh and I need the bulk of cash like no other to be able to do this stone setting like the the the the cash involved this message. This is also why, for example, we've planned the loan sequence also according to the financial needs linked to it. So there is a sequence going crescendo in terms of cash needs, which is why I started with the Mirage, which technically is a three hand watch. Then the Kantiam is a complicated watch. So the Kantier Manuel the movement has four hundred seventy six components, which is three times more components than the Mirage. So I would not have had the cash to start with the quantium collection. And the fiasco is even worse because you had watchmaking, precious metal, plus stones and |
| Andy Hoffman | And so will basically the watches keep getting more um expensive and valuable uh as as uh |
| Sylvain Berneron | is that is that the path? Not necessarily. I do not want to go higher than two fifty because most of the time these watches are simply packed with what I would call unnecessary things. Uh, but that's only my vision. Uh, I fully understood that some people like to spend five million on a on a on a full iced out watch. I'm not judging anybody, but uh for me two fifty is is is one enough. Uh and under 50, due to the small nature of our manufacturing, the extensive use of precious metal, the skilled labor that I mentioned, etc. I I frankly struggle to have a competitive offer under under 50. That's the the the harsh truth. It hurts to say |
| Andy Hoffman | Let's talk about pricing. And this has been a certainly a very important topic in the industry. Manufacturers take a lot of price in the past few years. Talk about, you know, you were just talking about your price range. Talk about how you determine price and you know what kind of margins you're trying to take here. |
| Sylvain Berneron | So you have two ways to to make the sausage, as we say in the industry. It's the same if you buy a bicycle, for example. You have the retail and the direct model. this Berneron SR falls in the in the category of direct to consumer so we are a B2C uh business we use a B2C business model we sell directly to the to the collectors for two reasons. First, I I do not have enough stock to to possibly supply any retail points. And second, I'm not saying no, maybe in the future we will partner with some people to to to s to sell some of our watches, not now. Uh we need to consolidate a bridge. Um because I I truly do value retail. I'm not one of these guys who say, oh, you know, let's screw the intermediate. I think that's a bit naive. But as a result, we are because we are direct to consumer now, we are able to uh operate on a leverage of three, so a coefficient of three. So if my watch is sold for three thousand, it costs me a thousand to produce. Uh that's mainly because another thousand goes uh I split it very roughly. It cost one to build, one to pay the salaries, operate the structure, etcetera, and another one to do the oxygen supply for the company to keep rolling further. So unlike people think, a coefficient of three is far. And I'd like to debunk some of these myths. I hear some keyboard heroes sometimes who tell me, oh, if the watch costs a thousand to make you could anything above one point five is greed I'm like yeah right you you've you certainly never had built even a slight assumption business plan in your life to say stuff like this. Mr. I know everything. Good luck making a watch that has a cogs, so a cost of of making of a thousand and sell it one point five. You'll go under in six months. Impossible. So and and and God knows the coefficient of three is from my knowledge in the industry the bottom bracket of what can be achieved. If you go under three uh uh you you your margin basically if you go under three my assumption is that either you will uh heavily diminish your capabilities of handling any bad buzz that could happen, any bad event, after sales, lack of supply, whatever. Or you will heavily damage the capabilities of your companies to move forward, develop new projects, uh invest into people, furniture, et cetera, et cetera. So it might be good to break the egg and start, but if your company doesn't have oxygen to grow, you'll end up circling where you are on the same floor and your company will effectively die because the other will progress. That's also the thing. When I say keep the narrative, that's what I mean. The biggest enemy in modern Hindi watchmaking, in my opinion, is the lack of narrative. Too many guys come out of the bushes with one watch that took them fifteen years to make they amaze everybody. You blow everybody's mind because you stacked all your ideas into one thing. But chapter two is not there, hasn't been thought about, and is not planned in a not even close future. So you have this huge spike of interest, which usually put the business under extreme pressure to provide to fulfill the orders, etc. to the point where it distract them completely from where do I go next? You end up you know like you with you completely focused at the bench fulfilling these orders, and that kills any potential for your company to turn into a brand or to have any potential long future. And sometimes even your best collectors can turn into not enemies, it's not the world, but with loving so much what you do now, they could prevent you from going further. And I've had this discussion with my Kantier Manuel this year. Some of our biggest advocates told me, ah Sylvain, the Kantium, why do you make a round watch now? And I was like, well, because I don't want to be boxed in the asymmetric mirage layout forever. I want to build for you a stable brand which needs by definition multiple pillars to stand on. And uh I remember I told Roy this and I was like, trust me, that maybe in 10 years you'll your taste will change and maybe you you'll move out of the Mirage connections that you have so deeply now and you'll happily revert back to a Kantier Manuel or a fiasco or I don't know and then we'll still have that meaningful collection together. I told him, mark my words, you'll see. Because me as a collector, my change my taste have changed dramatically over the years, which is the pleasure of the hobby |
| Andy Hoffman | as well, right? Indeed. Indeed. And I you know, you've obviously though, um you are in the price bracket that you are in and it is, you know, getting larger as you um create new product, more complicated product, different product product with more stones. Do you think that you could create, you know, with your experience now your your your business experience, your your design acumen, could you create a successful high volume, you know, um watch company that pr you know with prices between two and five thousand francs? Could you do that? That would differentiate and stand out? Have you thought about this? Oh yes. Oh yes, I've thought about it. And |
| Sylvain Berneron | I have a very precise answer for you. I know that I could provide a good recipe to make a mass market very appealing watch that could uh resonate with modern culture and be accessible in mass to to to a volume uh tank of of of clients but the only way to achieve it is to already own the manufacturing structure. I think and I give you an example. Uh I think Christopher Ward is really stretching their model to the max because they do not own the manufacturing structure. The only way you can go under this kind of prices, and it's been proven recently with the moon swatch exercise, is like the swatch group when you own the factories from A to Z and you make the plastic injection, the dice, the stones, the crayons, the pinions, the wheels, etc., etc. And you can handle that through and through and and place the different levels of spending accordingly. If you do not have that, I personally wouldn't start. And this is why for me it was not even uh don't get me wrong I'm very happy to do full precious exotic uh watches but even if I wanted to do a revolution in the sub uh 5000 segment, I possibly could not do it. Regardless how good my IT is, I guarantee you. I will come up with this design, regardless of how good it is, people will tell me, oh it costs five, it's that's a three thousand dollar watch. And the problem is, right now, this segment is being hammered heavily, in my opinion, that's my analysis on the problem. It's because on one side you have big corporations which are sitting on the manufacturing structures and they are scared to death because they have the cost infrastructure that goes with it because, don't get me wrong, when you have five thousand employees, the tooling, the lease, the the all the the loans at the banks that goes with it, you don't want to mess it up, right? So you don't want Mr. Bernard coming telling you, oh, let's build the triangle watch, you know, in millions of examples for the next year. It would never happen. And at the same time, the creativity, the the the uh is completely has been pushed away from these companies. You can no longer be creative in these big corporations because the the the Excel sheet is king. And until these two are reunited, it will never work, if you ask me. Somebody, Mr. Hayek Junior, or I don't know, I'm not here to make calls, but Mr Rupert, they have to reunite the creativity with the manufacture. Only when the two are together it works. Proof of that Moonswatch was a m the most recent example. So you see when you reunite the two, it was a creative idea. I'm not a a big fan of because I think it's product dilution if you ask me in a sense, but uh nonetheless, here is a true example of what happens when you reconnect the dots. Boom. People are queuing to buy a watch in the 21st century, which is hilarious. Because everybody has a phone. So it is of course possible. But somebody has to have the balls and to say, yes, sorry, I will put at risk my three four five hundred million manufacturing infrastructure I would put it up to the stress test to build that product that I believe in. And if you're a big entrepreneur you have to take the big balls risk that goes with it. Exactly. So this is the way I see it. Uh but yeah, so so me with my own need, my own uh resources, that segment is strictly unaccessible to me, I believe. And and Y |
| Andy Hoffman | ep. No, uh you it it it makes sense indeed. You need that uh manufacturing capacity to do it. I mean last thing to wrap it up, because it's great. Is there anything, you know, on the business side y you know, you think uh uh with Bernard you want to talk, you know, essay that you m think is important to understand about what you're doing here? And is there anything, you know, that starting a watch brand, taking all this risk that you would, you know, advice or information that you would give to whether it be you know people in any other business or in watchmaking, et cetera, that you would give to them um uh based on your experience so far? |
| Sylvain Berneron | So it's been almost five years. I've almost cried multiple times, uh delayed holidays, delayed paychecks, delayed all of that. Uh what I can say is I never regretted it and even if he would fail next year or the year after I'm I still would be happy that I tried. I should I should also mention this because it can be very rough, look very rough sometimes, but the pride and the joy of saying, I gave it a go. And I always relate to this. I've been racing motorcycles with my dad for 20 years as an amateur, when you try your hardest and you still get smoked on the track, you have no regrets. You don't even feel bad because you remember that at that time you tried all you had, you left it all on the racetrack and it didn't work and that's fine. Uh so my one and only advice to people is if you give it a go, give it your best shot. Like do not half ass it in some way, like trying to be safe for you. That's the worst thing. I tried my mirage, people called me silly. I made the full gold construction, the movement from the ground up, even the spring bars in gold, which is the thing that people make the most of most fun of uh right now, even my best friends, that was for me the way the a way to say, look, even that has been dialed into the max so that if it fails, I cannot think of a single point of the equation where I could have done more. Because the worst is that is because it happened to me during races. What what if you fail, you don't get the result you wanted to have, and your mind starts thinking, ah, but you missed one training on on Wednesday. Or you parted on Friday, you remember and you woke up at eleven instead of eight, like you said you were doing. If you had done these two things, maybe you would have had the result you wanted. That sucks. That's very bad because your brain will tell you. Yeah? So no regret. Yeah. You have to give it a euro. Yeah. If you if you do it truly, uh pack your bag, ready to embark on that journey with your your your your best intentions, a deep sense of of responsibility and commitment, and promise yourself that you will give it your hardest so that if you fail and do not hide that probability during the entire process I was well aware that I could probably lose a million Swiss francs, which is all the money that I saved. And I and I had dark times in the process. I was still looking at that devil. Yeah, saying, okay, this is there, I will keep on my path, trying not to collide with that uh scenario, but at least I'm acknowledging the fact that it potentially exists. It's the same way why I control my growth, right? Because I don't want to end up in after sales nightm |
| Andy Hoffman | are. Yep, exactly. Which also but I mean it it it plays into the desirability of the product as well. I mean it's a somewhat a virtuous um uh situation uh but indeed the temptation to uh produce five thousand mirages uh must have must be strong. Espe |
| Sylvain Berneron | cially with the uh because you do make the calculation. When you see the emails you you go like, wait a minute, I have you know five hundred people on the wait list. Let's imagine I build half of that 250s, that's time five. You take your iPhone, you make the quick annual revenue of the brands this year, times five, you go like that's not bad, is it? Uh yeah, it would be short-sighted, it would be uh unnecessarily risky, which that business is always is already is, again, between being brave but not stupid. It's it's the conclusion. Absolutely. We'll leave it there |
| Andy Hoffman | . Yes. So bam bum. And that's the business of watches for this episode. We hope you enjoyed. Please head on over to hodinky.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. We'll be back in two weeks with a fresh episode of the business of watches. Until then, I'm Andy Hoffman, and I'll see you on Ho Dinky.com. |