The continuation of Off The Cuff’s exclusive interview with luxury watch maker Mike Kobold, founder of Kobold Watch Co. To read Part I of the interview, please click HERE.

Off The Cuff: So, who is your customer? Who is a Kobold guy?

Mike Kobold: He is someone who has an affinity for finely made products – shoes, cigars, cars, etc. Of course, he is also someone who has an affinity for watches regardless of his career. I say that because many of our watches are tool watches, they are meant to be used in challenging and difficult situations. But they are also beautiful and elegant pieces of horological art. (The new Soarway GMT is pictured above)

Though I am not going to go into too much detail about specific demographics, one group we do market to encompasses military/police/protective services.

Since our watches are not inexpensive – and I can touch on that in a minute – we do want to attract people who can afford them. Active service military or police tend to be younger guys with disposable income and, equally important, they want a distinctive best-of-class product that’s going to perform. At the other end of the spectrum are retired military; their kids are out of the house and they now have the chance to indulge in their own interests.

Mike Kobold, Founder

What I don’t want is someone who really can’t afford to purchase a Kobold at this time and who may then regret their decision because of other more important things they should be addressing. That’s a bad call for the customer and for Kobold because we now have someone with buyer’s remorse and potentially a watch that has moved to the secondary market.

OTC: What about the used watch, or “secondary” market? What is your feeling about that?

MK: You know, generally speaking I don’t think about it too much because that’s not where our focus is – we don’t create watches for the secondary market, we want someone to buy a Kobold watch because they want to keep it and use it. However, the secondary market does provide a point of entry for some people who cannot afford our watches at full price and that’s important too. I hope that should someone buy one of our watches through that channel, their next Kobold will come from us.

Watches are so personal and for many collectors, knowing that they picked out a specific watch and were involved in the acquisition from start to finish makes a huge difference to them. But however it happens, we want all Kobold owners to have the same feeling of being part of a special community. That’s key to any successful brand.

OTC: In some of the watch forums and chat rooms, I have seen negative comments about pricing – basically that you charge too much for your watches. Is that a fair complaint?

MK: Our watches are not inexpensive and I’m certainly not apologizing for that. But I think people need to remember that watch making is an expensive business and we are still a very small company. I’m a very frugal guy – I still live in the same one-bedroom apartment I’ve had since college, I drive a pre-owned car and am constantly reinvesting back into the business. The sub $1,000 watch market is like 90% of the overall market which means that all the high-end tool and luxury watches out there are all fighting for the same 10% market share.

The Phantom – a military favorite


The Spirit of America

That means constant development and constant marketing and those two things cost a lot of money. Remember too that the lag time for a new watch, from conception to retail can run anywhere from 6 months to two years. Production costs and overhead increases affect every business and we are no different – so yes, that gets reflected in the retail cost of our watches. Every year we offer a new model at a reduced price to say thank you to our current and new customers – it does cost us real money in the form of lost revenue, but honestly that’s immaterial because the point is to continue and build the Kobold community.

OTC: What about the production limit of 2,500 units per watch model – where did that come from?

MK: It came from the business plan I drafted for my MBA project; that’s actually when Kobold Watch was founded. I chose to cap watch production at 2,500 units per model because at that time it was a figure I never thought I would reach – an arbitrary number. Now it defines the unique nature of every Kobold watch and I have no plans to change it.

OTC: When I think of your brand, I see some guy parachuting into the wilderness to study extinct botany or something equally exotic. So what’s next for Kobold Watch – how do you plan to build on the brand?

MK: Well, you can tell your readers that right now I’m looking at the designs for a new chronograph – 40mm. They can expect to see it in a year or so. It’s a great looking watch. That’s one of the things I love about watches – the emotional value they have for so many people. Certainly building on the brand’s message – “Embrace Adventure” – is something I want to continue. Whatever that adventure is, Kobold can be part of it; whether you are exploring Antarctica, excavating Mayan ruins or just living your life, our watches are up to the task.

A Polar Surveyor in action

We’ll be rolling out new models on a pretty regular basis, still a 2,500 unit maximum and it’s amazing how that is no longer such a large number. I’m also working on a book – that’s still in the development phase and it’s something I am very excited about.

There are many medium and short term projects that will help expand the brand but also keep it involved in the lives of the serious adventurers who rely on and support Kobold Watch. One project I am very dedicated to and will likely take a very long time to accomplish is the development of a 100% American automatic military watch. Our soldiers, sailors and airmen all wear watches that are made in other countries – good watches to be sure – but not American.

I want this country to be a leader again in fine horology and that will take a long time to accomplish because it involves rebuilding an entire industry that have been absent from the American landscape for more than 40 years. Still, that’s my big long term goal.

OTC: Mike, thanks very much for taking the time to speak with me and for giving Off The Cuff’s readers across the world a better understanding of your great brand – and your great watches.

Close your eyes. What comes to mind when I say, “handmade mechanical timepiece,” “exacting quality,” and “coveted by collectors, celebrities, explorers and heads of state?” Did your thoughts immediately drift to Pittsburgh, Pennsylvania? Maybe they should.

While Switzerland is home to the likes of Rolex and Germany to Glashutte, the Steel City is in fact the world headquarters of Kobold Watch Company and the remarkable Michael Kobold.

At all of 30 years old, Kobold has done something most in the luxury industry – heck, any industry – would have thought impossible. Within the insular world of high-end timepieces Michael Kobold has created a boutique watch company from scratch and it’s thriving. His line of watches, anchored by the stunning, and stunningly functional Polar Surveyor, is primarily geared to adventurous types – armchair and genuine alike.

Mike Kobold

Celebrating its 12th anniversary this year, Kobold Watch Company is barely out of diapers when compared to brands like Cartier, Jaeger-LeCoultre or Breguet. But his creations are already being compared to Rolex and Omega – two brands traditionally associated with jet setting, globetrotting and adventure. Often it’s Kobold doing the comparison, but that’s part of his brand’s success: he isn’t afraid to put his products to the test and tell you why they are just as good – if not better – than those other gold plated names.

When I first came across Kobold and his quirky little watch company a few years ago, it intrigued me. Nothing serious mind you, but I heard that the guy wore one of his watches on each wrist and that’s got to count for something. The more I learned, the more the man and brand impressed me.

I’m not alone. His loyal brand ambassadors include former President Bill Clinton, A-list actors like The Sopranos’ James Gandalfini and CSI: New York’s Gary Sinise, legendary adventurer Sir Ranulph Fiennes and global architect Daniel Libeskind.

Ran Fiennes: Brand Ambassador-in-Chief

I recently took receipt of my first Kobold, the Arctic Diver “Swiss.” This is a new model being offered in three versions, the “Swiss” which houses an ETA 2824-A2 movement, and two other variations which primarily sport U.S. components and are run by an in-house manufacture K.2651 movement based on new-old-stock German made movements.


My new Kobold Arctic Diver

The flagship Polar Surveyor

It’s a great watch. And though at 46mm it’s quite big, the Arctic Diver sits very comfortably on my wrist. What really impressed me however, was the emotional connection I developed with this watch almost immediately. It’s unique yet classically inspired design is easy to read which is good because it’s also very much built for someone who plans on wearing it to the ends of the earth. This watch has a purposefulness to it that makes me want to be like Indiana Jones, or Phillipe Cousteau (who, by the way designed his own Kobold watch).

Philippe Cousteau & The Large Soarway Diver

So, after watching this upstart company grow from the offshoot of an MBA project into a legitimate and respected player in the high-end horological business, I was ready to sit down with Mike and find out what makes Kobold tick.

Off The Cuff: Mike, tell me how things are going in the watch business? It’s been a rough year and most high-end brands are down about 30% – does that sound right?

Mike Kobold: Yes, pretty much every brand has seen at least a 30% overall drop from last year. Everyone’s been hit hard, but we have been able to make some adjustments and trim costs without compromising our standards. Still, the market is overheated and some of the larger houses have not been able to react as nimbly as us.

OTC: What has been your approach?

MK: We have cut costs without cutting our customer service. That has meant fewer trips and fewer shows. Fewer dinners and less entertaining; and my staff have worked to identify areas where we can tighten the belt and squeeze out more efficiency. We are still a small operation and have the ability to react a little more quickly than others. We saw what was coming down the road and started to make changes early.

OTC: What about your Internet-based model? How has that helped, or hurt, your overall business?

MK: It has definitely helped in that we are able to focus on watchmaking and keep the business geared toward customer service. It’s also easier for us to keep in direct contact with our customers and potential customers know that if they call us, they are going to be speaking with a real person – could be me. That said, as we have grown it’s just not that easy for me to be in direct contact with all of the customers and that’s been a frustration, albeit a nice one to have. It’s definitely been an organic kind of growth.

One of the main challenges of being an internet-based company is exposure. Since we only have a very small retail presence, Kobold has to do a lot of advertising. And as the founder and face of Kobold, I need to be out networking and making appearances. If you looked at my expense reports, you probably would question my cost cutting claim, but a big part of my job is to be seen, to meet people and to generate interest in and awareness of the brand. Still, it’s getting harder for me to maintain a personal level of customer interaction as we continue to grow.

As a company, having a strong focus on customer contact and service also means that we are better able to anticipate and react to customer needs. For example, the Arctic Diver roll-out was delayed a couple of times (ed: originally scheduled for customer delivery in April 2009, customers who pre-ordered their watches finally started to receive them in August). That really frustrated and embarrassed me, but it was a supplier issue and there wasn’t much I could do at that end.

OTC: So, how did you handle it?

MK: What we did for our customers who had pre-ordered an Arctic Diver was give them a free calfskin strap and make every effort to keep them up to date. We actually called every person and told them what was going on and let them know that they were getting a free strap as a thank you for their patience. It cost us a fair amount of money, but it was the right way to handle an unfortunate situation.

To be continued in Part II…