The Interview: Michael Kobold (Part I)

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…