In this Founder’s Update article, we share some of the biggest recent business milestones (e.g. improved service, new team hires), and conclude with our business roadmap for the year ahead.
What did we achieve in the last 6 months?
Since our last Founder’s Update in July, we’ve succeeded in launching 20+ new watches (including R1, A7, Tactical, DS4), launching on Amazon Prime, doubling the size of our full-time LA team (to 4 people), producing our 4th documentary short film, landing dozens of new press reviews, delivering over 120,000 in-home catalogs, and achieving our biggest holiday season to date.
Unlike previous year's launches, our pre-order and delivery schedule in Q4 2022 was on time and even ahead of schedule (with R1 chronographs delivering within 3 weeks of pre-order launch). This was primarily achieved thanks to the improved efficiency and diversification of our USA assembly teams (distributed in both California and Arizona). As a reference of progress in our stateside assembly, we built nearly as many watches in Q4 2022, as in all of 2021.
To support this growth, we’ve made major investments in logistics, assembly, customer support, and post-purchase services - and this was mainly achieved by our first two full-time hires.
Why did we wait so long to hire anyone at Vaer?
If you’re new to Vaer (and this is your first time reading a Founders Update), you might be surprised to learn that we’re an EXTREMELY lean operation. Since starting the company in 2016, almost all aspects of the business operation have been handled by two people, Ryan and Reagan (who also represent 100% ownership of the business). As of July 2022, we relied almost entirely on a network of partners and contractors to execute a complex international supply chain: from manufacturers overseas to US-based assembly technicians to our Florida leather team to our warehouse and fulfillment team in Missouri.
This lean business model is a result of both necessity and strategic decision-making.
Vaer has always been a value-oriented brand, and this translates to a low retail margin compared to most other direct-to-consumer online watch businesses. Almost all of our profit goes back into ordering more inventory, with the remainder going to drive awareness for the brand. This simply doesn’t leave much left to operate a large team (or a fancy office space). While many startups take on outside capital to subsidize this cost, this is something we’ve always been extremely wary of.
Our experience prior to starting Vaer was in early-stage tech startups, which was a crash course in the importance of maintaining full operational control of a business (and avoiding the boom or bust nature of Venture Capital investing). While we aspire to build a large team at Vaer, this expansion will only be undertaken on our terms, and when it delivers lasting value to our customers.
Who did we hire? And why?
In the fall of 2022, we made the decision to bring on two critical members to the team, both based here in Los Angeles. First, Ryan's younger brother Blake took ownership of our state-side assembly operations and post-purchase service, serving as a direct point-of-contact with our network of US assembly technicians. The second hire was Evan-Austin who became our first full-time customer support lead and the first point of contact with the brand (replacing Ryan as the primary point of contact for customer inquiries, shipping updates, and help with returns or warranty claims).
Blake’s efforts have increased fluidity and efficiency in assembly, improved our quality control processes, and enabled us to expand our assembly network. We now have the ability to break out and distribute components to multiple assembly partners and centralize our quality control process to one hub. In addition, he has rebuilt our service process, bringing service lead times from 3-4 months down to 3-4 weeks - a massive improvement!
Evan-Austin has been integral in reducing response times and delivering the fantastic customer experience that we’ve become known for. Our goal is to always do our best to delight our customers, and Evan-Austin’s understanding of the products and amiable demeanor have been just what the team needed.
It’s only been a few months, but the impact that Blake and Evan have had on the business is unquestionable (we simply wouldn’t have been able to succeed over the holidays without their contribution). While we remain committed to a “lean-as-possible” business model, we’re optimistic that these new hires will open up opportunities for further growth of the team in the months ahead.
What’s on the product release roadmap for 2023?
Looking ahead, we’re very optimistic about the state of the Vaer product lineup. With the release of the R1 Chronograph to complement our existing Field and Dive watch offerings, we believe that we have a competitive offering in almost every sub-$1000 category, and are a market leader for American assembled watches.
Our 3 biggest releases (by total revenue) over the last 6 months give a good insight into the business's future prospects. They are as follows:
- C5 Tactical Field - from $299
- R1 Cream Chronograph - from $399
- DS4 Meridian Solar Diver - from $259
What have we learned from the C5 Tactical?
Our biggest seller of all of last year was the C5 Tactical Field watch (despite it only being in-stock for 5 months). This success was a result of taking a winning template in the C5 USA quartz collection, and vastly improving legibility and lume performance, and adding the aesthetic flair of an all-black PVD finish. It confirmed that technical performance is a TOP PRIORITY of the Vaer community, and affirmed the appeal of watches with an operational use case.
Over the next 12 months we’re going to double down on this success, further increasing the “tactical” nature of our field collection with some of the following ideas in the works:
- The long-awaited release of the C4 Tactical USA Solar Field Watch
- Larger dial options (42mm, maybe 44mm)
- New PVD finishes & case materials (ex. titanium)
- Lume power chart on all product pages
- Our first use of a crown guard
- Potential collaboration with US military service branches
What have we learned from the R1 Chronograph?
Complementing the success of the C5 Tactical, is another affordable USA-assembled watch, the R1 Chronograph. However, unlike the field design, which is rather conservative, the R1 design is bold, colorful, and highly unique. From its retro pillow-shaped case, boxed sapphire crystal, and multi-colored dial layout, we took a lot more risks with the R1 compared to many other models, and fortunately, those choices paid off.
As the chronograph is our newest watch category, it’s also the one where we have the most room for expansion and experimentation. Here are some of the ideas we have for our chronos in 2023:
- Dive case chronograph (think vintage Speedmaster/Daytona)
- Field case chronograph (think vintage Breitling Top Time)
- Bolder and more dramatic colorways
- Potential collaboration with automotive organizations
What have we learned from the DS4 Solar Diver?
As was briefly mentioned at the top of this email, Vaer is now available on Amazon Prime, and the DS4 Meridian Solar was the product that helped kickstart this initiative. As our most affordable dive watch, it’s the perfect entry point into the brand and a great representation of what makes Vaer unique in the line-up. While we will ALWAYS prioritize small-batch USA assembly and direct sales on our website, we also realize that there are thousands of watches sold on Amazon every day, and our S-series products are perfectly suited to compete in this important market - allowing us to reach a whole new set of customers.
Currently the DS4 and its USA-assembled sibling the D4, are only available in a few minimalist colorways. Starting in the spring, we’ll be bringing a host of new color options and design variants into the solar collection, including a much-requested PVD tactical version.
What’s our biggest product release of 2023?
In addition to the release roadmap and design concepts outlined above, the single most substantial release of the next 12 months will be our upcoming G5 Meridian GMT, a USA-assembled automatic powered by the all-new Miyota 9075 true GMT movement. Set for a Spring 2023 release, this new model will be based around our second generation G7 Swiss GMT, but with a starting retail of only $800 (compared to $1099 for the G7).
We’ll be sharing more details on the upcoming G5 in the weeks ahead, but you can expect an early-bird pre-order period starting in late February, for shipment aiming for mid-April.
Our Wrist Essentials:
Reagan: After some big surf to start the year, most of my free time over the past few weeks has been out of the water, and in the snow (having just returned from a snowboarding trip in Colorado). I’ve had my R1 Chronograph Cream 38mm with me the entire time, and it’s been a lot of fun speed-timing my runs. Back in LA, I’ve been loving the D4 Meridian Black 38mm on bracelet, which has a strong presence thanks to its Submariner resemblance. I’m also falling back in love with the ceramic bezel (after years with my aluminum bezel D4 Meridian Navy).
Ryan: I never would have guessed a year ago (as I've been obsessed with our dive watches), but our 38mm Blue R1 Chrono on a single pass black strap has been living on my wrist. Around town, it's easy to style with anything, and the unique case & dial is a great conversation starter. California has been having an insane "atmospheric river" event over the past months, which has brought some of the greatest surf and snow conditions we've seen in years, so all of my spare time has been spent either in the ocean or up at our local mountain, Mammoth, and the R1 has excelled in both environments. The chrono timer comes in handy in the most random instances (snow runs, steak flipping, pasta cooking, lume testing, the list goes on). In terms of my strap choice, we have such a great variety of 2 piece straps and bracelets, but the single pass black strap is just so dang simple and reliable, I can't get away from it - it makes sense that our initial offerings came only with single pass straps.
Thank you for your continued support, and please feel free to share your thoughts and feedback. We value your input and will do our best to respond promptly.
All the best,
Reagan Cook & Ryan Torres
Ryan and Reagan co-founded Vaer Watches in Venice, California in 2016. As small business owners they handle just about every aspect of the daily operations of the company from watch design and supply chain management, to customer support and photography. Over the years, they've learned a thing or two about watchmaking, online retail, and American sourcing and assembly. If you have a question, comment or correction related to this article you can contact the authors directly at team@vaerdesign.com.
