News travels fast, you may have heard already, we hope to inform you personally about the acquisition of our company.
We have been approached in past to be taken over. Until last year, we never engaged in such discussions as we had idea that our children may take over in future. By now, we know that both our children do not want to work in the company, we started to have discussions with the two groups that approached us last year.
After a year of deep discussions, we felt best with one group in terms of expectations and strategy. This group required, specifically, to keep both us and the current management team in place for at least 5 years. Within this group, we will be the largest Swiss entity and we will continue to operate independently.
The group that will take over is Citizen Watch, a strategic watch industry buyer that has over 125 subsidiaries. Citizen has a reputation for innovation and letting its subsidiaries manage themselves independently. Coincidentally, this completes a circle for our company as Frederique Constant started with an order from a Japanese customer. The company has always had strong relationships with Japan and we feel good about long-term collaboration and continuity within the Citizen Group.
Today we are doing the official announcement and attached is our letter for our employees and stakeholders.
We are exited about this next chapter of our company. Thank you for your continued support and sharing this journey with us.
Aletta and Peter Stas
Thank you all for the great reactions on our Horological Smartwatches in Basel! We are very happy to see the very positive enthusiasm to the concept that we introduced end February in Geneva, Tokyo and San Francisco. The Horological Smartwatch is a Beautiful Swiss timepiece with connected functionality. It has all the attributes of a beautiful Swiss watch, characterised by the fact that it is based around a dial rather than a screen. The watches connect to an app on Android or iOS phone, allowing to track activity, measure sleep cycles, and get reminders to be more active if sitting too long. Activity and sleep quality can be seen on a secondary analog dial on the watch face itself. The health benefits of being more active and getting better sleep are well understood. Activity monitoring and sleep tracking are the most successful wearable application of today, used by over 20 million people. We are now combining a beautiful Swiss watch with the advanced MotionX technology platform. Traditional watchmaking uses applied technology (five centuries of research in mechanics), the smartwatch uses embedded technology in the form of dynamic firmware that is in constant communication with the world. It is a long way from the mechanical calibre hermetically sealed inside its case, only to be opened every few years to add a bit of oil. We very quickly realised that we couldn’t do this on our own. So we set up the MMT joint venture with our partner Fullpower. MMT designs the circuits and manages the production of the modules in Switzerland. Fullpower developed the schematic, firmware, the apps and the cloud. MMT offers the technology platform also to other brands in the watch industry.
We have 2+ years battery life, an extremely important advantage compared to other smart watches. We always focus on improving battery life over time and we expect we will see further improvements. For comparison, most popular smartwatches run for less than 12 hours in continuous usage, and the longest lasting smartwatches run for at most a few days before needing to be recharged.
Modules for Swiss Horological Smartwatches have been developed, manufactured, and assembled in Switzerland. MMT is a Geneva based Swiss manufacturer. Modules are made to stringent quality and legal requirements. MMT Horological Smartwatch Modules already meet the new legal requirements for “Swissness” that will become active as of January 1st, 2017.
Most probably you have recently heard about the new book : ‘How Google Works’. Reviews are rather negative; readers’ expectations should be suitably low. The book however describes interesting themes, some I would like to write about in this post.
Intriguing is the strategy to motivate ‘Smart Creatives’: those intelligent, self-motivated employees who are responsible for coming-up with next technologies, methods, and products. They are those we call true A-Players at Frederique Constant, they are our fuel for growth. We need to hire and retain them. Salary and perks do not motivate them. They seek meaning in their work and approach their careers with a missionary zeal ‘to make a difference’.
Company Culture is essential to retain ‘Smart Creatives’ and ensure continuous fuel for growth. At Frederique Constant our mission is ‘To let more people enjoy luxury’, it is a purpose beyond individual members of our company. It is a purpose that we expect will outlive us. We think of our mission daily.
‘Smart Creatives’ are obviously motivated by Creation, an incredibly important aspect of our innovation strategy. We trust our engineers and watchmakers, we say yes to them as much as possible. We stay flexible in communication and approach. ‘Smart Creatives’ power derives from merit and in-sight, not tenure or salary. We have thirty something watch geniuses assembling Perpetual Calendars with ultra complex patented mechanisms. At other watch manufacturers, only very senior (and old) watchmakers would be allowed to touch such complicated mechanisms. Being involved in creation and manufacturing of high-end luxury watch mechanisms motivates all watchmakers at Frederique Constant.
Another Google strategy that resonates is their approach to product launches: Launch quickly, iterate and don’t be afraid to fail. This is not necessarily the strategy of most Swiss watch manufacturers… At Frederique Constant however, we have never been afraid to jump-in. In 2001, we started to develop our first mechanical caliber with the Watchmaker Schools in Amsterdam and Geneva. Later we added students from the Ingenieurs School in Geneva. Developing and manufacturing our first mechanical caliber was a three year very intense effort with many ups-and-downs. We were driven to create a ‘perfect’ Heart Beat and introduced the first, most simple version in 2004. Ten years later we are an independent Manufacture that created 15 calibers, representing over 25% of our annual turnover. If we would not have started with what looked like an impossible project in 2001, we would never have reached where we are today. Innovation is at our core and a key motivator for ‘Smart Creatives’.
Lastly, Google’s hiring practices are of interest. Hiring processes are extremely important at any company. Companies should pursue versatile ‘Learning persons’ whose private passions suggest dedication and personal pride. Decisions on hiring and promotions should be peer-based, reached by committees of employees instead of individual hiring managers. Keep interviews to the point and revealing.
We are very happy to report that we have closed the year with 16% sales growth compared to 2013. This is an enormous performance considering that the watch industry exports only grew approximately 2% in 2014. We are very proud on this result! All teams in the company, our distributors, and our retail partners have been working very hard to realize maximum sales in an often-difficult environment. Thank you very much for this hard work!
Not only has the result been good in 2014, very important is also that we have made structural changes last year in our management approach. Aletta and myself have stepped back somewhat from day-to-day operations and this work has been picked-up increasingly by our Management Team. With hard work, help of coaches, planning meetings, and various IT systems, our overall accountability culture has improved significantly. This is very important as it creates a solid base for the future. We thank all at the company for this new way of working.
With more time available, Aletta and myself have been able to focus more on external relations, collection creation, and strategy. Never before have we had our new collection so well developed at this stage, more sophisticated, all details fine-tuned to a new level. Our merchandising strategy is showing increasing strong results.
All this gives us strong confidence for 2015. As always, we have great ambitions and we are sure that we will have another year of excitement and strong growth.
With our target to grow production and sales from 135K to 150K in 2015, we will let more people enjoy luxury. This core purpose is our reason of being and the driver to live our passion.
Thank you for your interest in Frederique Constant, thank you for your support. We wish you an excellent start of the year and are looking forward continuing our journey with you. Together we are strong and together we will be living our passion!
Read in the NY Times this weekend:
In the past decade, many Swiss watchmakers, from luxury kingpins such as Vacheron Constantin to mid-market brands such as Frederique Constant, have embraced the notion of becoming manufacturers, a term of prestige that distinguishes companies that make every bit of their watches from those that buy components for assembly and marketing.
Full Article: http://nyti.ms/1BQru0z
I’ve blogged a couple of times about one of my favorite companies, Frederique Constant, a remarkable maker of fine watches in Geneva, Switzerland. Their distinctiveness is what they call “Accessible Luxury” and their slogan is “Live Your Passion.” In discovering more about their history and brand, I came to realize that their distinctive approach to watches parallels my own approach to wisdom. Since I left a great university position nearly twenty years ago to spread ancient wisdom across the culture and globe, I’ve actually been focused on what you could call “Accessible Wisdom” – not wisdom that you need a PhD to understand, or years of study in distinguished libraries to acquire, but deep and practical insight of the highest order that applies to the challenges of everyday life, and answers the questions that we all inevitably ask.
Peter and Aletta Stas, the founders of Frederique Constant, were lovers of fine watches in their early years together, and wanted to find a way to put such a luxury within the reach of more people. They understood that luxury is not at its core about inaccessibility, or elitist cost, but rather that it essentially embodies such qualities as great beauty, excellence, high functionality, comfort, and ease. With the right focus and tremendous ingenuity, they’ve been able to live their passion and realize their dream of including more people within the realm of high end luxury, making it more widely accessible. And they’re having resounding success around the world, as a result.
Wisdom, also, is not about inaccessibility. The truth is that you don’t have to be a legendary guru, or a top scholar, in order to attain and benefit from the greatest insights available for living in this world. But too often, the deepest wisdom has been treated as exactly that – as if you have to be first inaugurated into an esoteric cult, or initiated into a gnostic order of insiders who study rare documents in arcane languages, or you have to learn to speak a technical jargon far beyond the comprehension of those who have not been trained in its use, or else, unfortunately, the best of human insight can’t be yours. And that, I’ve been determined to show for the past twenty years, is just not true.
It has indeed taken me years of formal training and decades of dedicated work, like a top Swiss watchmaker, to be able to separate truth from falsehood, and insight from illusion, in matters of human life and aspiration, where the differences can sometimes be subtle but crucial. What are our greatest insights? How can they best be applied? How do we separate mere appearance from reality? Part of the reason I’m so impressed with Frederique Constant is that they’re doing for watches what I’ve long sought to do for wisdom. And their passion has helped me to clarity mine. On the basis of all my own hard work and study, refining my sensibilities and logical acumen to the highest degree, I’m now able to offer people accessible wisdom that they can use and enjoy, and that can enhance their lives, as it does mine, every day.
The more we can make accessible to others what we’ve perhaps worked so hard to achieve ourselves, the more we make our distinctive mark on the world, and we can seek to serve from the riches and blessings of our own lives, bringing these riches and blessings to others.
What are you really good at? What can you make more accessible to others? How can you do and share with passion? These are questions always worth asking.
Ask them today.
Here my short feedback on the Apple Watch.
I certainly like number of software features of the Apple Watch. Still form factor is a problem, square watches are extremely difficult to sell, only very small part of business. Also, watch is thick, not always on, needs to be charged, and we have to see final product, see if straps are smooth, see how coined underside sits on wrist ergonomically. Apple is a formidable competitor. Believe however that Jon Ive’s comment is premature, the Swiss watch industry is not yet ‘In Trouble’.
The future of smartwatches is in Switzerland, as long as we believe in it and do not commit the same mistakes as we did during the quartz crisis. A connected watch is not an extension of a smartphone. There is no sense in replicating the functions of the first on the second. I cannot imagine a watch showing emails effectively or a user talking to his watch. The future is elsewhere and will be based upon software. For a smart watch to be perceived as a watch, it has to be like a traditional watch, a jewel, with its own longevity. A watch is just the opposite of a gadget. And must stay like this if one wants to succeed on this market