If you’re looking to learn from one of the fastest growing e-commerce brands this century, read on. MVMT Watches has cracked the code to e-commerce growth. What started as an idea by two college pals has quickly turned into a $100+ million dollar business.
While many think this fast-paced growth is near impossible, for MVMT founders Kramer Laplante and Jake Kassan, they’ve been able to do just that. Their brand has sold over one million watches in the past three years and they started from the ground floor, just like most e-commerce entrepreneurs.
When you look into the inner workings of a brand like MVMT watches, other founders often get blown away. These bootstrapped entrepreneurs grew from being parking valets to driving their own Audi R8’s. In this article, we’re going to dive behind the curtain to really see what’s fueled the rapid growth of MVMT and how you can potentially replicate it.
Before we dive in, it’s always awesome to learn about the people behind a brand.
They were two college dudes
Jake Kassan was going to community college in Santa Barbara, California, always thinking about ways to get out of class. He couldn’t connect how the book reports he needed to complete for homework related to his professional goals. At age 19, he dropped out of college.
Kramer Laplante was finishing up his last semester at University of California Santa Barbara. When the idea for MVMT came up, he pulled the plug on college and dropped out too.
The two had always been entrepreneurial, starting prior crowdfunding campaigns and e-commerce companies. Kramer had previously launched a $100,000 crowdfunding campaign to fund a wallet company while Jake had run an apparel business targeting rave-goers.
MVMT was the start of something different for the duo. They’d been longtime friends and roommates, looking for a way to launch something together. When they started diving into the watch market, they were surprised to see the crazy markups most brands put on their watches.
Flashback five years ago and most brands like Nixon or Fossil were selling watches prices at $300- $500 dollars. For a millennial, this price point wasn’t a fit.
Jake and Kramer realized they could create a lower priced alternative and tap into their own generation’s demand. Their first step forward was to design these watches and find the right factory to work with.
Preparing for launch
Like many companies about to launch, nothing happens overnight and there are tons of roadblocks along the way. Neither Jake or Kramer are designers, yet they did have some photoshop experience and started taking notes on what they liked in certain watch designs.
This enabled them to craft their own designs that were slightly different than what existed on the market but not completely out of left field. The founders knew they were creating a brand, not a new type of watch.
The hardest part of the preparation was figuring out how to produce their first watches. This is where most entrepreneurs stop. You have an idea and don’t know how to turn that idea into an actual product.
For Jake and Kramer, they’d heard of Alibaba (Sourcify didn’t exist back then) and start searching for manufacturers on there. The problem was they weren’t sure which manufacturers were legit and who they could trust with production. They ended up hitting up around 30 manufacturers and getting quotes from a few.
This enabled them to realize the incredible margin watch companies were making. At an average unit cost of around $15 at the time (watch costs have dropped a bit since then), they could undercut bigger players in the market by selling directly to consumers online.
Getting their initial samples took a few months and some of the samples that arrived weren’t going to pass their quality standards. After a few design iterations, they were ready to rock and launch these badass watches.
What most people don’t know about MVMT is that they actually tried to launch on Kickstarter but were denied. Kickstarter didn’t see their watches as being genuinely unique and denied their project.
The founders were obviously super bummed. They’d just poured the last few months of their lives into developing these watches and now couldn’t even launch on the most popular crowdfunding site in the world.
That’s when they turned to Indiegogo, a more alternative crowdfunding platform at the time of their launch in 2013. The followed a similar playbook to the legendary Hacking Kickstarter post by Tim Ferriss.
This method worked well five years ago when almost every crowdfunding campaign was pretty epic and getting press. Nowadays, landing media for your crowdfunding campaign is much harder as the market is flooded with crowdfunding projects looking to pitch their way into the media.
For the MVMT team though, this Indiegogo campaign is what enabled them to get the ball rolling. They ended up raising $219,000 from 2,887 backers.
This means they sold watches to about 2,887 people and had, even more, watches to ship (some people ordered more than one watch). If you recall the average unit cost of a watch ($15), they only had to invest about $45,000 into inventory to cover the unit costs of watches sent to their original backers.
This left the founders with over $100,000 to figure out how to grow their brand. Many crowdfunded companies stay as one-off campaigns. Transitioning from a crowdfunded company to an e-commerce company is an art and the founders of MVMT orchestrated this extremely well.
For starters, they set up their store on Shopify which enabled them to streamline their e-commerce store. They then began to develop their voice, which they showcased across social media.
Social Media Pick Up
When MVMT transitioned off of Indiegogo and into a full-fledged e-commerce brand, they needed to figure out how to best grow their reach. At the time, Facebook and Instagram still had some incredible organic reach.
If you grew a Facebook page, most of the people who like it saw your post. Nowadays, these numbers have dropped to below 3%.
For the founders of MVMT, they saw this as a ripe opportunity to hack the system. They knew like many that a post that is highly engaged is shown on these platforms more. To boost this engagement, they’d make posts like the below.
The founders would giveaway watches to people who tagged their friends on social media. They’d run giveaway contests on a monthly basis on Facebook and sometimes even more on Instagram.
When someone tagged their friends in the post, Facebook and Instagram saw this as a highly engaged post and would, in turn, show it to more people.
Though this is commonly known in today’s world of influencer marketing, at the time in 2013, not nearly as many brands were giving away free product to grow their audience.
This growth hack, along with a smart outlook towards their ad spend, enabled MVMT to grow to over 6 million combined followers across social media platforms.
In a podcast interview on Short Story Long, Jake attested to their careful watch over return on ad spend (ROAS) as being one of the main factors contributing to MVMT’s success.
Without the right funnels and influencers though, MVMT might not have been the company it is today.
When you’re growing an e-commerce brand, you always need to be thinking about how you can optimize. Everything from your email campaigns to your supply chain can be improved and without the right tests in place, you won’t know if there is room to improve.
For MVMT, this primarily meant testing what people are doing on their website and seeing what call to actions performed best. They used tools like Hotjar for heatmaps on their site and Optimizely for A/B testing call to actions.
This enabled them to really understand what was working and what needed improving.
Pro tip: To see if there is room to cut manufacturing costs, try Sourcify.
To add reviews to their site, they use Yotpo which showcases happy customers for each product.
When you’re starting an e-commerce store though, don’t spend too much on tools. Instead, focus on growing your brand and audience. Without the right reach, you won’t even have enough data to see what really works.
Keys to Content and Influencer Outreach
One of the best ways MVMT has grown is through user-generated content. The team behind MVMT are masters at getting great content made. If you look at their social channels, almost all of their content is generated from their community.
This is a very different approach from some bigger brands like Nixon watches, who create a lot of their content in-house.
Though user-generated content doesn’t mean free, it does mean that you usually get to latch onto the reach of a creator. When someone creates an epic piece for a brand, they often like to share it as well (and it is sometimes mandated in the contract).
For MVMT, this influencer strategy overlapped with content creation as they hit up influencers who created content that they felt aligned with their brand. They’ve now worked with hundreds of influencers who have created thousands of pieces of content for them.
If you’re looking to create content for your own brand, start by hitting up influencers with a similar sized audience. It’s going to be much harder to land a large influencer unless you have the budget. There are smaller content creators that create just as cool work willing to contribute for free.
Developing an International Brand
In today’s world of global commerce, I see a lot of brands looking to grow internationally without first crushing their domestic market. This trend is really relevant in Asia, where e-commerce brands have started to sell into China on sites like Tmall.
The fact of the matter is, if you’re struggling to sell domestically, it’s going to be even harder when you try to sell internationally especially if it’s in a country that doesn’t speak your native tongue.
This doesn’t mean you shouldn’t ship your products around the world. What it means is you should focus your brand development efforts on growing domestically before investing overseas.
For MVMT, they first focused on growing an eccentric brand in America and when their audience grew, they then started targeting ads in Europe and now around the world.
For your brand, this international expansion needs to be supported by a global fulfillment network. If your customers have to pay duties in their countries when receiving your product or if it takes a few weeks, they won’t be happy.
When happy customers can make or break your brand, it’s crucial to ensure you don’t expand abroad too fast.
With that said, growing internationally has never been easier with the ability to ship overseas efficiently and target customers through ad platforms anywhere in the world.
The Next Steps in Retail
Brands used to try to approach retailers right off the bat because that was the only way to gain access to customers at the time. Nowadays, if you’re starting a brand, you take the reverse path.
You start online, grow a following, and then once you get big enough, retailers start to reach out. This inbound flow flips the traditional route on its head. The brands who do retail right, create demand online and spread into retail to further develop their brand. They don’t start with a retail strategy.
For MVMT Watches, they will always be e-commerce focused. When a big retailer like Nordstrom approaches them though, there’s no reason to turn down an order. Instead of having to sell individual watches, they can land a retail deal with a company like Nordstrom and sell one hundred thousand watches at a time.
Though retailers typically take around a 50% margin and you sell to them at wholesale pricing, it enables you to have a larger deal flow right off the bat. With that said, for an e-commerce company, retail is not a good strategy, to begin with, as it will often cause cash flow problems.
Even though this larger deal flow is exciting, many retailers pay on 30, 60, or 90-day payment terms. This means they don’t have to pay for your product when you ship it. Instead, you’ll invoice them for these payment terms and hope they meet your deadline. This is where a company’s account receivables pile up, as retailers can be notorious for missing payment dates.
Some retailers will create a deal for you to place your products on consignment. This means you still own your product but it’s in a retailer’s store and they only pay you if it sells. Though this sounds good in theory, when you have limited inventory, placing the product in a retail store can further strain this inventory. If the product doesn’t sell, they’ll just return it to you on your dime.
If you’re just getting the ball rolling with your company, don’t focus on retail.
You’re Capable Too
If you asked Jake and Karem where they thought MVMT would be today, chances are they weren’t thinking they’d surpass $100 million in revenue. What they did have is a vision and dream to make something different.
It’s those goals that make companies grow. You can think about starting and growing a business all you want, but until you actually put in the work, it’ll be stuck in your head.
Now is the time to take action. With tools like Sourcify and Shopify, starting an e-commerce store has never been easier. What are you waiting for?