Ultra-Light Startup to $20 Million in Revenue: WatchUWant CEO OJ Whatley (Part 3)

Sramana Mitra: Talk a bit more about some of the granular details of specific elements?

OJ Whatley: In 2000, I walked into a watch store and I happened to pick up these hardcover books on the history of Panerai. They were like coffee table books. I went on eBay and found about eight of these in different languages. I noticed that they were selling from $100 to $150 each. I asked everyone who was working with me at that software company and found out that you could call Panerai on the 800 number and ask them to send these books to you and they would send them to you for free. I had my co-workers order these books and I would take them out for lunch in exchange for getting me these books. I would then sell them on eBay for anywhere between $50  to $300. That was a big piece of my capital.

Sramana Mitra: Was that also getting you in touch with people who are passionate about Panerai?

OJ Whatley: 100%. These went hand in hand with the people who were buying the watches – who were trying to educate themselves about the watch. They were starving for every piece of history that they could get their hands on because Panerai is a company that’s been around since 1860. In fact, one of the interesting facts about Panerai is that they’re the only company that’s ever been able to buy watches from Rolex, put their name on those watches, sell those watches with Rolex dials or Panerai dials. It really was an unheard of relationship that to this day, no one understands how it came to be. That association with Rolex really drove the brand and drove the reputation especially for vintage Rolex collectors because when they had finally owned every vintage Rolex watch they could get their hands on, they turned to Panerai. All of a sudden, a new market was born. These vintage Panerai watches, which in 1998 were going for $5,000, were selling for $150,000 to $250,000 once the Rolex collectors hopped on.

Sramana Mitra: Were you able to get to that market – to be able to source a $5,000 watch and be able to sell up for $150,000?

OJ Whatley: That’s a great question. In fact, part of my success was by being an enthusiast as well as a dealer. I created alliances with other collectors and enthusiasts. I couldn’t possibly dream of paying them $100,000 for that watch that I might sell for $120,000. They allowed me to sell the watch on their behalf via a consignment basis.

Sramana Mitra: Then shared the profit?

OJ Whatley: Either shared the profit or they would just say, “Hey, get me $100,000 and anything over that is yours to keep.”

Sramana Mitra: You were making very good margins from these transactions?

OJ Whatley: Yes. Every watch you buy, you don’t always sell for a profit. Sometimes you lose money and that’s where I use that S word.

Sramana Mitra: Go back to the book strategy through which you connected with some of these passionate individuals.

OJ Whatley: The book strategy was a website called Paneristi.com, which in 1999 had 10 followers. Today, they probably have 100,000 hits a month.

Sramana Mitra: You own that site?

OJ Whatley: I don’t own that site. I became friends with the founder of that site and I basically served on that site as an advocate. I was an advisor so that whenever anyone had a question about buying their first Panerai, I would normally get shout-outs from the community. People would say, “Hey, call OJ. He can get you what you’re looking for.” I have a lot of support from the community because I put myself out there as someone who wanted to meet other people who were enthusiastic about Panerai. I became accessible. My calling card was my name and my cellphone number.

Sramana Mitra: You were active in the Panerai community?

OJ Whatley: Yes, very much so and I still am today.

Sramana Mitra: How big is that community?

OJ Whatley: From 2000 to 2010, Panerai was the number one hottest selling watch brand in the world.

Sramana Mitra: How much of that community are you in touch with?

OJ Whatley: It’s a really good question because what I quickly found out was that Panerai enthusiasts were typical watch enthusiasts. You don’t decide you like watches and then fall in love with Panerai. You typically love watches and then you discover Panerai. Or you liked watches but there was something about Panerai that you just didn’t understand. When someone explained it to you, all of a sudden it made sense and you develop this voracious appetite to learn, and consume as much Panerai knowledge and buy as many Panerais as you can get your hands on.

One of the keys to Panerai’s success in the early 2000 was a very limited production along with every watch being individually numbered so you knew exactly how many watches they made for that year. It was a very simple serial number system where you could identify the year of manufacture followed by how many pieces were made for that year. There was total transparency. This was groundbreaking because no other watch brand had any way to tell people when watches were made or how many were made. Rolex had a serial numbering system but it was a little convoluted. With as many watches as they are turning out, it was very difficult to really get clarity but with Panerai, if there was an A on the case stack, it means that it was made in 1998. B is 1999. C is 2000 and all the way up to the current letter which is P, which is 2014 production.

This segment is part 3 in the series : Ultra-Light Startup to $20 Million in Revenue: WatchUWant CEO OJ Whatley
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