The Startup Story – Episode 4: RT Custer, co-founder of Vortic Watch Company
You can listen to RT's Episode in it's entirety here: https://www.thestartupstory.co/vorticwatches
RT Custer: I'm RT Custer, Co Founder and CEO of Vortic Watch Company, and this is my Startup Story.
James McKinney: Every wildfire began with a spark. Every superhero has an origin story. And every single startup has a moment that they point to as their beginning. And every founder has a purpose that drove them in the midst of all obstacles. THAT is The Startup Story.
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James McKinney: There is absolutely no denying that small businesses and entrepreneurs are the backbone of our economy. It's not the Fortune 500 companies that drive our economy; it's the small businesses that are striving to do big things. But I'm going to be honest. Sometimes our efforts can appear to be significant only to us. It's when we participate in or pursue something larger than ourselves or our own efforts that we can truly see how much of an impact we can make.
That said, our guest today has a bit of a different perspective because his startup exists in a space where he has to stand toe to toe with industry giants from day one.
Our guest today is positioned in an industry where most of the manufacturing is done overseas, and he is fighting to keep the manufacturing of his product entirely in the United States. Our guest is RT Custer, CEO and Co Founder for Vortic Watch Company. Yes, you heard me correctly. A watch company. Not a digital watch to compete with the likes of Apple or Samsung, but a unique, one of a kind analog watch. His passion for this unique craft does not just reside in the product, but also in the process. Vortic Watches are absolutely works of art and conversation pieces. The fact that RT wants to bring watch making back to the US is a mission that we should all want to support.
In this episode, you will learn how necessary it is to have people around you that believe in what you are doing, because there are moments in the journey that will get incredibly dark. You will see how important it is to simply start the journey without needing to have all the answers from day one, and you'll hear firsthand how powerful it is when business owners support other business owners. Let's be clear. RT's mission to bring watch making back to the United States via Vortic Watches is an incredibly ambitious feat. That said, RT is benefiting not just from the 1800s, but also the legacy of his grandfather and great-grandfather. A legacy deeply rooted in an old school work ethic and craftsmanship. In fact, when I say deeply rooted, I mean his story technically began on a Christmas tree farm.
RT Custer: And my mom grew up on a Christmas tree farm. That's where I grew up too, because they moved back home. They built a house like literally walking distance to my grandparents, and they raised me on the farm. And so my dad, when I was little, he took some time off of work and stayed home, and did some consulting you know so that he could spend a little bit of time with me when I was really little. Then when I was old enough to go to daycare, they both went back into fulltime corporate hustle. I got off the school bus at my grandparents house most of young life. My parents, I would say, were both side hustle entrepreneurs because we still had that Christmas tree farm that was started by my great grandfather because he actually worked for the state of Pennsylvania as the forester for 25 years without getting a raise.
James McKinney: Oh my goodness.
RT Custer: So finally just said forget this, I'm starting my own thing. And he started a Christmas tree farm in 1941. Back then, Christmas trees were big business. All local, you didn't have big box retailers selling trees, and most of the population had a real, alive Christmas tree. Then he passed that onto my grandfather who ran the farm, and also had a fulltime job as a forester. So the Christmas tree farm was kind of the side hustle for the family for 50 years.
James McKinney: Just out of curiosity, because I don't think… I know my listeners probably don't, I don't. From a Christmas tree business, what is the volume that a single farm puts out? Your family farm at the time, how many trees per season?
RT Custer: **Yeah, so a good year in the heyday was probably between 500 and 700 trees for us.
James McKinney: That’s awesome.
RT Custer: And that's why it was a small business, a side hustle, because even if we sold them for $75, do the math. That's not a whole lot of total revenue. You're really not feeding your family on that. The big business Christmas tree farms nowadays, in like North Carolina and the north west, they probably do 100,000. So this is a very small business. But my great-grandfather and my grandfather, I have to give them props because they realized early on who their client was, and who their target customer was. That was the doctors and the lawyers, and the country clubs. We specialized in large trees that were too big for your middle income household. So most Christmas tree farms where you can go and cut your own, you can just walk into the field and cut it down, it's all this big experience. My grandfather was like, "Nope. We're not going to let anyone into our fields. We're not going to let anyone touch our trees. We're going to select the best ones, and they're going to be for the country clubs."
James McKinney: That's awesome.
RT Custer: And so we never had a Christmas tree go to the White House, but we did have Christmas trees go to some really big country clubs, some really big in the northeast, really famous places, mostly country clubs. And we had some pretty cool clients doing that sort of stuff.
James McKinney: Growing up, you mentioned you never had one go to the White House. Was that, reflecting back on that as we're talking, was that something you were always aware of, like there's a chance we could have a family Christmas tree in the White House? Was that something that was a talking point among the family, or you knew that was like a badge of honor for Christmas tree farmers?
RT Custer: You know, it's just a badge of honor. Just a badge of honor. That and Rockefeller Center, the big tree there. We never got them that big. The biggest trees that we sold were in the 24 feet.
James McKinney: Oh wow.
RT Custer: That's huge, but those go to hospitals for their main entry ways and the country clubs, and that kind of stuff. That's still not even big enough, definitely not for Rockefeller Center, but even for the White House. I'm not sure how big their trees are. My grandfather and my great-grandfather were smart and I think most of those trees are donated, and they wanted to get paid for it. We never donated anything to anyone. It's a hard business, so why give it away for free? Why would you?
James McKinney: When did you know that maybe entrepreneurial journey was part of your story or did you, growing up you're like I do not want to be entrepreneurial? What was in your mindset, let's say high school years?
RT Custer: **I never… I mean I dreamed to be an entrepreneur. I never really talked about it much. I was definitely raised around entrepreneurs and the entrepreneurial mindset, just because we had the farm and that was our business, our family business. I remember learning how to sell Christmas trees at age five or six, how to talk to people. When they started walking towards the door, try to figure out how to get them to stay. If they didn't see the third aisle of trees where we had the different kinds back there, make sure you at least recommend they check that out before they go on to the next farm. I got taught how to sell really early.
Then my parents got divorced when I was 16 I think, and when that happened I kind of dove in and helped a lot more with the business side of the farm. My grandparents were getting a little older. My grandmother was always the one that did the books. She needed some help. So I kind of had to help a lot more, because my dad moved away. Not very far away, but he became less involved in the business. My mom owned the farm, and I just helped out.
Through late high school and all of college, I would come home during the holiday season as much as I could and help out. I think that was one of the first tastes of truly managing other people, and giving my advice on what I would do if this happened and that happened. Also, we're talking this was like 2009 is when I graduated from high school. That's about the time when the big box retailers started selling Christmas trees, so business was starting to get a lot harder for us. So just a lot of stuff kind of happened all at once. I just, I helped where I could. It was always fun for me. It was never work. So that was kind of, I would guess my first taste of entrepreneurship and small business management.
But when I got to college, when I was a freshman, it was pretty early in my freshman year. So I went to Penn State because it's a great school and I got in-state tuition, and it was two and a half hours away which is like just far enough that I don't have to go home for everything, but close enough that I could drive home. It's two and a half hours, so I could drive home for a weekend if I wanted to. I got recruited for this thing called college work painting. It's basically an opportunity for you to run your own small business as a college kid. There's a lot of college painters types of businesses, but like Cutco style we went door to door, and knocked on people's doors in our hometown, and asked if they wanted their house painted.
James McKinney: For those that don't know what Cutco is, that's the door to door knife company, right?
RT Custer: Yep. So I got recruited for College Works Painting, and funny enough, I had to go to three different recruiting sessions for them to take me because I was an engineer. They looked at me like I was a nerd. I thought I wanted to be an aerospace engineer. They mostly hired business majors or communications majors, you know people who would inherently be good at sales, because it's mostly sales. I had to knock on the door a whole bunch of times, just like you've got to let me do this, I think I'd really be good at it. I ended up, I was number one in the state, and number three in the nation out of at least a thousand people.
James McKinney: Wow. That's incredible.
RT Custer: I ran $129,000 business the summer of my freshman year as a 19 year old.
James McKinney: Now, out of curiosity because it was a school run program, I'm assuming the $129,000 book of business, was that actually something you got to manage and therefore reap the profits from that as far as once you eliminate the costs and everything? Or was this just you were sales and it was an internship?
RT Custer: Yeah. So they run it like an MLM, so the company, it's called College Works Painting. It's not actually associated with Penn State or any school in any way that I know of. They have managers, district managers, and vice presidents that work at a school and recruit college kids to do what I did, which they call an intern or a branch manager. Basically, I got recruited. I went through the training process. They taught me everything I needed to know about house painting. Told me everything I needed to know about how to estimate how much it would cost to paint a house, how much paint it would take, all that kind of stuff. Then they let us loose and they said, "Go knock on doors, and any door that has some peeling paint on it, literally peel the paint off the door and hand it to the home owner, and tell them now they need their house painted."
I ended up just being really good at that, and good at the sales side of that. I'd never held a paintbrush in my life, never painted a thing in my life. They actually made fun of me because at the paint training, when they actually taught us how to paint a house so that then we could hire the painters to actually go do the work in the summer time, my manager knew I'd never touched a paintbrush. He handed me a paint can, and he said, "Hey, can you open this for us?" I had never opened a paint can in my life. I sat there and everyone's laughing at me like trying to use a screwdriver to get into this paint can. I'm an engineer. I'm not dumb. I'm like I can figure out how to open a paint can. But it took me a lot longer than it should have. And they're all laughing at me, and my manager stands up and says, "All right, I want all of you to stop and take a look at this kid who is a couple years younger than most of you, and is currently kicking all of your asses."
James McKinney: I love it.
RT Custer: "He doesn't know how to open a paint can, and he's outselling every single one of you. So what's wrong?"
James McKinney: That is awesome. I love that.
RT Custer: He used me as a scapegoat to try to motivate the rest of his team. I didn't see it like that. At the time, I was embarrassed, whatever. But looking back on it and now that I'm friends with him, he taught me everything I know. His name's Joe, and he taught me everything I know about the hustle, the art of the sale, and managing my first real group of people. That was a really good test of his sales management and his sales leadership is basically using me as an example to motivate everybody else.
So that was my first real trench of entrepreneurship is College Works Painting. Not everyone does as well as I did. Out of the $129,000 in total revenue, I probably pocketed, I don't know, $25,000.
James McKinney: There was compensation for you. It wasn't just an internship or learning experience. There was compensation. That's great.
RT Custer: It was a business, yeah. I probably could have managed that business better and made more profit, but I learned so much. It was invaluable and I used that money to invest in the things that have gotten me where I am today.
James McKinney: So going through that experience, was that throughout your entire college time, or just your freshman and sophomore year? What was that?
RT Custer: Yeah, so that was freshman year. Like I said, it's basically an MLM so my second year they recruited me to then recruit other people like me that would then run their own business in their hometowns respectively. I ended up not being very good at that. I'm pretty good at managing people directly, but managing managers is where I started to fail. I also wasn't really good at recruiting people. I'm really good at selling things, but selling a job, selling an entrepreneurial opportunity to college kids was really difficult. I wasn't good at it.
I ended up having a really small team, and I did okay. I probably doubled the business year over year my sophomore year. But I would say half the business was still me personally hustling, knocking on doors, selling stuff. It wasn't my team. I was doing it myself. The one thing though is that's how I met my business partner for Vortic Watch Company is I recruited him to work for me my second year in College Works Painting. His name's Tyler. He was my best manager. I don't know how much he made that year, but he was the best person on my team, which was very small.
So I spent a lot of time with him, helping him sell the painting and helping him manage the job sites and hire the painters, and all that stuff. We became friends through that and my junior year, he and I started playing golf in college. We both got out of College Works at that point and moved onto other things, but that's where we had the idea for Vortic is on the golf course.
James McKinney: On the golf course, junior year you were saying, junior or senior?
RT Custer: **My junior year, his sophomore year, sometime in the spring. We were out on the White Course at Penn State, playing a quick round, and we were just talking about watches and how he was always a watch guy and always liked watches, and couldn't afford the ones that he wanted. I was studying industrial engineering and was fascinated by additive manufacturing, mostly metal 3D printing is what I was really fascinated by. So I was talking to him about metal 3D printing and all the use cases for that. We were talking about what if we could make a watch that's actually made in the USA? Like 100% made in America, because most watches are Swiss or Japanese or Chinese in today's day and age.
James McKinney: So before, let's pause there for a second real quick because I think there's a lot about the watch industry that plays into your story that I don't think most people know about the watch industry. You mentioned right there that most of them are Swiss or Japanese made. In three minutes, can you give a brief history of just watch making in the states and how did that stop happening in the states?
RT Custer: Great question. Let's go way back. The watch was invented hundreds and hundreds of years ago, but in the mid 1800s until about the mid 1900s, America was the Switzerland of the world. The best watches in the world, especially in the late 1800s early 1900s, were made in the United States. Back then, they were pocket watches.
This is pre wrist watch. The wrist watch was World War I, World War II, when that kind of started coming around. So late 1800s, we're talking about pocket watches. We needed pocket watches in America because of the railroads. We have a huge country and we're talking massive westward expansion in the mid to late 1800s. We were building railroads like crazy. The railroads needed to have a time system, and everyone needed to know when the train was going to get there. Everyone on the train needed to know what time it was. So everybody, the conductors and the engineers, they all had pocket watches.
Then that led into the work force and the everyday person in America wanting to carry a pocket watch so they could know what time it was. It's the equivalent of the cellophane today. Everyone had to have that.
America was making between 1850 and 1950, over a hundred million pocket watches were manufactured in America.
James McKinney: Wow.
RT Custer: By at least ten major companies. There were dozens of companies. On our website, we call them the ten great American watch companies. They were the ones that made the most, or are the most famous. Those are the ones that we kind of focused on for what we do.
James McKinney: How did we start losing ground in that industry?
RT Custer: This is my opinion from my own research.
James McKinney: Of course.
RT Custer: But World War I was, to most people's opinion, the invention of what we call the wrist watch today. There were wristwatches well before that, but mass market style we call them the trench watch. When you're in the trenches during World War I, you were always looking out over the battlefield, and you're holding your gun, and you had to know what time it was without looking down because if you looked down you could get shot. So they literally strapped pocket watches to their wrist back then so that they wouldn't have to take their eyes off the battlefield. That was the trench watch.
So the military requested that these watch companies make them smaller time pieces that would be more comfortable on the wrist for trench watches. So that's what gives you the history of the trench watch, and there's a lot of really cool books about that from World War I. Then everybody got back from the war, and kept wearing their watch. So people started wearing watches. That became the cool thing to do. Then the same thing in World War II, but even more prevalent. So that's kind of where the wrist watch came from.
But then think about this for a second. Switzerland was neutral in World War I and World War II. So if you take all the time that World War I and World War II took up, the US government said to all these watch companies, "If you're going to make stuff, it has to be for the war effort. So you can only make watches that we can use in the war or you need to use your metal and your machines to make firing pins or other small military application uses." So in World War I and World War II, all these US manufacturers basically stopped research and development. They didn't have the ability. They were mandated that they had to just pump out watches for our soldiers.
Switzerland was neutral, so they're still doing R&D. They're still pumping out watches. They're inventing really cool stuff. They got at least a decade ahead of us because they didn't have to worry about it. Again, that's my opinion, but that's what seems to make sense to me because after World war II, a lot of these US companies started to fluster. They started, their R&D didn't make as much sense as the Swiss R&D, and they started to go out of business one after the other.
James McKinney: Well, I mean when you're 10 years behind anything in an industry, it's going to be really hard to catch up, and you have to make a decision whether do we try to catch up or do we just jump ship and try something new, or pivot and do something totally different. That completely makes sense to me. So thank you for that history lesson.
Now, back to your junior year. You're on the golf course, you're talking about your additive engineering I think is what you called it, making things with metal, 3D printing, and the watch idea came up.
RT Custer: So basically, Tyler and I were talking about American made wristwatches. This is like 2013. We decided on the golf course that day that we were going to make a wristwatch. We were going to start a watch company and we were going to manufacture watches. We started doing a whole bunch of research and all the watches that we could find were Swiss, Japanese, or Chinese for that reason. We wanted to make one that was actually made in the United States.
So we started doing all kinds of research. We couldn't find anyone that would make the movement or the internal time keeping mechanism in the United States. We could find a manufacturer that could make the case and the crown and the leather strap. That stuff could be made or we could find a belt company to make the leather. It's just a smaller belt. All of that stuff was figured out. It's just the inside, the actual gears and springs that tell time. All of that, the high quality stuff, is made in Switzerland. We were like why? Why can't we make it in America?
As we were searching that, as we were trying to figure that out, we stumbled upon the history of the old pocket watches that I just told you about. I'm a history nerd, and I just dove in. I was like this is the coolest thing ever. We made a hundred million pocket watches back then. Where are they? How do we find them? We found one in a pawn shop that had been scrapped. The gold case was scrapped and the movement, the inside, was thrown away because the pawn shop just wanted the couple hundred dollars worth of gold.
First of all, that was a shame. Second of all, the movement, it's a tiny little engine. It was made 100 years ago, but the stuff they made in the early 1900s was made to last forever. It wasn't made like we make stuff today. So we realized that and we realized that there were a lot of them out there, and we realized that most of them are only worth the precious metal value of their case. So we figured other people were probably scrapping them. So we started looking around, and we found more and more and more. We said, you know what, I think we have a business here.
So we launched what we call the American Artisan Series on Kickstarter December of 2014 after over a year and a half of trying and testing and finding movements, and working with hundreds of pawn shops and estate sales, and flea markets to find these things. That's where it started.
James McKinney: You said 2014 was the Kickstarter?
RT Custer: Yeah, December of 2014 so there was a lot to happen there. I graduated from college in May of 2014, so a lot of life happened during that business.
James McKinney: **How did that Kickstarter campaign do? I think there's a statistic that it's like 82% of Kickstarter campaigns don't hit goal.
RT Custer: Yeah, yeah. So we hit our goal in the first 12 hours.
James McKinney: That's great.
RT Custer: We set the goal kind of low. We were in our early twenties, fresh out of college. $10,000 was a lot of money. So we were like you know what, if we can raise $10 grand, we'll go buy a 3D printer that will be used for our prototyping purposes and that'll give us enough to make a down payment on a few of the suppliers that we need to buy other things from. So that's what we set. We set the goal at $10,000. We sold over 60 watches in 30 days and raised a little over $40,000 on our first Kickstarter campaign.
James McKinney: That's awesome.
RT Custer: Yeah, that's how we did it. I would say a third of that was from friends and family, and like friends of friends, our immediate network. Then two-thirds of it was from random humans on the internet from all over the world, which is awesome. That's the power of Kickstarter.
James McKinney: I love that.
RT Custer: We reached to Australia, to people that we'd never met and just saw me and Tyler making a video in our garage about how we wanted to preserve American history one watch at a time.
James McKinney: That's awesome. Would you consider the launch of that Kickstarter campaign to be the beginning of Vortic Watches?
RT Custer: Correct, yeah. That was really our first product launch.
James McKinney: So before we unpack Vortic Watches a bit, as you're going through all of the history of it and being a history person, and you're young. So let's talk about some of the things you had to work through in order to make that happen. You're talking about tackling or entering into a space that is just a monster. It's a monster outside of the US that controls the market. Swiss, Japanese, and I think of it similar to Dollar Shave Club. When he started razors, Gillette had 70% of the market.
RT Custer: You take on Proctor & Gamble, yeah.
James McKinney: Right. So what are you thinking? What are you and your partner Tyler thinking as you're, whether it be on the golf course or afterwards, or the pub, or whatever, what are you thinking when you're actually talking about entering watch making and bringing it to the states?
RT Custer: You know it's funny. Tyler and I laugh about this all the time because we had no idea what we were getting ourselves into. We didn't do any research on any of that. We had a really good idea. We were super passionate about the idea and we put it on the internet, and people loved it. So we were like okay, cool. We have a business. Like we got so lucky. One anecdote is 100 years ago, there were those 10 great American watch companies, but there were only three companies that made the cases, the gold and silver cases.
At some point, probably late 1800s, there must have been a mastermind meeting of those 10 people that ran those 10 different watch companies, and they said, "You know what guys, let's make all of our cases standardized. All of them will be the same size. We'll have these eight or 10 sizes, and that way we can share these suppliers that make the gold and silver cases." That happened 100 years ago.
We didn't know that happened. We had no idea that there was a standardization of pocket watch cases until honestly about a year in, after the Kickstarter, when customers started sending us their grandfather's pocket watches and stuff, and we were like wow, this is the same size as this one that we just saw last week, that's kind of cool. Started doing a bunch of research, started working with professional watch makers that have been doing this for longer than we've been alive, who started telling us cool stuff like that. And we were like wow, that's awesome. That probably makes what we're trying to do way easier.
Once we learned that, then we really dove into that. We figured out the engineering behind those standardization of cases, and we were able to standardize our cases and our process for when we're putting those pocket watch internals into our modern cases. Now we have a standard set of engineering, and just a standard few sizes because we got so lucky that happened 100 years ago.
My dad always says, mostly about golf, "I'd rather be lucky than good." That is 100% true on that distinct fact. We had no idea. We would have figured it out like 3D printing or engineers. We have the resources to make every single watch completely one of a kind from an engineering standpoint, but the fact that they standardized, it's the only reason we can do it for the price and the cost that we do today.
James McKinney: That's awesome. So the Kickstarter closes. You've exceeded goal. Now it's you and Tyler and thinking, "Now we've got to do something." So what are the early days of Vortic Watches?
RT Custer: Yeah. At that time, we were in Colorado at that point. I had taken a job with Walmart in Colorado after graduation, because after the painting thing, I did an internship with Proctor & Gamble in Pennsylvania, and then that got me in the door with Walmart because they're suppliers of each other. I did an internship down in Bentonville, Arkansas for Sam's Club, the baby brother of Walmart. Then while I was there, they offered me a job in logistics for Walmart. Walmart logistics engineering.
So I was one of 100 engineers that basically was in charge of helping to redesign the Walmart distribution centers so that they could keep up with Amazon at that point, and fulfill orders to the stores and also to homes. So that was my first job out of school, my corporate job, and what paid the bills for us for two years I worked for them in Loveland Colorado here, just a little south of us. They put me in Colorado because it was really cheap for me to fly everywhere else. I travelled about 75% of the time. So I was kind of like internal consulting basically.
That was an awesome job. Because of that job I was able to buy a house when I got here, and Tyler lived with me in that house, and we used the basement and the garage of that house to make watches for almost a year.
James McKinney: That is awesome. So that is, now we're in 2016.
RT Custer: Yep. Late 2014 we're on Kickstarter. We sell 60 watches or so at a huge reduced price that was kind of our offering on Kickstarter, this will be half price. It took us until I would say May of 2015 to ship the first watch.
James McKinney: So five months, got it. Okay.
RT Custer: Five or six months to figure out how to make the thing we sold. Which was three times longer than we thought it would take, and that happens a lot on Kickstarter. So all of our-
James McKinney: So going into Kickstarter, you had not done this yet.
RT Custer: No.
James McKinney: You just had an idea and you're like, "Eh, we can do this."
RT Custer: Yeah. We 3D printed some prototypes. We had some suppliers setup. We had a rough cost of goods sold estimate, and that was it. I would call it minimal viable product is what we took pictures of and put online. We told that story, and we said, "Hey, we're just a couple of kids out of school with what we think is a cool idea." So anyway, May of 2015 we made the first watch, shipped the first watch.
I think we probably shipped the last watch from Kickstarter late that year. So fast forward to 2016 . in 2016, we started really selling watches through our website, and we probably sold about 100 watches in 2016, just working out of a small office space at that point. And then 2017 we got a larger office that was also retail facing, and had a little retail shop which was one of the worst ideas we've ever had.
James McKinney: Retail is expensive.
RT Custer: Yeah. We were, I don't know how much the square foot cost was, but to today, we still have people walk into our current workshop, which is kind of off the beaten path, and they say, "Hey, you were at Jessop Farm," which is like this really cool little farm community down the street from where I live. People in Fort Collins, Colorado know that place to be really cool and this quintessential part of the town. They associate Vortic Watch Company as being one of the first tenants there, so that's kind of cool. Not worth the tens of thousands we spent in rent, but kind of cool.
Anyway, we realized pretty fast that we only had about 500 square feet for four people at that time, and people were just walking in, not going to buy anything. Just walking in so they could see what we were doing. Half the people that walked in, they were like, "Oh, you guys make watches? How long you been in business? How are you doing?" Just that kind of like… just that's cute, like how long is this business going to last? Which is fair, because we probably looked like we were a startup because we were. Yeah, so that lasted I think we outgrew that space in about 10 months or so.
Mid 2017 we moved to our current space which is a 2000 square foot warehouse about a mile and a half outside of town that we pay the same amount per month for that 2,000 square feet as we did for the 500 here locally. Late 2017, we got our first CNC machine, and started making a lot of our own parts. That got us addicted to making our own parts and so now we have two CNC machines and a lathe on the way now, with another five axis machine after that. So now we're making a lot of our own components, which is really awesome.
James McKinney: Is that the inner workings of the piece? Is that what you're referring to?
RT Custer: We make all the outside. So probably, I think this might be a good time for me to literally show you what we do. So everything, this is cool how it 60 minutes style, I don't know if you can hear that. Everything on the inside of this watch is an old pocket watch.
James McKinney: Okay. That's amazing.
RT Custer: So you can see that there. There's a little glare, but all those gears and springs, that is old and then what we make is the case. So the outside ring around it, the glass on both the front and back to protect it. This crown is what we call the winder, so these are all that you have to manually wind them every day. There's not batteries. It doesn't' move with your wrist like a modern watch. You literally have to wind it like the old pocket watch. We don't change the engineering of it. Then we also make the screws that hold this whole thing together. Then the leather strap and the metal buckle. So basically, everything inside is old. Everything outside is new.
James McKinney: And all of them are beautiful. For those listening, if you have not been to Vortic Watches, VorticWatches.com? That's the URL?
RT Custer: Vorticwatches.com.
James McKinney: Vorticwatches.com. My favorite is the railroad edition. The watches are stunning. As a fan, that's why I reached out to RT just as a fan. I wanted to know more about his story and how this came to be, and bringing watch making back to America. But as I'm listening to your story, RT, I see the early days of just learning and selling, and having success as a young sales person, and having success in the painting MLM. Then having your sophomore year, realizing something that you weren't good at, and that's recruiting people, managing managers. Now, you're growing an enterprise that is looking to take on the Swiss giants, if you will, of watch making. At any point in time, do you doubt that you're able to pull this off?
RT Custer: Every time you're about to sign a huge financial document, that thought crosses your mind for sure. So the most recent one was the most recent piece of equipment is over $100,000 for this most recent machine. I personally guarantee it, and so if we don't make that payment on the machine, they'll come and take my house.
James McKinney: And you're married with kids now, right now, right?
RT Custer: Yeah. I have a son who is 18 months old, and another one on the way, and a home and a family to take care of.
James McKinney: So why do that? Again, we talked a little bit, some of the listeners are reluctant entrepreneurs. There's a little bit of fear and hesitance in it. What is it about Vortic Watches? What is it about the mission of bringing American watch making back to the states? What is it that is so significant to you that you're willing to do that?
RT Custer: I firmly believe that we make the coolest watches on planet earth. I am so excited about what we do that I can't even put that into words. Every single watch we make is one of a kind. It tells a story. It's a conversation piece. So you said we're taking on the Swiss giants, but we're… you can't compare what we do to what we do in anyway. Yeah, we make a wristwatch, but people say that to me all the time. They're like, "What about the Apple watch? Isn't that going to put the entire watch industry out of business?"
The answer is no. People buy our watches because they want to talk about them, because they want to support the company that made them, because they want to support American made. Because every time somebody looks at one of our watches on your wrist, they're going to ask about it because it looks a little different, and the crown is at 12 o'clock. It's like, "Is that an old pocket watch?" that starts a conversation, which can lead into other things. That's why people buy watches now. That is so exciting.
For me, it's really exciting because I did some research, and I called a lot of our customers. Most of our customers are small business owners. They're entrepreneurs. They work in management at a company. They're just like me. They want to support me, and I want to support them. That's why I do it, is because it's awesome. I wake up every day and it's different. I still don't know a lot about watches. I'll be really honest about you. Just like I never knew much about painting. It's not about watches for me. It's about the experience that our product gives to the customer, and the experience that running this business gives to me every day.
James McKinney: You know, it's interesting. You've said a few things there that I have been preaching for… I'm a few decades older than you are, and I've been preaching something you just mentioned right there. Entrepreneurs support other entrepreneurs. Period. For anyone who has brought something from nothing, and laid a bit of themselves on the line to do it, they understand what it is that went into that, and they're willing to support it. So the fact that you reached out to other small businesses, because you want to support them. That is what I've been preaching for a few years, so awesome that you're doing that as well.
The other thing that you talked about, you don't know watches or I don't want to restate that phrase. What was the exact phrase you said?
RT Custer: I still don't know everything there is to know about watches.
James McKinney: But what's interesting when you think about, as your time with Walmart and Sam's Club and logistics. What I pick up very quickly is that you have the ability to understand and connect the dots between idea and product, and end consumer, and all the logistics in between. You're great at selling. I love the Christmas tree story. You're great at selling. Granted, you were five or six, so a five or six year old can sell a whole lot of things to a whole lot of people because just so stinking cute when it happens.
RT Custer: Pretty cute back then.
James McKinney: You know, but you learned sales early on, with the painting as well. So you were very quick for that. Does Tyler fill in the gaps on the operational side for you? How does he complement what you do?
RT Custer: Yeah, so funny story about Tyler. I was an engineer in college and Tyler was a math major. Now, he does all of our engineering, and I do all of the talking to our customers. We totally switched our career paths. At first, it was because everything I did at Walmart was via email and phone, so I was just really good at answering emails, and getting back to people quickly, and I didn't mind talking to people on the phone.
Tyler was much more proficient at figuring out how to make things, and diving into the research side of finding a supplier and finding the right supplier, and testing things, and all that kind of stuff. He was fascinated by all that. His dad was a mechanic … is a mechanic. Tyler helped in the shop with his dad, and that was their family business. So he just really liked figuring out how things worked.
That's kind of like we just started dividing up the work like that. Plus, I could answer people's emails after I was done at Walmart. If we needed to contact suppliers that really had to be done during the day. It was just a clear separation of what was going to happen, because when I was fulltime at Walmart, Tyler was fulltime on Vortic. He worked on Vortic fulltime since started on Kickstarter.
James McKinney: Are you fulltime on Vortic now?
RT Custer: Yes. After two years with Walmart, I left. It was May of 2016 so it's been another two and a half years now that I've been fulltime for Vortic. But yeah, so anyway it's funny that Tyler just kind of took over what on paper probably should have been what I was doing. We totally switched. Now, it's awesome because he has owned that completely and he's taught himself how to use all of our CNC machines. Literally via YouTube.
James McKinney: YouTube university, I'm telling you.
RT Custer: Yeah. Today, he manages and writes programs for, and operates over a quarter of a million dollars worth of equipment from 100% YouTube and a couple of conversation with our advisors that run other companies. So yes, to answer your question. He does all of the manufacturing, and then we together had the realization that about I guess about two years ago, that if I was going to be focused on sales and marketing, and PR, and that constant hustle of trying to get people to know that we exist, I couldn't also be the one that manages the people putting together the watches. I couldn't also be in charge of saying, "Okay, this customer's watch gets made today, and this customer's watch gets made tomorrow."
The whole production and operational side of the business, we needed another person. So we put out the call, which funny enough he just walked into our shop one day. His name's Thane, and we hired him about 18 months ago. We literally hired him to, for all intents and purposes, be a business partner and take over the other third of the business that really needed help. The thing I said about me not being good at managing managers, it's been the hardest thing for me to work with Thane because I want to micro manage. I want to say, "I talked to the customer. I sold this watch to this customer. We've got to get it done. We've got to prioritize it in front of this other thing," and Thane's just like a rock. He's just like, "Nope. This is how it's going to happen. This is more efficient. It doesn't matter what you told the customer, this is how it's going to happen because that's better for our business."
And I love him for that. We've butted heads a lot. It's been hard as hell for all of us to work together, but I think now after over a year, we're really hitting our stride and things are picking up for us. It's going really well.
James McKinney: So let me do a little math there. So you said you left Walmart about two years ago. Your son is 18 months, which would mean your girlfriend was pregnant at the time. How did that conversation go, and where was the business at that you thought, "You know what, this is a great time to leave a stable job and go fulltime and carry the burden with Vortic"?
RT Custer: So Vortic, at the time that I left Walmart, we were launching our second product. It was something that was really exciting for me, and I thought it was going to take over the world. We were going to sell thousands of them. It was going to be absolutely bonkers, right? I'd been planning the product launch for months and months, and I was like, "Okay. I'm going to leave the job. I'm going to take a 10 day vacation. After that 10 day vacation, I'm going to launch this product on Kickstarter. That product is going to triple our business, and then we'll figure out how to pay me from the proceeds of that new product."
I quit the job. I take the vacation. Spend a lot of the money that I had in the bank on that vacation, but I needed a break, and we launched the product. We hit our goal in the first 10 hours. It was great. Our goal was, I don't know, $50-60,000. We hit it, we raised like $75,000 in like two or three days. Then we got a call from one of our suppliers, who basically said, "Hey, this other supplier that we're looking at using to help work on this project for you, you don't want to work with them. This is not a good idea. None of this is a good idea."
We had to pull the plug on Kickstarter. That was our Kickstarter number two. We pulled the plug we gave everybody their money back. We walked away. I was doing a tour of America that I had set up, to go to all these different jewelry stores and sell them on the product and talk to them, do little pop ups at our friends bars and stuff trying to sell watches. We were hustling, and it was working. But the product that we wanted to make wasn't possible. Yeah, it was honestly the largest failure that we've had as a business, and I think about it all the time. We still haven't launched that product, because we're really close. We've almost figured it out now, and we have to make almost everything ourselves to do it right. So it's just going to cost a lot more money, take a lot more time. It's going to be awesome. But we pulled the plug on it.
So, since we pulled the plug on that, we pivoted and we spent all the time and money and energy and R&D that we had set aside for this new product on making our original product better. We call that Version 2, which is what I just showed you on my wrist. It's what you'll see on our website. We basically gutted the entire product that we make, and made everything about it better. Then we started selling that. We flopped for like… and floundered for I don't know, three or four months trying to figure it out. That was a really depressing time for me.
James McKinney: What was going through your mind during that time? Let's talk about that time, because I think there's encouragement and learning's for those listening. You had left because you were optimistic, and you were planning on that Kickstarter being outstanding, and the product to be great, and to kind of carry you into that transition. It just didn't play out like that. Obviously, the Kickstarter did perform, but you had to pull it because the product… What was going on in your head during those months?
RT Custer: I mean, it was like a really bad time of my life, but I took the energy, and I put it into the revisions to our current product. I put it into the fact that we need to make a lot of significant changes in the business. That's when we started talking about hiring Thane, who is our I call him COO, product manager now. Because I was trying to do way too many things at once, and so was Tyler. Kind of realized that, and we realized we needed help. We started looking for help, and so we found more people to help us physically in the business, and also investors.
We went out and raised another round of investment and renegotiated our small business loan, and got a larger small business loan. Basically said, "Okay, this thing that we wanted to do didn't work. Here's what we're going to do with that time, and money, and energy anyway. It's going to be awesome. It's going to improve this, this, and this." We used that platform to make all those changes. So it was, for me, scary and depressing that we failed launching that product.
But again, a huge learning experience and my dad is one of our advisors and has helped me through a lot of that stuff. He was a proponent of me leaving the corporate job. He questioned… all my family and friends, everybody questioned that idea at first. But my dad said, "They're going to hire you back if this doesn't work. They were just trying to promote you and make you move to Bentonville, to the home office. They're going to hire you back in a heartbeat. You were killing it at that job, and working a side hustle at the same time. If the side hustle doesn't work out and you come crying back, you might have to take the same salary and you'll be a year behind your peers, but that's life. At least you tried." My girlfriend said the same thing, and Lindsey, she was really supportive. Three, four months after we got back from that failure and we started rebuilding and started working on this new product, Lindsey and I found out we were pregnant. It wasn't a good time. We didn't plan for it. I was looking at buying rings. I didn't have any money, so I was trying to figure out how to finance a ring even though I spent every cent I had.
James McKinney: Or 3D print the ring?
RT Custer: Yeah, something like that. It was kind of figure out, okay, we sell a couple watches through this one jewelry store, maybe I can trade some watches. I was going down that path. Then we found out we were pregnant, and she's like, "Hey, save your money. Let's make sure our son has a good life and we get married later." So she was immensely supportive, and she's an entrepreneur too so she gets it.
Again, knock on wood, a lot of luck in there because she makes way more money than I do. I found a good one, and hanging onto that one for sure. She is willing and able to let me keep working without getting paid much. That, among a lot of other things, has been our saving grace.
James McKinney: That's awesome. Where do you see Vortic Watches in three years?
RT Custer: I don't know. Three years from now feels like a really long time. I guess we've been around for five, which feels like forever. But 2019 is going to be a growth year. We're going to try to double the business. We're going to try to make 800 or 900 watches in 2019.
James McKinney: That's awesome.
RT Custer: And we've always sold more watches than we can make, so I imagine we'll probably sell 1,000.
James McKinney: What goes through your mind when you say that out loud? Probably sell 1,000 watches?
RT Custer: It's funny, because my initial business plan for the company was to sell 1,000 watches in year one, so I keep shooting for the stars and I keep ending up a little bit down that road, and I shouldn't complain because it's fun and the journey's awesome. You know, we're cash flowing now and everybody's happy. I think I can pay myself this year, so a lot of really good stuff happening. But I still, I want to do more. I want to make more products. I want to have more customers. We're releasing two new products this year, including the one that we failed to launch on Kickstarter for the first time. So I'm going to be really excited to actually see that in person.
James McKinney: That's awesome.
RT Custer: We call it the Journeyman Series, and it's basically our first fully modern watch. Uses a Swiss made movement on the inside. All the other components are made in America. So that'll be our first fully modern watch. Should be really exciting in a different size and stuff like that. So this year we're just trying to double business, just trying to really build a good foundation.
Three years from now though? We really want to be known for online customization. So right now, you can scroll through about 100 pocket watches that we have in inventory, and design the different color of case, different color of crown, different color of leather, and we make it to order. So three years from now, we envision you to be able to do that with a fully modern watch that would be amore production product, that we can make thousands of instead of just dozens of, like our current products.
We'll still be making the products we make now, but we'll just have other products in other product lines to offer across probably different price points, and just be I think to more succinctly answer your question, three years from now we're not going to be a small business anymore. We'll be a company, and that's really exciting.
James McKinney: That is awesome. When you look back on your journey up to this point, today, I'm a big believer that if we lose sight of those who are so pivotal to our success, it will ultimately lead to our failure. Who do you point to for just, with just an immense amount of gratitude towards because of how supportive they have been for you in your journey?
RT Custer: For the whole journey, it's been my dad. My life's journey. I wrote a
Father's Day blog post on Vortic's website.
James McKinney: We'll include a link to that on the show notes, because I read it as well. It was awesome.
RT Custer: I guess it was six months ago now, Father's Day. My father just called me crying. It was after he read that. But that was true. Everything I said was from the heart, and I wrote it because I'm a dad now. I talk about it a lot with my friends that are dads. The whole nature versus nurture thing, like how do I raise an entrepreneur? Not that I want my son or my son's now, I want to force them to be entrepreneurs, but like how do I raise them in a way where they believe that they can do whatever they put their mind to?
I think it's really simple, and it's what my dad did, and it's every time you read a bedtime story and it's about a fire truck or an astronaut or something, if they're excited about it, tell them, "Hey, if you want to be a fireman someday, that's absolutely what you should do. You can do anything you put your mind to." My dad said that so many times. I can remember, even though it's one of the only things I remember at my age from when I was little. He and my mom, and my family, they all said that to me in one way or another throughout all of my life.
My mom and my grandma were the most scared for me when I left my corporate job to be an entrepreneur. Even thought they were scared and they asked me a lot of times, they said, "Are you sure? Are you sure? Are you sure you want to do this?" When I kept saying, "Yes, I'm sure. Yes, I'm sure this is what I want to do," they stopped asking, and they said, "Okay. If that's what you're going to do, then how can we help?" That's awesome.
James McKinney: That is awesome.
RT Custer: I say that all the time now as a dad. Because your kids are going to do stuff that are going to piss you off. They do stuff that you don't want them to do. How do you stay positive? How do you not crush them accidently? So definitely my dad, and then most recently my girlfriend, Lindsey, for literally financially supporting me, and emotionally supporting me on the good and the bad days. When I got back from that second Kickstarter that failed, she could have said, "Well, maybe you should do something else," and she said, "What are you going to do about it?" I said, "Well, I think Tyler and I talked about it, and I think we can do this, this, and this." She's like, "cool. Go to bed, wake up tomorrow and do it."
James McKinney: That's awesome. Did that, because in my own journey there's moments that my wife has said something similar in some of the darkest of times. Did that inflate your chest, make you stand taller, in the midst of that dark moment, that encouragement that she gave you?
RT Custer: For sure. Someone that close to you, especially as an entrepreneur. I work so much. I love what I do, so I work a lot. I don't have a lot of time to spend with other people, so I don't have a whole lot of what I would consider close friends. So her opinion matters so much to me because she's not just my partner, she's also my best friend. So yeah, what you said about your wife. Everything they say, everything they don't say and they infer… it hurts. There's a lot of stuff that significantly impacts you that you don't even think about. It's the same thing as the parental conversation that we just had. So yeah, so those would be definitely the two most influential people in my life that I can't thank enough for sure.
James McKinney: People talk about how the entrepreneurial journey is a lonely journey, and it shouldn't be. We need people. You mentioned an advisory board, right? Whether it be an advisory team or business partner, or a life partner, spouse, girlfriend, whatever that is a sounding board for you, is someone that can hold you up when you just want to crumble sometimes. It definitely should not be a lonely journey, and I would say the successful companies, it never was a lonely journey. They were with people and guidance the whole time. That's awesome that you have Lindsey that can do that for you. Those moments get heavy.
RT Custer: Yep, and a lot of big decisions happen in those moments, and a lot of big decisions are made under duress. A lot of things could have gone differently had I not had a support system at all, for sure.
James McKinney: So for our listeners, whether it be the entrepreneur that is just frustrated with the levels of significant traction that they're getting, isn't what they thought it was. Or the reluctant entrepreneur that isn't quite sure if they're ready to make the leap into fulltime entrepreneurship, or they think they can pull it off. Or the defeated entrepreneur that just has had failure, after failure. With your journey, what do you say to those three? Any one of them or all of them.
RT Custer: So Tyler and I laugh about this all the time. We feel like our motto at Vortic, what we should put on the wall is, "We'll figure it out," because we say that phrase way too often. But it's true. We say it all the time. We will figure it out, and sometimes we'll figure it out means we messed up and we canceled a Kickstarter campaign, and we do something totally different.
Sometimes, it means giving customers their money back because we just couldn't do what we said we were going to do. Sometimes, it means taking six months to make something that we thought would take six days. But we'll figure it out. There's always a way around that. We just have to call every customer and say, "We're sorry." Stuff like that has happened a lot to us.
The one thing that Thane has taught me, when we hired him and that he's said over and over to me recently, and that has just recently started to hit home, is, "You can't be scared of your customer." Because that's the thing that keeps me up at night. I am deathly afraid of our customers. I'm afraid of our customers being mad at us for something, whether it's like it takes too long to make their watch, their watch gets damaged in the mail and we have to fix that or figure something out. We put the wrong leather strap on it.
Stupid things that I stress about at this point. 95% of our customers are going to forgive us for all of that stuff, especially if you just own it, and you call them, and you say, "Hey. We messed up. Here's what we're going to do to make it right. Not going to happen again." Those conversations recently that I've had with customers, that's when I've started to realize that a lot of my customers are just like me. They're entrepreneurs, they're small business owners, they're managers. Because I've had some of those conversation with the Railroad Edition that you said you liked.
James McKinney: I love that one.
RT Custer: That product we launched it almost two years ago because we thought we'd figure it out. We didn't and it took us forever to make it, and we're still making them. We're only about halfway through the preorders that we've taken, and I've had to have a lot of really hard conversations with customers saying, "Hey, you remember that watch that you paid us $5,000 for six months ago? Well we haven't even started it yet."
But here's the good news. 95% of those customers, they're like, "First of all, I appreciate the fact that you personally called me, the owner of the company. That's really cool. Second of all, I'm a business owner too. I've messed up before, and everything you just said is really hard to say, so I appreciate that. Third of all, I'm seeing reviews online of my friends that just bought this watch and they got it just because they were a little bit ahead of me in line, and they're all super stoked because it's the coolest thing they've ever seen in their lives, so I'm going to wait for it."
There's always one guy that cusses you out and hangs up the phone, and then sends this long email, copying his attorney. That's only happened once, and I just clicked "refund" and it's gone. But most of the customers are like, "It happens, we'll figure it out."
So anyway, you need something like that. You need a phrase like, "We'll figure it out," or, "We'll find a way." My first boss at College Works Painting, Joe, he always said, "Winners make it happen," was his term, his, "We'll figure it out." Because he was all about sales, so he was like, "You're going to win, you're going to hustle, you're going to get it done, you're going to make it happen. Winners make it happen." I think about that a lot too. Everyone's motivated differently, but I think the reason that, "We'll figure it out" works for us, works for me and Tyler, is we're engineers. We think like engineers.
Engineers are creative problem solving, so the, "We'll figure it out," that's a problem in front of us that we can see, and we can figure out how to solve. It's another Rubik's Cube for us to tackle, and that's what keeps us going.
James McKinney: What I love most about RT's story is all the key decision points in his journey, and how in those moments, he never too the safe route out of the fear of the what if, or the unknown. He left a safe and stable job with Walmart because he had a plan of attack to help Vortic Watches carry the financial burden of his salary. Did it work out for him like he thought it would? No. His planned Kickstarter had to cancel due to supplier issues, and the money he was planning on was no longer in the game plan. Yet, it worked out better than he had imagined.
You might be thinking, "James, I don't remember it working out better for him. All RT did was improve their existing product and sell more units." True, but in his darkest moment, when fear set in because of the failure of his Kickstarter, he thought there was no way out and in the moment he was able to lean on the people closest to him to build him back up.
See, the entrepreneurial journey is painted as one where we are warriors of 100% of the time without fail. That is just not true, because we're still humans. What makes us unique as entrepreneurs is the high levels of risk we are willing to take to bring our dreams to reality. What we need to realize, though, is that we are not able to do so alone. It is critical to lean on those around us to support us and believe in us in the moments when we are sucker punched by failure. That failure will make us better entrepreneurs, but the support of those around us simply make us better, period. In addition to having a core group of people around us, we need to seize opportunities to support the entrepreneurs we come across.
With that in mind, show some support for RT and the Vortic Watch company. Obviously, if you can afford it, buy one of their watches from vorticwatches.com. However, if that's not in your budget, then do something equally powerful and follow them on Instagram, @VorticWatches. Don't just follow them, tag a handful of friends in a few of their photos. If you're an entrepreneur, you know how hard it is to get the word out about your business or product. Let's show RT and Vortic Watches some support today.
But here's my personal ask for support, from one founder to another. The Startup Story itself is a startup, and we would love to hear your story and possibly share your startup story. Please connect with us on Facebook or Instagram @TheStartupstory.co. Mention us, comment on a post, DM us, or visit our website at TheStartupStory.co to connect with us. Make sure to subscribe on Apple Podcast, Google Play Music, Stitcher, or wherever you get your podcast. And please leave a review. They really do help with being discovered by others.
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