Review: BMW i8

The question I get asked most often by friends who know nothing about watches is, "What makes a watch so expensive?" To answer this, I often compare a watch to a car. My explanation goes something like this:

To engineer a car from scratch, the main cost is in the manufacturing and assembly of each part. A great mechanical watch is not much different. As the cost of materials is not a major factor for either, the size of the parts does not particularly matter. To create hundreds of parts of anything, finish them properly, and assemble them well is expensive, especially when not very many units of the product are going to be made.

This is, of course, a simplified analogy, but it does tend to drive the point home. Suffice it to say, there are more than a few similarities between great watches and great cars, and typically fans of one are often fans of the other. However, while the first decade of the 21st century was a golden age for watchmaking, the cars were horribly boring. Each manufacturer produced more and more of the same thing. Horsepower went up and up, but curb weights, safety devices, and other "advances", along with styling as bland as McDonalds food made for a generation of fast but uninspired cars.

In the last few years, however, that has begun to change. Tesla has come out of nowhere with their fantastic Model S, a car from completely outside the box. Ferrari is making its best cars in decades. The 991 is the best Porsche 911 model since the air-cooled 993, and the 918 is a supercar fit for any child's wall. Engine sizes are decreasing, utilizing more and more technology to make cars even faster without destroying the planet or padding OPEC pockets.

I grew up drooling over said supercars, poring over the pages of every car magazine and dragging my parents to Rodeo Drive and the Sunset Strip whenever we were in LA, just hoping to get a glimpse of an exotic car driving by. This feels like a new golden age of automotive design, and no car exemplifies that or excites me more than the BMW i8. After driving one daily for the past two weeks, I thought I would share some impressions.

 BMW i8

BMW i8


I am a longtime BMW fan. My first "nice" car was an E36 M3. I have since had nearly every generation of each M car with an X5, 550, and others in between. When I first saw the concept that later became the i8, I was blown away. The design was how I always pictured a sports car of the future. The first striking thing about the production i8 is how faithfully they stayed to that concept.

 Photo of i8 concept from Car and Driver

Photo of i8 concept from Car and Driver

The car looks like a concept car in real life. In fact, I have had multiple people ask me if it is a "real car" or if they are for sale. And that brings me to my first note on driving an i8: it gets A LOT of attention. Living in Los Angeles, people get pretty used to most cars. Porsches here are like Lexus's elswhere. You cannot drive for fifteen minutes without seeing a Tesla. But the i8 cuts immediately through all of this. Parked on the street, one can be assured that the car will be surrounded by people when you return. At every stop light, expect to get thumbs up from the driver in the next lane (my favorite thumbs up so far was from a California Highway Patrol officer). This car makes people interested, and it makes them happy.

 Strangers walking around BMW i8 when parked

Strangers walking around BMW i8 when parked

It's no wonder that people get excited. This car is a showcase of beautiful, contemporary design. It is wide and crouches low, with very little over hang in the front or rear. The proportions are just right. The signature design element is the sculpted rear tail lights that create an air channel under the downward swooping roof -- a design that could only be born from a wind tunnel and only crafted out of space age materials. The doors are incredibly long, taking up about half the length of the car. They open upwards in a motion that would please Russ Hanneman

 The tail light/roof swoop of the i8 is not only the dominating visual cue from the rear...

The tail light/roof swoop of the i8 is not only the dominating visual cue from the rear...

 The air tunnel is also the rear view for the driver

The air tunnel is also the rear view for the driver

So what's it like to drive? To be honest, I was intimidated at first. Opening the scissor door and getting in takes some getting used to. The car looks like it arrived from the future, and I worried that I was not well qualified to drive future space craft. However, once inside the cabin, I was immediately reassured. The controls are distinctly BMW, and my familiarity with other models served me well here. The build quality is a notch above any BMW I have driven. The car is completely silent when running on the electric motor, with not a single squeak or rattle to be heard. Yes, that's right, I said electric motor. The i8 is a plug-in hybrid. It has an electric motor in front of the passenger cabin that drives the front wheels, and a mid-engine 3-cylinder turbocharged gasoline engine just behind. Like many BMW's, there are a variety of drive mods. The three most used are all-electric, Comfort, and Sport.

In comfort mode, electricity is relied on until you lay into the accelerator. Then, the gas engine seamlessly fires up and the car effortlessly propels itself forward. Sport mode keeps both engines on simultaneously. The car has torque on demand at every part of the power band, so much so that it is best driven a gear higher than you feel you should be. The sound of the gas engine is quite satisfying as well. As green as it is, this car still sounds like a proper sports car. And it is quite green. In just shy of 500 miles of mainly city driving, I am getting 52 mpg. For comparison, over 20,000 miles of the same sort of driving in my E60 M5, I averaged 6 mpg (!!!). My 2014 550i gets 17 mpg. When driven fairly hard in Sport, the car still gets around 30 mpg. It is truly remarkable.

 My current average fuel economy as per the on-board computer after 500 miles in the i8

My current average fuel economy as per the on-board computer after 500 miles in the i8

Sports cars now are exponentially quicker than what could ever be used on the streets. While other manufacturers continue to chase magazine specs and bragging rights, BMW has completely rethought the idea of a modern sports car. It is still wickedly fast, but rather than continuing to add speed that drivers can't use, BMW sought out to optimize the entire experience. In the i8, they have combined museum worthy design with supercar performance, eco-friendly manufacturing and emissions, Gran Tourismo level comfort, and all at a price that is a fraction of its closest competitors.

The common thread among great modern watches is their creators recognize that it is no longer exciting to simply parrot what was made in the past and add useless bells and whistles. The i8 is truly a car that looks toward the future rather than reflecting on the past. That such a forward thinking, daring product was made by a large company like BMW gives me hope for cars, watches, and all the other products I love. I think it is important to recognize products like this and support companies for making them. When an eight year old kid walks by and starts jumping up and down in glee at the sight of it, you remember why these kinds of products are important. Oh and did I mention it has a back seat? My son certainly approves...

 Booster seat in the rear of the i8

Booster seat in the rear of the i8


TickTocking Into The Future

You may notice there have been some changes around here. Today, I'm excited to announce TickTocking 2.0 (or maybe 3.0...who's keeping track?).

I started TickTocking several years ago as a blog where I could speak candidly about watches and the watch industry. At the time, I was running MB&F North America. I was not beholden to advertisers or other watch brands in any way, so I could speak my mind and provide an insider's perspective that is rare to find in this industry. Over the years I wrote less and less and felt I had less and less to write about. However, at no point did my passion for watches and the watch industry wane. 

After my time in the industry, I mainly went back to being a watch collector, privately enjoying this hobby just as I did in the beginning, over a decade ago. I have now seen, handled, and often owned many of the most exciting watches in the world and have seen the industry from the inside. I have also met and worked with many of the top journalists, dealers, collectors, and brand executives in the world. All of this served to strengthen my point of view: that great watches are incredibly special and important objects and that people need to be exposed to them and properly educated so they can fully appreciate them and differentiate great, good, and bad.

In the last few years, because of my connections and trust within the industry, I have helped collectors from all over the world find or sell rare pieces privately. This again gave me access to some of the great pieces in the world.

So that brings me to today. I am relaunching TickTocking as a hybrid of a blog and dealer site. I am going to personally curate a selection of the best watches on the planet, offered for sale right here on TickTocking, and simultaneously use this site to educate and spark discussions on watches, business, design, art, architecture, technology, philosophy and whatever else comes up. The goal is to be a completely transparent resource for very high level information, and to become the world's most trusted source for high-end, exotic watches -- something that I believe is missing from the landscape.

In the Watches section of the site, you will find galleries of a selection of the pieces I am offering for sale. Each includes further information explaining the watch, and most have video reviews that I have personally made to give you an idea of what the watch is actually like to hold and own. The blog itself will continue to be a home base for musings and discussions.

I look forward to sharing my love of watches with you, and, when you are ready, to help you find the watch of your dreams.

Sincerely,

Steve Hallock

Hodinkee Hires Kevin Rose and Raises $3.6 Million

This morning, Hodinkee announced that it has merged with Watchville, Kevin Rose's app, that Kevin will now be CEO of Hodinkee, and that it has raised $3.6 million from a big time team of investors. If you follow this blog at all, you know I primarily write on watches and tech, so this post has me about as excited as could be. First, let's talk about the money. $3.6 million sounds like a nice, modest raise that will allow Hodinkee to function with enough working capital to make big moves and great hires (like hiring Jack Forster as managing editor), but isn't so big that they give away too much control. The real story with the money, however, is who it came from. The list includes True Ventures, Google Ventures, Twitter founder Evan Williams, Basecamp's Jason Fried, and Mr. John Mayer, yes THE John Mayer. Having this many brilliant, diversely well-connected people intimately involved with the project virtually guarantees it is going to move in an interesting direction and will have a major leg up in succeeding.

Having Kevin as CEO is certainly the most interesting part of the story. Kevin is a serial entrepreneur who is very well known in the tech industry and rose to fame in the first dot com era as the founder of Digg. I have long lamented about the incompetence and tone-deaf nature that is rampant in the watch industry, which makes Kevin a breath of fresh air. He is a young guy, and totally gets the 21st century 20s-40s successful male, while much of the industry is still shaping their businesses based on demographics and business models that became obsolete decades ago. I have been dying to see outsiders come into this industry to shape things up, and Kevin is right at the top.

So where do they go from here? Facebook took off because they bit off a niche of the market -- college students -- got full adoption there, then expanded outwards. Hodinkee represents a perfect niche to replicate this model. In a few short years, it has completely dominated the landscape of watch journalism and become a reference site even for those in other industries. It has also shown it can create revenue streams other than ads with huge sales of accessories and even retailing high end watches/clocks like the collaboration with my friends at MB&F. With Ben Clymer able to focus more on the content, and Jack Forster at the helm, I expect the content to continue to get even better. I am sure it is not lost on anyone involved that the models for selling new, used, and vintage watches are all broken. There is a tremendous market here for someone to take, and I would not be surprised to see things move in this direction. Then there are all of the different possible verticals. Gawker has Deadspin, Jezebel, etc. Hodinkee could easily expand into different verticals, becoming a huge media portal.

One thing is for certain, they are not playing around at this point. This is a big move. Kevin and this investor list would not be involved if they didn't recognize the major opportunities here to become more than simply the best high end watch blog on the planet. Hodinkee just got on the rocket ride, and I cannot wait to see how high it can go.

Screw the Customer

Aside from watches, one of my other passions is contemporary art. There is a distinct form of art that offends me, however: art that makes fun of art collectors. Regrettably, this is not very uncommon. The main message communicated is usually some form of, "By the nature of you paying exorbitant sums for this, you prove that you are yuppy scum and I, oh great artist, am superior." Perhaps this is inevitable in an industry where the creators often spend a large portion of their lives below the poverty line, and with any success the consumers are firmly in the 1%, but that reality makes it no less detestable to me. The luxury watch industry is particularly vulnerable to a version of this mentality given the intrinsic uselessness of mechanical watches and their exorbitant prices. As the saying goes, "there's a sucker born every day." Sometimes I think this is the entire business model of some companies.

The question I get asked the most by watch-Muggles (that 99% of society who does not and will not ever understand why I pay $80,000 for a watch) is "What makes a watch worth $80,000?" Curiously, this is a question that we watch collectors very rarely ask ourselves. Perhaps ignorance is bliss and turning a blind eye to the absurdity of it all is necessary to the full enjoyment of the hobby. But there is a line, and sometimes it gets crossed, even by some of my favorite brands.

The newly released Richard Mille RM27-02 will run you a cool $800,000 (not a typo)
The newly released Richard Mille RM27-02 will run you a cool $800,000 (not a typo)

And so we cross the line from products to ethics. Capitalism, supply and demand, we are taught in business school that a firm can charge what the market will bear, with no judgments associated. I think this is wrong and short sighted. I believe that for the long term health of a company and the market as a whole, each product should be priced to provide as much value as possible to the buyer. It's a simple concept actually: make the best product you can make and don't fuck people over, even if they are complicit in it themselves and ultimately responsible for their own money.

And what of the media? We've read the same story countless times. "Watch X does such and such, is made of such and such, is really cool and a great achievement." The last paragraph contains some astronomical price that is delivered with the dead pan of a congressional jobs report. Now, I am not naive. I understand the paradox of expecting outlets who are funded by the brands to be critical of their most indefensible crimes, but I do think that the stakes are higher than we think. Ultimately, these are not transactions in a vacuum. The pricing problem is the single biggest threat to the entire industry.

Over the last 15 years, average retail prices throughout the industry have consistently increased year over year, every few years discarding an entire "generation" of collectors. The sentiment expressed most often by the group of collectors I have known for the longest is that they are not interested in buying anymore, mainly due to pricing -- not that they can't afford what they want, but for those of us who are not new to the market, it is simply impossible to see the value at current prices.

There are some fantastic watches being made right now, and many have somewhat justifiable prices. One of my favorite posts on this blog is my thoughts on how to actually sell a $100,000 watch. I am not calling for an angry mob to burn the entire industry down. But when the most common question any sane person would ask is, "What makes watch Y worth $XXX,XXX," I do think it is a point that we need to look at and have start the process of critical thinking toward. At least it would save me from having to spend an hour of my morning ranting on my blog.

If I Were Running Audemars Piguet North America

Last week, news broke that Audemars Piguet was parting ways with their CEO, Philippe Merk and replacing him (supposedly in interim) with François-Henry Bennahmias, formerly head of AP North America. AP is my favorite "big" brand.  In fact, the watch I wear most often is an AP.  They have great products, great history, and many great people who work there.  They have the resources to do some amazing things.  So I couldn't help but think: if they hired me to replace Francois, what would I do?

First, I would listen to the chime of the minute repeater that I made them give me as a signing bonus.  Then I would get down to serious business.

My focus would be on service and value.  The two are intricately related.  I would push them to finally take the jump into online sales and create a technology platform that offered the best user/customer experience in the business.  I would invest heavily in the US service center to the point that NO SERVICE SHOULD TAKE MORE THAN 4 WEEKS, with the eventual goal to turn out routine services and minor fixes in less than 2 weeks.

I would promote transparency and open dialogue.  I, myself, would be available continuously through social media and email and also empower other employees to be as well.  I would answer the tough questions honestly and make my positions very clear.  I would be swift in rectifying any and all instances of poor service from us or our partners.  Any customer willing to spend $10k+ on an archaic instrument deserves to be treated with utmost respect - not propitiation but true fairness.  This has to be hammered into the culture from the top down.

Chris Dixon, tech entrepreneur and investor, posted a great piece over the weekend on how people are now focused on experience rather than product.  Luxury brands have known this for a while, but have lost their way.  They see people tire of the experience, and think they have to focus harder on selling the product.  That's why you see all sorts of BS claims on materials, movements, complications, etc.  What they're missing is that the experience is still what's important, they are simply selling the wrong experience.  The typical arrogance and elitism of luxury is not as effective anymore.  What people want is a company that is committed to doing things in the best possible way, with the utmost integrity, and that treats its fans and customers like family, not suckers.

There are plenty of other things to do, but I believe that if someone were to truly implement these few points with passion and integrity, the brand would rise head and shoulders above the rest and set a fantastic example for the industry as a whole.  The US is different from the rest of the world.  Customers are very savvy, status is much less important, etc.  No watch company has gotten the message right here yet.  It's not hard, but it can't be faked and there is no shortcut.

For a nominal (7 figure) salary and a brownstone in the West Village, I'd be happy to do it for them without breaking a sweat.  But do you think they'd make me learn French?

An Industry in Danger

Next week in Geneva, SIHH marks the real beginning of a new year for the watch industry.  This will be my first year for a while not attending the shows.  As someone who is now on the outside looking in, I have a new perspective - and can also be more candid.  During my time in the industry, I gained a ton of respect for a few people, including my former team at MB&F.  Mostly, however, I was left disillusioned by the vast majority of the industry. I believe the watch industry is in a condition of serious danger.  Ten years of incredible sales brought on by what we now know to be a completely artificial boom here in the US and now economic growth in Asia have made it too easy to think for the short term at the detriment of the long without realizing the effects.  Brands have not paid the proper amount of attention and respect to their collectors, their products or their business models.  Here is a short list of what I would like to see change for the health of the industry as a hole.

  1. Pricing is out of control.  We ALL know this to be true.  Walk into a retail store and try to buy a nice watch for less than $9000 retail.  It is incredibly difficult.  Watches that were in production 10 years ago now routinely cost double for the same piece.  10 years ago, a Patek perpetual chrono cost about $35,000.  Now $135,000.  Most of the interesting stuff starts at around $100,000.  This is insanity.  Brands need to control their costs better and maybe stop lining their pockets so thickly.  This can only continue for so long before a critical mass of collectors realize things have gotten out of control.
  2. Explore new sales channels.  The internet is the most power sales tool in history.  Sorry for my retailer friends, but why are retailers getting the same margins they were before that marketing and sales channel existed?  In many cases, why are they even necessary?  Want to cut costs to bring pricing back to earth?  Here's a great place to start.  The sales pipeline is stuck in the past.  The answer is not just to open up fancy brand boutiques and keep the margin, the answer is to streamline and cut prices.
  3. Create products with soul.  Aside from a few independents and the occasional big brand release, most new watches have no soul.  A mechanical watch either has to be art or extremely practical.  If it's over about $10,000 you can toss practical aside.  So what we have is an industry trying to make art, but 95% of the artists are untalented dilettantes who in most cases don't even understand what art is and that it is their job to make it.  To make a watch for $200,000 where things flip around and at precisely 8am it shoots water in the wearers eye and says "I love you" is not art.  To make something just "because it's cool" is not art except for a very very small number of true tastemakers who have such a solid grasp of the product that it works.   I'm sorry, but most of this stuff is shit.  The product people in the industry need to take a hard look at why mechanical watches exist and what they can truly offer of value - not repetition or novelty.

Will we see this at SIHH next week?  Of course not.  And so I wish my friends - the good guys - good luck at the show, and I will enjoy reading about it from Los Angeles.

Moving on Part 2 - Why and What Next?

If you missed my post yesterday, I am leaving my position with MB&F.  First of all, I got so many amazingly nice emails and phone calls.  Thank you very much.  It is great to know that people appreciated the job I did.  Another common comment was that of surprise or shock that I would leave, and curiosity as to what I am doing next.  I want to provide a bit more information. First, my leaving in no way reflects on MB&F.  They are fantastic people, running a fantastic company.  I greatly enjoyed my time there and am proud to have helped them get to where they are.  We are parting on very good terms, and I have made it known that I am available to help them in the future should they need anything.

So leaving really came down to two things - personal goals, and timing.  Most importantly, I am ready for a new challenge.  Learning a completely new industry, new skills, and meeting so many great people has been an amazing challenge and growth experience.  Now I would like to synthesize that and all of my previous experience to create something really big.  And the timing was right to make the switch.  I am confident that the gains I have achieved and contacts I have made are stable enough that I can hand them back to our Geneva office, and they will continue here in North America without losing too much momentum.

So what is next?  Honestly, I am still deciding.  I have a few ideas of businesses I would like to start and some interesting job offers.  Some are watch related, some are not.  I got into the watch industry almost by accident.  Now I want to take a step back and make a real decision if I want to get back into it or not.  Most importantly, I want to work with super bright, driven people who are focused on creating something important.  I was lucky to have that experience with MB&F, and I hope to find or create it again.

Of course I will keep the blog going and keep everyone updated here.  If you have any questions about my leaving or my time in the industry, now is a great time to ask and I'll try to write them up as posts.  Thank you again for the support - the future is very exciting!