Whither HODINKEE?

Hey, remember me? Regrettably I've allowed Horolonomics to lay fallow for too long, since earlier this summer really.  I can't exactly explain why, but it is fair to say that the pandemic is at least partially responsible.  I've had quite a few articles I've wanted to post in the interim, but I'm finally awakening from my temporary hibernation in response to pending developments at HODINKEE.

As I explained in my interview over at Watchsignals (full disclosure: I'm an official advisor), the good people at HODINKEE set me upon my path as an enthusiast and collector of watches.  I can't exactly remember when I started reading it, I think it was when Kevin Rose joined the team, probably around 2015.  I'd used his first startup "recommendation engine," Digg, and listened to his podcast for a while (Diggnation, which was really fun) and that is when HODINKEE popped on my radar.  

It is fair to say that a great deal of the emergent interest in watch collecting is attributable to the work HODINKEE has done under the leadership of Ben Clymer. 

Ben Clymer during HODINKEE's H10 event.

So, I'm posting this because it sure looks like that arrangement is very significantly changing.  To be clear: I'd thought this day would inevitably arrive.  Venture capital funded enterprise almost always involves sidelining founders, usually after giving them a good chunk of payoff (this may or may not be what is happening).  I actually marveled at the fact that Clymer was able to maintain his position for so long. This is approximately his twelfth year with the company, an eon in the VC world.   Perhaps the pandemic rendered the arrangement unsustainable, though.  The term "runway" is often used in reference to the pool of funding available to a VC enterprise as it operates in the red during its early days.  It seems the runway grew short, the pool of funding was tapped, and one of the conditions of new funding involved a new CEO.

I believe this to be the case based upon an article posted and then retracted by Watchpro on the morning of December 1.  You can find it in Google's cache (also archived here).  Watchpro reports that a pool of funders (including Tom Brady and John Mayer) have extended $40 million of additional runway to HODINKEE.  I have reason to believe that this article is accurate and this news will come out eventually.  The new CEO bundled with the funding is reportedly Mr. Porter founder Toby Bateman.  

So, let's break down the good and the bad.  The good: HODINKEE stays alive to fight another day.  Who knows, maybe Mr. Bateman is immensely talented and he will do great things that we all appreciate.  It is hard to say without having some additional details.

The bad: there is a risk that HODINKEE will not be able to keep its non-commercial (i.e. writing) talent team whole during all these changes.  Also, will the new CEO capably keep Mr. Clymer fully engaged in the enterprise?  Much of this might depend upon vesting arrangements for stock options.  

My chief concern is that the VCs will see the future for HODINKEE as an ecommerce acquisition target and inadequately support the publishing side of the house.  In fact, I think this is a real possibility.  One of the most valuable assets for the brand is the AD arrangements HODINKEE has assembled.  I can easily imagine a luxury conglomerate or a retail network with a weak online commerce game seeing HODINKEE as a route to leapfrogging the competition. 

There is nothing inherently wrong with that endgame.  It is important, though, to note that HODINKEE has filled the important role of building enthusiasm and interest for the watch community as a whole.  In this sense, the company has provided a "public good" of education and interest-building which benefits all the players, including and especially the brands.  A good example was Hodinkee's H10 event celebrating its 10th anniversary. This was essentially a free conference for the community and industry to gather and dialogue.

The program for the H10 event.

Venture capitalists subsidized that public good for many years.  If those days are numbered will the community lose this public good?  If that happens, what is the implication for the wider watch community?   We will have to wait and see.