Who doesn’t love an underdog story?
Batting against an opponent much bigger than you is a scary concept. Underdog stories go back as far as biblical times with the famous story of David and Goliath, where an unexpected victory comes from a situation that seems doomed to the worst possible outcome. One of the most inspiring underdog stories comes from our very own co-founder R.T. Custer when he was just getting Vortic Watch Company off the ground.
R.T. is inspiring enough as it is, running vastly different companies successfully and knocking it out of the park with his entrepreneurship. There’s so much work that goes into his endeavors, and it’s amazing in itself just to achieve success in the ways that he has.
However, we get some exclusive insight into the ups and downs of creating Vortic Watch Company and the challenges it faced in its early days in this episode of the Jesse Tee Show, on which R.T. was a guest. If you’re looking to be inspired by a real-life example of the classic David and Goliath scenario, this article is for you.
A Quick Recap of Vortic's Origins
R.T. and his friend, Tyler Wolfe, had the idea of restoring classic, antique watches while they were in college together at Penn State. From 2011 to 2014, they discussed ideas and planned how they would start this process, knowing they wanted to operate in America first and foremost. Creating jobs for Americans was at the top of their priority list.
As they spent these years researching where they could find the parts to make their watches, they stumbled onto the history of these hundred-year-old American watch companies like Hamilton, Elgin, Illinois, and Walham that made hundreds of millions of pocket watches in the United States, mostly in the Northeast back between 1850 and 1950. Back in those days, the pocket watch could be likened to the iPhone. Everyone needed some way to tell the time, and a pocket watch was one of the only ways to conveniently do so.
To your average person, these old pocket watches were good only for the gold and silver inside the cases. To R.T. and Tyler, however, this was the start of their business. They had the idea that if they took these hundred-year-old antique pocket watches and crafted the outside components for a wristwatch, they would have a 100-percent American-made product. Not to mention, these watches looked slick. Once they had their idea solidified, they put it on Kickstarter with a goal of $10,000 so that they could buy a 3D printer to make the components they needed.
With the help of R.T.’s corporate logistics job working for Walmart keeping them afloat, they began making watches in their basement in 2014. It wasn’t always smooth sailing, and they definitely faced a learning curve.
“We didn't ship a watch until almost Q4 of 2015, which is pretty normal in Kickstarter. We were children at that point. We had no experience running a business. We had no experience making watches. I was an engineer, and he [Tyler] was a math major. We were just like, Yeah, it's a watch. How hard can it be? I think that being naive actually ended up being a good thing because we didn't sweat the tough things, you know, we just figured it out.” - R.T. Custer
This whole process turned out to be more of a proof of concept for the pair, as R.T. spent the following few years raising over $1 million in seed capital and through angel investors. In 2017, they finally started seeing a profit and were able to obtain bank loans, which was the start of the business’ growth and financial success.
Success Is All About Relationships
Seeking out investment is no easy task, and it takes a lot of determination. R.T. points out that the first 10 investors they sought out were friends and family.
“It was a lot of selling, trying to prove to someone that I am a good investment and, whether the watch thing works out or something else, that I'm gonna use this money to go make money. How do we find someone that has enough liquid capital that they can write a 50 to hundred thousand dollar check and have it not hurt them and be fully aware that they might lose every cent of this now or 10 years from now? You have to know a guy who knows a guy who knows a guy, you know, it's just part of the process.” - R.T. Custer
R.T. had to find people who believed in him, not people who believed in the product. Sure, he needed to have a good idea to get people on board, but he carried the legitimacy of his business on his shoulders and propelled its success through his words.
“I would say the 10 investors that I got were mostly friends, family, or friends of family. They invested in either me or Tyler or both of us. They maybe thought watches were cool, or they thought the idea was interesting enough to talk about, but they were investing in Tyler and me. Our drive, our enthusiasm, our we'll-figure-it-out kind of attitude. Once we started making money and we were at least profitable in some ways, I think that's when more of your traditional angel investors started to come in and be interested.” - R.T. Custer
When it comes down to it, it’s all about relationships. R.T. and Tyler had the drive, and they had the ambition required to start the business. They had that million-dollar idea, but they needed investment to get it off the ground. Without people who believed in them, they would never have made it out of their basement. Thanks to their incredible work ethic and remarkable salesmanship, they got the investment they needed.
Vortic v. Swatch: A True David and Goliath Story
In July of 2015, R.T. and Tyler received a cease and desist in the mail from the Swatch Group, which is a conglomerate of about 26 different brands and the largest watch company in the world. Here’s the ad that prompted the “cease and desist” order.
The Hamilton name is featured front and center on the wristwatch, causing the issue. R.T and Tyler initially thought this was more of a miscommunication. Surely the biggest watch company in the world isn’t gunning after these two kids crafting American-made watches in their basement. They reached out to the Swatch Group and, for two years, tried to explain what they did and why it was unique. Unfortunately, they were officially hit with a lawsuit in 2017.
After four years of fighting an uphill battle, the pair began considering bankruptcy. They just wanted this lawsuit to go away and to find an opportunity to reorganize. R.T. says he sat in the parking lot of Vortic and Google searched “best bankruptcy lawyers in Colorado,” which is how he found Rob Lance. It turns out that his first call was the lifesaver he needed.
“Probably an hour and a half to two hours into that 30-minute meeting, he [Rob] canceled his whole schedule for me. It took me a while to catch him up. We were talking years of legal stuff, and he says R.T., I have good news and bad news. The bad news is I'm not the type of bankruptcy attorney you're looking for. I actually am a bulldog attorney that goes after big corporations for falsely filing bankruptcy when they don't really need to. The good news is my business partner is a trademark expert, and I have a special place in my heart for people like you that are getting screwed by these big companies.” - R.T. Custer
R.T. admits that this was the first time in his life he cried tears of joy because he was so incredibly relieved. Amidst all these dark moments and points in which he and Tyler thought everything was lost, he happened to find an ally that would help pull them from the trenches.
During the years-long legal battle, R.T. was also sued personally by the Swatch Group, which he theorizes was nothing more than a scare tactic. This huge watch conglomerate was trying to intimidate him with an ever-growing pile of legal fees and the threat of jail time if he lost the suit. Jesse asked if there were ever any dark periods throughout this process and how R.T. managed to get through them. Specifically, he asked if R.T. ever considered giving up on everything.
“I don't think I ever made it to the point of me wanting to quit, and I don't know that he [Tyler] ever officially made it there either. I just had so much information, so much context about what would happen if we won or we didn’t. So he really had to look at me and give me advice on what we should and shouldn't do. He was the voice of reason in some ways. We couldn’t get a loan because the other thing is if you have a federal lawsuit on your back, it is almost impossible to get investors in loans.” - R.T. Custer
Because of these lawsuits, R.T. grew in ways he never imagined. In addition to his entrepreneurship and running his companies, R.T. has had to learn all there is to know about trademark law. He said arguably the worst part of the lawsuit was the effect it had on his relationship with Tyler. Since Tyler was tied up physically making the watches and training employees to make the watches, R.T. became the face of the company and, by extension, the face of the lawsuit.
Another major thing that both R.T. and Tyler learned is that you have to have that balance in professional relationships and even in personal ones as well. When the going gets tough, you need to have the voice of reason on your side. Even though it was a bogus lawsuit with the intent to intimidate, it was still a lawsuit.
“We went to court in February of 2020, where I handed exhibit A — this watch — to the judge. I told her our whole story, what we did, what we didn't do. Basically, We take pocket watches and turn them into wrist watches, and I really hope that's not illegal because it's our whole business model. Six months after that day in court, she sent us all an email and said, Nope, it's not illegal. Everything's fine. You guys are good. We were protected under all these different trademark rules and everything. It's upcycling. We basically protected the idea of recycling and upcycling.” - R.T. Custer
This ruling was a groundbreaking decision for not only Vortic but anyone who is considering an upcycling business. Because of R.T. and Tyler’s determination to stand behind Vortic, those who want to preserve history by creating innovative, modern products are protected.
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At Vortic Watch Company, we don’t just make watches, we restore pieces of history. Vortic takes timeless, antique pocket watches and reimagines them as incredible, one-of-a-kind wristwatches. We take pride in our process, and we think that care is present in the quality of our products.
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