Once Upon a Time in Malmo

So news broke on Friday that the Festina Group had acquired the assets and intellectual properties of Anima, the parent company of Kronaby.

So, in essence, Festina has acquired the former darlings of the connected watch world.  And have done so at a fire sale price.  Here is the release exactly as it was forwarded to me by another journalist -

Madrid - Spain, March. 08, 2019 – Festina Lotus SA has announced today that it has entered into an agreement to acquire from the Bankruptcy Estate of the company Anima AB, their assets and intellectual properties, including the hybrid watch brand Kronaby. Anima AB, based in Malmö, Sweden – designs, develops, manufactures, markets and distributes the hybrid smartwatch brand Kronaby. The acquisition, subject to certain conditions, is expected to be finalized in March 2019. Several of Anima/Kronaby functions and operations will be integrated into Festina Group. The ten-person Research & Development team focusing on Application, Cloud and Analytics development will remain in Malmö. The acquisition has been conveyed by Trägårdh's law firm, Malmö, Sweden. 

"We are happy to be able to find a solution together with Festina Lotus SA. They have a long experience of the watch and jewelry business, and we believe that the Festina Group will bring great opportunities and vision to the Kronaby brand and the technology it is based on” says Pål Borge, co-founder of Kronaby. "The capabilities of the Festina Group are so much more extensive and we look forward to see the development of the Kronaby brand in the future.”

The President of the Festina Group, Miguel Rodriguez, commented, "It is an important acquisition for us, we not only bring in a new brand to our existing portfolio, we also take a step into the smartwatch segment. Kronaby has proved to be one of the best hybrid smartwatches in the world and the newly integrated people and technology will play an important role in the strategic future of our Group. We all know that the world is constantly changing and connected devices are something we all have around us in our daily life.”

So what does that mean for the staff at Kronaby?  Well, suffice it to say, the word around the campfire is that most of them will be contacting their local unemployment office.

I have to say, in all honesty, that this is one of the most dramatic rises and falls in this business that I have seen in the time that I have been involved in it.  And if I am really honest?  It didn't have to go this way.  

So what went wrong?  Probably a lot of small things, each one on it's own not enough to sink the ship.  But like a poison pill, you swallow it, and slowly it makes it way through.  But at it's root?  This was a fairly fundamental misunderstanding of how the watch business actually worked.  And that was evidenced in several areas including marketing, sales and PR.  Inevitably, a few fundamental things have to happen:

1.  Your PR function needs to actually LIKE the press and be willing to communicate with them, rather than just hang onto the good looking influencer at the party.  Because, curious to relate, it is the press who will get your product and message out there.

2.  Your marketing has to try to shake off millennialitis.  This can be challenging, because all of the data tells you that millennials represent a huge buying group.  This is true, but as a group?  They are not really  buying watches, with, perhaps, the exceptions of Apple and Samsung watches.  Your marketing team needs to message to people with actual money who will actually spend it on your actual product.

3.  Your sales team needs to understand that merely opening a store is not the same as actually selling watches.  If watches are sold, they actually need to be paid for, meaning that, in theory, monies should be received by your HQ in a reasonable amount of time.  The watch business is a goofy one, and one that all too many people think that they can outsmart, and they ultimately get their heads handed to them for their trouble.  A store on memo is going to pay Richemont, LVMH, SWATCH, everyone else, and finally, eventually, maybe you.  But most likely not. 

Kronaby was a wonderfully charming, romantic story...
until it wasn't.  

Bankruptcy

For Anima (Kronaby) the plug was officially pulled yesterday when they were declared bankrupt.  I reached out to the company and received this statement from the CEO, my comments follow after -

It is with sadness that yesterday the 6^th of feb Anima AB who owns hybrid smartwatch brand Kronaby has been declared bankrupt. Our main focus is now to continue the positive ongoing dialogues we have with a number of investors, in order to secure the forthcoming growth of the company. Our main owner – Goertek, has changed their strategy going forward and therefore ended their investment with very short notice, which has resulted in lack of time onboarding new investors with high interest in the company. This has unfortunately significantly limited our chances of avoiding a bankruptcy. We see a considerable growth of the Sales of Kronaby hybrid watches and will work hard to secure a future for the brand.

For now the business sustains and the company operations continues. This also means that our app and watches are working 100% and there is no damage on the watches on our customers wrists nor the watches you and we have in stock and in stores. It is our belief that this, together with the strong interest from the market, indicates all the right conditions for the potential new investors. 
Okay, let's consider some basic points that are getting somewhat glossed over -

1.  Goertek is not just some other typical "Chinese fall guy" that the Swiss (and I guess in this instance) the Swedes like to blame for incompetence, lack of vision, etc.  In fact?  They are a pretty big TECHNOLOGY company.  They understand probably better than most that good things, sometimes, take time.  And the amounts that they have been investing in the Kronaby watch?  It's beer money to them.  I suspect that two things happened -
A.  They realized that the tech behind the Kronaby watch is already way, way behind the times.  Rather than recreate a wheel that is already rolling and working quite well in millions of other watches (for a shit-ton less money), they might as well become movement customers and simply buy stock from a company that can actually produce it consistently.  Wonder why the Alpina and Frederique Constant watches still haven't caught fire?  I don't.

2.  Leadership  - or in this case?  A lack thereof.  As continuing readers will note, I followed he build up and launch of the Kronaby watch.  I attended the launch in Malmo now two years ago.  And I came to learn that the four fellows heading up the efforts didn't really understand the watch business, and more importantly?  Had a very tough time recognizing, admitting and correcting some of their behaviors.  For a company that had no actual manufacturing overhead, and 60 or so employees, it is REALLY hard to understand how you could have an operating loss at the level that they did in 2017?  Per the article cited in yesterday's post, they had 37 million Krona in sales and managed a loss of 127 million Krona.  I'm sorry, but that is the kind of burn rate not disimilar to Internet companies just before the bubble burst.

Lastly, let's say you are the mom and pop retail store that bought in?  While it's all well and good to tell these folks that they shouldn't worry, that just isn't so.  They now have stock that may, and then again may not be worth anything in a few months time unless new, serious, deep pocketed investors are brought in.  And if you are the customer?  Well, let's hold a good thought.

Perhaps the greatest tragedy in all of this is the staff.  Good people doing their best in a ship piloted by people with out sized ambitions who were (and apparently still are) perhaps trying to punch above their weight.  Selling watches isn't easy.  If it were, BaselWorld would be growing, not shrinking.  

Kronaby is a beautiful name, the design is pleasing and the concept is a good one.  But sooner or later someone will have to step in who actually understands that it's all well and good to say that you are a lifestyle product, but ultimately that product is still a watch, and it might not be a bad idea to try and have a better understanding of that industry.   

And The Shit Gets Even Realer

Today started out with an email from a reader who is -
Finnish, living and working in the UK, with a Swedish ex-wife (who he is apparently on good terms with), who was visiting his kids this week (in Sweden) and forwarded me this link to a Swedish newspaper article -
Anima in Bankruptcy

For those of you not fluent in Swedish, Google Translate provides a pretty solid translation.

Long story short, after just over 2 years of the Kronaby watch, the company is now looking for a white night to ride to the rescue and this morning filed bankruptcy paperwork.

More on this in a few hours.
  

A Few Weeks with the Kronaby Carat

So, it seemed about time that you might get to hear about the Kronaby connected watches from someone other than a fashion or tech blogger, so here we go ; )

While fashion influencers were posting carefully curated outfit collections chronicling their "must haves" for London fashion week, many of the folks who write and read about watches were wondering just exactly how the Kronaby watch might work in real life.  

With BaselWorld approaching hope was renewed, but alas a few of us had our appointments rearranged on fairly short notice making press appointments virtually impossible.  Fortunately, I was able to lay hands to a Kronaby watch, wear it, and offer some feedback - and here it is.

This is the Kronaby Carat -

 
It measures 38 mm in diameter and despite its positioning as a watch for women, I have to be honest that even with my rather large, hairy wrists, it is a very good size.  I would really not want to go any larger.

The blue dial with the gold tone of the rose pvd is quite beguiling and it is a very good looking watch.  Interesting to relate that the color of the dial itself tends to shift and change a bit depending on the light.  

The case back is also treated in rose gold pvd, and the finish of the case, on the whole, is really quite good.

The strap is a very nice dark blue, and referred to in the Kronaby literature as vegetal tanned, which I presume means vegetable tanned.  It is comfortable and the perfect match to the watch, and is finished with a gold pvd buckle -

The physical portions of the watch - the case, dial, hands, etc., are first rate and of a class you would expect from a much more expensive watch.  A lot of this is down to the design, but it still needed to be produced, and in terms of the finished product, Kronaby did not disappoint.

Here are the pertinents, direct from Kronaby:

Case
38 mm, Stainless steel 316L, Rose gold tone PVD

Crystal
Double domed sapphire crystal with AR coating

Dial
Blue metal plated circular brush with applied indexes

Hands
Rose gold tone

Bracelet
18 mm dark blue Italian vegetal tanned leather strap, Rose gold tone buckle18

Water-Resistant
10 bar/100 metres

Movement
Kronaby connected movement BT002, 2-hand-bi-directional micro stepping motor, Bluetooth 4.1 Low Energy (BLE), vibration motor, accelerometer

Battery
Battery Life up to two years (depending on use), CR3032 coin cell

App
Kronaby App working with (or later version) Android 5.0 and 
iOS 9  

The suggested retail price is 395,00 € 
It is important to note that the Kronaby collection is currently available in limited markets, and I will assume that the US price will be whatever the conversion rate bares, but we will see.

The additional connected functions of the watch itself are assigned to the crown, and the two push pieces (2 o'clock and 4 o'clock).  It bears mentioning that in terms of actual functions you are limited in terms of how many can be utilized without making an addition/adjustment via the Kronaby APP on your phone.  There are (at present) 9 functions to choose from, with only 3 that can be used at any given time (1 for the crown, 1 for the upper push piece, 1 for the lower push piece).  Now in fairness, the majority of functions that you might want are not necessarily dependent upon activation from your watch, and include the filtered notifications that trigger the watch to vibrate (one, two or three "buzzes") to get your attention.  The vibration is, perhaps, a bit too gentle.  I have missed more than a few notifications.  Having said that, here are the various notifications:

PEOPLE - this enables you to select different people from your contacts list and receive a buzz (or buzzes) when they are trying to reach you.

GET MOVING - this notifies you when you've been stationary for an hour.

CALENDAR - this notifies you when an appointment (via your calendar) is coming up.

ALARM - essentially like any other alarm function - watch vibrates at the appointed time.

It also gives you the option of various APP notifications:
Facebook, Instagram, Linkedin, Messenger, Twitter and WhatsApp.  As my students are WhatsApp addicts, I have opted to leave that one off ; )

And as I said, these are not dependent upon a button assignment so you can have them all at the same time.

But then we get to the features, and these are divided up into two sets.  One set operated via the crown, the other via the pushers.

Currently, the crown offers a choice of:

1.  Daily hundred - this essentially allows you to track your steps on the watch face.  IMPORTANT - you can still get that also get that information via the Activity section which gives you a running total - but this requires you to look at the APP on your phone rather than the watch itself.

2.  Date - essentially shows you the date (i.e. 1, 2, 3, etc.) 

3.  Second time - this is a second time zone.  This is the option that I chose as it is the most useful for me.

4.  Timer - essentially a count down.  

And then you have five other features to chose from that can be assigned to the pusher buttons:

1.  Find phone - I love this feature, hit the button, it connects to your phone which then sends a signal.  I have this one assigned to the bottom pusher.

2.  Music control - allows you to adjust the volume of you iTunes, etc.

3.  Camera - essentially a "shutter release" button on your watch.

4.  Remember this spot - remembers your location, great for finding your car, bike, etc. 

5.  Walk me home - allows you to set-up a friend or family member as a safety contact.  You press the pusher and your contact can see your location on a map.  Your location is updated each time you hit the pusher.  This can also be used as an emergency signal when you hold the pusher for 3 seconds.  This is a VERY useful feature.

As near as I can figure, Kronaby is using their own proprietary modules and utilizing (it would appear) a Swiss quartz movement.  

Overall, the watch was very comfortable to wear and it is quite good looking as well.  Interesting to relate that it took a few days for all of the features to "sync" completely, but at this point they all work well.

Now when I was at the launch, there was a bit of a different sense as to the total number of features the watch could offer at any given time. The impression that was given was that all of the functions were there to choose from, but there was not an understanding conveyed as to just how many features could be used at any given time, and the likely need to shift them around on your phone's APP should you wish to utilize something other than the three currently assigned at any given time.  This is something that the folks at Kronaby will want to make as clear as possible to customers to avoid potential complaints.  If you know that you are limited to 3 of the features at a given time, you will adapt your expectations accordingly.

I was also curious as to how good the customer support would be, and this was a bit of a curiously strange and not 100% satisfactory interaction.  But in fairness, Kronaby is pretty much brand new and it will take some time for all of the bugs to get worked out.  In fairness, the request was made over the weekend, and a response was received late morning Monday - not too bad in terms of time frame.  The actual instructions received were not really clear, and could have been better.  I understand that English might not have been the first language of the person who replied to me, but the easy solution to this is to have prepared (canned) responses that the customer service agent can simply cut and paste and drop into the reply.  This will also help solve the language gap.  Again, this is something that in time will be smoother.

Also, per the Kronaby site there is also a Reject Call function which I believe would be operated via the crown, but there is no mention of it in the APP that I could find, so I am not sure if it is, essentially, hardwired in?  If the website is anything to go by, pushing the crown when the phone rings automatically rejects the call, at least that is what I would deduce, so I will give it a try shorty.

One other curiosity - nowhere in the packaging that the watch came in, nor on the website, are there any DIRECTIONS about the need for the APP, where you would obtain the APP, etc.  And I realize that it would be easy to assume that people would simply understand the need to do this and visit the APP Store, but having manned the customer service lines for a watch brand in the past, I can tell you that you should never, ever assume anything.  Consider that at least in the US, it is likely that there will be a fair amount of direct, online sales.  Or perhaps a watch that is given as a gift.  Wouldn't it make sense to ensure that the person receiving the watch knows EXACTLY what they need to do?  And I make this point because the lack of this type of documentation indicates to me that Kronaby is missing a HUGE potential market - people over 50.  That particular age demographic might not seem sexy, but they are perhaps one of the best potential customer groups that Kronaby could have.  People who want the traditional look and feel of a watch, and would appreciate and make use of the connected features of the Kronaby watch.

So all in all?  A very nice watch at a good price point.  Kronaby already has a tough row to hoe as there are quite a few competitors already in the various market spaces.  Several brands are already out there that offer not dissimilar watches with very similar features at lower prices in more market segments.

Me personally?  I'd really like to see them succeed, but ultimately that will be up to them.  They are, unfortunately, a wee bit late to the dance.  But if they can tighten up and focus, and connect a bit better with people other than celebrity fashionistas?  Well they just might make it ; )


Enjoy your watches.
 





 

 

A Few Minutes with Sarandis Kalogeropulos

The next great idea in watches is not necessarily going to come from Switzerland.  More importantly, it is not necessarily going to come exclusively from watch makers.  At least not in the way we have come to think about it.  Kronaby is made up of a decidedly different type of "watch brand" employee.

One of the founders is VP & CCO Sarandis Kalogeropulos.  He was kind enough to spare me some time the day before Kronaby's big launch last week.  So now, a few minutes with Sarandis Kalogeropulos -

Courtesy of Kronaby

Tempus Fugit - Okay, I have a "standard format" that I usually work with, but in fairness you are not the "standard" type of watch brand head.  So we're going to mix it up a bit.

Sarandis Kalogeropulos - Okay!



TF -  You come from a completely different industry background.  What made you decide to get involved with watches?

SK - It was a collective decision that four of us made together.  We saw that there was a digital transition that was happening.  Watches were becoming digital.  But we didn't feel that they had truly become digital, at least not in terms of harnessing all of the possibilities.  So the question for us was. how can we make a watch digital in a way that offers something truly unique, of value, and desirable?

Courtesy of Kronaby

TF - So again, you are not from the watch world (at least in terms of professional background). You and a lot of your team came from the mobile phone field, correct?

SK - Yes, many of us did come from the mobile phone industry, and we felt that as so many phone features were possible using the same hardware (the smart phone itself) why couldn't we make a connected watch using the same principle.  When you update or add apps to your phone, you don't have to take the phone to the shop and change the hardware.  Why shouldn't a connected watch be the same? 



TF - And this was the "trigger" to step away from the mobile business and enter the connected watch market?
 
SK - It's important to say that I loved the mobile business, but phones had started to become a commodity, and not necessarily in a good way.  Connected watches offered something different, so at Kronaby we wanted to see an evolution of this ongoing shift in the watch industry.  We felt that the industry had tried (but not yet succeeded) in offering a truly connected watch, and based on this we decided to jump in.  So let's say that was the logical side of the decision.  The emotional side was a love of watches.  Myself and my colleagues felt an emotional tie to watches.  And so the die was cast.  We started with 20 - 30 people in September 2015.  And now a year later we are ready to introduce the world to our baby.



TF - So tell us a little bit about you.

SK - My parents are from Greece, and they came here when I was young.  For the most part I was brought up here in Sweden.  When I was still very young we went back to Greece, as a lot of Greek Swedes have also done, but my family returned pretty quickly.  Sweden was sort of the "land of opportunity for my family.  In many ways it has truly offered the best of both worlds for my family, and many families like mine.  This is something that people don't realize about Sweden, it is a place where you really can have a chance to make a new start, and pursue your dreams.



TF - Where did you grow up?

SK - I grew up in Landskrona, which is near Malmo.  



TF - As a boy, what did you want to be when you "grew up"?

SK - Believe it or not, I wanted to be an engineer.  Even as a young boy, that was it.  Not a fireman, or footballer, but an engineer.  I was somewhat obsessed with creating technology, and new things.  A very early project involved trying to make an improved bicycle horn with my cousin.  



TF - Well, please don't take this the wrong way, but you seem more like a marketing / sales guy.  You are far more outgoing than the stereotypical engineer.

SK - Well, believe it or not I was very shy as a kid.  From an early age I wore thick glasses, and as I said, I was shy.  You know, kids are famous for being kind and friendly to other kids? (laughing) 

But then I went from wearing glasses to contacts and things changed!  Almost like Clark Kent becoming Superman by taking off his glasses.  It really changed my life.



TF - What did you study?
 
SK - I studied electrical engineering for 2 years.  After that I studied physics, then nuclear physics.  



TF - From nuclear physicist to watch brand VP & CCO?

SK - Well, not exactly!  In the end I decided that I wanted to move away from academia, and I went to work at Ericcson (later Sony Ericcson) as a battery engineer in 1998.  And I did pretty well there.  After 3 years I was offered a manager's job, but I really wanted to be a specialist.  Then after 2 years, 2 managers left and I became a manager of the battery group.  

But a big turning point for me was when I was sent to the US to help implement part of Ericcson's battery design and manufacturing there.  And I was not sent to Silicon Valley!  No, it was North Carolina.  And I discovered something pretty amazing and different about how people really communicate.  I assumed that people would ask about you more as a courtesy, but the people I met were really interested in learning about me, and I became interested in learning about them.  It really changed the way I viewed not only other people but myself.



TF - And then?

SK - And then, on August 18th, 2015 we launched Anima, which is the parent company of Kronaby.

Courtesy of Kronaby

TF - In five words or so - what is Kronaby?

SK - I think an easy way to answer that is to explain how the name would translate into English.  What does Kronaby mean?  It is a combination of two words -
Krona is Swedish for crown, and By means village.  A great deal of what drove our entry into the connected watch market was the belief that everyone in their heart has a "personal village" where time almost stops.  People love fishing, sports, painting - i.e. a moment where you are in your own personal place.  And while you are in your own space, you still want to be somewhat connected.  In other words, you are in control of how connected you wish to be.  Kronaby offers that type of personal connection.



TF - So what is Anima's role in all of this?

SK - We started with Anima - 2015 was the starting point.  We felt that we wanted to have a watch brand.  This started in December/January of 2016.  Anima is at its heart a technology company.

More than just technology, Anima has taken pains to have a diverse team.  We can handle around 20 different languages right here in our office!   Along with communication, customer service is very important.  We therefore decided to hire customer service people BEFORE the product launch.



TF - Okay, onto the question that both customers and possible retailers will want answered - what kind of retailer do you see Kronaby in?

SK - We are not selling gadgets, not mere products.  We want to sell something with soul and heart.  So for us it is not all about numbers.  Owing to this, we feel that there will probably be two streams - watch stores and lifestyle retail stores.  But we do not feel that so-called consumer retail stores like Best Buys or mobile phone stores are where we should be either.  This is not mere merchandise.  With Kronaby, we feel that the retail partner is really selling something that is an expression about this "personal village" that I spoke about earlier.  That takes something more.  It takes passionate people who value and appreciate their connection with their customers.  I like when a store can take the time to explain and really make it personal.  Some stores have too many choices, too many options.  And ultimately, a store is just a store.  It is the people working in the store that really make things happen.  In this sense, these people are more important than the store itself.

In addition, we will also be available through our own online shop, which we intend to staff with real human beings to ensure clear communication and support!



TF - What are the biggest challenges facing Kronaby?

SK - How are we going to penetrate the global market?  How will people hear about us?  How can we communicate Kronaby in a meaningful way that people will remember?  I believe in our people, our product and our message.  We are a Swedish company, but not for Swedes only.  We are a Swedish Company in a Global Context.



TF - What are Kronaby's opportunities?

SK - Kronaby's opportunities are closely related to Anima's opportunities.  Our firm belief is that more and more there will be increasing digitization in our daily lives, but our goal is to offer that digitization in a way that improves your life.  And improving your life does not mean radically changing it.  In other words, the product should adapt to you, not the other way around.



TF - Well, since were talking out life and how we live it, what do you like to do in your free time?

SK - More than anything I like to be with people.  I am a big "social networker", but not only in the digital space.  I truly enjoy spending time with my family.  I love reading linkedin articles, and other short, quick articles.  My personal life is really a "social network", with people constantly coming around, a house filled with friends and family.  I think you could say that is part of my "Greek DNA". 

 TF - What advice to you have for the next Saranids Kalogeropulos out there?

SK -  Be yourself, do what you believe in and always be nice. The more gentle you are the better it is.

A "Smart Watch" that Might Actually be Smart

I have been sitting on the sidelines of the great connected / smart watch debate over the past several months.  Apple continues to set the pace in terms of sales, and continues to befuddle and further confuse the deluded thinking of the brain trust over at Tag Heuer.  Sorry, I am not buying the sales figures being reported.  When I finally see one "in the wild" I will be a lot more likely to believe it.
Moreover, the Apple watch costs a hell of a lot less.  It is, however, essentially an iPhone strapped to the wrist.  Too much information for many of us, and like an iPhone is more of an "of the moment" thing.

For me personally, I am still a fan of the connected watch being offered by Frederique Constant & Alpina.  Many argue that it is, essentially, a Fitbit bundled into a watch, but it does provide some basic functionality that makes sense for the majority of us.  I have not personally tried one out, but I have heard from many that it is quite good, but perhaps a bit ambitiously priced, at north of $1,000 US.  And I would, regrettably agree.  I do feel it is a bit more expensive than it should be.

But there is something out there, not yet released, that might be offering a more personal solution for the person who will actually be wearing a smart / connected watch.

Courtesy of Kronaby

A few weeks back, a Swedish technology company known as Anima sent round a brief press release and some images.  They are clearly playing their cards close to the vest, but what can be gleaned from the pictures is that it is a traditional looking watch.

The watch line has been named Kronaby.  It will be officially launched in late January of 2017 -

or as the count down clock on the Kronaby site informs as of 9:30 this morning:

123 Days

19 Hours

30 Minutes

Courtesy of Kronaby

Okay, other smart watches have nice, classic design.  So what's the big deal?  What will make Kronaby special?

Well, I can only go on what is in the release, but it was the statement by co-founder Saran's Kalogeropulos that stood out.  Now although he does use the dreaded "T Word" (Timepiece), it is the very last sentence that has piqued my curiosity.  

Courtesy of Kronaby

“We have created a timepiece that honours our love for classic watches,” says Sarandis Kalogeropulos. “ A simply beautiful timepiece on the outside, with high-quality materials, a classic dial and hands. On the inside, however, nothing is typical about it. We have developed a new and unique movement, that coupled with the app, can be tailored to individual needs,” says Sarandis Kalogeropulos. 

And that last sentence again:

We have developed a new and unique movement, that coupled with the app, can be tailored to individual needs

Okay, you've got my attention!  We have just under 124 days to go, but this could actually be the first "smart watch" that is actually smart.  

Stay tuned!