On this podcast, we talk about R.T.’s really bad week that became a really good opportunity, winning a lawsuit against the Swatch group, the value of masterminds, and so much more!
R.T. Custer is a Serial Entrepreneur specializing in story-based marketing for consumer product companies.
He started Vortic Watch Company with his friend Tyler in college and grew it to a nationally recognized 7 figure luxury brand that’s now expanding into an 8,000 sq ft facility in downtown Fort Collins.
In 2020 R.T. spun off the expert team of marketers helping with Vortic to create a marketing agency that soon after joined forces with fellow agency entrepreneur and friend, Jim Carter, resulting in Carter & Custer.
R.T.’s goal is to change the lives of other entrepreneurs by helping them tell the world about what they have to share.
In This Conversation We Discuss:
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Chase Clymer
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R.T. Custer
You need to charge more so you make more revenue. But it's not about revenue, it's about profit. If your business is not profitable, your business will not survive, especially, it won't survive a pandemic.
Chase Clymer
Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
Let's get on with the show
Welcome back, everybody. I'm your host, Chase Clymer. And today, we're welcoming to the show, a multi-passionate entrepreneur.
He specializes in story-based marketing for consumer product companies. He's got a passion for mastermind. And most notably, he has scaled a watch company to 7 figures. Welcome to the show, R.T. Custer.
R.T. Custer
Thanks for having me, Chase. Excited to be here.
Chase Clymer
Oh, I'm excited. So I guess let's... Quickly, before we dive into the history of the brand, just let people know about the uniqueness about your product and like what you're actually selling?
R.T. Custer
Yeah, thanks. So Vortic Watch Company. And it's vorticwatches.com for anyone who wants to see a picture of it.
But it's basically an antique American pocket watch that we convert into a one of a kind wristwatch. We don't make very many watches. We make about 400 units per year. So we sell them for about $2500 to $10,000 a piece.
And everything inside is the original antique pocket watch movement or mechanism for those not familiar with watches and everything outside is made in Fort Collins, Colorado in our workshop.
So it's almost entirely and some of them are completely manufactured inside the United States.
Chase Clymer
Absolutely. All right. Take me back in time to where this idea came from. What was going on?
R.T. Custer
Yeah, so we... My business partner, Tyler and I had a bunch of crazy ideas about watches on the golf course at Penn State after school one day. That was like 2011 or so.
We came up with a few crazy ideas, pitched them to some professors, and did some business plan competition stuff in college. I had a lot of fun with that. And then went our separate ways. You know, college life, a lot of stuff going on.
When we left school 2014, I took a job with Walmart in logistics out in Colorado. And Tyler came out to visit me.
It was like, "Hey, man, this is a really great place. I'd love to move out here. I don't really like my job in Philly. This isn't working out." And we were like, "Why don't we start that watch company we're talking about? I had a great job, I could kind of like be the roof over our heads for a little while."
And so that's basically what happened is we put the idea of a pocket watch and the antique American pocket watch turned into a wristwatch on Kickstarter in late November of 2014 and the rest is history, Chase. We get a classic Kickstarter story.
We set our goal at $10,000. We hit $41,000 in 30 days, but internally we thought we were gonna make a million on Kickstarter and we'll just be on yachts, the rest of our life or something. We had these crazy goals.
And so then it just became a hustle of like, "Okay. Well, we got the minimum viable product, we got product-market fit. $40,000 isn't enough to start a business. But it was enough to prove that people were interested in this product." And so we started...
I started raising money and he started figuring out how to make the product. And it took us about 3 years to figure all that stuff out.
And since about 2017, we've made and sold just [about] everything we can. Very niche product, very difficult to make. So low quantity.
But we just focused on that high-quality, made in America, kind of thing and sold on Shopify the whole time.
Chase Clymer
Absolutely. So I got a bunch of follow up questions for that right there. So obviously Kickstarter is a great way to find product-market fit. There's a lot of entrepreneurs that we have on the show that that's where they...
Things clicked and that's where they got started. Well, one of the follow ups that I always like to ask is... Okay, you're done with a Kickstarter, you're onto your own website now. You said it was a Shopify website.
R.T. Custer
Mm-hmm.
Chase Clymer
How were you growing your customer base? What were you doing to go out there to get more sales?
R.T. Custer
Yeah. So in the early days, we were doing a lot of events. I was trying to get into retail stores because I was told from the beginning like "Okay. Watches are sold --Rolexes and Omegas-- you have to be in a big jewelry store." And some of our initial investors were in that world.
And so I was doing a bunch of trade shows and events and people were learning about us that way. We did... We hired a PR company to just try to get a bunch of stories about us. And then a lot of word of mouth, honestly, from our customers.
I called the first, I would say, 100 maybe 150 customers. When they received their watch, I got the notification. And again, like I make a very low quantity. So it was not meant to be a sustainable thing.
But I talked to the first let's say 100 customers, and 10 or so of those customers became investors after those conversations because they just fell in love with our product. And we had a huge...
For the first 3 or 4 years in our business 60% of our customers bought a second watch within 12 months. And so a massive repeat customer rate, especially in this industry. And so a lot of word of mouth, just people being really excited about this.
And thankfully with the prices where they are, we didn't have to sell more than a few 100 to keep going with a small team.
Chase Clymer
Absolutely. And that's kind of another question that I had for you is with such a high price point. Did you experiment with any of the more traditional growth avenues like paid media?
Because what I see on the internet, and this is just my opinion now. This isn't a fact.
But those higher price point products are harder to make work with paid ads.
R.T. Custer
Yeah. You're 100%, right. We tried. We tried hiring an agency to do ads for us in the 2017 - 2018 realm. And it was okay. But they were mostly awareness ads. And I didn't feel like the agency was getting it.
So in, I think it was like mid to late 2018. I took that over myself. And I just started messing around with Facebook ads myself. And I did Facebook and Instagram, outreach ads, basically trying to obtain email addresses. And I just owned the fact starting in about 2019.
I joined a mastermind for the first time and somebody in the mastermind was just like "Email marketing is the past, present and future. Just get on it man, especially for a high high ticket item like that." And so I just went all in on email marketing.
And so all of the ads that I was running, were just obtaining emails. We did a bunch of sweepstakes and giveaways starting in 2019, and 2020.
And our email list was probably at 2500 people in 2018 - 2019 realm. And now we're over... We're almost at 40,000 people on our email list. And our open rates are insane. I think it's just really solid feedback from customers.
I send an email every Tuesday at 12 noon and I have for almost 3 years. And so that consistency and focus on email marketing. I found that the customer takes about 4 to 6 months between when they learn about us and when they make a purchase. And so I just own that.
And so, yes, the ads we're running. We're not trying to sell anything. We're just saying, "Hey, sign up for our email list. I have 22 emails that you get automatically once every 10 days for over 200 days that teach you about our company.”
“And by the time you get that last email, if you don't want to Vortic Watch, you can totally unsubscribe. It's all good. You're just not our customer."
That's really the journey. And I wish it wouldn't have taken me 3 years to figure out that I should focus on email marketing, and then 4 years to build the thing.
But knock on wood, here we are [with] really strong email lists and strong following on social from all that. And it's working out really, really well.
Chase Clymer
What I want to highlight for the listeners here is you glossed over probably one of the most important things we're gonna talk about this episode is this...
This is the statement. This is the golden nugget --if you like that term-- is if you have a high-priced product, a luxury product, you need to win that trust over time and email is the way to do it.
So if you're a listener out there, and you're thinking of getting into the game, or you're already in the game, you're like, "I don't know how to sell these expensive bicycles or whatever." Email is the key. How long did you say your welcome series was?
R.T. Custer
So when I initially built it, there were 20 emails, and they were sent every 10 days. And I did that because we also send that weekly email every Tuesday. And so I wanted people to hopefully not get more than one email every couple of days and try to spread it out. Now we...
Our email system is a little more robust. And so I think there's 22 soon to be 25 emails in the welcome series. And then we also have a second welcome series about a separate product.
We have our limited edition stuff. And then we built it out. So the first few emails are every 3 or 4 days. And then it kind of extends the process after that.
Chase Clymer
Are you doing any personalization through obtaining first party data from your customers or potential customers?
R.T. Custer
So we get their name and email address when they sign up. We don't collect phone numbers, and we don't text our customers currently. We don't use text message marketing, simply because most of our customers are of a demographic that would prefer an email.
So I've played around with personalization, but I always get nervous that if I try to include somebody's first name, and they typed it wrong and now I'm insulting them by calling him the wrong name algorithmically. So I've just stayed away from a lot of that stuff.
And I make it personal by saying all of our weekly Tuesday emails come from the company. So this...
The from is Vortic Watch Company. And all of those automated customer journey emails come from R.T. Custer of Vortic Watch Company, and they're written in my voice in first person, versus third person in our weekly emails. And I found that that works really well.
We get a lot of people that literally answer those automated emails thinking that it's me speaking to them, which is pretty awesome.
Chase Clymer
Absolutely. I'm sure that's a great source for inspiration for copy or stuff to add into your FAQs. Just so much stuff is going to come out of that
R.T. Custer
100% Yeah, and the customers seem to really appreciate you know, that that we took the time to document our story and tell it not just on the website but in a format that they can digest and not all at once.
Chase Clymer
Absolutely. So looking back on building Vortic, are there any mistakes that you made or stuff you want to help other people watch out for?
R.T. Custer
Too many to list in a short podcast. Biggest... Biggest learning experience that we've had was early on. So 2015, we were sued by the world's largest watch Company, the Swatch Group over a trademark.
And that legal battle ended in 2021. We took them all the way to federal court and we defeated them. But that took 6 figures from us and probably 7 figures from them two attorneys fighting this crazy legal battle over the word "Hamilton". And it was a huge…
I call it a learning experience because it started with a mistake, which was not doing enough research on just what a trademark was. I was... I don't know.
I was a kid when I started this company. I was barely out of college. I had no idea what trademarks and patents meant.
And so when we got the cease and desist, we were just like, "Okay, well, they just don't understand. We're taking the antique Hamilton pocket watch and turning it into a modern wristwatch.”
“Yeah. It still says Hamilton on the face of the watch. That's not because we're printing it there, it's because it just was there. It's an old pocket watch and wristwatch.”
And so if you want to learn more about that, I've done a bunch of podcast interviews and I was in Entrepreneur Magazine, actually, for the story.
It was interesting. It's called Hamilton v Vortic. And that case has now it's now being cited in major lawsuits all over the country, because basically, we defended the art of upcycling or turning something that's basically trash to treasure it's what we do.
Chase Clymer
I'm gonna go look that up. That's highly fascinating to me. And the whole time we were talking, I knew the angle that was probably going to end up but I was just, that's...
I'm gonna look that up. So now that's a nerd me coming out, not host me.
R.T. Custer
Yeah, anyone that's interested in legal stuff. And like I said, a huge learning experience. Now, I know more about trademark law than I think any entrepreneurship should ever know, unless you're an attorney, obviously.
So it's unfortunate that it took years and that much money to have what I usually refer to as just a really difficult conversation between me and the CEO of a massive conglomerate in Switzerland. And I offered coffee with those individuals to try to figure it out.
And unfortunately we were met with lawsuits, but we defended our American dream. We still have it and fortunately enough people told our story.
I was on a bunch of podcasts throughout the whole thing talking about it. I got interviewed on national TV twice. We got more press than we could count just from other American entrepreneurs standing up and saying like, "Hey, these these kids are just trying to make some watches guys. Come on." So that was a huge... I wouldn't say...
The mistake there is just the unknown. You don't know what you don't know. And I don't know how I would have solved that without having experiences like that and just getting the cease and desist.
But now, I'm implementing that every time we have an idea for a new brand or a new product, I immediately look up the trademark, see if we can own it, and then we start working on it just because I'm trying to look ahead. (laughs)
Chase Clymer
Something that was kind of brought up in the pre show is your huge fan of Donald Miller’s Building a StoryBrand. So for the uninitiated why is that important? Why should everyone go out and stop this podcast and listen to the audiobook or actually pick it up and read it?
R.T. Custer
Yeah, for sure. So right around the time, we started running Facebook ads to try to get email addresses and grow our email list.
My business partner Tyler, and I read Building a StoryBrand and Start with Why. And they were recommendations, I think from either a mastermind I was in, or a coach, or a friend. I can't remember exactly. But we just went headfirst into Building a StoryBrand specifically.
And then Start with Why some of the concepts there were really helpful if you read those two at the same time.
And if you look at vorticwatches.com, and you just scroll down the homepage, it's still the way I built it when I read those books.
And it literally says, "What We Do", "How We Do It", "Why We Do It", and "How To Buy It". It says those exact words on the homepage so there's no confusion and most of its above the fold is what they say.
So you don't have to go past the homepage to know what we do, and how to buy it and why we do and all that kind of stuff. And I think that helped a lot initially, just like clarifying our... Clarifying what we do, because it is confusing.
We take an old... A 100-year old pocket watch and turn it into a wristwatch. That's very different in the watch industry. There's a lot of subsequent questions that customers have. And so then we applied that storytelling.
And the concept of like, "I'm the guide. As the company and the customer, the product is the hero. And the problem we're solving is the villain. And the answer to the problem in our industry is just you want to [have a] "cool watch" sometimes.
But there's not as much evil or problem or solving in the luxury space. But we applied those storytelling concepts to all of the emails that we wrote for those automated journeys.
And that's why people answer the emails because we're telling the story. We're not trying to sell anything.
Chase Clymer
Absolutely. Let's fast forward now to basically the pandemic. That happened a few years back.
And you had mentioned something in the pre-show that I thought was super interesting which was, you didn't think that the watch company was going to do as well and you pivoted very hard. The watch company still exists.
But talk about what you did during the pandemic. And how you came up with that idea and how that worked out?
R.T. Custer
Yeah, so March of... February and March of 2020 was the hardest time of my life. February 19 of 2020, I was sitting in a federal courtroom in Manhattan, defending Vortic Watch Company against the Swatch Group in the final volley of this lawsuit, which that's for today. We won. But obviously it was one of the most stressful times in my life.
I got on a train from Manhattan to Lancaster, Pennsylvania to see my mom for the last time. She passed away of cancer in mid-March of 2020.
And on the plane from Pennsylvania back to Colorado, I got COVID before they knew it was COVID because this was like late February 2020.
And I got really, really bad because I think I was just so stressed. I wasn't eating well. I wasn't taking care of myself. I was probably the most vulnerable to sickness I've ever been in my life with that level of stress.
And so all that said, I was going into the pandemic with all these bad things happening, all this stress.
And the pandemic hits and people start freaking out and I was just... I started freaking out, too. I was just like "Why would you buy a $3,000 wristwatch that does absolutely nothing except tell time and only if you wind it? It is 100 years old. You have to manually wind it. This is the ultimate niche luxury thing. Why would somebody buy that on the internet during a global pandemic?"
And in my mind to try to protect the company and my family --I have two little kids-- I pivoted and I did what what I always... What I thought my mom would want me to do because she and my dad both worked in advertising their whole lives.
And I grew up around advertising. I love it. I love story-based marketing. I love that stuff. And I was just like, "Okay, a bunch of people are pivoting and they're moving their businesses online.”
“If I need to make money in a pinch, I can help people do this. I can help people write automated email journeys, I can help people do what I did for Vortic. And if Vortic fails, then I'll still be able to pay my bills."
And so I started an advertising agency. (laughs) And the agency was doing work for Vortic. And then some of my friends and I could start paying myself from that.
We had a bunch of crazy ideas. A lot of fun stuff, mostly in the Shopify world. And fast forward to today, the watch company, we've never sold more watches than in 2020 and 2021 than ever.
Those 2 years were the best 2 years ever.
It still sometimes doesn't make sense to me why people are buying luxury wristwatches online during a pandemic, but it's awesome. And we have an agency now. I sold half the agency to a friend because running 2 businesses is hard.
So I have 2 business partners. And now I have a 7-figure wristwatch company and a 7-figure advertising agency.
And my job is business development, which is awesome. I just get to talk to people like you, Chase and tell these stories. And hopefully it's helpful to other people. And maybe I can help someone with either a watch or some advertising related services.
Chase Clymer
There is one thing. R.T., you lied to me just now. You don't just have 2 businesses. Let's just keep it going, man. What's the other thing you're doing?
R.T. Custer
(laughs) Okay, well, I look at them technically. So technically, I have 2 main businesses because the... What you're referencing, is a mastermind.
So a few months ago, and the pandemic, unfortunately, I mean, it eradicated the idea, for a little while, of in-person events, and especially in-person masterminds.
And one of my friends was running a mastermind called Fast Foundations. And he just didn't want to do it anymore. Because of all like, you had to pivot online and he just didn't want to do that.
And so we purchased this, my business partner in Carter and Custer Agency and I, we purchased this mastermind called Fast Foundations, and it's basically a 50-person mastermind, all in person.
So we brought it back in person just more recently, here in 2022. And we do 2 in-person events across 5 months. And then an awesome online community in-between. And that's masterminds have just been really close to my heart.
So when we had this opportunity to buy one and kind of use it as business development for our agency, while also obviously, helping entry level entrepreneurs, --that's what it's for.-- Fast Foundations is for people with 500,000 in revenue or less. Just getting started.
And we realized, "Okay, well, this is a great way to help people that maybe can't afford our agency services quite yet. But we can still help them and we can make some money at the same time."
And so, I look at it as basically a marketing funnel that is profitable. And also people first and just makes you feel good to give back and help people in a mastermind setting. So, you're right, those are my 3, I guess, focuses.
And the way that I stay focused is that I do the same thing for all the things that I do. It's business development, it's having conversations, and it's saying like...
Sometimes I'm talking about watches, sometimes I'm talking about advertising agency services, and sometimes I'm talking about just promoting the fact that you should be in a mastermind.
Whether you choose Fast Foundations mastermind or a different one, I can't say how much masterminds have helped me and helped me have all the ideas we just talked about in this episode so far.
I would say most of them came from a mastermind or a coach of some kind. I'm not special. (laughs) I just took some cool ideas I had randomly in a room full of other people and implemented them.
Chase Clymer
I couldn't agree more that masterminds are life changing. I think that some of the best... The series of events that changed my life was I had someone be... He's now, I would say, a mentor and a friend but back then he didn't know what he's saying to me was really impactful.
But it was basically he flipped the script in the way I was wired to think about things from a zero sum mindset to an abundance mindset.
So once I went into that mentality and then realized that my competition is probably the best people I can ever interact with, my life changed.
R.T. Custer
Yeah, it's huge. And little idea... The person that sold us the mastermind is Chris Harder. And he ran Fast Foundations for a while. Now, he just does like very high-end masterminds.
And he told me ever since... He's a watch collector himself. And ever since I met him, he's just like "R.T., you're not charging enough. You need to double or triple your prices for these Vortic Watches. This is…”
“You make the coolest watches. This is way cooler than my $50,000 Rolex and you're charging how much? $1500? What are you doing?" And I... It took him and 7 other people...
What do they say? "You have to hear something 7 times to really grasp it." To finally start charging what I'm worth, what we're worth, what these watches are worth.
And now, yeah, the average purchase price last year for a Vortech watch was $3800. And we didn't just arbitrarily increase the price, we increased our quality drastically to make up for it.
And we just own the fact that we do something very abnormal and really cool and super niche, and you have to pay accordingly.
And lots of great feedback from our true customers about that. And I think that passes on to a lot of different industries and a lot of different things. You have to charge what you're worth, to make your business sustainable.
And that's what really clicked for me is when people just told me to charge more. I was just like, "I don't know." But when people really walked me through why it's like, "Okay, you need to charge more, so you make more revenue."
But it's not about revenue, it's about profit. If your business is not profitable, your business will not survive. Especially, it won't survive a pandemic.
And our business was extremely profitable during the pandemic, because I took some of that advice from a mastermind in 2018 - 2019.
So, knock on wood, I'm going to keep coming. I'm gonna keep going to those masterminds, because I keep getting those little, like you said ,golden nuggets. It changed the game man. It's awesome.
Chase Clymer
Oh dude, it is the most hilarious throwaway nonsense lines that I hear in some of these conversations during our masterminds. "What? Oh, stop, stop, stop, stop. What? How did that work? It was just that simple? I've been going around in circles for this for 6 months."
R.T. Custer
(laughs) And sometimes you need validation. Sometimes you need permission. Sometimes you need motivation...
Chase Clymer
Accountability.
R.T. Custer
And sometimes you just... Yeah. Yeah, exactly. Accountability. And the other times, honestly Chase, I've joined masterminds to literally buy friends and people don't admit that. And I will admit it 100 times over. There are no…
I live in Fort Collins, Colorado, it's a beautiful place. But it's a small town. There's a lot of entrepreneurs and a lot of small business owners here. Most of them think small. I want to sell one of these companies that I have for hundreds of millions of dollars someday.
I'm thinking huge. So I need to surround myself with people that think like me, otherwise, everyone else is going to hold me back.
And so joining a mastermind puts you in the room with people that think like you. And that can become your friends and accountability partners, and just other people doing similar stuff that just get it .
So anyway, that's why we bought Fast Foundations, because not only is it a good kind of funnel into our agency, and a great give back and feel good. But I just...
If you were to say what's the one thing in business that you believe the most in, I think a few years ago, I would have said email marketing because that thing is just working... But now it's masterminds. It just...
They don't all work. But if you find the right one, you find the right group, just like anything, the investment pays off.
Chase Clymer
Absolutely. R.T., this has been an amazing interview and I'm so happy to have you on the podcast. If people are curious and they want to learn more about what you're doing in your life, where should they go? So
R.T. Custer
Yeah. For watches vorticwatches.com. It's V as in Victor, O-R-T-I-C watches. and for everything else, just catching up or if you want to connect personally, I'm R.T. Custer, Robert Thomas Custer, on Instagram and LinkedIn.
Chase Clymer
Awesome. Thank you so much for coming on the show.
R.T. Custer
Thanks, Chase. Thanks for having me.
Chase Clymer
Alright. I can't thank our guests enough for coming on the show and sharing their knowledge and journey with us.
We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
Make sure you head over to honestecommerce.co to check out all the other amazing content that we have. Make sure you subscribe, leave a review.
And obviously if you're thinking about growing your business, check out our agency at electriceye.io. Until next time.