Founder's Story - Eugene Tutunikov: Scaling SwissWatchExpo to $90M Without Funding | S2 Ep. 67

Episode Date: October 8, 2024

In this episode of Founder's Story, Daniel Robbins interviews Eugene Tutunikov, the CEO of SwissWatchExpo, who shares his remarkable journey from Wall Street to scaling a family business to $90 million in sales—without outside funding. Eugene discusses his early life as a refugee immigrant from Ukraine, the inspiration he drew from his family’s resilience, and how those experiences shaped his approach to entrepreneurship.Tune in to hear Eugene’s story of transforming a small mom-and-pop watch business into an industry leader. He covers the pivotal moments in his business journey, such as prioritizing e-commerce, streamlining operations, and learning how to scale without investor backing. Eugene shares practical advice on tackling uncertainty, managing growth, and the power of curiosity when navigating unknown industries.If you’re fascinated by luxury watches, entrepreneurship, and bootstrapped success stories, this episode is packed with valuable insights on balancing long-term growth and strategic execution.Key Topics Discussed:The immigrant experience and its impact on entrepreneurial mindset.Scaling a business from a local store to a global leader in luxury watches.The challenges of growing a business without outside funding.The rise of digital and luxury watches in today’s market.Strategies for maintaining business growth over the long term.Learn more about SwissWatchExpo: Website: SwissWatchExpo.comSocial: @SwissWatchExpoOur Sponsors:* Check out PrizePicks and use my code FOUNDERS for a great deal: www.prizepicks.com* Check out Rosetta Stone and use my code TODAY for a great deal: www.rosettastone.comAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

hey everyone welcome back to founder's story today we have eugene hitunikoff who is the ceo of swiss watch expo and he has scaled this company to 90 million dollars without outside funding we have so many guests that talk about scaling with funding, we're going to focus on how do you get to that type of figures and revenue without funding. That's incredible. You are a former Wall Street executive, turned small family business into an industry leader. Eugene, we got to dive into how you did this. What is the secret sauce? But first, I'd like to understand, how do you get even into entrepreneurship daniel thank you so much for having me on the podcast uh we have a a great story which i think

the your listeners will enjoy we're a family of refugee immigrants we came over in 1989 uh from the former soviet union and it's ukraine. It was still part of the Soviet Union. And we moved to the Philadelphia area. I grew up, you know, all welfare, shopping with food stamps. I remember going to the grocery store with my grandmother and asking her why our money looks different than other people's money because if you don't know, back then, the food stamps were these, like, big, colorful coupons

that people actually used to bring in and use as money at the grocery stores. There was no card back then. But it was a very motivating experience for me because the whole community came over with the same background to the country without any language skills and no money. And I witnessed my family and all their friends within five to seven years go from nothing to living in the suburbs, owning a house, and having a Mercedes or a Lexus in the driveway. So I'm very proud to be an American. And I really think anything can be accomplished

in this country with enough hard work. And I wanted to make sure my family took a risk and sacrificed a lot to come to this country. And I want to make sure I made something of myself to thank them for that. So this is something that set me up on my journey. That's amazing. I guess that's the American dream, right? I'm kind of curious, do you think, your personal perspective, that maybe that people that are a few generations here uh maybe

current generations now that have had all the things they need growing up i wonder if they're less motivated or inspired to get into business or entrepreneurship because they're not they didn't come from that struggle time what do you think about that i think that's definitely very true i think there's a certain personality trait of people that are willing to leave a country and deal with a lot of uncertainty uh to start their life over at the time my parents were there in their late 20s and i was six years old old to start their life over and to take risks. And if you're within that group or your child witnessing that, it kind of teaches you that it's okay to take risks. It's okay to deal with a lot of uncertainty. It teaches you how to figure

things out that you might not know anything about going into them. And those are all traits that are very important to building a successful business. If you're somebody that doesn't handle uncertainty well, you'd be a great entrepreneur. I'm glad you bring that up. Uncertainty, risk, fear, like those are the things that no matter what you do, you're going to go through. And I don't think people realize just how hard it can be uh so what was the motivation for you though that you said okay i'm going to go into the watch business like out of all the things that you could do why did you choose that industry so i kind of

fell into it i i was a big math and finance nerd growing up up. I got a full scholarship to NYU and I studied math, finance, and economics and graduated in three and a half years without double major and a minor. And then I worked on Wall Street for about 10 years as a trader. My mother got together with my stepfather in 2008. And my stepfather is a master watchmaker and he's trained at Rolex. She moved to Atlanta where he was living and on the side he would fix up watches because he was running a Rolex service center. Basically, think of it as the mechanic for watches.

So he knew how to take a watch that wasn't working, refurbish it and make it work perfectly. On the side, they would buy watches and sell them on eBay. I was 25 years old when this started. I invested in the business to help them buy some inventory in the beginning. They didn't really have any plans to get involved. But as the business grew and they built a very nice local mom-and-pop shop and business through marketplaces, and they would tell me these stories of, you know, they shipped a watch to Texas.

Somebody from Florida flew to Georgia to pick up a watch. I thought there was definitely something to it, and I always liked watches. I already owned some watches even before this. And, you know, I'm a big student of history, and one of my favorite entrepreneurs is Jeff Bezos, and he was a hedge fund finance executive,

and he left a very successful hedge fund career to go sell books online when Amazon started it was only books it wasn't anything else people think Amazon's selling everything he left his first plan was just to sell books online and the reason he chose books was because it's a very large catalog there's a lot of variety they're not extremely large and it would be he thought that would be the perfect product to to start an e-commerce business from well watches are even better product because there's a large variety they're much more expensive so you could really build a scalable profitable business much quicker so he could really build a scalable, profitable business much quicker. So he was kind of the motivation. If he could go refinance and sell books online,

I thought selling watches online would be even more fun. And why not give it a shot? So my parents, for a couple of years, asked me to join. I finally came on board eight years ago. They had a local business. It was doing pretty well. And we decided, you know, I wanted to scale it and build a name for ourselves online. So I really focused on e-commerce, streamlining the operations.

And we've since then become one of the leaders in the whole world in our space. The business has grown 10x in that eight-year period. We're going to do 90 million in sales this year and should break through 100 million next year. And like you mentioned in the beginning, we bootstrapped the whole thing. So the whole business was started with less than a couple million in capital that we pulled together as a family. And right now our profits are well north of that.

So it's been a wildly fun and successful ride. And now I'm trying to figure out what do I need to do to go from $100 to $200 million. I have my ideas. I just brought on another executive. And we're putting all the pieces of the puzzle together to get to $200 million over the next handful of years. It's been a fun ride. What else can I tell you about it? Well, I got to say, there you go.

Former Wall Street, which it is a common theme. We've talked to a few people that have gone through that process. Like you said, Jeff Bezos, going from that to that. So there must be a lot of correlations there. But I appreciate the fact that it wasn't that you wanted to do 100 million in year two, that it was a slow process that you worked your way up to a certain place and then you came in and then you're taking the business to the next level.

I think a lot of people want to hit 100 million overnight, not realizing this is a marathon and business requires time. Look at Jeff Bezos. It took them decades to really getos it took them like decades to really get you know it took them quite some time and a lot of funding to get to a certain place i know my favorite story was uh we were meeting with some executives from toys r us and they talked about how toys r us basically gave them funding got them out of their bankruptcy in like late 90s and then look what happened to toys r us but uh

i'm curious on on the as you were scaling up though like when you go from a million to 10 million 10 million to 50 million what are some of the things that you had to change well for first of all i want to touch on the point that you mentioned i think entrepreneurs right away think of where they want to get to whether it's 100 million or a billion where in my experience you know figuring out where you want to get to every 3 6 and 12 months uh is very very valuable and if you can grow every year and you could compound you're gonna outpace those entrepreneurs that are going for the big swings and they're trying to double and triple every year because most of those you

know if you grow too fast things fall apart just as fast or if you could do steady growth over 10 20 years you you'll have an enormous business um but the things that need to change as you grow when I joined the business we didn't have data so it was very rudimentary what did we sell the week before was receipts in a shoebox so being a finance guy the first thing I wanted was data I hired a coder in Argentina. He helped me build a lot of internal proprietary data analytics so I could see what we're buying, what we're selling,

where we're selling it, where we're making money. I really studied the business and that led us to a bit of a pivot there because my parents at the time were doing both watches and jewelry and it was very clearly where our strength was, both from an SEO and marketing perspective and the inventory that our clients were looking for is all watches. So we got rid of watches. Secondly, we realized right away when I started looking at the data that the majority of our online visitors are coming through mobile. And our mobile site was just, this was 2016, and the site was just not mobile-friendly. So the limited resources that we had at the time,

I put all into redesigning the mobile site and making it very mobile-friendly. And then also just putting a lot more process around the whole business, how we're selling, what we're buying, how we're deciding what to buy, just really getting our hands on every aspect of the business, knowing everything that's going on. So as you grow, then you have much more information, and that information makes you more effective in your next stage of growth. So I know from your background

that you didn't already know how to do these things. Like you didn't already know about the data side. You didn't know about e-commerce, web design, digital marketing. What did you do to learn these things? Or how did you even know that, like, for example, the mobile side or your digital marketing that you had to do with SEO or any other things? How did you know know that, like, for example, the mobile side or your digital marketing that you had to do with SEO or any other things? How did you know how to even do these things? Or if you hire somebody, how did you know who to hire and even if they're doing a good job? So I think one of the traits that I had from my Wall Street days is the ability to work extremely long hours and not you know not feel like it's work so I got used to that being on Wall Street so 60-80 hour work weeks the first

few years were the norm and I have a high degree of curiosity you know my experience never bet against an entrepreneur that can work really long and is highly curious. So I just, you know, I see business as a game and a puzzle, and I'm highly curious, and I could put in hours to try to figure things out. And to me, it's all just like solving pieces of a puzzle. So how do I do it? I read online every blog I could find about anything I wanted to learn about,

any aspect of the business I wanted to tackle, I would then try to go interview companies that provide that service. Usually companies that I would never pay nor I could afford. And then I would go and reconstruct that service for a tenth or a twentieth of the cost by either doing it in-house or hiring freelancers around the world. So that is the trick. You just learn. You interview people. You ask a lot of questions. You figure out what you try to think about what makes sense, what doesn't make sense.

And then you go and you figure out how to do it in the least expensive way possible, especially in the beginning. That's basically been the process and it is the process. Yeah, I don't think a lot of people understand the power of of being curious i think it's one of the most powerful traits of a lot of successful people is listening and being curious because like you said you could talk to someone and they can give you the answers and then you just have to go do the implementation which there's so many people freelancers outsource there's so many ways around the world if somebody doesn't have

a specific budget they can find some way or they can watch youtube i mean there's so many ways that they can get it done ai tools all these things we have now which you didn't have then um but i'm glad you bring that up so now watches fascinate me i've always been a huge fan of Swiss watches, watches. I feel like, and I could be wrong because I don't have any data, but I feel like as watches have become more digital options, like more digital options for watches. So the last few months, I've been practicing how to learn Spanish because it is really a passion of mine. I've been using Rosetta Stone. Why? Because it immerses you in the language without having translation. So you can really learn to speak, listen, and think in that language.

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Flow Health, and Quora use Vanta to manage risk and prove security in real time our audience gets a special offer of one thousand dollars off vanta at vanta.com slash founders that's v-a-n-t-a.com slash founders for one thousand dollars off now back to the show that the physical non-digital watch has continued to be even bigger or more popular. What are you seeing in terms of the rise of the digital watch side with the rise of the traditional Swiss watch side? Yeah, people always ask me if digital watches and Apple watches are hurting our business. And it's quite the opposite. I think they're great. I call the gateway drug to luxury watches

because people will get an Apple watch or a digital watch potentially first. Now they got used to wearing a watch on their wrist. It's way better if they never did that and they only got used to checking their phone. And then when they, you know, progress a little bit in their career, hit a milestone, maybe get a big bonus,

they'll typically go and then buy a luxury watch. A lot of our clients have both digital watches and luxury watches, but in the evenings, you catch them wearing their luxury watch when they're out to dinner or out with friends and so forth. So we're about 60% of our website visitors right now are under 40 years old. So it's definitely not a product for an older clientele. What's really interesting is the younger generation has a different purchase behavior. So they, they will, they're not necessarily buying a watch to have for their rest of their, the consumers in their twenties and thirties have a much higher velocity in their watch collections. So a 50- or 60-year-old watch collector will typically buy a watch

and they'll either hold it for their life or for many, many years where the young consumer is much more comfortable buying a watch and then trading it in for something else six or 12 months later. But we're seeing a lot of young people, even in their teens, coming in looking for watches because they're following their favorite celebrities, athletes on social media, and they're looking how they're dressing,

what they're wearing, and they want to replicate that in their life. So they're seeing them wearing luxury watches, and they appreciate the fact that they want to mimic them, but also that luxury watches are an asset, and they hold their value. And they get really into it because there's so much variety, there's so much information. They'll buy a watch, and they'll trade it in for something else,

and so forth, and they'll meet up with their friends, and there's a lot of watch collecting groups from all over the world. So the demand for luxury watches is by no means going down. Yeah, I mean, I hate to say it, but I will look at somebody's watch when I meet them, and you can't help but judge them on their watch. Like, I can imagine you that's that's next level right I don't know much about it I just really like watches but I always look

everyone's watch I was even thinking about this last night I was sitting next to somebody I was staring at his watch I was trying to figure out what kind of watch it was I think he probably thought it was weird that I was like literally like I have never seen that watch before like I really wanted to ask him like what kind of watch that was but when you get into it you really really start to get into it it becomes becomes the thing so what what are some of the brands that are that are really popular that you're seeing and i'm fascinated by these this age demographic that is really into luxury watches so what are some of the popular brands now um that you have yeah to your point about judging somebody for their watch i don't judge them but it's um

it's definitely for most men it's the only type of accessory they wear and automatically if you enter a group a room full of people you'll you'll it's so funny to me because you'll see two guys that are clearly very shy and then they won't talk to anybody else they see it they're they're both wearing nice watches and as soon as they see each other they walk up to each other and strike up a conversation so it becomes this conversation piece among crowds between watch collectors where you could walk into a party and you see somebody else wearing an interesting, unique luxury watch and it becomes an instant connection between two people. And oftentimes, what's funniest to me is when

I could tell these people won't talk to anybody else in the night because they're very shy, but they're talking to each other because instantly they feel comfortable because they're both wearing luxury watches. So it's interesting how that works. But the brands, you know, the beauty of the luxury watch industry, these brands have been around for hundreds of years,

and they have a long history. You know, these watches are made by hand, and this is why limited quantities, so this is why they hold their value so well so the brands that are were popular 50 years ago are popular now and they'll be popular 50 years from now unlike your apple watch which you know needs to be replaced every two three years to keep up with technology the the styling and design of these brands is classic and iconic, and it does not go away. And oftentimes, a 30- or 40-year-old watch is even more impressive than the newer models. So the brands we typically do a lot of business in is Rolex, AP, Cartier, Omega, Patek Philippe.

And every day, we have a 35-person staff. We're buying between 30 and 50 watches a day and we're selling between 30 and 50 watches a day. You're looking at between 60 and 100 transactions where we've become such a destination. The last

month we had about 600,000 unique visitors a month on our website, which is awesome. Last year for my 40th birthday i went to mexico city and i stopped by the paddock philippe store and there's two guys shopping there and the store didn't really have much inventory so just you know on the way out as being an entrepreneur slip one of the guys my card and he's like wait you're supposed to text uh he's like i haven't bought for me yet but i'm on your site like every week you guys are amazing and i this was in mexico city which six years ago barely anybody in outside of atlanta would have known about us for me to go to

mexico city and people were like oh yeah we were on your site every week felt really really good man you've taken the company global right you've created a global brand that is the leader in the industry um and that's always i'm sure you know one of the greatest feelings is when somebody out there knows your product and brand from hundreds or thousands of miles away and you know 10 years ago no one knew who you were at all um i'm really interested in like the value that these watches hold because i've heard that many of these watches uh i know obviously there's many brands and stuff but i've heard that many of these watches can hold significant value so you're not just buying like something that can you know something that you're going to wear but it's something that you're going to wear, but it's something that over time may even increase

in value or remain the same value. So you could possibly resell it. Obviously, conditions and there's things that are involved, but how do you look at in terms of these as almost like an investment? Maybe it's the wrong word, but something that might continue holding value in the future yeah it's certainly an asset and we have a lot of clients come back to us and they bought a watch from us four years ago and they come back and sell it to us and we're paying them a lot more

than they bought it from us for not every watch will appreciate so there's you need to really look for more unique and rare pieces for significant appreciation but it's not unusual especially on vintage watches where you know a lot of the models are appreciated by 10 times over the last 15 years so watch you're buying for 10,000 15 years ago you could easily sell for 100,000000 now. It's not unusual.

But they all hold their value. And the reason we picked the brands that we deal in are those that we know that if a customer of ours comes back to us to sell the watch back to us in the future, they'll be able to either get most of their investment back that they used to purchase from us or maybe even get more. What is the most expensive watch that you either sold or maybe did some repair on?

We've sold quite a few pieces, over $100,000. Usually they're AP or Patek Philippe's. There's people that try to post on their Instagram and they sell $200,000 or $300,000 watches, but they sell 200,000 or 300,000-hour watches, but they sell one watch a month.

Like I mentioned, we're selling 30 to 50 watches a day. Our average sale is around $10,000. But I really like to be in the volume business and not concentrate our inventory in the ultra, ultra premium. You know that saying, sell to to the masses live with the classes i wouldn't i wouldn't say necessarily i'm selling to the masses because it is you know ten thousand dollar watches but within a luxury watch space we would probably have the most accessible selection of any any major competitor well eugene i've been very fascinated today.

I want to go to your website. I need a new watch, so I'm going to go to your website, and I want to check it out. But if other people also, they want to learn more information about you, they want to check out the site, how can they do so? Yeah, go to SwissWatchExpo.com or follow our social media at SwissWatchExpo. We ship all over the world. Last year, we had a couple that was local for their 25th wedding anniversary.

They went to Switzerland to buy each other watches, and she was able to find the Cartier there that she wanted. And they told us the story because they came by, and they went to a bunch of shops in Switzerland. They went there to tour Switzerland and buy each other watches because this is where you know all the luxury brands are coming from and they finally went to like the fourth or fifth place looking for the rolex that he wanted and they didn't have it but the guy's like where are you from and they're like atlanta georgia in the u.s and you ever heard of atlanta and he's like yeah i have but why don't you just go to

swedish expo i'm sure they have the watch. They came into our local showroom and they're like, I don't know what you guys are doing, but there's a shop in Switzerland that told me to come back and shop with you guys. That felt pretty good. Well, they could have saved a lot of money on travel, I guess, by just going. Exactly. Going to SwissWatchExpo. You don't have to go to Switzerland. So if anyone's in the U.S., don't go to Switzerland. just go to Atlanta if you need a showroom or just go to your website.

So SwissWatchExpo. Eugene, this has been great. Really inspiring. I always love a story of the bootstrap to millions and revenue and the journey that goes along. Obviously, you're only able to scratch the surface today of the actual journey because how much can you fit into a 30-minute time period? I know entrepreneurship is super hard. It's challenging. 60, 80 hours a week that you had to work to get to this point. So it's been a lot, but I really appreciate it. I think a lot of people are going to learn something. They're going to be inspired. But I hope if you are going to be buying your next watch, go and check out SwissWatchExpo. Eugene, thank you so much for joining us today

on Founder's Story. Thank you, Daniel. This was awesome.