February 17, 2021 5 min read
Did you hear that Patek Philippe discontinued Nautilus Ref. 5711?
Neither had I. Here’s a quick translation for people who, like me, know nothing about watches: Did you hear that the classic watch company Patek Philippe is no longer making a watch called Nautilus Ref. 5711, which every collector right now wants to buy for enormous gobs of money?
It’s fascinating—because this isn’t a story about watches at all. It’s a story about the counterintuitive power of change, and how long-term success sometimes requires short-term pain.
In fact, “short-term pain” is an understatement. It really requires short-term, voluntary, willing-to-piss-off-your-customers, cut-sales-of-a-booming-product, look-absolutely-insane-to-everyone pain.
“There may be little logic in discontinuing a wildly popular product,” the New York Times reported last week. But that’s what Patek Philippe is doing.
It’s really smart. And one day, you might need to do something just like it.
Why to Watch This Watch
Here’s the short of it: Patek Philippe has been making its Ref. 5711 watch for 43 years, but demand surged a few years ago. Back in 2019, according to the New York Times, the wait list stretched for eight years. Now the wait will stretch forever, because Patek Philippe just confirmed that it’s no longer making the watch at all.
In fact, it stopped making the watch back in 2019. It just didn’t tell anyone.
Customers were not happy about this. Retailers were upset, too. Hordes of people have been waiting for this watch, eager to buy and sell it. The thing goes for more than $30,000! Now the best anyone can get is a second-hand version for maybe six times that amount.
Why?
The watch had become so popular that its meaning changed. People were flashing it around Instagram as a sign of wealth. Others were surely buying it just to flip it. And it was distracting attention from the company’s other products. This may have made the company a bunch of money in the short-term, but it risked draining the company’s value in the long-term.
“We are doing this for our clients who already own a Patek Philippe and to protect our brand from becoming too commercial,” the company’s president, Thierry Stern, told the Times. “I can continue to make this fantastic product, or sell 10 times more of them. But I am not working for numbers. I am protecting the company for the future, for my children.”
He knows people will be upset. But he said it’s a lesson his father taught him, and that he’s passing down to his own children: “When you have a fantastic brand like Patek,” he said, “you have to protect the brand and not just one product.”
This is not just a decision for high-end watches. It’s a universal one. For example, it works just as well with… beer?
Bye-Bye, Best-Selling Beer
In 2003, Dogfish Head Craft Brewery created a beer called 60 Minute IPA. People went absolutely crazy for it. The beer was on track to become up to 80 percent of all Dogfish sales. This was exciting for Dogfish founder Sam Calagione. Who doesn’t love a hit product? But it worried him too.
IPA was a hugely popular style of beer at the time, but he knew it wouldn’t be popular forever. If IPA dominated his sales, then he’d become known as an IPA brand—and when people’s tastes changed, he’d be known as an old brand. That’s death.
His solution: Instead of cashing in on the IPA boom, he severely capped sales of that best-selling beer.
People were furious. Some screamed at him on the street. But Calagione held firm. “It gave us a pretty unique soapbox to stand on in a crowded marketplace,’” Calagione told me many years ago. “We can say, ‘We want to stand for something different.”
When retailers asked for his IPA, he talked them into carrying his other beers instead. Eventually it worked: Dogfish stopped being associated with IPA, and started being thought of as an all-around innovator. In 2019, Sam sold the brand for $300 million—which is not the price you command if you’re a washed-up old IPA brand.
I love telling that story in keynote talks (here’s one example), because it hammers the point home so well: Change is inevitable—and sometimes, we need to bring it on ourselves.
It doesn’t matter if you’re selling an everyday beer or a watch that costs the same as college tuition, or if you’re not even in business at all. The fact remains the same: The greatest opportunity isn’t always the one in front of us. It might be the one far away—so far that we can’t see it, and must only trust that it’s there. Then, to reach it, we must control our own fate… even if, for a little bit, that means it’s going to hurt.
This article was excerpted from Jason Feifer’s newsletter, Build For Tomorrow, which is about how to find opportunity in change. Click here to subscribe.