Switzerland, every mention
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every year anyone Ben Gilbert 67David Rosenthal 38Michael Lewis 2Howard Schultz 1
Verbatim, from the transcripts: the passages where Switzerland comes up
10 Years of Acquired (with Michael Lewis) · Acquired
- ▶ 1:20:28 Ben Gilbert There's been companies that don't feel Switzerland enough
- ▶ 1:20:46 Michael Lewis They don't feel Switzerland enough.
- ▶ 1:20:53 Michael Lewis So you're looking for Switzerland.
Epic Systems (MyChart) · Acquired
- ▶ 3:36:59 Ben Gilbert The entire GDP of Switzerland's worth of waste exists in our healthcare system.
Rolex (Audio) · Acquired
- ▶ 3:27 Ben Gilbert This is the story of the most successful Swiss watch company, but it wasn't founded in Switzerland, or even by a Swiss person.
- ▶ 10:37 David Rosenthal And while he's there in boarding school there in Bavaria, he meets a friend who is from Switzerland, and he develops an interest in that country, and he no longer really has any family ties or anything to Bavaria anymore, doesn't really…
- ▶ 10:51 David Rosenthal Switzerland seems like a good place.
- ▶ 11:04 David Rosenthal So this business was buying like raw pearls from fishermen and then selling them to the famous Swiss jewelers there in Geneva.
- ▶ 11:25 David Rosenthal As far as Switzerland goes, they are in the industry, besides banking.
- ▶ 11:53 David Rosenthal So they are facilitating the trade of all these best in the world Swiss watches out of Switzerland and into other countries around the world.
- ▶ 12:25 Ben Gilbert And it's important to remember, too, it's not like watches were this little corner of the Swiss economy.
- ▶ 12:32 Ben Gilbert Exporting watches was a huge part of the Swiss economy and a huge employer in the nation.
- ▶ 14:16 Ben Gilbert And he sits at this really interesting choke point of the whole industry, where he understands how all the producers are sort of laid out, and how the whole value chain works on the Swiss side of things.
- ▶ 18:30 Ben Gilbert It's an essential tool for moving about the world, which explains how it's such a huge industry that moves the needle for the nation of Switzerland.
- ▶ 23:17 David Rosenthal You would either import fully finished watches from Switzerland, a whole product, so to speak, and either a trading firm like Wilsdorf & Davis would do this or Kuno Korten would export it.
- ▶ 23:48 Ben Gilbert He operated one click up the value chain, sort of aggregating on the Swiss side.
- ▶ 24:03 David Rosenthal Yes, so he's not making anything, but he is assembling the finished products, so he would have watchmakers there in Britain assemble the best movements that he would import from Switzerland with the best cases that he would find, and that…
- ▶ 25:21 David Rosenthal Well, that brings us to the other half of the Rolex equation, one Jean Aigler, based in Bien, Switzerland, which is in the mountains of the north of the country.
- ▶ 25:37 David Rosenthal Geneva's in the southwest of the country in Switzerland, right next to France.
- ▶ 35:43 David Rosenthal And a few days after this fruitful journey, the Rolex brand was filed and then officially registered in Switzerland by Wilsdorf and Davis.
- ▶ 35:59 David Rosenthal So they trademark it in Switzerland.
- ▶ 37:12 David Rosenthal Wristwatch movement to the School of Horology in Switzerland to be awarded the world's first wristwatch chronometer rating.
- ▶ 37:29 David Rosenthal Now, getting certified at the School of Horology in Switzerland is nice and all, but this isn't an astronomical observatory.
- ▶ 45:03 Ben Gilbert All right, David, so how are we getting to Switzerland?
- ▶ 47:36 David Rosenthal And then be able to export from Switzerland now to countries all over the world and not go through Britain first.
- ▶ 48:13 Ben Gilbert And at the same time, it also makes sense if you're a business operating in Britain in this time to say, eh, I'm moving to Switzerland.
- ▶ 48:20 Ben Gilbert There's this alternative reason to move the business to Switzerland, and Hans knows it.
- ▶ 48:25 Ben Gilbert If he's gonna build a globally renowned watch company, he wants to do it in Switzerland.
- ▶ 49:07 Ben Gilbert Why is Switzerland an amazing place for watchmaking?
- ▶ 49:22 Ben Gilbert So perhaps this is a good time to go and tell the history of watchmaking in Switzerland story.
- ▶ 51:01 Ben Gilbert If you're gonna go pick a profession out of a hat to have in Switzerland, mountainous country, long cold winter, like, this is a great one.
- ▶ 51:31 David Rosenthal I've been to Geneva, and I've been to other places in Switzerland, but I know very little about its culture and history.
- ▶ 53:25 David Rosenthal So this is how Switzerland gets the reputation as the watchmaking capital of the world.
- ▶ 53:52 David Rosenthal Well, I mean, it sounds like Switzerland itself.
- ▶ 54:47 Ben Gilbert Switzerland.
- ▶ 54:48 David Rosenthal Switzerland, yeah.
- ▶ 1:01:14 David Rosenthal Two Swiss casemakers file a patent for a moisture-proof winding stem and button.
- ▶ 1:01:43 David Rosenthal And Hans, like Forrest Mars, reads the Swiss patent filing register religiously every day.
- ▶ 1:01:53 David Rosenthal He is reading all of the patents that are getting filed in Switzerland.
- ▶ 1:03:00 David Rosenthal This patent got filed in the Swiss patent register.
- ▶ 1:39:37 David Rosenthal At the beginning of the war in 1940, remember Rolex is in Switzerland,
- ▶ 1:41:32 Ben Gilbert Totally amazing, and this also underscores another reason why Switzerland was such a watchmaking powerhouse.
- ▶ 1:41:38 Ben Gilbert This is a very engineering-heavy industrial thing, and they didn't have to devote any resources to the war because they were completely neutral, and so all of their craftspeople and machinists and everything can keep making watches.
- ▶ 1:48:52 David Rosenthal So Hans decides that he is going to give this very special Rolex watch to the Swiss General Henri Guisson, who led Switzerland through the war.
- ▶ 1:49:04 David Rosenthal National hero in Switzerland.
- ▶ 1:49:06 David Rosenthal The Dwight Eisenhower of Switzerland, one might say.
- ▶ 1:49:09 Ben Gilbert What does that even look like, to lead Switzerland through the war?
- ▶ 1:57:56 David Rosenthal You mentioned Omega, but basically anybody else, certainly any other Swiss company, can make a perfectly on-parody watch to what Rolex can make at this point in time.
- ▶ 1:58:08 Ben Gilbert There's 30 Swiss companies doing this, yeah.
- ▶ 2:02:22 David Rosenthal It was designed in association with the engineers at CERN in Switzerland, the particle accelerator, for scientists who are working
- ▶ 2:47:47 Ben Gilbert The Swiss are riding high.
- ▶ 2:47:50 Ben Gilbert They're the undisputed champs of watchmaking.
- ▶ 2:47:55 Ben Gilbert At one point, the Swiss actually made up as much as 85% of the world's total wristwatches.
- ▶ 2:48:03 Ben Gilbert 85% of the market they had.
- ▶ 2:48:16 Ben Gilbert They made nineteen million of the total 21 and a half million that year.
- ▶ 2:48:50 Ben Gilbert It's like Switzerland was Hinshu Science Park, and these places all sort of needed together and collaborate.
- ▶ 2:49:24 Ben Gilbert The Swiss peaked at almost ninety million watches made in 1973.
- ▶ 2:49:30 Ben Gilbert Up from 19,000,028 years before, they're now at ninety million watches handmade in this crazy production process per year.
- ▶ 2:51:42 David Rosenthal Oh, well, I know the Swiss themselves were doing big industry-wide consortiums.
- ▶ 2:54:23 Ben Gilbert There was a quartz chronometer in a lab at CEH, which is Switzerland's electronics watch laboratory, that was twice as accurate as a mechanical watch.
- ▶ 2:56:10 Ben Gilbert The Swiss think of it as the quartz crisis.
- ▶ 2:58:55 Ben Gilbert And so by 1980, just a few years in, I mean, think about this, 69, the Seiko Astron launches, 75 is when the Swiss are going, oh, crap, and then within four years, it's over.
- ▶ 2:59:20 Ben Gilbert Switzerland, at peak, made ninety million.
- ▶ 2:59:27 Ben Gilbert By 1981, the next year, Japanese watch exports surpass Switzerland.
- ▶ 2:59:40 Ben Gilbert And then, 1985, just four years after Japan meets Switzerland, Japan's exports are three X Switzerland.
- ▶ 2:59:59 Ben Gilbert So, the Swiss market's global share would fall from that 85 at peak in 1945 to just 15% by 1980.
- ▶ 3:00:45 David Rosenthal Yeah, so this is, like, massively impacting the entire Swiss economy, right?
- ▶ 3:01:20 Ben Gilbert I mean, they watched this certainly happen, and they had a lot of fear around it, but they weren't as caught up as the rest of the Switzerland companies that were all super, super dependent on each other.
- ▶ 3:04:53 Ben Gilbert Okay, so we're at this, like, complete demise of Switzerland here.
- ▶ 3:07:48 Ben Gilbert Saving what's left of the Swiss watch industry.
- ▶ 3:07:58 Ben Gilbert But Rolex was in Switzerland during the quartz crisis.
- ▶ 3:08:15 Ben Gilbert Dude, Rolex is 30% of the revenue in the entire Swiss watch industry.
- ▶ 3:08:37 Ben Gilbert And the market of wrist-based time-telling was no longer available to the Swiss.
- ▶ 3:08:44 Ben Gilbert But there was a market for something different that the Swiss were great at if they were sort of set up and positioned correctly and managed correctly.
- ▶ 3:10:51 Ben Gilbert So in many ways, they should have been Switzerland's most likely horse to ride this thing out.
- ▶ 3:14:53 Ben Gilbert That's not the way that the rest of Switzerland was thinking.
- ▶ 3:22:37 Ben Gilbert Every company told you that, including all those in Switzerland.
- ▶ 3:24:19 David Rosenthal Rolex is just one foundation in Switzerland, the most ironclad privacy foundation friendly laws in the world.
- ▶ 3:30:06 David Rosenthal But the other thing that he did that people will talk about, he consolidated all the factories, every physical location where parts that went into Rolex watches were made, whether those were in-house Rolex made or a third-party supplier…
- ▶ 4:14:09 Ben Gilbert 30% of the Swiss watch industry, other categories don't have this kind of outsized winner, even in handbags where Louis Vuitton is so, I mean, they print money, print money, somewhere around 20%.
- ▶ 4:15:27 Ben Gilbert Ok, so, employee count, they have about 16,000 people worldwide, about 9000 of those are in Switzerland.
- ▶ 4:15:35 Ben Gilbert I had a lot of fun trying to size this market, trying to figure out Swiss watches versus watches.
- ▶ 4:15:41 Ben Gilbert The Swiss watch industry is something like thirty-five billion dollars wholesale before the retail markup, across all players, including the super high-end and Omega and Swatch and everyone else.
- ▶ 4:15:59 Ben Gilbert But where it gets very interesting is when we zoom out from just Swiss watches.
- ▶ 4:16:04 Ben Gilbert Switzerland produces two percent of the world's watches.
- ▶ 4:16:12 Ben Gilbert And to put some real numbers on that, Switzerland makes seventeen million watches a year, and most estimates are that there are between 709 hundred
- ▶ 4:16:30 Ben Gilbert So, this two percent of units sold that happens in Switzerland accounts for 45% of the dollars in all watches.
- ▶ 4:16:47 Ben Gilbert Two percent of units are made in Switzerland, and 45% of the revenue is captured there.
- ▶ 4:16:54 David Rosenthal Apple alone ships way more Apple watches every year than the entire Swiss watch industry.
- ▶ 4:17:12 Ben Gilbert That includes a whole bunch of swatches and fashion watches, and, you know, Switzerland makes a lot of quartz also, so it is true that 45% of the dollars come from seventeen million watches out of seven to nine hundred million, but it's…
- ▶ 4:17:34 Ben Gilbert To make that point specifically, 86% of Switzerland's watch export comes from mechanical watches.
- ▶ 4:17:47 Ben Gilbert So, 40% of all watch revenue in the world came from Swiss mechanicals.
- ▶ 4:17:59 Ben Gilbert Well, Rolex has 30% of the Swiss market by revenue, but probably even more by profit.
- ▶ 4:18:07 Ben Gilbert Morgan Stanley and Lux Consult estimate that of the thirty-five billion dollars in total revenue for Swiss watch manufacturers, there's about 11.8 billion of total profit, implying that the industry-wide operating margin is 29%.
- ▶ 4:18:45 Ben Gilbert My best guess is that while they account for 30% of the industry's revenue, it's in the neighborhood of 40% of the total Swiss profit.
- ▶ 4:21:09 Ben Gilbert They own their own buildings in Switzerland.
- ▶ 4:30:18 Ben Gilbert I mean, Quartz was counter-positioned against Switzerland, but I don't think Rolex was counter-positioned against other Swiss tactics.
Mars Inc. - The Chocolate Story (Audio) · Acquired
- ▶ 16:58 David Rosenthal As he gets deeper and deeper into the chocolate world, he travels to Europe and learns about milk chocolate, which had just been invented not too long before in Switzerland by the Swiss company Nestle.
- ▶ 25:01 Ben Gilbert He invents a new type of food for babies who are unable to breastfeed there in Switzerland, and remember, at this point in time, something like one in five babies died before their first birthday, so infant mortality is a massive, massive…
- ▶ 1:16:02 David Rosenthal So, in early 1933, Forrest moves his family from Paris to Switzerland to go learn from the chocolate masters, and Forrest goes to work, first at Jean Tobler, making Toblerone, and then at the original itself, Nestle.
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