Today: How Nicolas Hayek became a billionaire using simple business ideas overlooked by others.
Nick Hayek was born in Lebanon in 1928 and as young man moved to Switzerland and became a Swiss citizen. After studying math and physics at France’s University of Lyon, at the age of 25 he started his first company.
And it taught him a harsh business lesson. With a wife and two little children to support, Nick had the courage to start his company because he thought he had business commitments in place to pay the bills. He was wrong.
Those who promised him business reneged and with no income, Nick was frightened and tearful, sick to his stomach and unable to sleep at night as he tried not to panic.
But he didn’t quit. Eventually, Nick landed some deals but this harsh, frightful lesson stayed with him his entire career. And he made it a positive. As a result of overcoming the problems, it gave him the courage to take risk believing he could overcome whatever obstacles.
Over the years, Nick built a successful business consulting practice.
Then one day in 1982, opportunity struck. A group of Swiss bankers asked him to create a plan to liquidate the major Swiss watchmakers, for those watchmakers could no longer compete with the cheap Asian brands and were hemorrhaging money
Those bankers were determined to recoup as much of their loans as they could, even though it meant laying-off thousands of employees and shutting down a centuries old world famous Swiss industry.
In preparing that plan, Nick explored the watch making industry and got an incredible idea. Don’t shut it down, merge the two biggest watchmakers and redirect them.
On one hand, build top quality cheap watches using 50 parts, not well over 100 as the Swiss had done and slash prices, while designing those watches to be stylish, making them more attractive than their Asian competitors.
But on the other hand, high income buyers would pay a premium for top quality Swiss brands, the Rolls Royce of watches and Nick proposed raising prices on those watches.
The banks were stunned. Don’t shut the industry down, expand it! Is Nick nuts? To help them find the courage to lend more money and to implement his ideas, Nick bought control of the two failing big Swiss watchmakers and merged them.
He owned 51% of the new company and became the CEO.
Now that Nick took this bold action, had the bankers been wrong? Did the venture become an overnight success? No, it was a disaster. It looked like he had made a colossal mistake and it alarmed the bankers.
But instead of panicking and blaming himself for making such a stupid move, to Nick it was just another obstacle to overcome. He studied the reasons for the disaster and realized the idea was sound but he had selected the wrong people to implement it.
Nick needed entrepreneurs to run the business, not conservative managers.
After making some personnel changes, the business took off. Today Nick’s company, Swatch is the world’s biggest watchmaker.
Swatch’s low price watches sell for as little as $25. They’re lightweight, with amusing clock faces and come in bright colored bands. And Flik Flak, a children’s brand is patterned on them.
But today, with high tech cell phones, who needs a watch to tell the time? It seems many people do for they often wear them to be stylish. Swatch sells millions of watches annually and over the years has sold hundreds of millions of them.
Meanwhile, Swatch’s high end brands, Blancpain, Breguet, Calvin Klein, Hamilton, Longines, Mido, Omega and Tissot sell for prices from hundreds of dollars to three quarters of a million dollars.
They don’t sell in volume like the inexpensive watches but they are highly profitable.
In fiscal 2009, Swatch Group had sales of about $5 billion (about 5.4 billion Swiss francs) and profits of about $709 million (about 763 million Swiss francs). The company employs 23,000 workers worldwide. Ironically, one of its strongest sales markets is Asia.
This success made Nick extremely wealthy, a multi-billionaire.
In 2003, at the age of 75, he stepped down as CEO but remained Chairman, naming his son Nick to replace him as CEO. His daughter Nayla also has a Board seat.
Even after stepping down, Nick, Sr. remained a marvelous salesman for the company, traveling to trade shows around the world to talk watches and to conduct business deals. He also worked long hours at the company, saying that he was not working, he was just doing what he loved.
When asked if he would ever retire, he would say great artists like Picasso were seldom asked such a question. And Nick never did retire.
On June 28th, 2010 he passed away quietly in his Biel, Switzerland office at the age of 82, still on the job. Among his survivors are his wife Marianne and his son and daughter.
But Nick is also survived by a grateful nation for saving their century’s old watch making industry and by the thousands of people it employs. And he is survived by wealthy watch collectors and by many millions of people who just want a light, stylish, inexpensive little time piece.
Success Tip of the Week:
As Nick demonstrated, we all face obstacles but as he did for his idea, if you feel your idea has merit, don’t quit. Learn from its failures, adjust your practices and persist. Then you will know if your idea has merit. And who knows, it may make you very successful.
In the next KazanToday:
A dramatic life changing rescue by an Angel of Mercy.