Courage, for Ryan MacCauley (EMBA ’06), was showing up at his first graduation fair booth, prototypes of his ClassWatch spread out on a table before him, waiting for college students to render feedback on the product he’d been shaping into a business since before he began his MBA degree.
“These kids had no idea I was the owner of the company, and they could look over and say, ‘That’s the dumbest idea I ever heard,’” MacCauley said. “You could be crushed. You’d leave that event knowing the thing you’d worked at for the past five or six years was over. You had to be willing to take that risk.”
Fortunately for MacCauley and his younger brother, Kevin MacCauley, co-owners of ClassWatch, student response to their Swiss-made watch personalized with a school insignia, class year, degree and/or initials was overwhelmingly positive.
Ryan MacCauley’s older brother, John MacCauley, came up with the idea for ClassWatch. John and Ryan kicked around the idea and rough-sketched some business plans while they each advanced in their day jobs, Ryan’s at Coopers & Lybrand (now PricewaterhouseCoopers), which took him from his native Indiana to Raleigh. Enrolling in UNC Kenan-Flagler’s MBA for Executives Programs, with its emphasis on entrepreneurship, provided the impetus to pursue ClassWatch seriously. At his admissions interview, when he brought up the idea of launching a business, the interviewer suggested he talk to Ted Zoller, executive director of the Center for Entrepreneurial Studies about “how we can help you reach your goals with ClassWatch,” MacCauley recalled.
Right away, MacCauley learned concepts and skills that he applied to his evolving business plan. In the first-year fundamentals courses, he learned to put together pro forma financial statements to communicate with investors. In his second-year electives, he found a model for valuing ClassWatch that was critical in finding an angel investor. And most important, he participated in Zoller’s “Softlaunch” course and won the Launch Award, besting more than 20 other entrepreneurs in the class when his operational business plan and elevator pitch deemed his business most prepared for commercial launch. That gave him the confidence to pursue the business venture full time and his angel investor the confidence to back him.
The five-year plan for ClassWatch called for no sales the first year. MacCauley chose to focus on obtaining licensing agreements with universities and Swiss watch manufacturers rather than making sales initially.
“Our goal from the beginning was to think big,” he said. “We focused our efforts early on to building the long-term relationships necessary to thrive and secure our market position. We knew you couldn’t change a 100 year-old industry overnight.” Before taking their product to market, the MacCauleys developed an infrastructure and process capable of supporting the sale of thousands of watches.
Their year one goal, after launching in January 2008, was to sign up 10 universities and three watch manufacturers. In the first six months, they signed up more than 50 universities and 10 manufacturers. They laid out a plan to phase-in sales over five years, aiming for 5 percent of their sales goal by the end of 2009. They had already exceeded that goal at the end of 2008.
Some potential investors have asked how the recession has affected watch sales overall. MacCauley said he has had to remind them, “we’re not in the watch business; we’re in the commemorative business.” So far, that market has remained strong.