Morning!

I’ve always been curious about watches. Growing up in a working-class household, I’d always see these famous people parade around with Rolexes on T.V. and always wondered how someone could have so much money to spend on a piece of metal that tells the time. As I grew older, I started to realise how much of a status piece a watch was. I’d hear business people talk about them on podcasts. Entrepreneurs wear them while talking on stage. All they're not telling time but instead signalling “wealth”.

It wasn't until recently, though, that I started to think of why, in particular, when I think of wealth and watches, why do I always think of Rolex?

I had no idea of the brand’s history, how they became so popular, or why they’re so coveted.

So, I spent this weekend researching through the last few decades of Rolex's history and their marketing, and truthfully, I was a little bit shocked by some things that I found.

Here’s how to market like Rolex 👇🏻

In 1904, two friends were having dinner at Maxim's restaurant in Paris.

One of them was a Brazilian aristocrat called Alberto Santos-Dumont. The other was a French jeweller called Louis Cartier. Santos-Dumont was one of the most famous men in Europe at the time. A wealthy, eccentric inventor who had spent the previous three years building aircraft and balloons, and who had become the talk of Paris after flying his balloon around the Eiffel Tower.

He was also a man with a very specific problem.

In 1904, every man in the world told the time using a pocket watch. You'd reach into your waistcoat, pull out a chain, click open the lid, check the time, click it shut, and put it back. Simple enough, unless you happened to be flying a plane. Santos-Dumont needed both hands on the controls. Fumbling for a pocket watch mid-flight was a death sentence waiting to happen.

So between courses, he asked Cartier if he could design him a watch he could wear on his wrist instead.

A few weeks later, Cartier delivered. A small, square-cased timepiece with a leather strap and visible screws that he called the Santos. It became the first men's wristwatch ever produced. Up until that point, the only people who wore watches on their wrists were women, and any man who tried was openly laughed at.

A year later in 1905, on the other side of the Channel, a 24-year-old German called Hans Wilsdorf opened a small office at 83 Hatton Garden in London. He'd just founded a company with his brother-in-law called Wilsdorf & Davis. Their business was simple. Import Swiss watch movements, put them into watch cases, and sell them to British jewellers.

It was a deeply unfashionable thing to be selling.

As Wilsdorf himself put it later, "In those days, a wristwatch was considered a joke. The few who wore them were laughed at. People said a watch with such a tiny, delicate mechanism could never withstand the violent gestures of hand and arm. And, of course, it was too small to be accurate."

But Wilsdorf wasn't put off. In 1908, he registered a brand name he'd come up with on the top deck of a horse-drawn London bus. Rolex. Five letters. Easy to say in any language and short enough to fit on a watch dial.

Today, Cartier is a hugely successful luxury jeweller, valued at around $10 billion. They still make watches. Watch enthusiasts revere them.

But somehow, despite inventing the men's wristwatch a full year before Rolex was even founded, Cartier never became the watch brand. Rolex did. The same Rolex that started by selling other people's movements out of an office in central London is now the single most recognised symbol of success on the planet. They sell roughly 1.24 million watches a year, generate $10 billion in revenue.

How did this happen?

I spent this week reading the marketing history of Rolex, going back through Hans Wilsdorf's original campaigns, and trying to figure out what was actually being done that made the brand into something so much bigger than a watch.

Three principles kept coming back, again and again, across 120 years of Rolex's marketing. Each one is rooted in a deep psychological mechanism that most marketers don't even know has a name.

Let’s get into them!

Rolex doesn't sell watches.

That sounds like a lazy marketing line, but stick with me. The entry-level Rolex Datejust costs around £8,000. For that money, you could buy 200 Casio watches that tell the time more accurately. You could buy an Apple Watch that does about a thousand more things than a Rolex ever could. You could buy two flights to Tokyo, a year of rent in most British cities, or a half-decent second-hand car.

People still pay £8,000 for the Rolex. And the question is why.

The answer is one of the oldest and least talked-about principles in marketing. It's called costly signalling, and it comes from evolutionary biology. The theory was first developed by a biologist called Amotz Zahavi in 1975 to explain why a peacock has a giant, useless, brightly coloured tail that makes it slower and easier to spot by predators.

The peacock's tail isn't useful. It's a signal. A statement to other peacocks that says "I'm so genetically strong that I can afford to carry this stupid tail around and still survive." The cost of the tail is the proof of the message. A weak peacock couldn't afford to carry one.

The same logic applies to luxury goods. An £8,000 watch only signals success because £8,000 is genuinely hard to part with - the cost is the message.

But here's where Rolex did something far smarter than every other luxury brand on Earth. They didn't just build a costly signal, they built a costly signal that the entire world could read.

Most luxury brands signal status only to the in-group. A Patek Philippe signals wealth to people who already follow watches. A Bottega Veneta bag signals taste to people who follow fashion. These are private signals. Only the tribe can read them.

A 17-year-old in Liverpool can spot a Rolex on a music video. A grandmother in Toronto knows what it means when her son-in-law shows up wearing one. A taxi driver in Lagos can identify a fake from across the road. It is, for all practical purposes, a globally legible piece of body language that says "I have made it."

You see this same principle being chased by some of the most successful modern brands, with varying degrees of success.

The lesson: The most valuable thing you can build in a category isn't necessarily the best product, it's the most legible signal. People don't buy products. They buy what owning the product tells the world about them.

Walk into Wimbledon and look at the Centre Court scoreboard. The clock on it is a Rolex. Always has been.

Watch the next Formula 1 race and you'll see the Rolex logo on every podium. Tune into the next Oscars ceremony and Rolex is the official watch of the Academy. Switch over to The Open and Rolex has been the official timekeeper since 1981.

There is not a single mid-tier event on Rolex's sponsorship roster anywhere in the world. Not one regional tournament. Not one second-string competition. The selectiveness isn't a side effect of the strategy. It is the strategy.

The psychological mechanism at play here has a name too. It's called the halo effect. When humans associate positive qualities with one thing, those qualities transfer to anything that thing is associated with.

Every time a banker watches Wimbledon, every time a CEO watches Le Mans, every time a film executive watches the Oscars, Rolex is quietly stitched into the visual fabric of what success looks like. Decade after decade, that association compounds. By the time the same banker, CEO, or film executive walks into a Rolex authorised dealer, the brand has already done 30 years of unconscious selling.

You see brands trying to use the halo effect everywhere once you know what to look for.

Stella Artois sponsoring Wimbledon for years lifted a £4 lager into something people felt comfortable ordering on a date. Omega being the official watch James Bond wears.

Sponsorship isn't about visibility. You can buy visibility on Instagram for £20. It’s about association with the upper class of society.

In 1957, a social psychologist called Leon Festinger published a theory called effort justification, which says that the harder a human works for something, the more they value it.

Rolex have built an entire purchase experience around this single insight.

You cannot walk into a Rolex authorised dealer in London this afternoon and buy a Daytona, a Submariner, or a GMT-Master. You can walk in. You can ask. The dealer will smile politely and put your name on a list. Then, depending on the model, you might wait six months. You might wait three years. Some people wait a decade.

Now, you might think that's a supply problem. It's not. Rolex produced 1.24 million watches in 2023. They could easily produce two million. In fact, in 2024, they did the opposite. They actively reduced production from 1.24 million to 1.18 million. Revenue still went up, from £8.1 billion to £8.5 billion. They made more money by selling fewer watches.

This isn't a manufacturing constraint. It's a deliberate marketing strategy that completely inverts the normal logic of business.

Most brands optimise to sell more. Rolex optimises to sell less, to fewer people, at higher prices. The waiting list isn't an unfortunate side effect of demand. The waiting list is the product.

By the time you finally get the call from your dealer saying "your Submariner is ready", you have already invested years of emotional energy into the watch. You've thought about it. You've talked to friends about it. You've built up a relationship with the dealer. You've earned your place on the list.

Soho House operates the same way with their membership process. There's a waiting list. There's an application. There are interviews. By the time you become a member, you've spent so much emotional energy on getting in that you feel like you've truly earned something.

It’s the same idea.

Friction isn't a flaw in the experience. For luxury, friction is the experience.

I couldn't finish this essay without mentioning one more thing I find extremely interesting in the Rolex story…

In 1945, after his wife passed away, Hans Wilsdorf transferred his entire ownership of Rolex into a private Swiss foundation called the Hans Wilsdorf Foundation. That foundation still owns Rolex today. There are no shareholders.

This structural decision in 1945, more than any single marketing campaign, is the reason Rolex is what it is today. It gave them the freedom to play a 100-year game when every competitor was playing a 10-year one. It let them deliberately under-produce when shareholders would have screamed for more. It let them refuse to discount when stock markets would have demanded sales. It let them spend decades sponsoring excellence and waiting for the halo to build, with no need to prove ROI to anyone.

It's the reminder that the best brands aren't built by chasing growth. They're built by chasing meaning.

And it’s why Rolex will probably be at the top of the watch game for many more decades to come.

Right, that’s all I’ve got for you today!

Until next Sunday,

— Niall

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