Fintech … Finmedia?. Hodinkee’s foray into insurance…
By: Harry Arakkal
Tags: Fintech, Insurance, Hodinkee

Recently, Hodinkee, the popular watch community, announced an insurance product for watches. Now, users can insure their coveted watches with an app rather than with the typical rigmarole of phone calls and extensive documentation. The announcement sticks out amongst the site’s typical content of new watches, celebrity collections, and historical reviews. However, at second glance, it’s another innovative move in its impressive history.

Image taken from https://insurance.hodinkee.com

The first big move was the start of the Hodinkee shop. Sites like Hodinkee tend to rely on ads and occasional partnerships to fuel revenue. Ben Clymer — the CEO — instead looked to deal directly with the watches he espoused on the site. To understand why a people would buy watches from a media company, one has to understand Hodinkee’s history.

Watches have long been the purview of the elite. Spending serious money on something that is ultimately a tool never made sense for the masses. Now that smartphones have supplanted watches as the arbiters of time, there is even less need to spend any sum of money on a watch.

Hodinkee’s purpose has been on bringing that lofty hobby to a wider audience. Not by focusing on affordable options or good-enough substitutes, but by leaning into horology’s rich history. Spending any amount of time on Hodinkee will give you a greater appreciation of the value in fine watches and how someone could be captivated to spend the price of a car or small house on such an object.

The shop became an avenue for editorial curation and leveraged Hodinkee’s brand image to monetize some of its biggest fans. Especially for someone who was first introduced to watches by Hodinkee, it is much more attractive to purchase from Hodinkee than striking out into the watch world on one’s own.

Hodinkee Insurance has the promise to reach an even greater proportion of its audience. Watches can often be the most valuable item someone owns, after their car and house. In addition, a watch is something that people want to pass on to the next generation and can earn an emotional value that cannot be replaced. All of this makes insurance a valued risk-management product.

Of course, Hodinkee is not the first insurer of watches, so they took the time to build a modern, compelling experience from day one and leapfrog the competition. Purchasing insurance from them is now something that happens with an app in minutes.

Many firms have turned to financial products as a lucrative avenue for growth and retention. Andressen Horowitz described this phenomenon earlier this year as “Every Company will be a Fintech Company”. Uber with its bank account, Apple with its credit card, and on and on. Directly controlling and receiving money from users is a valuable pursuit.

The most intriguing aspect of this case is that Hodinkee is ostensibly a media company. Media companies have notoriously struggled in the era of Facebook and Google, and most have relied on paid subscribers to monetize. Hodinkee is taking a different approach by not only selling physical products but also insuring those products. This origin makes the extension into insurance all the more compelling.

An oft referred to revenue model on the internet is Kevin Kelly’s 1000 true fans. The idea being that creators can survive using the internet by finding one thousand true fans that are willing to spend money to support them. This idea encourages specialization in specific verticals, because the goal is not to reach the broadest audience but the most dedicated audience.

In this vein, Hodinkee is vying for a significant revenue stream from a small segment of their audience, while maintaining free content for all. It’s a bold strategy and so far has done well. This is especially the case with over a million visitors a month who are very well off. Hodinkee describes their typical reader as someone who has a master’s degree, earns over $200,000, and buys around three watches a year worth $7000 each. Therefore, the market among just existing readers is already large for Hodinkee’s insurance product.

The democratization of financial technology combined with the strong brand of media companies serving vertical audiences are a one-two punch for new revenue models. Consumers no longer view banks as the only trusted place for money. Leveraging that change in behavior gives media brands the opportunity become the authority in their field like Hodinkee, versus eventually selling to the New York Times or Vox.

Recently, Clymer stepped down as CEO to focus back on producing watch content. Still, Clymer’s excellent tenure will not be soon forgotten. He built the community with passion and hard work and developed a truly viable media business without defaulting to a paywall. This is a model more media firms should explore to escape the influence of big tech and build lasting, independent brands.