2005: THE BREAKDOWN
One of our new holiday cards for 2005, and an overall sentiment I could have embraced more vigorously.
2005 Overview: The fourth year. Now that I’m writing this series of posts, I see that 2005 and 2006 were the worst years. And 2004 ranks right behind them. So, dear reader, you and I can both look forward to 2007! Which, perhaps not uncoincidentally, I am now realizing is the five-year mark, the halfway point, and the moment before which all entrepreneurs and entrepreneurial guidance will tell you is utter and complete hell. I had the hubris to think that my hell would not last that long (and that I could avoid hell altogether). Let me tell you, where there’s hubris, a downfall lurks not far behind, or at least ongoing misery if not a cataclysmic crash (which might be easier, because you’d get it over with). And yet still we humans commit hubris over and over again. Because, you know, we’re special.
In 2004 we’d staffed up with supposedly experienced and not inexpensive professionals and we’d implemented also not inexpensive systems from which we were promised we’d be able to pull things like accurate inventory counts and cash flow. You know, to make it less like you’re flying with a blindfold on and crashing into mountains. Unfortunately, in 2005, Knock Knock wasn’t getting what it needed from these professionals and systems, so I started to flail toward consultants. Which are also not inexpensive, and they come with their own breed of failure and mishegas, not to mention pissing off the staff they’re meant to augment.
When my childhood friends and I talked about our future careers and families, we were going to do everything right, almost all of it different from our parents (cf. “hubris”). We idealized romance and marriage and family. My idealization intensified over the years because I didn’t get married and have kids, but wanted to. One of these childhood friends recently described for me a really difficult period in her family life. Her two elementary-school-aged sons were going through a stage of resenting her, acting out and favoring their father. She and her husband were struggling and didn’t like each other very much (this has since improved immensely and they now like each other again). None of this, of course, served to inspire mom- or wife-of-the year behavior from her. Despite the tension, in addition to working full-time she had to continue keeping her children fed and housed and cleaned and shuffled to their various activities. She told me she would lie in bed next to her sleeping husband, turned away from her, and think to herself, “Everybody in my family hates me. I’m doing all of this, working myself almost to death, and they all hate me.”
That’s what 2005 felt like. Not that I was much of a peach, to be certain, probably difficult more than half the time, but it sure is hard when you’re slogging along trying to make everything work and you get lots and lots of flack. It can be lonely at the top not just because there’s no one to share what you’re doing but also because nobody likes the person who’s at the top. What’s worse is that the stress of the troublemakers and the shirkers overshadows all the people who are doing an amazing job, who are putting up with a tense work environment in which the quality of everybody’s contributions is varying wildly. I tend to fixate on and remember the bad rather than the good, which is both self-torturing and solution inducing, but for these couple of years, it’s like there’s an emotional blackout around all that was good. I can only imagine how bad it would have been if these wonderful people and events had not been there.
Neither was 2005 a great product release year for us. Wheels o’ Wisdom (oh, how I miss thee!) and Banner Greetings were the only new products of lasting power and note, and we had a few gynormous misfires (hello, Holiday Survival Kit!). We continued to get phenomenal press and public recognition, though financial growth was slow compared to the previous and following years. We had our first huge legal mess and our first acquisition offer. And I got to float in the Dead Sea. No, that’s not a metaphor.
- January 2005: Because our director of sales is unable to attend, I travel to the Atlanta Gift Show for the first time. We are having difficulty with a particular account, based near Atlanta, and I am looking forward to meeting with them to smooth things over. Near the time of the planned appointment, when the account arrives, I am standing on the other side of the showroom, near our products, next to all the other companies’ sales managers, when the principal of our rep company (who is known for being a hothead) stomps over to me and tells me sternly, loudly, and publicly that I will not be meeting with this account after all because of Knock Knock’s mishaps and this account does not care to do business with Knock Knock again. He yells at me for at least five minutes. By the time he walks away, I am shaking, and others are looking at me with pity and embarrassment in their eyes. I leave the showroom to catch my breath and confer with a friend who runs another showroom in the building. I decide that this is an unacceptable display and determine to find alternative representation—as with the rep fiasco of 2003, I find that certain seasoned industry professionals are inclined to treat me like a stupid child, something I cannot abide. I sneak my own products out of the showroom to meet with other rep agencies, a cloak-and-dagger operation playing out along the escalators of the America’s Mart, and secure another agency. As an outsider to the industry, I do not realize that this incident has quickly become the talk of the show, and for years to come I will meet people who will say, “Oh, you’re the one who . . . !” Along with other pettiness, I will later be sent a to-the-penny invoice for the complimentary dinner this original rep group had fed me and all the other represented lines’ sales professionals the evening before.
- January 2005: I begin to work with a sales consultant to augment the part-time work of our top-notch director of sales, who is working far more than part-time, but nonetheless there is still much more to do. The consultant is nice and smart but flaky and somewhat impolitic and will pose internal problems over time. One of his first moves, however, is to help us liquidate hundreds of thousands of dollars worth of obsolete inventory, because we have not yet done anything with our products that haven’t sold, an oversight comparable to not having cleaned your house for four years and also having paid ongoing storage fees on all the dirt.
What little girl doesn't hope to have the fruits of her labor appear in Hustler one day?
January 2005: A high-water mark in anyone’s career: our Sex Flashcards appear in Hustler, my own personal connection to Larry Flynt.
- January 2005: We begin our renovation, during which our entire company will have to share one unit while our other unit is adjoined with the unit next door to it. There are wires hanging from the loft balcony, networking the computers. We can hear everything that is said. One person has a penchant for grumpy and loud telephone conversations that make everybody else roll their eyes. Might I add also that the renovation is particularly stressful, bringing together frustrated landlords, inept carpenters, and blown schedules?
- January 2005: At the New York International Gift Fair, I am approached by an executive from a company that is the gold standard to me. She communicates that her company would like to acquire Knock Knock, something I could never have imagined. While I’m pretty sure I have no interest in selling yet, I am beside myself with pleasure and pride. In a follow-up email, I characterize Knock Knock as follows: “Generally speaking, I can tell you that Knock Knock grossed around $2.3 million in 2004, and we are on target for $4 million in 2005 [this is an indication of how poor our projection capabilities are at this moment]. Our organization is growing and departmentalizing and currently consists of 10 employees and myself. We sell to over 2,000 retailers in the United States, a mix of single rooftops and chains served by 13 rep groups, and we are currently expanding into Canada and the UK via one rep group and two distributors. Of course we have plans for growth that include new product and sales channels as well as the deepening of existing ones.”
The Holiday Survival Kit that did not do anything for our own survival.
February 2005: Urged on by our manufacturing broker, who makes money on everything we order, Knock Knock places purchase orders for two products that, he says, have a minimum order quantity of 50,000 units plus extra costs for tooling. Bear in mind that we have never manufactured more than 5,000 units of any new product. He and I are certain that these products—the Holiday Survival Kit, based on a handmade gift we sent to all our reps in December 2004, and Mistlefaux—will be smash hits on the order of Pet Rocks. I do not recall any Knock Knock staffperson being so enthusiastic about these products’ prospects, though the sales consultant is.
- February 2005: On one evening, two women have to leave early in order to relieve their nannies because both nannies have to be home early to be with their children because the nannies’ husbands are working late. Both of the Knock Knock women’s husbands are also working late. I happen to know that in one case, the salary I pay the woman is higher than her husband’s. It seems to me that there is a vast domino effect of men who work late and women who come home early to accommodate them and as a feminist I think to myself that it is no wonder feminism sometimes encounters an uphill battle.
- February 2005: I vaguely entertain auditioning for the new Martha Stewart version of The Apprentice, then come to my senses.
Our beloved designer Eric on the front page of the LA Times after running the marathon, sporting the orange and the logo.
March 2005: We sponsor one of our longtime employees in running the LA Marathon on behalf of a charity. His picture is on the front page of the LA Times on Monday morning.
- March 2005: We move into our beautiful newly renovated offices.
- March 2005: Our director of sales gives notice, a true loss. She is sane and talented and a real ballast to the company, but her inability to work full-time is starting to be a challenge for both of us. She is also rightfully frustrated with the over-the-shoulder kibitzing of the manufacturing broker and the sales consultant (plus, she knows full well that the manufacturing broker is lying to, stealing from, and manipulating me, and after telling me once early on, has determined I’m drinking the Kool-Aid too much to hear it again), the poor attitudes and incompetence at the core of the business departments, and my inability to handle the stress and lead the team. She will stay, however, through the National Stationery Show, in May.
- April 2005: I solidify a consulting relationship with the manufacturing broker’s company in which he and his partner will help us manage the business and sales side of the company. This is an inherent conflict of interest, the foxes guarding the hen house, but I imagine that they would never harm someone they profess to love as much as me. We do this all, of course, without signing a contract or putting anything in writing.
- April 2005: For a couple of months now, I have, under an attorney’s guidance, been tracking in writing the many problems with our director of operations to substantiate her eventual dismissal, with cause. One day, she resigns, and I feel I have dodged a bullet. Shortly thereafter, however, she makes a demand for quite a bit of money, after which we enter an exceedingly difficult legal battle, the worst of Knock Knock history to this day. Horrifying mud is slung, primarily toward me. Immediately thereafter, the accountant, with whom she has formed sort of a cabal, resigns. Every position in the company is at this time single-point failure, meaning we only have one person in most of the company “departments,” so that when a position is vacant, an entire company function goes undone (or I do it, poorly). After they’ve left, I realize that between them they have failed to close a single month—and the entire year of 2004—of our financial history. This is only the tip of the ice cube.
- May 2005: We are invited to make a presentation for an entire new program for one of the big office superstores. I have long pined to “Target-ize” an office superstore, meaning bring to it innovation and design. We work hard on presentations, fly multiple people across the country to the meeting, give the retailer countless ideas, and never hear from them again.
The idealistic catalog "system" that launched a thousand fastener cuts.
May 2005: In another instance of attempting to reinvent a wheel that ain’t broke, we come out with what we think is the most innovative catalog ever to hit the gift industry, an expandable, updatable extravaganza that we expensively produce in China. The idea is that retailers, reps, and buyers will simply add additional pages as new releases are debuted, thus saving paper and mailing costs while preventing users from having to juggle multiple pamphlets. This “innovation” is an abysmal failure. Because the updates don’t include a table of contents or index, it’s impossible to find things and over time many products are repeated. During the next two years, we will field voluminous complaints, including that people are cutting themselves on the catalog’s closure. We joke about putting Band-Aids in subsequent mailings but never do. There will be actual applause and cheers at the rep orientation in 2007 when we retire this catalog and return to the customary single-season catalogs.
Three of our products were accepted into the juried California Design Biennial. Such pride! One great source of happiness for me is that so many of our designers have left Knock Knock with awards and publications on their resumés.
May 2005: Because I am fed up with paying thousands of dollars for the quarter-inch-thick plywood hardwall construction at tradeshows, I commission only the pipe-and-drape option and rent an SUV to ferry four-by-eight-foot pieces of half-inch plywood from Home Depot to use for our booth walls and hang them from the pipes with post ties. They are too heavy for the pipes, and over the course of the show our back wall threatens multiple times to crash down into the booth behind us, a purveyor of creepy dolls. This marks the end of my attempts to manage tradeshows more inexpensively and I resign myself to the financial dynamics of working with one-choice-only and unionized suppliers at the Javits Center.
- June 2005: Three of our products are included in the juried California Design Biennial, a tremendous honor, and are displayed at the Pasadena Museum of California Art. Our products are also published in and/or given awards by such notables as the How Design Magazine, the AIGA, and PRINT magazine. We are also included in numerous best-ofs.
Our While You Were Out Telephone Message Log, featured over and over again in cliffhanger teasers for the next episode of Real World Austin.
August 2005: A bunch of our product is on season 16 of The Real World, in Austin, prominently featured throughout the series. On August 2, 2005, on the episode “A Heartbreaking Valentine’s Day,” our While You Were Out telephone log is used to record a message for one participant, Danny, telling him urgently to call his father because his mother has died. Around the clock on MTV the teasers for the episode include a closeup of our product with the scrawled message. While I am sorry for Danny’s loss, I am in reality TV heaven.
- September 2005: I am invited to give a talk, my first as a professional, for the Los Angeles AIGA, at MoCA, a prominent Los Angeles museum. I am beside myself with excitement. The presentation goes extraordinarily well, to date one of my best. I have hired a car to drive my grandmother from her home in the Valley to Downtown LA so that she can be in the audience. During the question-and-answer period from the packed audience, I give various pieces of business advice. After the third or so inquiry, my Yiddish-accented grandma yells from the audience, “That’s enough, Jenny. Let them start their own businesses!” This is quite hilarious and spontaneously ends the presentation. During the wine and cheese mingling afterward she is a bit of a celebrity.
- October 2005: During the fourth quarter, the most important selling time for a gift company, we are fielding all manner of defective product. Shrinkwrap is proving almost impossible to get right—too loose, too tight, not clear enough. Each time we have a defective shipment we have to have it inspected, sometimes ship it back to China, and negotiate over replacement or rework. It is enough to drive us crazy, and because we have the manufacturing broker between us and the manufacturers, getting clarity is like typing with mittens on.
- November 2005: I continue to pursue something that has become a true bane: the fact that knockknock.com is owned but not used, purchased by another party about a year before I started Knock Knock. When I first attempted to negotiate for the URL, in 2002, the owner suggested I pay her $500,000. I will try to buy the domain every couple years until approximately 2010. I offer increasing amounts of money and get no response. The domain name is to this day unused, reflecting to another business, not at all related to the phrase “knock knock,” of this individual.
- December 2005: I take my first real vacation since starting Knock Knock and travel to Israel to visit a childhood friend and her family. While I enjoy the trip, there is no spiritual epiphany on the part of this secular Jew, and I get vomitously sick on the plane ride home after going into the mineral-laden Dead Sea and failing to shower soon enough afterward.
High Points of 2005:
- Realizing that we are going to be able to do customized programs for bigger chain retailers.
- Having our product be prominently featured on The Real World.
- Winning inclusion in the California Design Biennial.
- Continuing to have a great design team.
- Enjoying our purpose-built renovated offices.
- Speaking at MoCA through the AIGA.
Low Points of 2005:
- Three words: HR, HR, and HR.
- Struggling with defective product.
- Injuring people with our catalog.
- Having to reimburse the former Atlanta sales rep for his complimentary dinner (though it was also oddly satisfying because he was so petty).
Strangest Point of 2005: Living through the actual experience of unfounded legal threats that result, effectively, in extortion; make your life miserable; and ultimately offer you little recourse but to submit. Also, fielding serious complaints about catalog injuries.
Epiphany of 2005: Consultants often can’t help you, and they can almost never actually run your business—or really, parts of your business—for you.
Whole Point of 2005: Thickening that skin, and not just on the elbows.
2005: THE PRODUCTS
New Bestseller of 2005: Wheels o’ Wisdom. These are some of my favorite products of all time, basically tables in a circular format. I loved figuring out how to make the geometry of these work. The writing (done in Excel, natch) was incredibly challenging because of the character count limitations. We called them “Cordless Search Engines for Life.”
Our Wheels o' Wisdom, more than a card, less than a gift. They came with big envelopes so you could send or inscribe them. These remain some of my favorite Knock Knock products ever. Over a few years, we probably came out with some twelve titles.
New Flop of 2005: The Holiday Survival Kit, of which we manufactured an unprecedented 50,000 units. We literally could not give them away. We also made t-shirts from our Slang Flashcards, but selling them through our existing channels and figuring out the size assortments was so challenging that we canceled the program.
Interesting New Product Note of 2005: I misspelled “Gesundheit” in our Banner Greetings, an actual typo in die-cut. I’m a really bad Jew.
Our Banner Greetings were smaller than the normal banner and fit into a standard greeting card envelope. This was before everybody and her sister were doing banners. Yes, I misspelled "Gesundheit." Sometimes we fail to look up the most obvious things, and for those of us who have copy editor in our training and blood, we will remember these types of mistakes over the years and on our deathbeds.
Quantity of New Products Released in 2005: 15
Quantity of New Cards Released in 2005: 95
Quantity of Products and Cards Retired in 2005: 65
Total Live Products and Cards at Year-End 2004: 256
2005: THE MONEY
2005 Revenue: $2,725,283
Year-Over-Year Growth from 2004: 17 percent
2005 Loss: 110 percent more than 2003’s loss.
2005: THE PEOPLE
Number of full-time employees: 10, though I believe we had an additional two or three freelancers
2005: THE BONUS
This is what the interior of a Wheel o’ Wisdom looks like. This is the Choose Your Religion wheel, which had the most, and therefore smallest, text. It inspired our Convert’s Bible book.