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The Anti-Hallmark

In the multibillion-dollar greeting card business, Smart Alex has carved a niche by boldly going where no big company has gone before. Founder Jay Blumenfeld opens up about his irreverent, unorthodox rise to success.

Jay Blumenfeld started the bold and bawdy greeting cards company Smart Alex in 1980, building it without venture capital, business training -- or a sense of hearing. Today, the deaf, gay, and out-about-it-all CEO personally designs bestselling card lines for specialty retailers, including sex shops, across North America. Blumenfield recently linked up with Inc.com via instant messenger to share the story of Smart Alex, advice on succeeding with a niche brand, and why uniqueness counts in the business world.

How did you start Smart Alex?

It was by accident. I didn't intend to do it at all. What I wanted to do was to promote my photography, and get a photography book published after I got out of college. This was 1980. Many book-publishing art directors told me that I should put my creative energy into making greeting cards.  I thought it would be something I did for a year or two to promote myself as a photographer. But I fell in love with the alternative greeting cards industry, and decided to continue with the business.

What does Smart Alex do today? How is it distinct within the greeting cards industry?

We are a greeting card company that makes edgy cards. We aren't afraid to use butt-kickin' humor. And we sell through unusual channels. Most card companies are all alike and don't focus on a particular target audience as much as we do. We have a very specific market.

One of our most successful lines is the bachelorette series. I know I'm giving away our biggest secret, right? Oh no! But not many companies can do something like that.

We have great relationships with stores that aren't catered to by companies with bigger lines. Quotable is bigger. Hallmark and American Greetings are far bigger. They do humor. But it's just not as fearless as what we do at Smart Alex.

Can you make a comparison to another company?

If Hallmark and American greetings are like NBC and CBS, and Quotable is like CNN, I guess we're like an MTV or VH1.

After 27 years in the business, what are some important lessons you have learned?

I have always been on my own. I am deaf, which might surprise people. But I haven't looked for government or other assistance specifically for deaf CEOs. I don't even know if these programs exist. What I do know is it's easy to get things done when you do them on your own. That's one reason why we print locally, and have worked with some of the same sales representatives since 1985. Sure, it's outsourcing. But we have a great relationship with both our printers and our reps.

It is important to believe in your work, so much so that you can get it done without feeling you need any special help be it from government or selling to investors or outsourcing to China if you can't stop in to see what's being done.

That's an important lesson. Believe in what you do, and get it done yourself. That, and always pay your bills within 30 days.

So your company is completely self-financed?

When I need to borrow money for a new big project, I go to the bank and get a loan. I've borrowed and paid off $200,000 within five years. In the last six years, I haven't taken out loans for Smart Alex. I guess I'm an old fashioned guy in that regard. If I have to, I'd prefer to work with the bank directly. Though I'd rather not take out loans at all. Recently, profits have comprised 45 percent of income on most of our card lines. Our company made about $600,000 in revenue in 2007. That was up from $550,000 the year before. That's pretty good for a small company from the North Side of Chicago. People, and their sense of humor, can change so fast. The marketplace for greeting cards can be very fickle.

In light of the greeting card market's mercurial nature, why is business good now?

With Smart Alex, I have always used the philosophy "where people go, we go the other way." To an extent, we have to go with the flow of what's popular at the moment, knowing what's hot now will not be hot in two or three years. But what we do is we really get an understanding of our customers, meaning both the stores and the people who buy cards in them. We work with thousands of stores in the U.S. and have a distributor in Canada. We pay close attention to what we learn from stores when they place orders. And we pay close attention to our reps, who are out there communicating with the stores all the time.