Fad products are here today, gone tomorrow -- and nobody knows it better than Tom Baccei. Still, ever optimistic, he's focusing his magic eye on the future
Tom Baccei, who has worked for 72 days straight, holds up what passes for his Rolodex these days: a thick stack of new and old phone messages that hints of done deals, deals in the making, and media interviews that would do a press agent proud -- if he had one.
The calendar says June 29, 1994; the 50-year-old Baccei (pronounced buh-SHAY) and his 3-D Magic Eye illusions are as hot as the weather. He's got two Magic Eye books on the best-seller lists simultaneously -- and two more (including a Christmas book titled Do You See What I See? ) in production at his nine-employee company, N.E. Thing Enterprises, in Bedford, Mass. More than 200 newspapers are running his weekly syndicated feature in their color-comics sections. He recently signed a deal with General Mills that will have cereal eaters looking for his hidden 3-D images on the backs of some 20 million boxes of Honey Nut Cheerios and Apple Cinnamon Cheerios. T-shirts. Posters. Coffee mugs. Ties. Baccei's problem is which licensing deals to turn down.
Not since his stint as a cross-country bus driver for the legendary hippie bus line the Green Tortoise has Baccei had such a wild and wonderful and unpredictable ride. His vehicle these days: capitalism's come-and-go comet, the flashy phenomenon otherwise known as the fad product. Sightings are rare: at best a couple a decade. And frankly, what constitutes a fad is somewhat debatable. (See "Fads: The Ultimate Capitalist Tool?" on page 4.) But one thing is certain. When a fad sweeps the country, big money funnels back to the creator or controller of the fad.
"What do you do with a check for $1 million?" Baccei wonders aloud. Any day now, he's expecting a windfall in that ballpark from his publisher, Andrews and McMeel. "It's as if you're a hunter and you've just bagged a big deer. Now how do you get all the meat into the freezer?"
Clearly, there's still a pinch-me-I-must-be-dreaming quality to the blur that has been Baccei's life for the past year or so, when a $100-million industry snapped into focus. But Baccei's success is like his pictures, which at first glance appear to be so many indecipherable random swatches of color and then, when viewed properly, reveal hidden three-dimensional images. Upon examination, Baccei's quixotic success also displays an underlying "deep sight." He has held a vision from the start of how to manage, market, and leverage this fad, so that when it runs its course, just maybe he'll be left holding more than a bag of money.
Tom Baccei did not invent the latest marvel of 3-D viewing, but in hindsight, he appears blessed with many of the right skills and instincts to capitalize on its fadlike charms. Since the 1838 invention of the stereoscope by English physicist Sir Charles Wheatstone, 3-D viewing has displayed a roller-coaster-like pattern of peaks of popularity alternating with valleys of indifference. At the 1939 World's Fair, viewers watched Chrysler Motor Co.'s 15-minute 3-D film through glasses whose polarizing lenses resembled the headlights of popular Chrysler models. Thirteen years later, stereoscopic viewing took off again when Life magazine ran a shot of General Eisenhower touring Europe with a Realist 3-D camera in hand. The 1950s also brought a slew of Hollywood B-movies, one-trick ponies like Bwana Devil. ("A Lion in Your Lap! A Lover in Your Arms!" proclaimed the posters.) In the 1960s and 1970s, filmmakers again passed out flimsy colored glasses to moviegoers, but this time the fare was X-rated; often, the reviews were better than the movies. Wrote one reviewer of The Starlets: "The action is so real, I thought I was cheating on my wife."
Though tantalizing, 3-D viewing was limited by the enabling mechanical devices -- the handheld View-Masters and the goofy glasses -- until the late '50s, when Bell Labs electronics engineer Bela Julesz used a computer to generate what he called "ambiguous stereograms." He achieved the effect of a stereoscope, which presents the eye with two slightly different representations of the same two-dimensional image; the brain, in trying to reconcile those minute differences, is tricked into perceiving depth. Starting with two identical squares of randomly generated black-and-white dots, Julesz used the computer to shift a pattern of dots in the right image slightly to the left, filling the resulting empty space with more random dots. The brain, fusing the two images into one, detects the pattern and, interpreting the shift as depth, sees that pattern floating above a speckled background. In a scientific paper published in 1968, Julesz foreshadowed the appeal of this "naked-eye" approach to 3-D viewing: "In the case of holograms, the observer has to inspect them from various positions, while for ambiguous stereograms it is the mind of the observer that wanders around."
Tom Baccei's mind certainly wandered when he saw his first random-dot image in the spring of 1990. Random-dot stereograms, which until that time had been discussed mostly in academic circles, inched closer toward the masses in a single-frame adaptation of the technique published in Stereo World, a publication for 3-D enthusiasts that had recently added Baccei to its subscriber rolls. Baccei, then president of a small high-tech company called Pentica Systems Inc., did more than marvel: he immediately perceived a novel way to market his company's in-circuit emulators, debugging tools for systems engineers. Writing his own computer program to generate a random-dot image, Baccei "hid" the model number of one of his products in the field of dots. Then he ran an ad with the headline "Pentica Loves Puzzles" in a trade journal, promising an unspecified prize to readers who could identify the hidden image.
The responses flooded in -- many bearing notes of praise, like "the coolest ad in years!" And they came not just from systems engineers. Torn from the magazine, the "Pentica Loves Puzzles" ad was faxed and photocopied and distributed from friend to friend and coworker to coworker. Baccei claims he sat bolt upright in bed at 4 one morning during the summer of 1990. "If they're going to send me letters, they'll send me checks," he realized. Working nights and weekends in Pentica's offices and on the company's computers, Baccei began a satellite business to create and sell the '90s incarnation of 3-D.
He called his new company N.E. Thing Enterprises, in keeping with his pinball-like career odyssey, which had already inked him a most distinctive rÉsumÉ: college dropout, coffeehouse singer-songwriter, teacher in an alternative school, bit actor (fully clothed) in a soft-core porno film, cabinetmaker, and massively bearded bus driver for the Green Tortoise bus company, famous for its pull-down bunks, communal meals, and unscheduled, 200-mile side trips terminating in bus-emptying skinny-dips in somebody's favorite swimming hole. Baccei spins some pretty good Tortoise stories of brushes with Hell's Angels and Southern police officers. He compares those days to an Outward Bound-like crucible of problem solving.
Good thing. For as the '70s came to a close, Baccei realized he was pushing 40 with no bead on any sort of remunerative career. Looking for a toehold in the corporate world, he imposed upon his roommate, who owned a software company, for a short-term position. Taking a deep breath, he parlayed that into a job as a technical-support manager for a commercial software product at a big military/industrial company. He learned on the fly. That job led him to Pentica Systems Ltd., an English company that hired him away in 1986 to set up a subsidiary in the United States.
"People ask me what I do. I'm a learner," says Baccei, a classic classroom underachiever who now reads mathematics books for relaxation. "I'll take on anything -- except maybe foreign languages."
Although well-apprenticed in the school of the unknown, Baccei realized that controlling the 3-D fad would be the challenge of his life. For openers, he wasn't peddling an instantly recognizable sight gag like a Wacky Wallwalker. Most people come up goggle-eyed and frustrated the first time they try to see into a 3-D illusion. But the party effect gave him hope.
Wherever he went, he handed people what he was then calling Stare-e-os, Amazing 3-D Gaze Toys. "If you have 10 people together, you're almost always going to find 2 or more who can see the image easily, and as soon as they go, 'Ahhhh,' everybody else has to find it, and people begin to help each other. There's a nuclear-chain-reaction effect," says Baccei, who decided to proceed on that basis: "If I could introduce this neutron into enough nuclei and if each nucleus gives me more neutrons, I'm going to get a chain reaction." He'd seed the fad himself -- and then try to cut deals with corporate America.
He began in 1991, like a caterpillar destined to metamorphose, as a mail-order company, contracting out the printing of three posters and a 1992 calendar. Mail order, however, was a business he did not want on an ongoing basis. "My goal in life is not to own a forklift," he says. "Nor do I want to worry about losing $80,000 worth of paper inventory if it gets wet." But mail order provided easy entrÉe into the marketplace. Having scored with the Pentica ad, Baccei placed similar ads in Games magazine and Omni, both of which ran features about the new twist on 3-D viewing, and in the American Airlines in-flight magazine. The airline ad pulled the real weight. Tokyo-bound businesspeople had plenty of time to stare at his Stare-e-os, and Baccei was soon turning out images for books and jigsaw puzzles in Japan, sharpening his creative techniques, developing a style, and building up an inventory of images, rather like a minor-league ballplayer honing his skills in Triple A before stepping up at bat in "the show."
"My biggest fear," he says, "was lighting the fuse and then missing out on the bang." Although he can copyright his individual images and has applied for a patent on the computer program, Baccei realized that his fad-to-be had few barriers to entry. Consequently, he was constantly looking over his shoulder. "Where are they?" he wondered.
As it happened, Baccei's most worrisome competitor entered the fray in a fashion that undoubtedly cost N.E. Thing sales early on and threatened to grab the reins on the fad but may have actually helped Baccei in two very specific ways. NVision Grafix Inc., in Irving, Tex., sold its first 3-D poster in July 1992. The company was started by two fraternity brothers in their late twenties, aerospace engineer Paul Herber and software engineer Mike Bielinski, who was no stranger to Baccei. Bielinski, too, had been inspired by that Stereo World random-dot image and had written a program to permit enthusiasts to design their own 3-D illusions on their home computers. In fact, Bielinski persuaded Baccei to add his software to N.E. Thing's list of mail-order offerings. Later, Bielinski called Baccei to tell him he planned to be a bit more active in the field.
NVision moved in on posters with a high-visibility sales strategy and a profit margin to drool over. The plan: to sell its Holusion Art Prints in shopping malls, first from freestanding carts and kiosks, and later in mall arts-and-crafts and frame shops like Deck the Walls. The mall carts and kiosks were a brilliant stroke: they made the 3-D posters self-advertising, like hula hoops or Frisbees. Each mall cart, to borrow Baccei's conceit, was like a breeder reactor. Excited shouts of "I see it!" fetched crowds. Local newspapers and TV stations picked up the craze. Sales shot up higher.
The posters retail for $19.95 to $24.95. Figuring in a keystone markup for the kiosk vendor or store owner, that means NVision receives around $10 for a poster it probably pays about a quarter to have printed. "It's been lucrative," admits Bielinski, whose headquarters staff now totals 25, including computer artists who labor as long as two months per poster. "What we did shrewdly in 1993 was take the time to set up a good nationwide distribution system: 10 reps with warehouses across the country. By doing everything ourselves, we created more overhead, but we also get the lion's share of the profit."
And Baccei, odd as it sounds, is grateful for every nickel of NVision's success. Not only did NVision help fan the fad, but its ample profits helped lock it into a poster-dominated strategy that enabled Baccei to counterattack by launching his long-term vision for N.E. Thing Enterprises. Fate dealt him another helping hand in the person of Mark Gregorek. Gregorek, a veteran licensing agent, acknowledges the frequency of the megahit in the very name of his company, Blue Moon Licensing. Like a prospector knee-deep in a mountain stream, he pans for gold in dusty flea markets, boardwalk T-shirt stands, and trendy urban gift shops. When a friend faxed him a copy of Baccei's Pentica ad, Gregorek tried to see into the picture but couldn't -- until one day in February of last year, when he was leaning back in his chair, talking to someone on the phone, and, bingo -- seeing was believing. "I knew this was it, the mother lode." Gregorek pressed on.
Baccei, who was ready to learn about licensing anyway, agreed to a meeting the day after Gregorek called. One indication of how well they hit it off: their only contract, more than a year and many millions of dollars in the pipeline later, is an oral one. Not only did Gregorek's contacts prove invaluable, he became a key sounding board and strategic adviser.
One of the first things Gregorek and Baccei discussed was the importance of creating not just a brand name, but the brand name in the emerging field of 3-D illusions, which at last check showed at least a half dozen companies pushing products. In his (yes, out-of-print) book How to Create Your Own Fad and Make a Million Dollars, Ken "Wacky Wallwalker" Hakuta begins chapter 4, "Name That Fad," by writing: "Think if I had kept the name of the creature that arrived by mail that day: 'Octopus.' . . . As a book is judged by its cover, so a fad is judged by its name." The name Stare-e-os, Baccei and Gregorek realized, was hampered by audio implications and simply wasn't powerful enough. They brainstormed: Inner Eye, Deep Vision -- and then agreed on Magic Eye, the name Baccei's Japanese publisher had used.
Next they made what was a tough decision, especially with a short-life-cycle fad product: to forgo a good chunk of short-term profit in the hopes of longer-term gains. The thinking: Let NVision have the big profits in posters. How many posters are people going to buy, anyway? N.E. Thing would make it look as if it were trying to wrestle posters away from NVision by simultaneously licensing images to several poster companies. Meanwhile, by getting into books, comics, school supplies, clothing, computer screen savers, and greeting cards -- a whole universe of other licensing deals -- N.E. Thing would fan out quickly, capturing markets, earning royalty payments, and simultaneously reinforcing the Magic Eye brand name.
The strategy worked as planned. "When Tom licensed his images to poster companies, it scared us. We were afraid of lower-priced products," admits Bielinski, who has maintained his prices by emphasizing art-print quality and by himself licensing images, such as Bugs Bunny and Marilyn Monroe, for his prints. Although N.E. Thing's $2 million in sales last year (a quantum leap from $150,000 in 1992, when Baccei was still president of Pentica) didn't come close to the $13 million in revenues NVision claims for 1993, Baccei expects 1994 licensing royalties to exceed $10 million. He's confident he'll gain the upper hand in what he pegs "the fad year" for his product. That, from the start, was one of his goals.
Another was to leverage the fad, so that after its inevitable peak and diminishing public interest, he'd not only be "set for life" financially but also be set up for the next line on his rÉsumÉ. This, according to Baccei's plan, will involve a character named Wizzy Nodwig, an adolescent wizard with his hat pulled down over his eyes. The name is a playful twist on computer jargon WYSIWYG (what you see is what you get). With Wizzy, what you see is "nod" (not) what you get. Wizzy first appeared as part of the Magic Eye logo on the cover of the second book and, only at Baccei's insistence, was added a few weeks after the debut of the Universal Press Syndicate feature as a two-dimensional prop for hints to its hidden image.
"Wizzy's not like a sorcerer's apprentice who doesn't deserve to wear the sorcerer's hat," explains Baccei, who's already fleshing out an obvious alter ego in the person of a hero in an animated cartoon series. "Wizzy's supposed to be a magician. We all root for him because we know he's well-intentioned. However, the magic doesn't always do quite what he expects."
Baccei couldn't hope to "buy" the weekly exposure Wizzy now receives each Sunday morning in papers such as the Chicago Sun-Times, the Denver Post, and the New York Daily News, some of which have given the Magic Eye prime space -- the front page of the comics section above the fold. The combined circulation of the 230 to 250 participating papers easily tops 20 million. Likewise, the General Mills deal offers another mass-market penetration that pays N.E. Thing handsomely to solidify its Magic Eye brand name and introduce kids to Wizzy Nodwig.
All licensing deals, in fact, have been viewed through this eye-on-the-future filter. Thus did Baccei turn away from a possible poster deal with Zima (landed by NVision) but accept a call from CBS to help produce a 16-page sales booklet for the company-owned and -operated TV division. You guessed it: the cover will contain a 3-D image of the CBS eye logo. "Don't tell CBS, but I'd probably pay them for the opportunity to do this job," says Baccei, eager for some network contacts and a leg up with the legions of Fortune 500 advertisers who will be sent the CBS sales booklet.
"I see this [the fad] as the first stage of a rocket," Baccei says the next morning in a meeting his lawyer has arranged with some Boston investment bankers. "I'd like to see this as a creative multimedia company. I'm talking Disney of the 21st century. Why shouldn't I aim big?" says Baccei, who is dressed in a pink short-sleeved shirt and jeans, to a semicircle of suits. A moneyman, who only moments before had said, "Wow, this is cool," upon successfully viewing a Magic Eye image for the first time, has apparently snapped back into less starry-eyed focus. "You already hit the ball out of the park," he suggests. "Just circle the bases and take a shower."
Baccei, however, isn't ready to retire and live the easy life. He drives a three-year-old Subaru. He wears a $50 Casio watch. "This is my yacht," he says, swiveling in his chair to take in a room full of computers staffed by three artists working on images. He says he knows it's foolish to imagine he'd hit another home run, that he'd be happy stroking singles. His dream, for the second stage of N.E. Thing Enterprises, is a Hollywood-like work cycle: months of intense creativity followed by creative relaxation. Something similar comes through in Baccei's foreword to the second Magic Eye book. "It was Wizzy who once said: 'The secret is to find the balance between order and chaos . . . to find your place in the almost symmetry."
Such "manic bursts" appear to be a hallmark of the fad person, says Christopher Miller, professor of marketing at Rice University, who has studied and written academic papers on fads. His assessment of Baccei's hopes for a Wizzy Nodwig animated series? "If he can leverage it past the pure novelty, past when six months or a year from now people are saying, 'Seen it. Done it. What's new?' he may be successful," says Miller, acknowledging Baccei's strategically improved chances of a second hit. "But the odds are so low to begin with. No one really knows what makes these things go. There's so much randomness. It's a lot like gambling. I think it's hard to maintain the attitude, 'Hey, I got lucky. I was in the right place at the right time,' because the ego takes over."
Not many slot-machine winners, he reminds us, hit the jackpot and successfully swear off casinos. Imagining Wizzy Nodwig rising to a possible peak, Miller talks about the real profit in children's cartoons -- the plastic figures and dolls. "That's where the money is. That's nirvana."
Yes, Baccei and Gregorek have thought those thoughts.* * *
John Grossmann is a freelance writer based in Jamison, Pa.
FADS: THE ULTIMATE CAPITALIST TOOL?
What is a fad? "A fad," says Ken Hakuta, who made some $20 million selling Wacky Wallwalkers in the 1980s, "is something that gives just a couple of minutes of extreme fun. It can be useful. It can be useless."
"A fad implies a convulsive market response," says John Kao, who teaches a course on creativity at the Harvard Business School.
"A fad is a lot like a niche brand, but instead of a very loyal, small segment of the market, you see an intense loyalty by a large segment over a short period of time," says Wharton Business School marketing professor Pete Fader. Long-lived niche brands -- for instance, Freedent Chewing Gum for denture wearers -- are, in fact, as rare as fads, according to Fader. He maintains that most niche products, like light beer, soon become a category unto themselves.
"There's definitely a feeding-frenzy quality to a fad and a short window of opportunity," says Christopher Miller, a marketing professor at Rice University, who has "spent a good bit of time thinking about fads" and writing about them as well. Miller believes a fad spreads like a joke and dies like a joke that's made the rounds: when there's nobody left to tell it to. "Fads are sort of the ultimate capitalist tool, the ultimate get-rich-quick scheme. Thousands of entrepreneurs dash themselves on the rocks so one can survive," says Miller, who admits, "I don't have a really clear definition of a fad."
Like pornography, which Supreme Court Justice Potter Stewart said he couldn't define but knew when he saw it, a fad is generally recognizable once it's rolling like a great sales avalanche. Out-the-store, round-the-block lines are a good sign. So, these days, is a big buzz on electronic mail. The 3-D-illusion fad was clearly gaining momentum when the downtown branch of the New York bookstore Shakespeare & Co. sold virtually its entire initial order of the first Magic Eye book -- to its employees, before the book even hit the shelves.
A FOLLOW-UP ON FOUR FABLED FRENZIES
Cabbage Patch Kids
What began in the mid-1970s as a hand-stitched quilted sculpture selling for $100 overwhelmed the 1982 Christmas season after the doll's creator, Xavier Roberts, granted Coleco Industries a license to produce a smaller, mass-market version. Closing his broadcast one night, CBS anchorman Dan Rather did his part in fanning the fad. "They're cute. I'll take two." The following year, when supply came more in line with demand, American kids "adopted" more than 3 million Cabbage Patch Kids at $20 to $30 each.
End of story, right? Wrong. Though far from the media spotlight, Cabbage Patch Kids, under the current license holder, Hasbro, are now entering the world at an even more prolific rate than a decade ago. More than 75 million have been sold since 1983. The handcrafted version, still available for adoption at Roberts's BabyLand General Hospital, a popular tourist attraction in Cleveland, Ga., currently sells for no less than $190. Signed, special-edition dolls go as high as $650.
If a fad is here today, gone tomorrow, then perhaps Cabbage Patch Kids is not a fad but an ongoing fancy.
Ken Hakuta, who struck it rich with a tacky-to-the-touch rubber octopus and anointed himself Dr. Fad, extended the life of his Wacky Wallwalker by taking it off the market. A must-have item in 1983, when he had as many as 350 workers turning out Wacky Wallwalkers in a Korean factory, Hakuta stopped production in 1985 and then milked the fad dry by selling more millions to the Kellogg Co., which included them as premiums in cereal boxes as recently as 1991.
He disconnected his 800 fad line (which at its peak was taking more than 400 calls a month) earlier this year, hosted his last fad fair in 1992, and stopped producing his syndicated Dr. Fad's Show, though it's still televised in reruns in 13 countries. These days Hakuta runs Tradex Corp., based in Washington, D.C., and designs and manufactures small premium-style science toys. People still come to him with all sorts of ideas. He hasn't seen a second fad in the rough yet -- except perhaps when speaking at grade schools. "Maybe only 25% of third to sixth graders know what a Wacky Wallwalker is," says Hakuta. "When that percentage falls a bit lower, I might consider bringing them back as a nostalgia item." Maybe, he says, on the Home Shopping Network.
What board game flopped at the 1982 Toy Fair and went on to take the country by storm, selling about 20 million copies in 1984 alone? The answer, of course, is Trivial Pursuit, which made millionaires of Canadian buddies Chris Haney and Scott Abbott, and Haney's older brother John. The fad year long over, the game and its offshoots (travel packs, a children's version, and annual year-in-review editions) continue to sell more than 1.5 million units each year in 19 languages.
The game's inventors wrote their last question long ago but have had a hand in developing a CD-ROM version due out soon. They have resisted the temptation to create another game, preferring to indulge themselves in such projects as golf courses, racehorses, a junior hockey team, and part ownership in the Skydome in Toronto.
The Pet Rock
More so than any other product, the Pet Rock seems the quintessential fad. Dressing up a barroom quip, a clever California advertising copywriter sold some 1.5 million ordinary beach pebbles at $4 a pop, proving packaging is all. Hearing his friends complain about how expensive it was to care for their dogs, Gary Dahl joked about his pet rock and was soon writing a spoof of a dog-training manual. The fad broke in October 1975 and was dead as a stone the next February, giving Dahl an Andy Warhol-like five months in the spotlight. He had to give away tens of thousands of unsold Pet Rocks.
That didn't stop him from trying for act 2. He broke even on 100,000 Sand Breeding Kits (male and female vials of sand that could be mated to produce deserts or kitty litter), lost money backing Red China Dirt ($5 tubes of soil allegedly smuggled from communist China), and for a time ran a consulting business to evaluate and fine-tune other people's fads-to-be. "I must have looked at two a week for 18 years," says the 57-year-old Dahl, who now produces TV commercials and videos for corporate clients and whose unlisted telephone number does not keep the hopelessly hopeful from his door. "I'm not sure I can define a fad, but I know what won't sell. I received a box of it yesterday: a condom for your floppy disk -- to protect against computer viruses.
"My advice to those who succeed with a fad? Enjoy it while it lasts. The Pet Rock was fun, but I let it go on a year too long. I wanted that next year. I believed my own publicity, and I think my ego got in the way of my common sense."