But it made Gail worse than nervous. In January 1991, just over a year after she had joined the DaMert Co., she was hospitalized for seven days. "It was a kidney stone," she reports, "but I'm convinced it was from the stress." Notes Fred: "It was a tough year. I knew it was going to be rough on Gail, but I didn't know how rough it was going to be."
* * *
3. Domestic Affairs
How Will We Maintain Boundaries between Home and Office?
Before working together, the DaMerts rarely mixed business with their home life. Of necessity, Gail stayed mum about her often top-secret "Star Wars"-related work. Fred, hardly a typical entrepreneur, liked to leave work behind him and take refuge in what he called their "happy haven" of a home.
But in the fall of 1989, just as Gail was joining the business, they acted on an agreement they'd made five years earlier: to move closer to Fred's work. They chose a house 15 minutes away from the office in a stark development with barely a patch of grass on the lot. At least the house was brand new, which Gail appreciated because "I couldn't afford to worry about a stopped-up sink while I got this company on a sure footing." All in all, though, "No one was really crazy about it," admits Fred. To make the situation bearable, the two agreed to make the house a "five-year house." But in the interim, there was no more happy haven for the DaMerts. Their home, in effect, became a satellite office where Gail worked evenings and weekends and occasionally held management meetings. Their bedroom was so stuffed with office equipment that their bed was pushed into a lonely corner. "Why ruin a great office with a bed?" Fred quipped.
To counteract the deadening effects of bringing their work home, Fred proposed early on that they avoid talking business at home. But Gail overruled it. "Gail felt she really needed to talk about company stuff with me after hours," Fred says. "We put in a lot of overtime together. Things changed." While they had previously taken hikes together regularly around the scenic San Francisco Bay area, Fred began walking off into the Oakland Hills by himself while Gail let off steam at the gym. "I needed to work out my frustrations before going home," she says.
"We needed the extra space for ourselves," adds Fred. "You see the person across the dinner table and think about work. It isn't the greatest thing in the world."
* * *
4. Running the Business
What if Other Managers Come between Us?
Given her increasing alienation from her husband, it's perhaps not surprising that Gail began working closely with a sales and marketing consultant named Greg McVey. The DaMerts first contracted with McVey in mid-1991 to help install some basic sales-management systems, such as having someone call customers to see if they were interested in reordering products. McVey also scouted for other retail chains, like Imaginarium and Learningsmith, to carry the line.
By the spring of 1992, McVey had become Gail's new mentor, and he began guiding her into the very territory that Fred had hired Gail to guard for him: product development. Fred didn't object to McVey's presence, but he also didn't realize the implications of McVey's plans to overhaul the department. As McVey diagnosed it, "Fred had lost the fire in the belly." To the sales-driven McVey, developing the kind of off-the-wall products that Fred liked most, such as Space Phones, which promised to produce an "astro-sound," and the Radiometer, a solar-powered engine, was a waste of time. Those one-shot products are orphans, he told Gail, while the company's emerging lines of mobiles, glow-in-the-dark items, and puzzles would continue to generate sales and spin-offs.
After the lukewarm 1991 Christmas sales of the Movie Motion Zoetrope -- a toy version of a kinescope that Fred and fellow toy developer Bill Hanlon had spent $10,000 and more than a year working on -- Gail edged closer to McVey's view. Without telling Fred, she began working with McVey on a plan that would ultimately reduce Fred's decision-making power. That "major undertaking," as she described it, would "bring new-product development underneath sales and marketing."
On June 17, 1992, she called key managers -- including Fred -- to a meeting at their house. "This was my meeting," she says. "Fred didn't know in advance what it was about."
Armed with a flip chart and reams of statistics, Gail first pumped up Fred's ego by giving him a dazzling bird's-eye view of the company they had built. Recalls Hanlon, who had worked with Fred since 1989: "Ah, yes, 'the pie.' She showed the product families we had created and how much of our sales came from those products." From there, she deftly wound around to how the company now needed to "close the loop of operations" and make product decisions that would take into consideration market trends she had identified. That way, fewer orphans would be created. "I wanted to move the department from being inspiration driven to being market driven," she says.
Two weeks after the meeting, she sent Fred a stern memo. "Effective immediately," it began, "I am instituting a more formal procedure for the review and evaluation of all proposed additions to the DaMert Co. product line." Explains Gail: "He was being very passive-aggressive. He just kept doing his job the same old way."
