Inside the Smartest Little Company in America

Whit Alexander and Richard Tait, founders of Cranium Inc., had never run a business before. But they did have one thing going for them: brains. That's why they managed to create the fastest-selling independent board game in history.

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The creators of the best-selling game Cranium just can't stop creating hit products. How can a company this young be so brainy?

Terry Archibald had worked at Cranium Inc. for only a few months, but he recognized at once that the company was betraying its own principles. Just back from vacation, the local editor of the French Canadian edition of the Cranium game was reviewing translations of some packaging language that had been chosen in his absence. Then he saw the phrase Épatants talents ("splendid talents"). Aware that the boxes for that edition were poised to go into production, Archibald wasted no time. He shot an E-mail to Cranium's marketing team in Seattle, strongly warning them off Épatants. As a concept it was dry. As a collection of sounds it clunked when spoken.

In short, it wasn't CHIFF.

CHIFF -- an acronym for "clever, high quality, innovative, friendly, and fun" -- is both the spirit that animates Cranium and the criterion by which all its decisions are judged. Far removed from rigorous quantitative metrics like Six Sigma, the cheerfully subjective CHIFF has proved to be a reliable guarantor of quality. Cranium's 14 employees -- as well as its suppliers, distributors, and public-relations and advertising agencies -- are so well indoctrinated in CHIFF that they reflexively apply its standards to everything they do. Consequently, workable but uninspiring choices -- the use of the word Épatants, for example -- never get the chance to diminish the brand. At Archibald's suggestion, Cranium substituted Époustouflants, which not only has a more playful definition ("mind-boggling") but also looks funny and is a hoot to pronounce. "We bounced it off a native French speaker here in our office, and he immediately broke into a grin," recalls editorial director Catherine Fisher. "So we knew it was right."

Cranium-the-company has done so much right that Cranium-the-flagship-product sold more than 1 million units in 2001, making it the fastest-selling independent board game in U.S. history despite its $34.95 price tag. Profitable within six weeks of its first product's debut, the company encored this year with a children's game that started winning awards before it left the factory. Eight more Cranium offerings await release. Endorsements have been high profile and ringing: Julia Roberts told Oprah she couldn't stop playing Cranium, and the readers of Playboy and American Woman -- who presumably have little else in common -- are ideal consumers for the game, according to reviews in those magazines.

"Making the money is great, but there are awards and then there are rewards. Our survival and success will come from optimizing fun, focus, passion, and profits. That takes smarts, and we thrive on that."

All that success has been reaped by a very young, very small company in a market cratered with failures. Cranium is the first start-up for Whit Alexander and Richard Tait, but they have approached the venture as a game of skill, not luck, and are planning every move with a deliberateness and stated ambition rare even in serial entrepreneurs. Aware that they lacked experience both as company builders and in the toy industry, the cofounders have borrowed from the best, adapting marketing tactics from such industry greats as the makers of Trivial Pursuit and Pictionary and borrowing product-development strategies from Microsoft. At the same time, they have made smartly counterintuitive decisions about distribution and talent that seem to guarantee a steady stream of genuinely new and distinctive products.

Not surprisingly for a couple of guys whose products celebrate the kaleidoscope of human ingenuity, Tait and Alexander are at least as proud of their company's smarts as they are of its success. "Making the money is great, of course," says Tait, "but there are awards and then there are rewards. Our survival and success will come from optimizing fun, focus, passion, and profits. That takes smarts, and we thrive on that."

Making the opening move

With their boyish expressions and frequent grins, Alexander and Tait look right at home in a toy company. But it's just as easy to picture them wandering the halls of Microsoft, where they spent much of the 1990s. Tait, 37, a thin Scot whose speech is still flavored by the Glasgow region, lists "shepherd" on his rÉsumÉ, along with "Microsoft Employee of the Year." Alexander, 40, who has gray hair parted down the side, was an ecologist, teacher, and urban planner before landing at the software giant, where, among other things, he produced Microsoft's Encarta World Atlas on CD-ROM. The partners talk alike -- frequently finishing each other's sentences -- and have begun to think alike as well. Alexander recalls a recent impromptu market-research trip to Barnes & Noble: "I was watching this woman pick up Cranium when I felt a presence. It was Richard, watching her from behind the opposite bookshelf."

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