Unfortunately, the sample that Le Gette and Wilson brought with them -- made of collapsable plastic and covered in fleece -- fell apart when Howard went to try it on. "Well, you both went to Wharton, and you both seem pretty smart," said Howard, "so I guess I'll give you a chance." It didn't hurt, Howard says, "that they were two cute guys."
When Brian Le Gette went on the air on Friday night, November 10, 1995, the partners -- having raised close to $100,000 from 18 investors, most of them Wharton classmates -- believed in their hearts that it was now or never. In the first four minutes on the air, Le Gette sold nothing. In the next four minutes, he sold out -- 5,000 ear warmers, with another 2,000 people waiting on hold. During his next two appearances, in January, he sold 17,000. Soon he was a regular on QVC. "You couldn't pay for that kind of time today," he says.
"Brian can sell his ass off," recalls Bill Besselman. "Five thousand units in five minutes one night. After that, the train just took off."
In 1997, Le Gette and Wilson decided to move the company -- which had been known variously as the Gorgonz Group, Gray Matter Holdings, and Big Bang Products -- to Baltimore. There, Le Gette and Wilson were joined by Wharton classmates Bill and Autumn Besselman and by Jim Waring and Ty Matlin, toy designers who had worked for Milton Bradley. The idea going forward was to come up with a seasonal counterpoint to the ear warmer. Eventually, the name would be changed to 180s -- which was meant to emphasize the company's innovativeness. "Over time," says public relations specialist Natalie Van Buskirk, "people take things for granted, accept what they have, whether it is the best solution or not, and simply make do. They develop blind spots to what might be possible. We look at products differently and do a 180 on them."
Backed by a $1.5 million round of financing -- most of it coming from the original 18 Wharton investors -- the new partnership focused on developing what Besselman calls "crazy cool ideas." Some were just crazy: a radio-controlled kite-glider, a collapsable beach mat, a talking children's lunch bag. In late '97, Gib Mason, a Baltimore accountant who would eventually be CFO and later president of 180s, was brought in to help with a second tranche of financing. This one raised $1.97 million. Part of the money came from a private equity fund run by an original 180s investor, Tampa-based Wharton graduate John Touchton Jr., who invested along with three other individuals. In return, Touchton received a new class of preferred equity stock.
The real push began to come up with countercyclical products. Under a separate Kelsyus brand, the company turned to making sunglasses, beach towels, and pool flotation devices. A line of collapsable beach chairs that turned into backpacks became the most successful of these summer products. But the dynamic never changed. "The other products all together didn't deliver nearly as much revenue as the ear warmers," says Golkow.
But behind the ear warmers, revenue leaped from $1 million in 1999 to $7.4 million in 2000, and the work force almost doubled to 17. "We didn't make a dime," says CFO Mason. "But we didn't lose money either." The next year revenue and staffing both doubled, to $15.2 million and 36.
Along the way Le Gette and Wilson were learning to live the good life. Besselman, who has remained friends with both, recalls a vacation they took with their significant others in 2002. The venue was Vail, Colo. Wilson showed up in a new Hummer H2, while Le Gette drove up in a Porsche.
But over cocktails, the Wharton grads had a debate about the relative merits of single brands versus multiple brands, "BMW versus GM," in the words of Besselman. A former McKinsey & Co. management consultant, Besselman was surprised when he sensed that the discussion was drifting over the heads of Wilson and Le Gette. "That's when I thought to myself: 'Maybe they're not so good at operating a company after all."
Beneath the surface, all was not well. For one thing, Le Gette and Wilson had been taking note of their differences. "It always surprised me that they got along so well so long," says Daphne Howard. Le Gette, Howard recalls, was the big-picture guy. Wilson, says Howard, was more nuts and bolts, more focused on keeping the production line moving. Le Gette doesn't disagree: "Ron was all about getting the product on the shelf." Le Gette, by contrast, didn't want the product on the shelf "until it was perfect." It made, he adds, "for a great struggle" -- and a great partnership -- for a long time anyhow.
Wilson resigned as co-CEO two years ago. "You can't have two daddies," is how he explains it. "That was okay when we were a little company. But we weren't a little company anymore. When you have two daddies, and something goes wrong, the kids go to the daddy they like and complain about the daddy they don't like.
"Not good."
Even before Wilson left, Le Gette had set about changing the company. For one thing, he started hiring people who were more like, well, him. "The current 180s people," Le Gette told a reporter in February, "are my people. They aren't Ron's people. Who they are is a reflection of me." That's exactly right, says Curt Golkow. "They all looked like Brian -- GQ men and WASPy blonde women." They didn't come cheap, either: "Brian was good at incentivizing his people."
Le Gette's goal was to transform the company. In the early days, says former GM Rick Olson, who left the company following the Patriarch takeover, 180s found success by reaching for "the low-hanging fruit, the large retailers." The company's rapid growth -- fueled by sales of ear warmers to the May Co. and Federated Department Stores -- meant, says Olson, "that every other department in the company was trying desperately to keep up with sales. That was the adage: If you can sell it, we can build it."
It was in 2003 that Le Gette decided to change the company's name to 180s. Perhaps more important, he also changed the company's distribution strategy. Where the old business plan began and ended with sales to the big department stores, the new paradigm looked like a pyramid, with the department stores at its base. Under the new system, products would be introduced at the top. The entry product would be state-of-the-art apparel sold at specialty running and skiing shops. The initial buyers would be highly competitive athletes. As part of this new strategy, the company decided to sponsor a team of nonprofessional athletes, Team 180s.
After a year or two, the product would then find its way into nationwide sporting goods stores like Modell's and the Sports Authority. The user now would be a weekend runner or occasional skier. Only later would the same product wind up on the shelves of a department store for sale to the general public. It was understood that the new strategy might cost the company revenue in the first year for a given product -- when the target would be high-margin sales to specialty buyers -- but the theory was that it would lead to greater sales down the road when the product hit the department stores.
