After a long spell of intense focus on one company, Paul Budnitz, founder of Kidrobot, is finding there’s nothing quite as liberating as being all over the place.
Foremost among his attributes, Paul Budnitz has impeccable taste, so it should be no surprise that when it came time to have a midlife crisis, his was exquisitely executed. Eight years after founding his most successful company, the art-toy emporium Kidrobot, the serial entrepreneur was feeling a little antsy. He had been ın New York City for what seemed like a long time, and had recently had his first child, a daughter; and because he had sold a good chunk of the company and assumed the role of creative guru, there was no longer any sort of anchor tethering him to Manhattan. He felt the time was right for a move.
That his unease with the city and with day-to-day management came in the midst of a recession proved fortuitous. Kidrobot's growth had been so dramatic over its short life that Budnitz hadn't had time to carefully consider each expansion. He took the company from two employees to 90—and from $300,000 in sales to more than $15 million—by making impulsive hires and when necessary assuming more responsibility himself. He designed and refined software, wooed artists, ran marketing, traveled to China to settle disputes with suppliers, and generally worked all the time. Things settled down by 2007, and Budnitz was able to back off a little, but Kidrobot was never exactly efficient.
It wasn't until 2009, the first down year in Kidrobot's history, that he realized his company was bloated, and that if he was going to put it in a position to get even bigger, it might first have to get smaller.
What if, he thought, we all move?
And so they did, to the crunchy city of Boulder, Colorado. On the surface, it was an odd choice. New York's gritty cool is practically infused into Kidrobot's toys—small, artfully made vinyl figures fetishized by kids and adults alike—many of which are designed or modified by edgy, urban artists who use the city's streets as their canvas. But videoconferencing and direct flights make location less important than it once was, and the abrupt relocation did two important things: It allowed the investors to keep Budnitz in the same city as the company he created, and it created an opportunity to rebuild the management almost from scratch.
"One of the reasons we moved, really, was to redo our nuts and bolts," Budnitz explained when I first called him to discuss a visit. "Which is much easier than doing it in the same office." It was the corporate version of skipping town rather than breaking up with a girlfriend, and it saved everyone the bloody purge that was inevitable had the company stayed in New York.
All employees were invited to make the move, but most had no interest in moving, and because Kidrobot's retailing has always been mostly Web based and thus location agnostic, the collision of circumstances provided for a kind of crazy kismet—a successful and still-ambitious company was able to hit Reset without actually changing its business. "We've hired people with more standard backgrounds," Budnitz says, noting that he had even replaced himself, removing the President from his title and retaining only Founder. "I'm no longer the CEO. I'm more in the design and marketing side now.
"What really worked out well about coming here was I felt like I already had the zaniness and the artist connections. I didn't really feel like I needed more edginess. But I started to realize that the back end wasn't strong, and it was affecting our ability to be more insane, more interesting."
Budnitz and his investors (he will say only that there are "a few" and that "some are private individuals") were also able to dip into Boulder's deep pool of adventure and outdoor-apparel businesses for key hires. "The way I describe it is, we got the best of the Midwest," he says. "We got these solid, supply-chain-oriented, sales-oriented people and a really great CFO." These people immediately corrected mistakes. For example, Budnitz had been with the same few Chinese manufacturers from Day One, and though he loved the companies' work, they had no incentive to keep prices low. Kidrobot's new supply-chain specialists, however, brought relationships that immediately opened doors. Manufacturers that previously had no interest in small first orders were now more open-minded, and Kidrobot's ability to shop among factories lowered costs, allowed more specialization (the company could now farm out vinyl to one factory and plush toys to another), and even had the unexpected benefit of boosting creativity. "We found," Budnitz says, "that we can now work with lots of materials, like wood toys, that we didn't have expertise in before." He couldn't believe how well it was all working out.
And an Illustrated Poster Shall Lead the Way
Boulder is a New Agey vortex of healthy people and tidy streets. Tucked up tight against the Rocky Mountains, which form the city's backyard, and yet just a half-hour by highway from Denver, it has a combination of clean air, comfortable living, and progressive ideology that make it a perfect place for contemplation and self-awareness. And it didn't take long for this juju to take effect on Paul Budnitz.
A few days before I arrived in town, the 43-year-old called to tell me that he had recently had a revelation that he thought was important to share, in case it might discourage my interest in his story. This is what he said: "I had this discovery, only about a month ago, that I'm really an incredibly superficial person. I had been trying to avoid this my whole life. We think superficial is a bad word. But it isn't. It means you can do a lot of things."
