Anticipation is a central tenet of Budnitz's marketing philosophy. Waiting creates value. Time is a commodity, and when we invest a chunk of it, we are almost certain to perceive the product we waited for as valuable, whether it actually is or not. Or, to look through a Paul Budnitz lens, it becomes beautiful.
"Business is a vehicle to make something beautiful," he says, summing himself up. "And my basic business plan, if you could call it one, is just to make and sell beautiful things and try not to be stupid about it—make sure it's at least possible to make a profit—and just assume that it'll work itself out and make money. This usually works, and occasionally doesn't."
You Expected a Less Unusual Backstory?
Budnitz is the slender, eccentric son of a nuclear physicist from Berkeley. He has a prominent nose, a fondness for meditation, and the uncanny ability to recognize—and create—cool things. "I've been running businesses my whole life," says Budnitz, and he's not exaggerating. Most summaries of his early life begin with the fact that he was writing safety-analysis software for nuclear power plants by age 15, but the entrepreneurial spark was actually struck a bit earlier, in eighth grade, when he would hop the train to Chinatown in San Francisco, buy fireworks, and resell them to his friends back home.
This wasn't your run-of-the-mill teenage black-market operation, either; business was so good that he couldn't keep track of the orders, so Budnitz computerized the orders using teletype machines on the University of California, Berkeley, campus, and that really streamlined the operation, until an IT guy discovered a bunch of orders for fireworks on the campus computers and reported the matter to the police, who showed up at the house and put an end to that business.
After high school, Budnitz decamped to Yale, where he studied film while also starting a business that bought, altered, and sold vintage Levi's and Air Jordans to global collectors. (Budnitz sold a pair of Air Jordans in Japan for $16,000.) After graduating with a degree in fine arts, he moved home to the Bay Area and focused on finishing a pair of movies. Wanting to edit on a computer but finding no software for doing this, Budnitz hacked his Macintosh and cut 93 Million Miles From the Sun. The film was the first ever edited on a home computer—a feat reported in the magazine Wired—and it won a prize at the 1997 Berlin International Film Festival.
Hacking would be a recurrent theme in his early years. His next start-up was MiniDisco, a company that hacked Sony MiniDisc players—a new portable music player he had discovered in Tokyo—so that they could be used as recording devices. MiniDisco boomed into a $7 million company by 2001, but Budnitz sensed that its days were numbered (Apple's iPod would be released later that year), unloaded the company, and turned his attention to Kidrobot.
Budnitz was a frequent traveler to Asia, and he found himself enamored of a handful of artful toymakers who were producing high-quality vinyl toys that sold in stylish shops, for large sums, to adults. What a great idea, Budnitz thought. This is so beautiful, and there's no market for this.
So he created one. At first, Budnitz merely imported toys and sold them on a website he built and coded himself. Eight months in, he opened a store on Haight Street in San Francisco. A few months after that, Kidrobot was producing art toys of its own and relocating to New York. There, Budnitz expanded the line and held on as Kidrobot's growth took off.
"When I first started, it was really hard to explain to people what I was doing," Budnitz says on the Kidrobot website. "People would ask, 'Are they art or are they toys?' And I'd say, 'Both—and selling them is part of the artwork, too.' " It was, at the time, a pretty revolutionary idea. "He created the whole thing, single-handedly," says Frank Kozik, one of the first artists Budnitz approached (and the creator of the Labbit character). "Paul was ahead of his time, with enough money lined up to be ahead of the curve and lose money for a few years and then take full advantage when it broke. He was there first, and Kidrobot will be there last."
Clever marketing helped make Kidrobot critically acclaimed and commercially successful. Budnitz mined the quirky corners of pop culture, sought out the coolest street and graffiti artists, and partnered with the edgiest brands and designers. He created demand by making limited editions at all price points—by making only 10 versions of a $5,000 toy, say, while also producing a collection of $5 characters in which certain ones would be very difficult to find. You might buy the whole set twice in search of one final piece. It is, of course, a classic piece of salesmanship best deployed by baseball-card makers.
Certainly, one of Kidrobot's shrewdest moves was the creation, in Year Two, of its two most popular characters, Dunny and Munny. Each of these is a standard mold of a character, manufactured in white vinyl. Dunny is given to artists to customize. Those customizations are then reproduced in very limited editions, except when they're not. Munny, on the other hand, is sold blank, the intention being that the buyer does the customization himself.
To this day, Dunny and Munny dominate Kidrobot's sales; they are manufactured in quantities of up to 50,000 and yet are continually reinvented so as to seem fresh. So iconic are the designs that in 2007, New York's Museum of Modern Art acquired them for its permanent collection.
