The story of Pretty Ugly begins with two people who never wanted to work at a toy company.

When David Horvath and Sun-Min Kim met at Parsons School of Design in 2001, the pair quickly bonded over their love for design and their hope to create toys with a meaningful message. They also fell in love. But just as their relationship began, Kim's student visa expired, and she moved back to Korea.

But the couple decided to stay together. "I sent her a letter after she went back and signed it with a doodle of a little lumpy monster at the bottom," says Horvath. "She sewed a replica of the little drawing and sent it back to me as a gift. And I realized, that the toy we had always talked about making was in my hand. I thought, 'This is it.'" And so the Pretty Ugly empire was born.

Before he even called Kim to thank her, he showed the doll to a friend. This friend happened to own a small knick-knack store called Giant Robot, and immediately asked Horvath for 20 of the dolls.  Horvath broke the news to Kim. "She made and sent me 20 more," he says. "I dropped them off at Giant Robot, and, by the time I got home, I had a message from my friend saying they had sold out."

Over the next 18 months, Kim sewed 1,800 dolls. She sent each batch to Horvath, who would then take them to a growing list of small stores, which included hip furniture stores, card shops, and kid stores.

"We realized that these dolls had huge reach. They're for the 8-year-old girl who wants to play and the 34-year-old woman who wants something funny on her modern furniture," says Horvath.

But it was about this time, in early 2003, that Kim put her foot down. "She said that her fingers were turning purple," laughs Horvath.  "This was the turning point, the moment we decided to take this business to the next level."

The first step: Kim came back to the United States for the business—and to marry Horvath.

That February, the couple got a booth at the International Toy Fair, an annual toy-ganza held in New York City. The response was immediate and positive, Horvath says the MoMA, Barney's, and "like Frank's store in Indiana" were all charmed by the Uglydolls.

The formula for success, according to Horvath, is that the dolls tell a story. For example, there's three-eyed Peaco, who's coy and friendly, and floppy-eared Ox, whose name means hugs and kisses. "To us, ugly means unique and different. It's about celebrating what makes you, you," he says. "I think that's an important message for everyone."

And it's the message and story that is pushing the business forward. Already this year, Pretty Ugly has sold twice the number of Uglydolls as it did last year. (Though Horvath won't reveal any numbers, he says "millions upon millions" of dolls have sold.) There are Uglydoll calendars, books, lunch boxes, and action figures. A trip to the website is a portal into an animated world of funny little creatures, and serves as another community-building and retail platform. Horvath says they are even branching out into the entertainment world in the near future.

"After 10 years in business, it's crazy to think that now there are people that have grown up with our dolls," says Horvath. "It's been so meaningful for us to know that the original idea has endured and made an impact."