For eight years I have been haunted by a character with a jack-o'-lantern grin and pipe-cleaner physique. His name is Jake. There was Jake, emblazoned on the sweat-soaked T-shirt of an early morning jogger in Rittenhouse Square in Philadelphia. There he was again, on a Frisbee sailing from teen to teen to teen near the boardwalk in Redondo Beach, California. There he was again, on a water bottle being shared by children in a park in Indianapolis. And there again, on no fewer than four baseball caps spied during an hour's souvenir shopping in Savannah, Georgia.

Jake is the inspiration-cum-mascot of Life Is Good, a 206-employee wholesaler and retailer founded in 1994 by brothers Bert and John Jacobs. Based in Boston, the company markets everything from apparel to dog dishes to furniture, but its chief product is optimism. The joyful-mawed Jake appears on much of the brand's merchandise engaged in a variety of outdoor pursuits: running or skiing or golfing or simply reclining in an Adirondack chair. Beneath this apotheosis of good clean fun appear the words "Life Is Good," or some equally rosy assertion.

In Jake, however, I see only my own blindness.

I first made Jake's acquaintance in 1998, when a press kit for Life Is Good, bundled with a shirt (pale blue, size XL), appeared in my office mailbox. Business editors can't resist passing judgment on new or unknown companies; reading about the then $2 million business I detected no seeds of greatness. All I saw was a commodity product, a stick figure, and a banality. Not only did I decline to write about the company, I walked around the office deriding it to my colleagues. I recall drawing a hangman figure with the caption "Yeah, Me!" on someone's whiteboard and proclaiming myself an entrepreneur.

Now granted, no business with a name like Life Is Good would consider me its target customer. I'm more the dark-night-of-the-soul type. My glass is half empty, the water's cloudy, and there's a dead fly bobbing on the surface. Still, I'm no cynic, and I have a pretty good sense of what's happening demographically in this country. How, then, did I completely miss the appeal of what may be the broadest mass-market phenomenon since The Simpsons?

Life Is Good is now an $80 million business with 5,000 distributors operating in 14 countries. The company, which has been profitable every year since 1997, offers more than 900 items in 14 categories. Its products are used by virtually everyone: toddlers, surfer dudes, college girls, grandmothers, and the occasional brute on a Harley. "We don't miss any demographics but we miss one psychographic--people who can't see the positive side of things," John Jacobs told me during a recent interview, during which I kept my dark underbelly discreetly cloaked.

The broad embrace of this brand--achieved with virtually no advertising--may stem from the different ways people interpret it. To the naturally chipper, it is a shout-out for the simple pleasures that enrich their lives. These are the things that make me happy, it announces. They're not expensive things; they're not things I dream about someday achieving; they're the things I enjoy here and now. In a sense, "Life Is Good" is "I'd Rather Be Surfing" minus the regret. I may not be surfing now, it says. But I have surfed and will surf again, and really, isn't that enough?

But "Life Is Good" has also become something of an anthem for survivors. The founders receive thousands of letters from people whose lives are demonstrably not good, because they are sick or have lost a loved one. Where other companies supply their stores with headquarters-authored mission and values statements, Life Is Good provides loose-leaf binders labeled "Fuel" and stuffed with thank-yous from people who have taken solace or inspiration from its message. Michael J. Fox, suffering from Parkinson's disease, has been photographed wearing Life Is Good products. So was Stephen King during his long convalescence after being struck by a van.

With the company climbing toward $100 million, winning plaudits from social-venture types, and eyeing an outpost in irony-drenched Manhattan, I decided it was finally time to swallow my prejudices and wrap my mind around the Life Is Good phenomenon. So I asked around. I talked to the founders. I bought a shirt.

And while I may never completely get Jake, I have developed a healthy respect for Bert and John Jacobs, who go by the respective titles chief executive optimist and chief creative optimist. The Jacobses rose to rag-trade riches on a combination of shrewdness and sincerity, all but eliminating the distinction between doing the right thing and doing the right thing for their business. I think much of what the Jacobs brothers have done is smart, most of it is interesting, and some of it is even (hold on…this is hard for me…) inspirational to brand marketers, wholesalers, nascent philanthropists, and entrepreneurs who worry that their company's proposition seems too simple to work. What follow are some lessons I learned from Life Is Good. The most important lesson, of course, was humility.

Work that birth legend. From the roof deck of their $8 million, 10,000-square-foot design center and flagship store on Boston's superswank Newbury Street, Bert and John Jacobs can see the site of their original business. Sixteen years ago they hawked $10 T-shirts featuring their own artwork (not Jake--he came later) from a card table on the opposite corner, making themselves scarce whenever the cops swung past. "It's a one-way street so one of us could always keep watch," says Bert Jacobs, who is now 41, the older brother by three years. "We had a folding table so we could pack up quickly."

That first business, called Jacobs Gallery, had other Boston area locations as well, all of them similarly ad hoc and illegal. The brothers also sold shirts door-to-door at college dorms up and down the East Coast for five years, living in their van and sleeping on piles of merchandise. It's a great story, Hewlett-Packard-two-guys-in-a-garage great. And the Jacobses are well aware of its allure. So they print the tale everywhere--on tags attached to their products, on cards dropped into shopping bags, on their website--even on some of their T-shirts. "I think it's interesting how many customers know the story about them traveling around selling shirts," says Carol Wilkes, co-owner of Highland Hiker, an outdoor gear store in Cashiers, North Carolina, that carries Life Is Good products. "You hear people telling it to each other. Someone might be in the store looking at things on the Life Is Good table and another customer says to them, 'Do you know about these guys? They started out of a little van.…"

Eschew irony. One reason I initially missed the charm of Life Is Good is that I misinterpreted its message. I sensed a smugness there, as though the wearer were proclaiming, "My life is good," or else a willful blinkeredness: "Life is good if you make enough money and live in a First World democracy." But the Jacobses mean neither of those things. Rather, the words are an exhortation to appreciate the here and now. "Don't determine that you're going to be happy when you get the new car or the big promotion or when you meet that special person," explains John. "You can decide that you're going to be happy today."

John points out that the assertion is, in fact, a modest one. "It's important that we're saying 'Life is good,' not 'Life is great," he says.

John also points out that the assertion is, in fact, a modest one. "It's important that we're saying 'Life is good,' not 'Life is great' or 'Life is perfect," he says. "There's a big difference. We know that there are lots of bad things in the world. But overall life is good. You have to focus on the good things and help others to focus on the good things." That message has resonated with people facing adversity, an unanticipated development that has made the business more meaningful to the Jacobses. Leafing through the brothers' scrapbooks, I come across photos of smiling children wearing Life Is Good caps to cover the ravages of chemotherapy. Recalling my early assumptions, I give myself a mental swat.

Listen to your friends. Disregard the experts. The Jacobses don't have business backgrounds. Bert majored in communications at Villanova, and John studied art and English at the University of Massachusetts, Amherst. What they do have is a shared gut in which they place enormous trust. In general, their instincts have guided them well, chiefly in the direction of measured expansion and rapid diversification (new product categories, new distribution models, international growth, real estate investments).

The brothers also trust the instincts of their vast circle of friends and employees. It was a bunch of chums who initially selected a drawing of Jake (done by John) and "Life Is Good" from an assortment of images and slogans the Jacobses were testing out during a between-sales-trips kegger in the early '90s. A number of friends have since joined the business, and last year the Jacobses made four of them partners, giving each 5 percent of the company. The founders hold the remaining 80 percent. "These aren't outsiders who came in all of a sudden saying they could get us from A to Z," says Bert. "They are our brothers and sisters in this thing, and their blood, sweat, and tears continue to pour into it."

By contrast, Life Is Good has no formal board of advisers, and the Jacobses aren't eager to create one. They readily seek expertise on narrow questions (the optimal square footage for company stores, for example) but generally shrug off broader, strategic counsel. Their conversation is peppered with sentences that begin "People told us…" followed by a summary of the advice: "Don't waste time distributing through mom-and-pops," "Don't locate your flagship store on Newbury Street," "Do spend money on an advertising campaign." These stories all end the same way--the Jacobses buck conventional wisdom and their own judgment proves correct.

The three most important things to a marketer are positioning, positioning, and positioning. The Jacobses have carefully staked out their rung on the marketplace ladder: premium but not exclusive. Life Is Good products cost about 20 percent more than middle-of-the-pack offerings. Life Is Good T-shirts, for example, are $20 at retail compared with an average $15 or $16 for most competitors. The company wholesales those shirts for $10 and spends about $6 producing them. "We'd like that to be closer to $5, but we use the best cotton we can get, it's double-reinforced stitching, and we garment-dye the product to give it a weathered look," says Bert. Margins are similar or better on other products, with the lowest being 40 percent and the highest 70 percent. Headwear and jewelry, which was introduced last year, are especially profitable.

The decision to buy and sell quality is an example of the Jacobses' defiance of expert advice. "Smart people that we worked with said, 'Guys, your message is what's selling shirts, and the graphics and the colors. Put it on a Fruit of the Loom and you'll make three bucks more every shirt," says John. "But we want this to be people's favorite shirt and we want it to still be their favorite shirt 10 years from now. It won't be if it's got holes and the collar's stretched out."

Life Is Good manufactures products around the world; most of its apparel is made in Peru. The Jacobses anticipate critics will observe that life isn't so good for unemployed textile workers in the United States, but argue that they are providing jobs for people without a safety net who would otherwise be much worse off.

Preserve Main Street. The ubiquity of its products notwithstanding, Life Is Good doesn't want to be Starbucks. The Jacobses detest the homogenization of retail that is turning downtowns into Stepford zones and possess an abiding affection for the mom-and-pops that have always been their backbone. Rather than Gap-ify, they plan to open no more than five to 10 corporate stores in total.

But without a glut of company stores, Life Is Good had no widespread physical showcase for its eclectic product line, which fills a 136-page catalog and includes tire covers, picture frames, and dog toys. Franchising would send the iconoclastic Jacobses down cookie-cutter lane and entail the assumption of legal liabilities; in addition franchisees couldn't benefit from corporate advertising, given that Life Is Good doesn't do any. So the brothers hit upon an intriguing alternative: Genuine Neighborhood Shoppes. A GNS is an independently owned and operated business that sells Life Is Good products and nothing else. GNS owners get some signage, a 10 percent discount on merchandise, a few exclusive products, and as much or as little help setting up stores as they desire. They pay no franchise fees, but they do agree to propagate the Life Is Good philanthropy model (more on that later) in their communities. The company expects to eventually have 300 such stores; there are now 40, most run by retailers who have a history with the company or by former or current Life Is Good employees.

So, for example, Shannon and Michael Bourassa and Shannon's brother Sean Patel recently opened Blue Monkey Trading Co., a GNS in Tucson. The Bourassas are steeped in Life Is Good culture--Michael has worked there for five years and is head of the receiving department--so they eagerly accepted the company's help with layout, merchandizing, website art, signage, and fixtures. "We really haven't come up with much ourselves," says Shannon Bourassa, who handles the finances from the couple's home in New Hampshire while her brother manages operations in Arizona.

Bob Ehrlich, by contrast, designed his own layout and décor for Simply Comfortable, a GNS in Lahaska, Pennsylvania. Ehrlich needed flexible shelving to accommodate a very small space and chose white fixtures to make the products' colors stand out. (Life Is Good favors natural wooden floors and walls made from dismantled barns.) "They're up in New England so they have a somewhat different point of view, but they looked at my plans and understood what I was doing," says Ehrlich.

"I think this notion of avoiding the cookie-cutter approach is cutting-edge, like mass customization where you're able to adapt something to a local market," says Frank Hoy, director of the Centers for Entrepreneurial Development, Advancement, Research and Support at the University of Texas at El Paso. "It also gives both the licensing company and the licensee more flexibility in their relationship." The cost is in control, says Hoy. As GNSs proliferate, "they will end up with more people in their network they don't know, and so trust counts for less."

Be a good supplier. Life Is Good is primarily a wholesaler: Its job is to keep distributors stocked with the right volume and the right mix. One way the company keeps up with demand is by stockpiling products in a plant in New Hampshire and holding off on screen-printing--the final phase of production--as long as possible to ensure maximum flexibility. Decisions on what designs to print are made by a team heavy in experience from the event-apparel industry. "These are guys who would wait until the fourth inning of the World Series before they started printing up the Red Sox T-shirts," says Bert. "They're used to pulling things off at the last minute."

The company's retail customers give it generally high marks for service, although a few cite supply-chain hiccups as the business has expanded. "To serve a company our size you have to have your back room in order, and they do very well in terms of delivery," says Sally Jewell, CEO and president of REI, an outdoor gear retailer with just over $1 billion in sales. Last year Life Is Good was among REI's top 50 best-selling suppliers, out of 1,500, and one of 15 nominated by management for Vendor of the Year.

Small retailers--which constitute about 98 percent of Life Is Good's accounts and 60 percent of its business--single out other aspects of its performance. "They do their inventory right so it's deep, with lots of categories and styles, but not so wide in terms of colors that you can't decide what to carry," says Greg Rowe, co-owner of two small Genuine Neighborhood Shoppes--both called Life According to Jake--in Gatlinburg and Knoxville, Tennessee. "The owners' enthusiasm filters down through every employee," says Julie Titone, owner of Harbor Goods, a GNS in Gloucester, Massachusetts. "From the warehouse crew, the customer service reps, the returns department--everyone is a pleasure to work with."

The Jacobses' ability to maintain that service level will be tested by the company's growth. Genuine Neighborhood Shoppes move far more Life Is Good product than do multibrand distributors, so their demands will by definition be greater. Fortunately, the GNSs have more predictable needs, which makes stocking them easier. In addition, the company is investing in just-in-time reporting systems to ensure that a run on Jake-on-a-mountain-bike caps doesn't leave the storeowner staring at an empty shelf.

The other challenge involves product diversity. Life Is Good has always been a strong presence in resorts, beach towns, and other destination areas; now it is expanding into cities and communities where people shop year-round. That means refreshing product lines more than twice a year--which has been the schedule until now. Toward that end the Jacobses are adding a holiday launch, and are also considering a resort season line.

Choose your IP battles. Another thing that bugged me about Life Is Good was the trademark question. What made these Joes think they could protect what may be the most easily ripped off intellectual property since the smiley face?

The answer is that they know they can't, or not completely. The company has girded itself with a portfolio of trademarks on phrases ("Life Is Good," "Do What You Like, Like What You Do") and images (notably Jake). Still, "we probably get three or four imitations a week," says Bert. "There was 'As Good As It Gets.' There's one right now called 'The Good Life." Such copycats, as well as parodies like "Life Sucks," which appeared briefly in department stores a few years ago, earn a warning letter from the company's counsel. Life Is Good is far more concerned about blatant knockoffs. "We've had people fill whole stores with counterfeit Life Is Good stuff," says Bert. "We go after them hard."

The Jacobs brothers are well aware that they embody the thing that makes them money. They labor under the onus of happiness.

But even knockoff artists are only a headache. Migraines come from large corporations that adopt "Life Is Good" as an advertising slogan, as Miller Brewing did briefly a few years back. The Jacobses are now embroiled in battle with LG Electronics, the $34.7 billion Korean corporation, which has launched a "Life's Good" campaign. Interestingly, the Jacobses--who have resisted the enormous temptation to co-brand--say a compromise might have been possible. "What we would have appreciated was a phone call saying, 'Is there a way we can work this out?" says Bert. "We probably would have found a way. Let's hold hands rather than have a fistfight."

Heed Marley's ghost--mankind is your business. Life Is Good's approach to philanthropy is among the most ambitious and focused I have encountered in a small company. It was born in the aftermath of September 11. "People were asking internally, 'Is the gig up? Can we still sell this message? Is life still good?" recalls John. The brothers responded by taking close to $30,000 they had set aside to do their first-ever advertising and using it to establish a charitable program for September 11 families. The following year they selected a pair of long-term causes, also family focused: Camp Sunshine, a retreat for children with life-threatening illnesses, and Project Joy, which provides play therapy for traumatized children. And they created a vehicle that similarly resonates with the Life Is Good brand: seasonal outdoor festivals.

The first four Life Is Good festivals--pumpkin-centric extravaganzas the past three autumns and a watermelon festival last summer--have taken place on the Boston Common. They feature the sorts of things you would expect (games, picnic foods, face painting) and are free to the public. Money comes from contests, donations, and T-shirt sales. (The watermelon festival raised more than $200,000.) Next year, Life Is Good expects to throw 23 pumpkin festivals on a single fall day, with the goal of raising more than $1 million. Eventually, every Genuine Neighborhood Shoppe will be expected to hold the events in their communities, pitching them under the Life Is Good umbrella.

The festivals are effective for many reasons: They are perfectly in sync with the company's marketing message, can be rolled out in a systematic fashion, offer a refreshing change from endless walkathons and galas, give employees, customers, and suppliers a worthy cause to rally round, and raise Life Is Good's public profile to boot. "Every day we make this more and more a central piece of what the company is," says Bert. "If you ask employees what's the most important thing we do, they'd say the festivals."

Be the brand. As noted before, Life Is Good doesn't advertise, and I picture Madison Avenue gnashing its collective teeth over the lost opportunity. In attitude and affect John and Bert are Jake made flesh. They are ardent in their leisure pursuits, which include basketball, hiking, kayaking, and ultimate Frisbee. The two appear so youthful and vigorous that meeting them is a Dorian Gray experience. I was tempted to search out the portrait of their aging, moldering selves that I assumed must be secreted somewhere at headquarters.

Consumers may not be aware of the affinity between the brand and its creators, but Life Is Good's retail customers mention it again and again. "What you see in the brand is how they live their everyday life," says Teague Hatfield, owner of FootZone of Bend, an Oregon running gear store that has sold Life Is Good products for a decade. "They do a wonderful job practicing what they preach," says REI's Jewell. "They are a real inspiration to our team."

The Jacobses, of course, are well aware that they embody the thing that makes them money. It's an enviable situation. Laboring under the onus of happiness, they must keep their hours sane, their workloads manageable, and their vacations uncanceled--for the good of the business. "Like Charlie Parker said," remarks John: "If you don't live it, it won't come out your horn."

Supply infinite demand. Just because the Jacobses wear rose-colored glasses doesn't mean the landscape they see isn't rose-colored. The brothers dream of creating a billion-dollar global company (they give themselves 15 years) that improves the culture by promulgating inspirational messages and--this is the important part, they say--by raising money and awareness for sick and disadvantaged children. Certainly they have chosen their market wisely. Like energy and umbrellas, optimism is something mankind will always need.

Be all in. The Jacobses say they are committed to never selling, never going public.

"And when you say never," I ask, "would you qualify that by saying you never say never?"

"We say never," says Bert. "Loud and clear."

As for my own bias, I can't say it's evaporated entirely. In a recent conversation Bert talked enthusiastically about the possibility of a Life Is Good film festival that screens celebratory movies to raise money for charity. Listening to him, I couldn't help recalling how I stormed out in the middle of Shine. But it's a neat idea that a lot of people would love and--as always with these guys--a pitch-perfect synthesis of the company's marketing and philanthropic messages.

So, is Life Is Good good?

Yes, I think it is.

Is life good?

I'm reserving judgment.

Leigh Buchanan is an Inc. editor-at-large.