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Some people look at a hole and see empty space. Others see opportunity. That's what Sheri Schmelzer spotted a few years ago when everyone-including her three children-started wearing Crocs, the colorful resin clogs dotted with holes.
“My kids and I were clowning around, and my eldest daughter, Lexie, got the sewing kit out. I grabbed one of the Crocs, pulled some buttons, rhinestones, and fabric out of the kit, and stuck them in the holes. Lexie said, 'Mom, I love that!' ”
When her husband, Rich, a seasoned entrepreneur with two technology start-ups under his belt, came home later that day, says Sheri, “I could see the lightbulb go on over his head.” Crocs had sold millions of pairs of shoes; the couple figured they could create a business simply by riding the wave. Rich refused to let a decorated Croc leave their Boulder, Colorado, house until he'd filed a patent.
But first they needed a name. “Rich and I had seen a movie where Meg Ryan says to Tom Hanks, 'I'm such a flibbertigibbet!' That became my nickname, so I called the business Jibbitz.” While Sheri designed, Rich strategized. They decided to sell the charms through a website, jibbitz.com.
Six months later, in February 2006, Sheri was doing so well that Rich left his business to work with her full-time. She was making hundreds of Jibbitz to order, by hand, by herself, in their basement. And filling those holes wasn't as easy as it looked. The bigger the shoe, the bigger the holes; it took six prototypes before Sheri figured out how to make her charms one-size-fits-all.
Rich soon found a way to get plastic Jibbitz manufactured in China, but Sheri hated giving up control. Already she was spending much of her time sending out replacements or refunding money for broken Jibbitz.
Late one night, Rich found her crying. “Do you think Microsoft had the perfect version the first time around?” he said. He persuaded her to hire help and move the operation out of their home.
Someone at Crocs was bound to notice the charms-after all, the company was headquartered just ten miles down the road. Duke Hanson, one of Crocs' founders, spotted Lexie and her Jibbitz at the local pool, handed her his business card, and said, “Have your mom call me.”
Sheri and Rich met with Crocs execs, but no one suggested buying the company. Sheri was actually relieved because she wanted to see if she, not Crocs, could make it big.
Biding her time allowed Sheri to develop over 300 designs and sign up 4,000 retail outlets. Having more products, more customers, and better distribution boosted the company's value. In December 2006, Crocs bought Jibbitz for $20 million, with the Schmelzers staying on board.
As president, Rich has been able to strike licensing deals. Spider-Man and Bugs Bunny have joined the collection of more than 3,000 Jibbitz. And Sheri is branching out into
messenger bags and cell phone cases. The diversification turned out to be a good thing when Crocs stock fell sharply earlier this year. As popular as the shoes are, it's not yet clear if they're a short-term fad or a long-term business.
Today Sheri sits in bright new digs, the chief design officer of a global business. Even she is amazed by how far you can go with one simple idea. “All I heard from family and friends was 'Gee, there are holes right there! Why didn't I think of that?'”
Margaret Heffernan has run five businesses and is the author of How She Does It.
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