1998 Direct Marketer of the Year - Jay Walker
The Execution. Walker persuaded Richard Thalheimer, president and founder of the Sharper Image catalog, to feature the $1,200 sculptures on the cover; he cinched the deal by paying Thalheimer an unheard of $40,000 co-op advertising allowance.
What Happened. Sharper Image sold out the first edition of 1,000 pieces in just 30 days to a blue-ribbon group of collectors, including Ringo Starr, John Kluge and Diana Ross. In addition, Walker created a video for use in cold mailings as well as follow-ups to leads—the first known use of videocassettes in direct mail.
But, the manufacturing facility Walker built in Stamford, CT, could not keep up with the orders, and even though Walker tried to diversify, the business failed. He lost $2 million personally and wound up owing $4 million more to investors.
Catalog Media Corp.
The events that follow did not happen in sequence, but rather concurrently. "I always have two or three businesses on the burner," Walker explains, "like a farmer rotating crops."
Catalog Ads: Wipeout #3
The Premise. The lesson learned from the sculpture business was that catalogs represented an enormous opportunity for national advertising. He had spent $40,000 advertising in the Sharper Image catalog, and it worked. Thalheimer made a lot of money even if Walker had lost everything.
One day Walker was in the Sharper Image offices and asked Thalheimer if he had ever considered taking full-page national advertising from blue-chip companies. "If you can do it, I will be your first catalog," Thalheimer said. Walker sketched out a business plan. It was like selling ads for a magazine, but with virtually no overhead—no editorial or production costs, no circulation expense. Instead, he had created what he later dubbed a "leveraged business method."
"In a leveraged business, we don't touch the underlying business or inventory anything," Walker explains. "I didn't fully get the concept then, but I do now."