Behind the Scenes of a 2-year-old Start-up
Written by Janece Shaffer Tuesday, August 14 2012
Snapshot: Dottie Thornton and Julia Mahood, co-founders, Mad Mags
 Julia Mahood |
Womenetics: Dottie, how did your history of working with start-up companies affect what you did with Mad Mags?
Dottie Thornton: My first job out of college was working for an entrepreneur, Michael McChesney, who launched a number of businesses – software/tech/ security-based kinds of businesses. In fact, we launched the world’s first Internet bank, and sold several businesses that were really successful. What was great was that I had different roles in each business. In one I focused on an operational/management/financial role, and in the other my role was very process oriented. You know, it was all very intense – launching and growing start-ups.
After I had my second child, I needed a break, so I took some time off. I soon met Jim Borders who was involved in real estate in Atlanta, and I thought I wanted to round out my resume by working outside the tech field. Like Michael, Jim saw business opportunities everywhere, but he was much more structured. His mindset was there are steps that we have to take to get to the goal. After two years in real estate, I was drawn back into working with Michael on yet another technology company. The thing was the job kept getting bigger and bigger. Around that time I met Julia and told her about this I had this idea. It seemed like we were a great fit. Julia had this background in design, marketing and packaging, and I could bring all I had learned from working with Jim and Michael, and the rest is history.
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Womenetics: Julia, how did you first get involved with Mad Mags?
Julia Mahood: We met at our children’s school, and Dottie said she wanted to make these Halloween magnets that you would put on your car. And you know, the timing was just right. I was looking for something new, and I thought this could be interesting. I could make it funky, not just a magnet. So, I did some sketches for about six months, and we went back and forth, putting it off. Then the following fall, when school was back in session we decided to produce a small line of Halloween magnets – get them made – and that would be our proof of concept. We started small – got the magnets in school fairs and in a couple of stores, and it didn’t fail. We realized we had a viable concept.
Womenetics: So now you have this confidence in the idea. What are you next steps?
Mahood: We decided that we wanted to have a booth at the Atlanta Merchandise Mart for the gift show in January 2011 – that was only six weeks away and we also decided that we wanted to feature not just the Halloween magnets but an entire line of magnets for year-round use. Six weeks to design a line of more than 60 magnets. We scrambled.
Womenetics: Why year-round?
Mahood: Seasonal items are a hard sell; people get stuck with that kind of merchandise, but if we were selling magnets year-round, an everyday line – if we could sell magnets for a kid’s birthday or Christmas or Hanukkah (for my people – I say, “Let my people…have magnets”) summer beach theme items - for if the stores could buy a rack and keep it full, then they would keep buying, and we wouldn’t be forgotten. The more they buy from us, the bigger commitment to the product. We are so dependent on the retailers to merchandise our magnets, and that’s one area we just don’t have a lot of control over. I would say that is one of our biggest challenges.
Womenetics: And how did that first show go?
Mahood: It was great. People were waiting to see the line when the other lines around us were as slow as molasses. People kept saying, “Your first market, and you sold so much.”
Womenetics: Since then what strategies have you used to grow your business?
Mahood: First year we sold the product ourselves in the Atlanta market. We then signed with two rep groups – one based in Atlanta and one in Dallas – and that meant that we now theoretically had 40 people selling the line. That’s what we thought, naively.
They were – and are – selling our line, but it is one of dozens of lines that they sell. What that meant is that we had to sell our line to every one of those 40 reps. There are a lot of components to our line; it’s unique, and it’s not just one thing for Christmas or Halloween. To successfully sell it, you have to really know it. Also, our prices are low, and the rep gets a percentage of what they sell, so if they sell $100 worth of magnets, that’s only $7 in their pocket. We spend a lot of time reaching out to our reps, but the bottom line is we are still trying to figure out how to create incentives for the reps. We’ve just signed with a rep group in New York as well.
Womenetics: Tell me about the Mad Mags customer.
Mahood: Our customers are predominantly women – mostly moms who are in their car all the time. For them, their car is like their office, and our magnets are a way to make their van cute; make it fun. And it’s a magnet, not a commitment, so if your husband is in the car, you can take it off. You can change your mood and change your magnet.
Womenetics: So how does the division of labor work between the two of you? Who does what?
Mahood: I’m the artist. Dottie is the spreadsheet diva. It’s a great balance because I over-engineer, and she under-engineers. You know, it’s all creative thinking. You have to be a creative thinker to be an entrepreneur. Dottie is always thinking outside the box. She is always asking, “What would appeal to someone – to the sales rep, the shop owner and the consumer.”
Womenetics: And what do you like about the business?
Mahood: This is not boring; it’s always changing. There are times when we are super busy, slammed with a deadline. Other times I can draw all week or I can hang with kids. The pace, the constant change suits us both.
This is a great age for me to be starting a business. I have enough experience to know that things don’t work out as you think they will. Now I think, “OK, I’ve learned something,” and I keep going. It would have been different for me at 25. There have been disappointments, but it’s our second year. And for now, it’s all about learning.
What I’ve learned is that those women you see on Oprah, who sold their company that made that $10 doodad for a load of money, they earned every dime. The energy and time it takes to build and sell a company – huge.
Womenetics: When you launched Mad Mags, what was the dream?
Mahood: The dream would be we would start this company, build it during year two. Year three we make a big profit and year five you sell it. That is what they say in the business, and that would be great. But we were told from the start that if you’re doing this just to sell it, just get out right now.
I’ve learned to sell a business is really difficult. You have to have all the stars align from your end as well as the company interested in buying. So, we are not counting on it. Up to this point, we’ve put everything we’ve made back into the business, but our hope this year is to start drawing a salary.
Womenetics: Tell me about one of your best days as an entrepreneur.
Mahood: The first Halloween we did our test market, we walked into a major Atlanta gift shop chain, and the buyer said, “I love this. You are local! I love it!” She wrote a huge order, and Dottie and I were chest pumping in the parking lot.
A Wal-mart buyer came to our booth at the January AmericasMart. I was writing down an order for a customer, and the Wal-mart buyer flipped her badge over so I could see her company name – the big stores always keep the badges hidden. It was kind of funny, but pretty exciting. She said she loved the product and was interested in Halloween. She left me her card. We sent a few samples and a catalog and didn't hear a thing. A few months later the buyer from Wal-mart called Dottie and asked her for a proposal to sell seven designs in 500 stores for Halloween 2012. Dottie then called our new rep to get some intel on Wal-mart, and our rep acted like Dottie was nuts; he couldn't believe that Wal-mart called a brand new company. We hadn't even been selling for a year yet.
Womenetics: What’s the plan to grow the business?
Mahood: The only way to really make money with the company is to sell huge quantities. We sell our products at wholesale for around $3. They are made in the USA so our prices are really good, but to turn a profit you have to sell big quantity. You don’t want to raise the price because you don’t want to price yourself out of the market. In the next two years, we will need to be selling to a major, national retailer.
We’d like to have a consultant to help us with the “what’s the next step.” There are so many fires to put out on a day-to-day basis that we don’t take the time we need to step back and look at the big picture. But that means hiring more people to give us that time and that means more money. When we began we both put in $15,000, and that money has sustained the company up until now.
Thornton: Right now we are operating the business out of our homes, and I’m ready to take it up a notch: expand our sales team, grow our advertising and look at it more closely and streamline the operations on the delivery side. The goal would be to cut out any waste.
I talked about doing this forever. I didn’t want to say, “Oh, I had this idea and never did it.” With this company, I’ve found a passion. I enjoy selling something I believe in and care about. I walk in, and there is this energy. If you have an idea, you owe it to yourself to explore it.
What I have learned is that I am a jack-of-all-trades. I struggled a lot with, “What am I?” I’m not a CPA, not an attorney, but I have all this experience. What I am is an entrepreneur.
Womenetics: What do you know now – a year in – that you wish you had known at the launch?
Thornton: We’ve chosen to bootstrap rather than get professional advice. We did everything ourselves. Looking back, maybe I would have gotten other professional advice, and as a result maybe we would have avoided a mistake here or there.
 Dottie Thornton |
I will tell you some great advice we got from a man I call my “gift guru,” Jeff O’Dell. He said If you want this to be a business and not a hobby, you must have sales reps and get into the best and brightest showrooms. He said that if we do that, the others will line up behind them. Unfortunately, we didn’t do that. Instead, we went with two great women who were launching their company like us, and their learning curve had an effect on our company. But it’s all part of the learning process.
Womenetics: Any other advice you’d like to offer?
Mahood: I would say if you are manufacturing a product, be sure to use two manufacturers. The drawback is you won’t have as large a quantity, which can mean a bigger price break, but if you only use one manufacturer and they go under, you are in trouble. It’s a balancing act – best price and limiting your risk.
Also, in terms of advertising, we found the most successful results came from putting an ad in the program for the gift shows we sell at. We always put something in like, “Mention this ad and get free shipping or an opening order of only $100.” I would say almost a third of the customers we had at the Mart referenced the ad. It was expensive, but it paid off.
Womenetics: There has been so much conversation lately around the idea of women having it all. How has your family responded to the demands of Mad Mags?
Mahood: My oldest son, Noah, said to me, “You are so much happier when you draw a lot.” He thinks this has made me a better mom. Sure, they grumble. A few weeks a year I am working 24/7, and during those times there’s not enough to eat. But I also hear them say, “My mom has this business.” It’s exciting for them, and it’s good for my marriage because I’m not going to be so focused solely on my children. I didn’t want to be a bitter old woman talking about my kids and their accomplishments.
The company gives me perspective. OK, so the shrubs aren’t perfect – who cares? When you are a stay-at-home mom, your holiday dinner is your merchandise mart. That one meal needs to have a lot of payoff, so it’s easier to get mad at your kids for not putting their napkin in their lap.
Womenetics: Is there a Mad Mag on your car now and if so, what is it?
Mahood: Of course there are magnets on my car. I have one that reads, “Be happy,” and I have one that says, “Caution New Driver – Embarrassed by Parents Who Put Signs on Cars.” It’s lime green and a top seller. And my 15-year-old son, Noah – loves it. I’m lying.
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Janece Shaffer, senior editor of Womenetics, is also an award-winning, professionally produced playwright. Her plays have been produced in theatres across the country including the Asolo Repertory Theatre, Alliance Theatre, and Taproot Theatre. She also has more than two decades of experience in the communications field and has held communications positions at Emory University, The NAMES Project Foundation/AIDS Memorial Quilt and the Alliance Theatre. Shaffer holds a bachelor’s degree in journalism from the University of Georgia and a master’s degree in communications from Georgia State University.
