BHAG in hand, I entered 1998 on a mission. No longer would Big Idea be simply Phil’s film company making Phil’s films. I would proactively grow it to the point where it could encompass the work of multiple storytellers working in film, TV, publishing, and whatever else we could think of. I was particularly driven by the impact I saw the Disney Company and Nickelodeon having on kids across America. Coming out of nowhere in the early 1990’s, Nickelodeon had grown so large by the end of the decade that half of all kids watching commercial television at any given time were watching Nickelodeon. Since the average American kid was watching more than three hours of television per day, the impact Nickelodeon’s programming and intentionally subversive attitude (Nick marketers freely admitted that their strategy was to position themselves as a kids “true ally” and to exclude parents from the conversation) drove me to do as much as I could, as quickly as I could. In my mind, Big Idea couldn’t be built fast enough. America’s kids needed it that badly.
I was aware, however, that I was a bit skinny on business experience. If Big Idea was to have the impact I hoped for, I needed serious help. So over the course of 1998, I assembled a group of experienced business folks to help. I didn’t have the industry connections or the money or prestige to pull people from Hollywood to suburban Chicago, so most of our executives were from the Chicago region and came primarily from large financial services and packaged goods companies like Kraft, Coca-Cola, Motorola, GE Capital and Price Waterhouse. It really was a pretty impressive group with tons of business experience. While they lacked traditional entertainment experience, the fact that VeggieTales was a product sold from store shelves made us all believe packaged goods experience would be just as valuable. (In fact, the growth in importance of Wal-Mart at that time had inspired even giant studios like Disney and Warner Brothers to hire packaged goods experts from places like Proctor & Gamble and Kraft to help shape their strategies.)
By the end of 1998, things looked promising for the “new” Big Idea. We had a hit product. We had an experienced, fired-up leadership team. We had a mission, and a big, hairy, audacious goal. What we were missing was a plan.
“No Man’s Land” threat number one, according to Inc.’s experts: Small companies, experiencing rapid initial growth, attempt to make the leap to being “big” without having a clear plan for sustaining that growth. What got you to $10 million in sales won’t necessarily take you to $100 million.
We sold something like seven million VeggieTales videos in 1998. Unable to imagine selling more than that, I assumed future growth would need to come from other areas like television and feature films. Unfortunately, the executive team I put together had no experience in television or feature films. Rather than wade into unknown waters, they figured future growth would come from selling even more VeggieTales videos using marketing techniques they had learned in the world of packaged goods. The team quickly discovered through research that even though we had sold seven million videos that year, only one-quarter of American mothers of young children had even heard of VeggieTales So, they reasoned, growing awareness would result in increased sales.
Enter 1999. I began the year investigating the TV and feature film businesses, looking for points of entry for Big Idea. I was working on these efforts more or less alone, though, as my executive team was busy building a large marketing group to launch an even larger VeggieTales awareness campaign. Between 1998 and 2000 our marketing department grew from 1 person to 30 people. We gave away 400,000 VeggieTales videos at the grand openings of malls and Target stores and took out two-page ads in People magazine to introduce America to the concept of VeggieTales. As a result, our marketing expense grew from $3 million in 1998 to $13 million in 2000. No problem, though, since the team estimated the increased awareness would double our sales within 24 months.
Except for one thing: The projected sales growth never happened. After 1998’s amazing 7 million video mark, sales actually declined in 1999 and 2000. Our marketing costs exploded, but our sales didn’t. That was a bit of a problem.
Meanwhile, I wasn’t having much more luck getting us into new businesses. Intrigued by the strategic possibilities of having a home in television, I began talking with the newly launched family network Pax TV about taking over their entire Saturday morning block. They seemed genuinely interested, given VeggieTales’ huge success. I spent time crunching numbers and identifying other shows that could fill out a block alongside VeggieTales and be introduced by Bob & Larry. The pieces were falling into place, when suddenly Pax announced they weren’t interested in a Big Idea Saturday morning block, but would much rather we supply them with an hour of programming for prime time. Since none of the shows I had been considering for Saturday morning would work well in prime time, I was back to square one.
As a hedge against the possibility that a TV strategy might not pan out, I was also trying to chart a course to take our animation studio toward feature film production. In late 1998 we put Larry-Boy and the Rumor Weed into production, our most cinematic half-hour video yet. It was my plan, in fact, that it would be our last half-hour video. With that in mind, I had already put Mike to work on an elaborate 45-minute script based on a classic Bible story that would take us one step closer to the world of feature films. The story was Jonah and the Whale.
Continued in Part 3 >