Profit in Parody

By BILL BAROL

IGNORANCE It's amazing how much easier it is for a team to work together when no one has any idea where they're going.

Justin Sewell didn't set out to become the voice of workplace cynicism--or of Despair Inc., a $1 million-a-year purveyor of satiric business maxims. Nor did he foresee that corporate leaders from Ken Lay to Sandy Weill would send him so many customers. It just worked out that way.

Back in 1996, Justin, his twin brother Jef and their friend Larry Kersten were laboring at a Dallas dotcom that had been dangling the prospect of shares before its underpaid employees. But the Sewells and Kersten were low on the ladder, and the promised stock never arrived. A dark mood ensued, Justin recalls, "especially after we started to see other employees becoming fantastically wealthy very quickly."

One day Justin received a catalog for Successories, the pre-eminent retailer of motivational art--posters and plaques bearing corporate bromides along the order of "Your attitude determines your altitude." The Sewells and Kersten started "bitterly laughing at how there was nothing in the catalog remotely appropriate to the situation we were in," Justin says. They started riffing on some notions for "demotivational" art. They even borrowed stock photos and ran up posters for their cubicles. "We didn't have any intention of starting a company at that point," Justin says, "because none of us had any entrepreneurial drive or self-confidence."

But early in 1998, their employer was bought out, and the new company passed out $15,000 checks as a sop in lieu of stock. The trio decided "it'd be funny if we pooled this money and started a company to make parodies of motivational posters," Justin says. "I mean, it was that or go to Vegas."

HUMILIATION The harder you try, the dumber you look.

Despair did not start auspiciously. With a little more than $100,000 in start-up capital (family and friends had also kicked in funds), the three laid out $50,000, trying to look like a big company at the National Stationery Show. The strategy netted them just $3,000 in orders. Filling those orders almost broke them. As a hedge against dealing with retailers who "could tell we were rubes and pretenders," Justin says, Despair went online, structuring Despair.com as a ruthless parody of "everything that's wrong in corporate America" and setting up a stylized version of Kersten as the embodiment of a cynical, jargon-spouting coo.

When the first set of what Despair called Demotivator images began circulating around the country via e-mail, the young company had to scramble to establish paternity. With some help from Yahoo, which named Despair a pick of the week, orders began to flow in for posters, coffee mugs, notepads, desk plaques--$500,000 worth in 1999, $900,000 in 2000 and slightly more than $1 million last year. Now headquartered in Austin, Texas, and running lean (everything from printing to shipping is outsourced, and Justin, 31, is both CEO and the sole paid employee), Despair is on track for revenue growth of about 35% in 2002.

APATHY If we don't take care of the customers, maybe they'll stop bugging us.

It's no coincidence that Despair is booming at this particular moment. Kurt Barnard, a retail consultant in Upper Montclair, N.J., says, "Anytime consumers see an opportunity to get even with corporate America, they'll do it." But Despair is on to some fundamental, painful truths. Gene Hendrix, a lecturer on organization design at San Francisco State University, starts every class with a discussion of a different Despair poster. "What I'm trying to get students to do," he says, "is deal with corporations the way they are."

Despair just released its 2003 line of Demotivator designs, but customers are also finding a creepy resonance in older messages. "We hear from people who say things like 'Man, I bought that Blame poster on impulse a couple of years ago,'" Justin says. "'But now I'm seeing that there really are people who believe that success is knowing who to blame for your failures.'" Justin--a college dropout and dotcom failure during the boom, a CEO and dotcom success in 2002--laughs a rueful laugh at that.