Stephen Newman

The Furniture Rental Fiasco by Stephen Newman

It was the spring of 2001, toward the end of the dot com boom. Online retailers were going out of business left and right. They spent all their investors’ money on razzle dazzle, and paid little attention to profitability. “Market share, market share,” they preached, and while that strategy worked for a select few (hi, Mr. Bezos) most companies were dropping like flies. (For a real treat, find yourself an old copy of the Internet Yellow Pages, published in 1993: “Oh, WOW! I forgot all about Lycos! Oh Webvan, that was the grocery delivery site, right? Wait, Pets.Com, was that the sock puppet one?”).

During this hectic time on the internet, YouCanSave.Com, the company I started out of my apartment in Sacramento, was flourishing. After two years in business, we now had a corporate office and a small warehouse. No more apartments, no more garages, no more dropshipping, no more renting warehouse space from the San Jose Goodwill. Now we were legit! So legit, in fact, that one of our suppliers was very interested in purchasing us.

I was just 26 years old, and Brett (my college roommate) and I were on the cusp of becoming millionaires! We only had 8 employees, but the business was already bringing in $12 million annually. This caught the attention of Thane International, an infomercial company based out of Palm Springs, CA. Thane was known for developing and marketing such hot sellers as the Orbitrek Elliptical Glider, the AB-DOer, and countless other As-Seen-On-TV creams, gidgets, and gazmos!

Bill Hay was founder and President of Thane. He was a multi-millionaire, married to Denise Dubarry-Hay, a TV actress. He lived in a mansion in Palm Springs, and had a live-in butler and a private chef who, before working for Mr. Hay, was Robin Williams’s full-time chef. Compare that to me, a 26-year-old who rented a one bedroom apartment, bought $5 screenprint t-shirts at Wal*Mart, drove my mom’s 1995 Ford Explorer, and loved the ultimate cheeseburger at Jack in the Box. Yet, somehow, we were about to be tasked with the challenge of impressing Mr. Hay, getting him to pay us millions of dollars because we had something he wanted. We had…the internet’s leading provider of As Seen On TV products. And when you ordered from us, you got a slight discount over the TV price, you received your item in days (no waiting 4-6 weeks like you had to on TV), and you got good customer service (not a call center in India).

After a few preliminary negotiations at the Housewares Show in Chicago, Mr. Hay suggested that he and Marty Fahncke, the President of Thane, visit us at our office in Hayward (a low class suburb of the San Francisco Bay Area). Our warehouse and office was just down the street from the Shasta Cola factory. If Coca Cola was San Francisco, Shasta Cola was Hayward.

One of Brett’s finest attributes, and also the thing that pissed me off the most, was that he was the world’s biggest penny pincher. A cheapskate. Frugal, if I’m being polite. The guy was all about the profits, so to say our office was “no frills” was an understatement. Our office furniture was from thrift shops and garage sales.. A cheesy $8 inspirational poster of Abraham Lincoln adorned our office wall, saying something like “Courage” and some random quote beneath it. Our biggest expense was probably the $100 ping pong table in our break room, which he probably convinced me to pay for out of my own pocket.

While his frugal nature helped our business make money, and helped us be successful when so many other companies failed, he also wanted to present a higher level of sophistication to Bill Hay. He wanted the Thane executives to feel like they were visiting a successful company who had their shit together, not a couple college guys in a dumpy shithole next to the world’s biggest supply of Shasta Cola. (Note to the reader: I used to love their Tiki Punch, as a kid).

Bill Hay was due to arrive in 48 hours. Brett had a plan. It was the only way. If we didn’t follow this plan, our dreams of becoming 26-year-old millionaires would be gone forever. We had to present the image of success. We had to….go to the office furniture rental place, in Oakland, and make our austere office look like a model home in the Hamptons!

In the morning, we rented a large moving van, and drove about 45 minutes up 880, in traffic, to a massive furniture rental warehouse. Did we rent just furniture? Oh no, that wouldn’t have been enough to get Bill Hay to open his rich-guy checkbook. We rented expensive rugs, fancy paintings, various plants, a vending machine, a receptionist desk, a leather sofa, executive chairs, a fancy telephone system, a conference table, an arrowhead water dispenser, and the list went on. We loaded up the truck, paying thousands of dollars just to rent this stuff for a week. For the next 24 hours, we arranged everything to perfection, moving our old beat up crap into the moving van, then discreetly parking it a half-mile up the road.

Once everything was in place, Brett sat us down in our brand new conference room, and began telling us what each of our roles is in the company, and how to answer every possible question.

“What do you do, Steve?”

“Um, well, I run all of our online marketing, I write copy for our products, I manage our network of affiliates, I…”

“Wrong!” Brett interrupted. “You drive traffic, create sales, and boost revenue. So, Steve, tell us what your role is here?”

This was a humiliating exercise. “Well, Mr. Hay, I drive traffic, create sales, and boost revenue, sir.”

Brett was satisfied. “Joe, tell us about your duties.” And the process was repeated. We were given explicit instructions on what to say, what not to say, how to speak, who to speak to, when to joke, when not to joke, and so on, and so forth.

Keep in mind, YouCanSave was (or had been) my company. I started it, on my own. I thought of the name, the business idea, I purchased the domain name, bought the business license, designed the logo, built the website, found the suppliers, wrote the ad copy, set the pricing, and only brought Brett on, months later, because he was unhappy in his corporate job making $40,000 a year and working his balls off for Andersen Consulting (now Accenture). So I, being the nice guy I am, sold half of the company to Brett for some pitiful amount, like $8,000. I knew his sales skills would help the business thrive. And I was right about that. But what I didn’t know was, months later, he’d present a corporate hierarchy chart to me, and suddenly he was President, and I was Vice-President. He once pitched it to me as, “You come up with the ideas and do the work, and I’ll sell your skills to the world!” I can’t deny that it was a good strategy. We were a great team. Our skills and weaknesses perfectly complemented one another. But…still…do I really need to participate in this pregame charade? “I drive traffic, create sales, and boost revenue. Wait, I increase traffic and drive sales? No. Wait let’s try it again. Mr. Hay, I drive traffic, create…oh fuck, forget it.”

The executives flew in on Mr. Hay’s private jet, landing at the run-down Hayward airport. Brett and I picked them up in his Nissan Pathfinder, and drove them to the office, where my wife, Jennifer, was now our receptionist, sitting with her fancy headset and phone system, and that really tall potted plant, to her left. What a fancy office we had.

The meeting lasted all day, and things went very well. One big misstep on Brett’s part was thinking somehow that Applebee’s would be an appropriate place to take a multi-millionaire for lunch. He had a strategy for it — he wanted Mr. Hay to see that we were just normal people who worked hard, and didn’t waste money on fancy lunches (no, we only wasted money on rental furniture for charades like this). Well, the burgers were fine, I thought, but as we were driving back to the office, Marty, Thane’s President, leaped out of the front seat of the car, right at the train tracks, and vomited all over the side of the road. I never let Brett live that one down (and neither did Marty).

The meeting went great, a verbal agreement was made for the transaction, and the executives flew back to Palm Springs. On Friday, we packed the furniture and returned it to the rental facility, and YouCanSave was again a low budget run down office space. No more Picaso, no more water dispenser, and goodbye plants.

The following week, Mr. Hay called because he had a few more questions, and some measurements he wanted to take of the warehouse, and some of the offices. He informed us he would be flying in the following afternoon for another visit.

“Steve, Joe, Jenn, Wrecell, everyone, quick…this is serious. Bill Hay is coming back tomorrow. We need to go, NOW, and get the furniture back. I’ve already called and they’re gonna keep the place open for us, but we have to leave NOW.” We got there quickly, but there was what must have been 100,000 square feet of stuff. There were no records of what, specifically, we had rented the prior week. Joe, was it this desk or that one? Steve, was it this plant or this plant or neither? Shit. We got most of the same stuff, I’m sure of. And when we got it back to the office, we couldn’t remember, did this painting go here? Jenn, which rug did we have in Joe’s office? Oh God, this is awful!!! What else was awful was we had to pay rental fees for another week, which was another $8,000. And we only needed this stuff for a couple hours. You’ve gotta be kidding me!

I still don’t know how we did it, but we pulled it off. Nobody noticed anything was amiss, or if they did, they never said anything. About six months later, the funds were transferred to our bank accounts, and became a wholly owned subsidiary of Thane International. To celebrate, Brett and I were invited to Mr. Hay’s mansion in Palm Springs. The night before our trip, I received a phone call from Robin Williams’s chef. “Hello, Mr. Newman. Mr. Hay would like to know how you’d like your steak cooked tomorrow night.”

I told him medium-rare.

Stephen Newman
DOC #90843


Categories: Stephen Newman

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