Ryan Walther and Arik Nordby sell empty promises.
Under their Prank-O brand, gift-givers have coughed up millions of laughs and well over $10 million in the last half-dozen years on “Prank Packs”—empty boxes, each one advertising an absurd product that does not exist. Even defunct in-flight catalog Skymall wouldn’t sell Prank-O’s stuff, which ranges from virtual reality headsets for your pet to the monstrosity Bathe & Brew that serves up a fresh cup of joe before you’re through shampooing.
When one of ABC’s Shark Tank producers asked the duo to pitch Prank-O on the show last year, Walther initially turned it down. “I didn’t want to sell my business in seven minutes,” he recounts from a corner booth at Nolo’s Kitchen & Bar; it’s a stone’s throw from the North Loop digs where the CEO and team, led by “chief prank officer” Nordby, crank out eight to 10 new Prank Packs annually. With some coaxing from the producer and an agreement that they could prank the show’s panel of serial entrepreneurs, Walther and Nordby last summer found themselves in a room with sharks.
[Shark Tank's] Mark Cuban and Kevin O’Leary both bit on Prank-O. But O’Leary’s demand for a 38-cent cut of every $8 Prank Pack sale screamed death by margins.
Without hesitation, Mark Cuban and Kevin O’Leary both bit on Prank-O. But O’Leary’s demand for a 38-cent cut of every $8 Prank Pack sale screamed death by margins, Walther says. They ultimately allied with Cuban. “We got a deal done on the show and we went into due diligence but just couldn’t come to terms,” Walther admits. “It was a very friendly exit. They wanted to stay in touch, and I still do, too.”
Though no deal emerged, the December episode sent tens of thousands of viewers in search of Prank-O and within minutes of airing crashed the company’s new website. Prank Pack sales rocketed, up more than 200 percent over the prior year’s web sales, and up triple digits on Amazon.
But Prank-O is just one asset of the 30 Watt comedy family. In roughly a decade, the Laugh Factory from Minneapolis, along with its Milwaukee spin-off, Drink Wisconsinibly, have landed products on the shelves of America’s largest brick-and-mortar businesses, including Target, Walmart, and Kohl’s. Unlike chief rivals Hallmark and American Greetings, however, they lack household name recognition. With a renewed focus, 30 Watt sees 2019 as the start of a shake-up in a retail gift industry it sees as tired and in need of a fresh take on funny.
Jeff Sunberg is arguably 30 Watt’s biggest believer. His business, The Creative Partners Group, sits opposite Target’s downtown headquarters, and for 26 years he’s been a manufacturer’s representative who sells to the retail chain. When Walther wanted to bring Prank Packs and other 30 Watt merchandise into Target stores five years ago, Sunberg remembers seeing its potential immediately.
“Their humor and approach toward party, entertaining, fun, and celebrating life’s moments really resonates with today’s major buying population,” he says. “If they continue to just stay in their lane regarding content and understanding today’s consumer, they should be a $20 [million] to $30 million company in the next five years.”
30 Watt and Prank-O (which was spun off as a separate company with the same management in 2018) last year pulled in “seven figures, approaching eight” in sales, according to Walther. Pulling together punchlines has never been a concern for Walther: Comedy comes naturally. “Humbly speaking, I’ve been doing it all my life,” he says. “I know the people who know how to do it, and we get it there.”
Walther and Nordby’s roots—along with the network of comedians they regularly tap for their products—trace all the way back to the founding of The Onion in 1988. As an early partner and one of the first hires at the satirical newspaper, Walther spent 20 years performing close to every task required to run the publication. He threw in headline ideas, sold ads, and even delivered it on a paper route.
Most of the products advertised on Prank Packs are hand-built by “chief prank officer” Arik Nordby and never actually sold, including the Snack Hat, which Nordby (left) used to dip a chip into off of Walther’s head. (Photo by Sam Schaust)
As The Onion’s popularity ascended, Walther spearheaded the launch of its Chicago office from its original headquarters in Madison, Wis., and was there for the newspaper’s expansion into film, television, and selling merchandise online. Included on The Onion’s e-commerce store were a series of empty boxes promising ridiculous fake products, under the name “Gotcha Box.” “They were just flying off the shelf and The Onion wasn’t doing anything about it,” Walther says.
Nordby, the Gotcha Box and Prank Pack creator, came up with the idea one Christmas watching his nephew unwrap a toaster-oven box that actually had a video game inside. The moment’s pandemonium flicked on a light bulb in his head and within a week he started designing fake gift boxes. They eventually premiered on The Onion store in the mid-2000s under a three-year contract.
Walther, at the time entering his 18th year at The Onion, contacted Nordby, who was freelancing as a graphic designer. When the merchandising deal was up, so was their time with The Onion.
“We made the leap,” recalls Nordby, “called it Prank Pack, and kind of started over.”
At the height of the recession in 2009, 30 Watt began in a warehouse in Eden Prairie, the same place Nordby, a Minnesota native, had been running another comedic lifestyle brand called Bogey Pro, aimed at bad golfers. (“I tried to launch that myself, but it was terrible and really hard,” Nordby says of the defunct brand, which primarily sold T-shirts and marketed non-existent oddities like the SwingPack, a backpack-shaped golf bag replacement that kept clubs on a golfer’s back fanned out like peacock feathers.)
Until 2014, 30 Watt remained a part-time money-maker for Nordby and the Wisconsin-born Walther. Their Prank Packs and assortment of novelty items were catching on at retailers like Target, and finally the time felt right to go big. Within a year, 30 Watt’s headcount grew to 21, the expansion financed by Walther.
“Prank-O was always the Trojan horse for us,” says Walther, earning them face time with buyers from Urban Outfitters, Bed Bath & Beyond, and elsewhere. Adam Czajka, the senior buyer for accessories, glassware, and gifts at Kohl’s, was an early fan of 30 Watt.
30 Watt sales growth
year-over-year on Amazon
2017: 20% | 2018: 59%
Prank-O sales growth
year-over-year on Amazon
2017: 48% | 2018: 108%
PrankO.com direct sales growth
2017: 112% | 2018: 226%
“The Prank Pack was really unique in the market at the time,” Czajka says. “It did really well in the first year,” and more shelf space followed. Kohl’s was so smitten with a Prank Pack promoting a fake beard used to conceal public drinking that it asked 30 Watt to produce and sell an actual Beer Beard at Kohl’s. “It certainly sold well and had a moment for a couple years,” Czajka says, “and then people moved onto other things.”
Before long, these one-offs began to consume 30 Watt’s creative team. From 2014 to 2017, “we had a ‘spray and pray’ [business] model,” says 30 Watt chief operating officer Julie Steenerson. The company’s modest portfolio developed at a rapid clip to include everything from pint glasses with one-liners to holiday sweaters to tiny cellphone-powered disco balls and light-up mirrors under the now-defunct Plug Life brand. “We probably sold a million dollars of Plug Life in a year, but I didn’t want to be in technology,” Walther says. “You don’t want to be blowing up phones.”
Expensive molds to make products also walloped the company’s bottom line. To build 30 Watt’s Cap Capper, a tiny bottle opener you clip onto the brow of a hat, for instance, it cost around $40,000 and left the company needing to sell roughly 75,000 units to break even. “The business suffered because I was investing in the future, and we were getting into all of these new areas—buying molds, dealing with Asia [manufacturing], getting into products that have lower margins than we projected,” Walther says.
That concern was compounded by retailers’ penchant for pigeonholing 30 Watt’s products into a three-week Christmas sales window. “Everything that the company was doing would hinge on the holiday season,” Steenerson says. “It’s extremely stressful to be building out for Target, Kohl’s, and Amazon for the exact same time.”
This left 30 Watt reliant upon a line of credit to manage cash flows. With the focus on holiday giftables, credit would be maxed by summer, until end-of-year sales came through. “We could never get out ahead of it,” Walther says. “We lost $1 million two years ago because we were chasing all of these shiny objects. We still delivered great products, but we weren’t making money.”
That was the year, in late 2017, that 30 Watt’s executive team realized that its long-term viability depended on a shift in strategy.
“I had honestly never met a team with this much creative talent,” Britta Chatterjee recalls of her first impression of 30 Watt. But when she came on as a consultant about a year ago, she recognized the need for focus.
“I described them as straddling a B2B and B2C company,” she says, “and with a staff that small, it’s not possible. The first thing was to focus on what’s working,” to get to get cash flow moving in the company’s favor. Narrowing its product line was indisputably needed; to what was the question.
“We started looking at our business,” Walther says, “and all the while this thing called the Prank Pack, which we were spending the least amount of time on, was our biggest moneymaker and growing at 150 percent year over year consistently.” In 2018, Prank Packs were spun off into Prank-O, no longer second fiddle to 30 Watt’s burgeoning portfolio.
Staff cuts at 30 Watt followed. The company’s creative team was halved from eight to four, production and logistics staffing was halved and a fulfillment company added, all of which reduced total headcount from 22 to 12. “Now it’s really about getting healthy as a company and operating in a model where we have the right number of individuals,” Steenerson says. Moving headquarters down one floor to a smaller office above Black Sheep Pizza also shaved some expenses.
The 30 Watt and Prank-O team in their North Loop office. (Photo courtesy of 30 Watt)
New to the 30 Watt game plan in 2019, however, is marketing. Over its lifetime, the company operated almost exclusively by word of mouth, never spending a dollar to promote itself or its products aside from some Facebook ads. Chatterjee, who swore off corporate life after years of working for Fortune 100 companies as a buyer and marketing professional, broke her golden rule to join 30 Watt as its first chief marketing officer. Says Chatterjee: “Our marketing will be as ordinary as Prank-O is: not at all.”
The payoff to shrinking and refocusing is already reaping rewards: 30 Watt and Prank-O’s bottom lines went from red to black in a year’s time. “In that one year, we had a million-dollar swing and we were profitable,” Walther says. Moreover, a modest gain is expected to come from outside the U.S. for the first time as Prank Packs and 30 Watt merchandise break into Australia and the U.K. this year.
The brands have no shortage of opportunities. Drink Wisconsinibly—which began as a commodity business hawking pint glasses, vessel openers, and T-shirts making light-hearted mockery of Wisconsin’s alcohol consumption—was spun off and relocated to Milwaukee in July after an internal “friends and family” fundraising round conducted by Walther. The business has taken an unlikely turn: Through a partnership with the Milwaukee Bucks, the brand opened three locations in the new Fiserv Forum arena and are the only spots in the stadium serving craft beer. Outside the stadium, where a climate-controlled entertainment square is being constructed, Drink Wisconsinibly will open a 3,500-square-foot tavern in late March. With a “northern cabin meets supper club” aesthetic and bratwurst-shaped door handles, the bar will serve local-only beers, Old Fashioneds from a “bubbler” (or drinking fountain), and Drink Wisconsinibly’s own brandy and other bottles of booze under the Drink Wisconsinibly Beverage Company label.
“The entire entertainment district and Fiserv Forum are all about being authentically Wisconsin, and Drink Wisconsinibly fits that ambition perfectly,” says Michael Belot, the senior vice president of Bucks Ventures and development for the NBA team. “I know they have aspirations to build this brand, certainly across the state of Wisconsin, and I think we’re a great start to help build that [out].”
30 Watt spin-off Drink Wisconsinibly opened its tavern outside of the Fiserv Forum in Milwaukee in late March. The location also serves as a hub for the company's merchandise line and will help launch its new beverage label. (Rendering courtesy of 30 Watt)
Back in Minnesota, 30 Watt and Prank-O in March kicked off their first line of gift bags, party supplies, smaller $4 Prank Packs, and everyday items in Target—the first step toward eating into shelf space long owned by Hallmark and American Greetings. “Those spaces only reset twice a year, so like the brother-in-law on the couch: It’s not going anywhere,” says 30 Watt chief revenue officer Sean Mortiz. “We’re all crossing our fingers that people will kind of pick that up so we can spin that into a true business case to take to Kohl’s, Walgreens, and other companies that have told us to [only] call them” during the holiday buying season.
30 Watt’s Target representative Jeff Sunberg knows all too well the implications this opportunity holds for the company. “It’s like oxygen. You need to have that success at [one retailer]—to say we’re doing this amount of sales per store per week—[to make other] national retailers say ‘Hmm, we’re missing something here.’ ”
With steady online sales growth, physical retail is the next frontier. “Nobody is avoiding going to stores because of Lord Bezos and his drones dropping stuff off,” Walther believes. “If we had an opportunity to have a curated space that was 30 Watt, from Prank-O to our gifts, I’m telling you it works. Because it’s new and trendy and it’s sure as hell funny.”
Sources of inspiration:
Ax-Man Surplus, Salvation Army, Sharper Image, Brookstone, Wish.com, Japanese websites
Ax-Man and Salvation Army trips per invention:
30, on average
Most used materials:
Hot-glue gun, Dremel (rotary tool), wire, double-sided tape
Average number of hours required to design each box:
40, on average
Best-selling Prank Packs:
Earwax Candle Kit and Roto Wipe
When chief prank officer Arik Nordby concepts new Prank Packs, the effort leads to more than empty boxes. Here’s a look inside his creative process and its unexpected (and often unsalable) output.
When an idea hits Nordby or chief creative officer Phil Jones, they scribble down a two-sentence description and maybe a suggested title. You have three seconds to grab someone with your product, Nordby says. “Some of our names are whimsical and others are straight in your face.”
The best ideas are put into a presentation using Shutterstock and Photoshop to gather gut reactions from staff. Previously Nordby would sketch out the box concepts, but to avoid any indication of bias toward one idea or another he began mocking them digitally using the same font for each idea.
“I’ll start with the [box] cover” and looking at potential images online, “and maybe some kind of joke will pop into my head,” Nordby says. In the avalanche of royalty-free images, he often concocts the narrative for each box and determines the direction he plans to take on the back and sides of the Prank Pack.
As part of his process, Nordby purchases retail goods to mock up actual products that the company intends to only create an empty box for. Locally, Prank Pack product concepts start from the shelves of Ax-Man Surplus and Salvation Army, but internet retail shops also offer up help when constructing one-off Prank Pack products. Nordby estimates around 70 percent of his Prank Pack product "inventions" are hand-built; the remaining are created in Photoshop. Altogether, he’s made around 40 never-sold products for Prank-O.
Whenever possible, friends and family serve as models on box panels. Every member of 30 Watt’s staff (and much of Nordby's family) have been pictured on a Prank Pack, and once photos are captured or downloaded, Nordby finishes the packaging.
Sam Schaust is the digital editor for Twin Cities Business.