The Kung Fu Hamster twirls nunchaku and dances while singing, “Kung-Fu Fighting.” The Hamsters lasted three years, because Gemmy kept making new versions. “All their profit ends up in a warehouse of inventory that is now worthless.” If buyers over-ordered, anticipating demand that dried up, he could be stuck with the overruns. “The hotter it gets, the faster it dies.” He learned about the biggest danger an importer can make is assuming a hot product would stay that way forever. The water gun craze lasted about a year and a half, longer than average. I destroyed the Super Soaker without spending millions on advertising,” says Flaherty. “Water guns were hot, so I made a better water gun with a big tank on your back. He likewise had no qualms in hopping on the 1992 water gun craze triggered by competitor Larami’s introduction of the Super Soaker. His attorney discovered nobody had patented a dancing palm. He admits that his 1992 desktop palm tree (that dances to the beat of whatever music is playing) was a direct rip-off of the Dancing Flower, a hit for competitor Takara. Even today he says, “I don’t like to talk about it too much,” out of fear that someone will catch on. Expanding his team of artists and designers, Flaherty realized what an incredible business he was in: He didn’t have to carry any inventory, and he got paid as soon as the cargo was on the water. He gets wistful recalling Pete the Repeat Parrot-an animatronic bird that talks back to you-and the Pinhead, a box with thousands of pins suspended through holes that you can shape into a sculpture. Soon he was selling to mass retailers like Walgreens and CVS: “I was basically sleeping in the office because if I went home, I would never get up.” Suddenly his manufacturers in Taiwan were filling entire shipping containers for delivery direct to big retail chains. “You squeeze the air bulb and the pants come down and you moon the guy next to you,” explains Flaherty. Next came Seymour Buns-a rubber doll with a suction cup on his back that you stick onto your car window. The first was called the Blaster, introduced in 1987, which the Chicago Tribune described at the time as: “a dashboard-mounted joystick that lets drivers pretend to shoot, blast or bomb annoying drivers, complete with appropriate sound effects.” Its bizarre success enabled Flaherty to license characters for more dashboard-mounted distractions, including Darth Vader, Pumpkin King Jack Skellington and a Homer Simpson who at the push of a button would blurt out, “What is this, National Stupid Driver’s Day?!” By 1989 he had scored with three hot items that boosted sales tenfold to $20 million. He rapidly moved down the sophistication ladder. The first products he ever imported were high-end pens by Mont-Blanc and Cross. After feeling strangled by a corporate job working with IBM mainframe computers, Flaherty founded Gemmy in 1984 at 23 based on the conviction that “If I’m going to work my butt off, I might as well do it for myself.” “Hard work was not a challenge, just something you did.” He went to school at the University of Dallas, where he also got his M.B.A. He grew up in Kansas City in the 1970s with four brothers and a sister, and worked at the country club 100 hours a week, if he could get it. Laherty may belong in the kitsch hall of fame, but says he prefers staying under the radar and flying commercial. Even Walmart CEO Doug McMillon, on an earnings call last fall, hailed inflatables as easy to sell: “Like, we’re going to blow out of some of those.” Sales of huggable plush toys also surged by a third during the pandemic this translated into high demand last season for Gemmy’s 8-foot-tall inflatable teddy bear, covered in a lightweight polyester fur. “After all the pandemic restrictions forced upon people during a season that’s about family and love and tradition, it’s not surprising that for both Halloween and the holidays people felt they just had permission to spend money and have fun,” says Phil Risk, an executive vice president at Prosper Insights, which surveys 8,000 shoppers and found that last year Americans spent a record $15.7 billion on December holiday decorations, and a record $3.4 billion on Halloween. That is, people’s need to feel comforted and safe, to build an oasis. And they are emblematic of one of the biggest consumer trends of the pandemic era: homesteading. In recent years these air-blown characters have come to dominate holiday lawn art in the American suburbs. Dan Flaherty and longtime CEO Jason McCann AARON KOTOWSKI FOR FORBES
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