I heard about Jibbitz from my mother and thought it would be an interesting company to look at for this blog. A good new product company that made it all the way from idea (2005) to market and to an exit in 2006.

In general it is a great story. From the Jibbitz Website, Sheri Schmelzer, and her three children were inspired to decorate their collection of 12 pairs of Crocs™ shoes in the basement of their Boulder, Colorado home. With clay and rhinestones, Schmelzer developed unique charms that fit into the holes of Crocs. Sheri’s husband, Rich, saw the potential to create a unique accessory brand with colorful snap-on products specifically suited for Crocs™ shoes.

Beginning with a home equity loan and small assembly line in their basement, the Schmelzers launched Jibbitz, whose name is derived from Sheri’s nickname “Flibberty-Jibbit.” The Schmelzers began work on a few designs to share with family and friends and launched a website on their wedding anniversary, August 9, 2005. Within 1-year, Jibbitz were offered in thousands of stores and had sold over 8 million pieces worldwide.

Rich had experience as a serial entrepreneur in the internet and software industry that he translated into the business development of Jibbitz. . Rich’s inventor experience and business mindset helped bring Jibbitz out of the basement and into the market. One of Rich’s previous ventures, WorldPrints.com was purchased in 2000 by Excite@Home.

In December 2006,Crocs acquired Jibbitz LLC for 10 million dollars with an additional 10 million if Jibbitz meets sales projections. Jibbitz currently operates as a wholly owned subsidiary of Crocs, Inc., and Founders Rich and Sheri Schmelzer have remained with Jibbitz as President and Chief Design Officer.

How strong is the IP? They have a design patent: D554847 S filed originally on April 17, 2006.

Despite the design patent, several knock offs appeared on the market as soon as the success began. So what makes the company worth buying if Crocs could just rip them off too? Their market strength. The key to real idea protection is marketing.

Post acquisition, with Croc’s backing they pursued these knock off artists and won a serious claim for 56 million dollars.

So what is the lesson? Check out the time line below:

What stands out to me is that they waited on filing the patent until after they had set up operations, had initial sales and launched a website. Often inventors believe that the first task is to file a patent. This 20 million dollar deal provides a different road map.