RH Brands finds humor hotlines are hot

Today, Jeff Goldblatt and his humor hotline company, RH Brands, could stand as an example of a startup business success story. But there was a time, Goldblatt recalls, when he considered  himself  "America's worst entrepreneur."

It was about five  years ago, and the Emory University and Goizueta Business School graduate had launched a series of telephone lines people could call to hear a brief funny message. The best-known, The Rejection Hotline -- created as a joke -- told the listener in bald terms that his amorous aspirations had no chance of leading to a date.

Goldblatt said the phone lines generated millions of calls, particularly from young people, and drew media attention but made him little money. A creative sort who'd studied journalism and creative writing  in college, Goldblatt didn't know much about creating a long-term business plan.

Then Goldblatt made what he calls his best move: "I decided to fire myself as CEO of my own company."

He brought in as his new chief executive Bryan Kujawski, another Emory grad who had co-founded and later sold a successful Atlanta advertising agency, 360i, and was looking for a second act. Kujawski's since taken on the day to day business operations of the Atlanta company, leaving Goldblatt to devise the hotlines and their content. He still writes or oversees the writing of the material.

"His coming on board really made this company," Goldblatt, 32, said of Kujawski, 37.

Since that point, in 2006, the two have built privately-held RH Brands into what they say is a highly profitable company with $2.5 million in annual revenue and significant growth in call volume with its Humor Hotlines brand. Plans call for expansion into international and non-English speaking markets.

The company makes money from advertising at the end of the humor bit. Typically, listeners have the choice to opt in to make a quick and easy purchase of, say, ringtones, from an advertiser. The more calls, the better for the company's bottom line.

Call volume at RH Brands has increased from 40 million in 2007 to 55 million in 2008 to 70 million in 2009, according to the company, which has seven employees.

Business has grown along with cell phone usage (90 percent of the company's calls are via cell phone) and the increase in demand for interactive mobile experiences. The calls are free to cell phone users, while land line users pay the standard long-distance charge.

Besides the Rejection Hotline, some of the more popular of the company's roughly 150 lines are the "It Could Always Suck More," "Outsource a Friendship to India," and "The Psychiatric Hotline."

They reach consumers for whom mobile is an integral part of life, and they do it when those consumers are looking for entertainment. RH Brands' target market "is an ideal fit for us," said Aurelie Guerrieri, head of marketing for SendMe, Inc., a mobile media company that sells entertainment products through RH Brands' humor hotlines.

While the number of calls soared after his arrival, Kujawski said, "Jeff had done the hard part. He'd built a following."

It all started in 2001 when Goldblatt was 23, just out of undergraduate school and running a small web consulting business.  One night, he and some friends watched as a man was spurned in full public view at a local bar by a woman. That led him to record on his business' unused voice mail box a witty rejection message. Theoretically, the number could be passed out to whoever needed a reality check. Practically, friends passed the number to friends for a laugh.

Then, Goldblatt said, "It went viral," crashing multiple voice mail systems, but convincing him that there was a business in his little prank.

Because in-call audio advertising on mobile phones was new territory, it took several years and the hiring of Kujawski to develop a workable money-making model.

"Jeff always had ideas about where the business should go, but he wasn't sure how to get there. It took a guy who'd done it before," said Mike DiLonardo, a fellow Emory graduate now an Atlanta businessman who brought the two together.

Together, Goldblatt and Kujawski own 70 percent of the company, with other investors owning 30 percent, they said.

Said Goldblatt, "We stumbled into this medium and it's proven to be a very effective advertising vehicle."