Bette Nesmith Graham fluid as "Mistake Out" in 1956. The name was later changed to Liquid Paper when she began her own company. Mistake Out started the 1960s operating at a small loss, with Nesmith's home doubling as company headquarters. As the product became an indispensable tool of the secretarial trade, Nesmith relocated production and shipping from her kitchen to a 10 feet-by-26 feet portable metal structure in her backyard, where packaging, shipping, and production were centered. Bette Nesmith married Robert Graham in 1962; he joined her in running the company. They divorced in 1975. She sold Liquid Paper to the Gillette Corporation
Michael Nesmith in the Air Force, Nesmith obtained a G.E.D. and was discharged under honorable conditions in 1962. He enrolled in San Antonio College, a community college, where he met John Kuehne (later to be known as John London) and began a musical collaboration. The duo won the first San Antonio College talent award, performing a mixture of standard folk songs and a few of Nesmith's original songs. While in college, Nesmith began to write more songs and poetry and after moving to Los Angeles, Nesmith began singing in folk clubs around the city and had one notable job as the "Hootmaster"