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 of this second marriage, he returned to Los Angeles where he met Victoria Kennedy. They moved to Santa Fe, New Mexico, in 1992 and then returned to Carmel, California, in 2000. They were married in April 2000 in Monterey, California. They separated in 2011 and Kennedy filed for divorce. Nesmith was forced to cancel the last four dates of his 2018 tour with Micky Dolenz due to a "minor health care". However, in an interview with "Rolling Stone" published on July 26, Nesmith revealed he had undergone quadruple bypass heart surgery, after which he had been hospitalized for over a