Masters of fun

Masters of fun

Spin Master has been creating hit toys for 20 years, including Air Hogs, Bakugan, Shrinky-Dinks and AquaDoodle. Last year, it had two of the best-selling products on the market – Zoomer the robotic dog and Flutterbye Flying Fairies – and added the hallowed Meccano brand to its growing roster. We talked to co-founders and co-CEOs Anton Rabie and Ronnen Harary about how the private company, which has 900 employees, keeps coming up with hits.

Ronnen Harary: It all started with Earth Buddy. The idea came from Israel, but no one was doing it here in Canada. So we said, let’s open a factory, and we produced 5,000 pieces in time for Mother’s Day, 1994.

Anton Rabie: Ronnen isn’t telling you the good stuff. I wrote my last exam at Western Business School during the week, and Ronnen drove up and showed me a prototype. We decided to take it to market in a couple days, so we set up a table on Yonge Street, with some samples we made in his mom’s kitchen out of panty hose we bought at Kmart.

RH: After two weeks, we got an order for 26,000 pieces from Walmart Canada. The biggest came from Kmart, after three months – half a million pieces for the U.S. market. AR: That was a $1.7-million order.

RH: We ended up having 200 workers going 24/7.

AR: Today, we get over 4,000 ideas a year, so we have to be able to pick the right ones.

RH: Our whole philosophy stems from being open to opportunities, no matter where they come from. In our industry, there are multiple inputs for ideas. Probably 30 per cent of the toys out there come from some sort of entertainment- based property, so we have a whole licensing division that is constantly evaluating opportunities from Disney, Nickelodeon, Dreamworks and independent producers. Then there’s inventor relations. A lot of inventors have become multimillionaires because of Spin Master, and we have a philosophy here: we are happy to pay millions and millions of dollars in royalties, because if we’re paying out a lot of royalties, it means we’re generating a lot of sales. We also have an entertainment division where we look for the ability to build global franchises. By the end of 2014, we’ll have made 500 half-hour TV shows.

AR: We get other ideas from retailers and smaller distributors who have no presence in the U.S. market.

RH: We also do internal product development. Ten years ago, probably 60 to 70 per cent of the ideas came from inventors. Now, it’s down to 20 per cent. A lot of it is iterative – for example, kids love our radio-controlled helicopters, so what else could they do with them? Well, it’d be fun if they could crash and bash them, and they’d never stop working. So how do you make that happen?

AR: Once you build a business unit, like Air Hogs, then you can build up expertise. We hire talented engineers and designers from the best schools, and they start to develop line extensions.

RH: We’re constantly out there, on the road. All good things happen when you’re out of the office. Our inventor relations guys are out there three months of the year, plus they’re at five or six shows. Our licensing group is stationed in Los Angeles, and they’re in Disney’s office every two weeks. We’ve been doing that for 20 years, so every relationship starts to build up. It’s also the way we treat people. We’ve passed or missed out on billions of dollars in business over the years, but we’ve had a great dialogue with every single person we’ve dealt with, and the doors are always open for the future.

AR: At the end of the day, though, you gotta be able to pick it. When an inventor shows Ben Varadi [the company’s executive VP] a concept, he dreams up the commercial in his head. And if there’s this incredible “wow” there, it helps him understand how kids will react to it.

RH: We call it pixie dust – it’s a bit ephemeral, but you can sense when you have something, especially when it elicits the same reaction from 10 people. If it’s something that is recognizable, you’re not going to break through. You want something with a play pattern you’ve never experienced before, or characters and stories you’ve never seen before. It’s not kind of like this or kind of like that – it’s unique.

- Dawn Calleja / Photograph by Lorne Bridgman