The land of GoBots, Pound Puppies, and Care Bears
On a county road winding through the farthest reaches of Minnetonka, in a nondescript office building, there is a room full of toys so new, they're not available in any store. No child—outside of a few testing groups—has ever played with them.
Bill Nichols, president of Blip Toys, surveys a wall covered in bright pink packages hanging from hooks like those in the aisles of a big box store.
"That's the Toys 'R' Us plan-o-gram for fall," Nichols says. "We started with a foot and a half."
The reason a top retailer would suddenly clear eight feet of prime real estate sits in a big bowl on the table in front of him like a pile of after-dinner mints: They're called Squinkies, and the tiny rubber toys come in a variety of animal and doll forms. The bowl is filled with cute little bunnies and babies and ponies, painted with surprising detail and squishy to the touch. There are already more than a thousand different Squinkies to collect, along with a bevy of playsets.
To the right of the pink wall is a grid of navy blue packages—the forthcoming boys' line of Squinkies, which is populated with aliens, racecars, soldiers, and ninjas. There are packages for licensed characters like Iron Man and Spider-Man, and dice that can turn the whole experience into a game of grade-school craps.
"Girls have relationships with toys," says Nichols, gazing up at the blue wall. "Boys become their toys."
Nichols has the fatherly charm of Bill Nye the Science Guy. He talks fast, thinks fast, and makes decisions fast whenever a staffer pokes a head in the room with a question. With a bonanza like Squinkies to manage, it's the only acceptable pace.
Just months ago, Nichols and Blip Toys—as in, just a "blip" on the radar—struck gold. Nichols didn't realize what they were sitting on until Target sold out the first stock of Squinkies in a week. Then Walmart ran out during the Christmas season. Then you couldn't find them anywhere.
"We got lucky," says Nichols with a battle-weary smile.
Since the holidays, Squinkies have tripled the volume of Blip's business. In February, they won the coveted Toy of the Year award. There's a line of Squinkie clothing on the way, a card game, a board game, even a video game in development with Activision.
"I just played the first beta version, it's awesome," says Nichols.
Squinkies also landed the mother of all promotional deals: a spot in the 2012 McDonald's Happy Meal lineup. It's a race against time to make Squinkies a lasting, licensable character—to take the concept from seasonal "it" toy to childhood classic.
"Squinkies is an 'act of god' product," says Richard Gottlieb, CEO of USA Toy Experts. "Nobody saw it coming. It was just the right product at the right price at the right time."
TRADITIONAL TOYS—EVERYTHING FROM action figures to sports toys to games—still make more money than video games. In 2010, Americans spent $21.9 billion on toys.
With so much money at stake, inventors and toy companies are all chasing the next big thing. The first Tickle Me Elmo sold over a million dolls, with parents fighting in the stores at Christmas time for the last ones. ZhuZhu Pets netted its creators $70 million when it became the must-have toy of 2009. And the take from Bratz dolls has been estimated to be as high as $777 million.
While the sky is the limit in terms of profits, the world of toy inventing has fundamentally changed in the modern era. The age of the pitchman is over. The frontier has been walled up by the big corporate names, with Hasbro and Mattel dominating. Getting the ear of the right people is hard, to say nothing of the checkbook.
Yet there was once a time when an inventor could make his fortune with a box full of homemade prototypes, a snappy pitch, and a few minutes of a toy company exec's time. Minnesota was a hotbed for just those kinds of entrepreneurs for many years. At this time each year—just after the national Toy Fair in February—toy executives from all over the country would fly into the Twin Cities to see what the Minnesotans had to offer. Though the business was never easy, the opportunities seemed endless for the plucky.
"I'd go a year without a placement, but I'd still be fired up," says inventor Scott Crosbie. "You had a chance. The hook was still dangling."
IN 1957, REYN Guyer was fresh out of college. Though he aspired to be a journalist, he found himself working at his father's design business in St. Paul. Guyer's father, a maverick designer with 120 paper-carton patents to his name, hired him to help come up with innovative new in-store displays.
"I did not see a great future in that business," says Guyer.
After several years, Guyer was looking for a new promotional gimmick for a company called Johnson's Shoe Polish. He figured a simple, cheap paper board game might do the trick. Then came a bolt of lightning.
"The people could be the players," he thought.
Guyer headed into the "bullpen" where all of the other designers were busy sketching. He laid out a large piece of corrugated cardboard and drew a grid. He rounded up the accountant and a secretary, and cajoled all the artists off their stools.
"You're the blue team, you're the yellow team," Guyer said excitedly.
Soon, eight people were pressed together on the 6-foot-by-4-foot grid, trying to move past on another.
"We didn't get very far because everybody was laughing so hard," Guyer remembers.
Guyer brought the idea to 3M. At the time, conventional business wisdom said that in order to thrive, businesses had to diversify. Many big local corporations decided to expand into toys in the '60s, including 3M and General Mills. Another huge name in the toy business was the Tonka Truck factory in Mound, a metal garden tool company founded in the '40s that morphed into an extremely successful maker of sturdy toy trucks, all designed and manufactured in Minnesota. Small, family-owned companies were also booming—a fishing-lure maker named Herb Schaper invented Cootie, and Lakeside Games had a hit with Barrel of Monkeys.
But 3M was not interested in the people-as-players idea. They did only traditional board games, Guyer was told. But Milton Bradley in Springfield, Massachusetts, was not so close-minded. Guyer and his designers replaced the squares with dots and added a spinning wheel.
"We were calling it 'The Pretzel,'" says Guyer. "Turns out we couldn't get that name. So they called it 'Twister.'"
Sears Roebuck Co., Milton Bradley's biggest retailer, was horrified when they saw "Twister." With just days before the start of the busy Christmas shopping season, they informed Milton Bradley they had no intention of peddling such a "risqué" game. Guyer got the call that all the ads had been canceled. He was devastated.
Except no one thought to tell Johnny Carson. He'd already agreed to play the game on The Tonight Show. In 1966, the glamorous Eva Gabor risked her perfect blond beehive to play Twister with Carson. The next day, all the remaining copies of the game flew off the shelves.
"It was joyous," says Guyer. "It was wonderful."
He was hooked. A short year later, Guyer, now running his own toy company, found himself knocking around another people-as-pieces game, this time with a caveman theme. His employees cut boulders out of dense foam to use as a kind of dodgeball. It was a total drag.
Out of boredom, one of his employees started bouncing the foam boulder up and down and taking shots at a net. Guyer suddenly stopped him.
"That's the game," he said.
It was the first ball kids could throw in the house, and it was christened "Nerf." Between Nerf and Twister, by the early '70s Guyer had more than enough money to concentrate on a painting career.
"I had the ability to go on and do some things I'd always wanted to do," he says. "So I did them."
His company produced several protégés. One of them was a onetime Catholic priest named Charlie Girsch, who took over one arm of Guyer's business with his wife, Maria, a former nun.
TIM MOODIE WAS was a consultant for a recycled paper products company when his project partner shoved him into a room with the Girsch Design team.
At the time, Moodie was designing gag products for the paper company—a coffee mug that said "Danger: Mold Experiment in Progress," toilet paper with social security cards printed on it—and wasn't interested in toys. His partner was convinced that a game Moodie designed could be a hit outside of the novelty world. Moodie brushed him off. Without telling him where they were going after lunch one day, the partner drove Moodie to the Girschs' office, marched him into the room, and slammed the door shut.
The pleasant-looking couple politely asked what Moodie had to show them, and he sheepishly sketched out his idea for a game with an "office politics" theme. They both shook their heads.
"What else you got?" Charlie asked.
Moodie and the Girschs got to talking and they invited him to come back once he had some more ideas. Moodie started driving to their Summit Avenue mansion in St. Paul, where he'd sit in the driver's seat madly sketching until he had 10 ideas before going inside.
Eventually, some of his ideas were good enough to sell. Moodie still has a crumpled design from the first idea he ever sold with the Girschs—a travel trivia game you could play in the car, with 10,000 questions that Moodie wrote himself.
"I made 250 bucks off that," he says bemusedly. "It just didn't sell that well."
Over time, the Girschs gained a reputation as the "godparents" of the local toy inventing scene as the industry swelled in the Twin Cities.
"There was a serious number of toy companies and toy executives and toy talent floating around the Twin Cities," recalls Girsch. "It was wonderful. It was seat-of-the-pants. The big corporations hadn't gotten involved yet."
The '70s and '80s were the boom years. Kenner, as a part of General Mills, cranked out Baby Alive, Care Bears, Play-Doh, and the original Star Wars action figures. Tonka reinvented itself by poaching people from Hasbro and Mattel, and produced GoBots, a competitor of Transformers. Tonka had another huge hit with Pound Puppies in 1986.
One could argue that Tonka became too successful for its own good. By the late '80s, the industry was already beginning to consolidate. Hasbro bought Milton Bradley. Mattel acquired Fisher-Price and Tyco. General Mills cut Kenner loose, which then purchased Parker Brothers. Eager to expand, Tonka bought Kenner for $622 million, nearly all of which was borrowed against the money made from Pound Puppies. The deal made Tonka the third-largest toymaker in the country.
"That put Tonka on the map," says Mike Marra, a Tonka engineer who got his start at Hasbro. "We were expanding the lines into all kinds of things—dolls, playsets, action figures."
But Kenner's impressive collection of tried-and-true brands couldn't save Tonka from its massive debt. In 1990, Tonka posted a $10 million loss. The following year, word spread through the industry that Tonka was being sold to Hasbro at a bargain price. Marra was laid off, with orders to fire 65 employees on his way out the door.
"In one day I had to let them all go," he says. "It wasn't easy."
The upshot of Tonka's demise was that the Twin Cities were suddenly saturated with a bevy of toy inventors, model builders, and artists with lots of free time on their hands. Many went into business on their own and started seeing one another in the same lobbies at pitch meetings all over the country. That bolstered a community the Girschs and a former Tonka guy had dubbed "Elvin Bash."
"It was a celebration of the Northern toy elves," explains Moodie.
The group formed an uneasy alliance. When one of them knew a toy executive was flying into town, the Girschs would arrange a room at the Embassy Suites. In the course of one afternoon, as many as nine design teams would come in lugging their boxes, give one another a wary but collegial nod in the lobby, then head into the exec's hotel room to pitch.
"Other cities talked about it but couldn't do it because the inventors didn't want to talk to each other," says Charlie Girsch. "There was too much mistrust."
Minneapolis City Council member Don Samuels was a partner in a tiny company called Red Racer Studio. He remembers the scene in the lobby, when a parade of "nerdy geniuses" competed to get their toy made.
"Often we'd be up half the night the night before getting something ready. There would be the smell of glue or paint," Samuels remembers. "There was so much opportunity that the competition was not direct."
There was Scott Crosbie, a.k.a. Professor Marvel, a musical impresario with a handlebar mustache. His biggest success was an exploding-cap Hot Wheels car he thought up while drifting off to sleep one night.
Then there was Moodie, who invented the Rap Master Microphone and the Bad Eggz Bunch during the sticky novelty craze.
Marra invented a three-dimensional board game called 13 Dead End Drive that went on to be produced in eight different languages and sold four million copies worldwide.
And of course there was Rick Polk, the son of the General Mills VP who had led the company's expansion into toys. Polk invented and sold a remote-control car large enough to drive his one-and-a-half-year-old son around in—though it never made it to market.
"The lawyers said parents might drive their kids into traffic," he says with a shrug.
But while the Northern elves were cooperating warily, that didn't mean the toy execs were in on the fun. The pitch meetings were often brutal.
Samuels remembers his worst pitch. It was the '90s, when color-changing toys were all the rage, and in the middle of a sleepless evening Samuels came up with what he thought was a fresh new take on the trend.
"It looked so good during the night," he remembers.
The next day during Elvin Bash, he pulled out a conceptual drawing of a child gleefully playing with the latest color-change technology—a vat of bleach. As soon as he took it out, he saw his partners' faces drop.
"They must have thought, 'What is he doing?'" Samuels remembers with a giggle.
And there were, of course, always accusations of idea theft, which came up more readily at the social gatherings that grew out of Elvin Bash, often at Crosbie's whimsical, antique-filled St. Louis Park house.
Crosbie remembers pitching a building set made of foam tubes and connectors to a Fisher-Price executive. He told the man to turn around.
"I'm going to build a structure in 45 seconds that will almost fill this room," he told the man, who dutifully turned and waited. Crosbie whipped up a giant boat-like structure that even rocked back and forth.
"He turned around and went, 'Wow,'" remembers Crosbie. "Six months later and here's the same thing in their showroom."
TIM KEHOE, ONE of the youngest Elvin Bash members, committed the cardinal sin of toy inventors when he was only 23 years old. He fell in love with an idea.
It started out as an elaborate design for a wand that could create a teddy bear out of soap bubbles. When he stopped to consider how anyone would be able to tell it was a teddy bear and not just a clump of bubbles, he had an epiphany.
"Why hasn't anyone done colored bubbles?"
Turns out, it's damn near impossible—a holy grail of toy design that has haunted inventors for decades.
At first, Kehoe thought it would be as simple as adding food coloring, but the dye just separated from the bubble solution and sank to the bottom of the jar. He ordered random chemicals online and mixed them together with Jell-O or melted fruit roll-ups. This resulted in a nitric acid bubble that could eat through clothes and caused chemical fires. He even managed to dye the whites of his eyes blue at one point.
Two years into his quest, he finally blew a royal blue bubble that floated off his wand perfectly. It then popped against his bathtub wall, staining it bright blue.
"I had two different places where I lost the damage deposits for new counters and new floors," Kehoe says. "It looked like spin art."
With $3 million worth of investment money and the help of a retired 3M chemist, Kehoe finally managed to blow a colored bubble that popped without leaving a stain. But by then, he was exhausted. In 2007, he sold the colored bubble company and got out of toys. "I was burnt out on the lawyer stuff and the business side," he says. "The model is sort of broken these days. It's hard to sell."
In the 15 years it took him to perfect colored bubbles, the toy industry had changed dramatically. Video games got cheaper, faster, and better, and the conventional wisdom was that a child was basically done with toys by age eight. As the audience shrunk, big-box stores squeezed out the small mom-and-pop toy stores, then the medium-sized chains. Today, more than half of all toy sales are made at a Walmart, Target, or Toys 'R' Us. Retailers began having more say over the products that toy companies made, and small-time inventors got left out in the cold.
Today, the big boys at Hasbro and Mattel won't take a meeting with individual inventors. Instead they deal with a short list of trusted toy agents, about a dozen worldwide. Two of those names came out of Elvin Bash: Marra and Andrew Berton.
As the toy companies stopped buying concepts, Elvin Bash began to erode. The Girschs moved to Colorado to teach seminars and write books on the creative process. Crosbie began spending more time on his music. Samuels decided to go to seminary, then won a Minneapolis city councilman's seat. Moodie started a spice company called Dr. Mops. Polk's product-development company, Whiteboard, diversified into sports equipment and medical devices. Some inventors scattered to the coastal toy companies. One ended up at Blip Toys.
Sometime in 2008, Elvin Bash held its final meeting at Crosbie's house, though no one realized it was the last one at the time. They shared the usual gossip over a potluck dinner. They talked politics in north Minneapolis with Samuels. They wagged their heads and decreed that a Slinky or a Monopoly would never be made in today's market. Then they drifted home and left Elvin Bash in the past.
"It was a riot," remembers Crosbie. "But we all just kind of saw the opportunity window get so tiny. And we started to do other things."
A FEW WEEKS ago, a couple of old Elvin Bashers crossed paths in the architecture building on the University of Minnesota campus. They had been invited by the U's brand-new product design professor to critique the students' toy concepts—though with instruction to be more gentle than they'd been treated at the Embassy Suites.
Tim Moodie surveys the row of projects, clipboard in hand. Some of the students are getting slammed by other critics.
"I'm amazed how many of you are using magnets," lectures one business insider. "A baby once swallowed small magnets. They clipped together in the infant's stomach and the baby died."
The students look stricken.
Moodie tries to keep it positive. He gravitates toward a concept called "Eye See You." The prototype is just a half-circle of wood that spins with a light-up eye pasted on either side. A student tosses bean bags at the shaky model to demonstrate.
"This could be a really simple home run," Moodie tells the eager students.
Rick Polk from Whiteboard agrees. "Kids love throwing stuff!"
Afterward, Moodie and Polk muse on the success of Bill Nichols and his tiny company—evidence, they say, of a budding toy-industry resurgence in Minnesota.
"The hope is that there will be more toy companies like Blip," says Moodie. "They're not huge behemoths like Mattel or Hasbro."
And no matter what the big labels or big boxes say, it can still pay to harbor some of the old maverick attitude, says Polk. "Sometimes success comes to just the person who has the balls to do it."
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