My first ‘real’ job was at Worlds of Wonder, a toy startup, in the late ’80s. I was fortunate to work on two number one hit toys, Teddy Ruxpin and Laser Tag. It was truly an amazing time. And like everyone else, I was totally hooked. What’s not to love about the toy industry? Who doesn’t like toys? After I quit Worlds of Wonder to license my own ideas, I founded Stephen Key Design LLC. My goal was to invent toys.
I had some early success. One of the first ideas I had I licensed to Ohio Art. The Michael Jordan Wall Ball was an indoor basketball game that sold for more than a decade. For a couple of years after, I submitted ideas to all of the major toy companies. It was a total bust. I wasn’t able to license a single other idea for a toy.
I learned firsthand that creating products for the toy industry is extremely difficult. It can be done, but it’s very competitive. Just think of any Toys “R” Us store. The competition is fierce.
It wasn’t long before I changed directions. Inventing for the novelty gift industry was much easier. At the time, I tried to understand what I was doing wrong. Dave Small, my former boss at Worlds of Wonder, has been bringing toys to market for more than 20 years. He told me simply, “It’s just so creative. There are so many ideas being developed every year, there’s an immense history. Familiarizing yourself with it takes time.”
Back in the ’90s, reaching out to toy companies was easier. Today using a toy broker is more common. Reaching out to smaller companies is still doable, but if you want to play in the big leagues, you’re going to need to work with an industry expert.
I was glad to meet Mike Marra, founder of Marra Design Associates, in Minnesota last month at an Inventors’ Network meeting. He’s been a toy inventor and broker for decades now. I asked Mike to give me his perspective as an industry insider. His resume is impressive, to say the least. Mike studied mechanical engineering before joining Hasbro’s product development department. Later on, he worked at Louis Marx and Company Toys, Colorforms, and Tonka Toys. In 1990, he founded his own firm with his wife and has licensed more than 140 toys since then — more than half of which he and his wife invented.
Needless to say, he knows toys.
Why did you return to the toy industry?
“Other industries were dull. The medical industry was fun. I designed devices for internal organ resections and skin stapling, which meant I got to spend time in operating rooms ensuring surgeons were using the new devices correctly. But the toy industry is sexy and fast-paced. It’s exciting all-around.”
Why did toy companies start working with toy brokers in the ’90s?
“At the same time my wife and I started to license our concepts to toy companies, we began doing development work for them as well. What I saw was a big gap in the woodwork. Large companies were starting to close their doors to independent people and their concepts because they were being served too many frivolous lawsuits. People were trying to rip them off. The toy industry moves very fast. Toy executives were being presented ideas they already had in development. So when I told my contacts at these companies, refer unsolicited inventors to us, we want to work for them, it was welcomed.”
What is a toy broker?
“What inventors need to know is, the toy industry trusts professional toy inventors and brokers. Manufacturers want to work with inventors. For example, they provide inventors and brokers they work with regularly, like me, with wish lists. My wife and I evaluate ideas based on our knowledge of the industry and digging into our 45 year-old archive of toy catalogues from companies around the world. Those catalogues help us determine what’s unique and why.”
What is unique about the toy industry?
“To be successful, a toy inventor must “substantially raise the bar,” the operative word being substantially. Unlike other industries, little twists and minor improvements don’t cut it. You have to come up with an innovative wow factor to capture a toy company’s attention for licensing. They need to exclaim, “Why didn’t we think of this!” The toy industry goes through so many product ideas a year internally and externally, incremental product category upgrades are a yawn.”
What do inventors need to do to succeed in the toy industry?
“Research, research… and research. When we evaluate ideas, we do our evaluations based on the category as a whole. Products in the entire category are your competition. So, I recommend using Google, catalogs, and sales flyers to study the market, not just toy stores. We pour through our catalogues to understand the entire history of each toy idea presented to us.”
The good news is, the toy industry couldn’t care less about ‘patent pending’ or ‘provisional patents’ when it comes to licensing a product concept.
Yes, that’s true. In many instances, introducing a new product is about hitting the current trend before it peaks. The window of opportunity for sales would be missed waiting for patents to issue. Let me put it this way: Marra Design has never filed for a patent prior to licensing a product concept.”
So what should inventors do to protect themselves?
“Always get a non-disclosure agreement or confidentiality form from anyone. If it doesn’t expire, that’s better. I always tell inventors, never show or talk to anyone about a product idea unless you have a reasonably worded NDA in place first.”
I loved what Mike had to say about how much work inventors should do on an idea before he’s shown it. He told me, “We don’t want to see people spend too much money early on. It’s never, is the idea good or bad. It’s, is it licensable? Does it have the right licensing characteristics? Every single idea in the world is marketable, but not every single idea in the world is licensable.”
What is licensing then? “Getting someone to pay for your dream,” he said.
Originally published on Inc.com October 9th 2015.
