Spin Master/PAW Patrol: Ronnen Harary (2021)

Hey everyone, I'm taking a much needed summer vacation this week, so we're bringing you an episode from the How I Built This Archive. It's an incredible story of how Ronan Harari built a toy company called Spinmaster, and Even if you're not familiar with the name Spin Master, If you've been around kids at all in the last decade You have definitely heard about Spinmaster's most successful toy franchise called Paw Patrol, and it's amazing how they created it. This episode first air back at the end of twenty twenty one, and I hope you enjoy it as much as I enjoy doing the interview.

You'd basically been profitable every single year, and you'd been growing every single year. And then all of a sudden you're not only unprofitable, you're losing a lot of money. Um were you worried about whether you guys would make it? I actually personally myself I rise in a crisis. That being said, I mean it the relationships definitely frayed. Either among the founders. Oh yeah, yeah. Amongst the founders came out, some the inefficiencies in the business, the way we're organized. This is why older people have gray hair. You know, when people say they have gr gray hair from something. Like this was our seminal gray hair Event. Yeah, and you have some grey hair.

I have a lot of grey hair Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, Haronan Harari started out making novelty gifts from pani hose and sawdust. Spend twenty five years building a toy company. That launched the multi-billion dollar children's franchise.

Paw Patrol. Let me start out by saying I love this episode, and I love it not only because the toy category is a joyful one, but because this story hits just about every single lesson you could possibly think of when it comes to building a business. Product, market fit, and failure. Intuition versus research, pattern spotting, solving a problem you have that others have, smart bets, and spectacular crashes? I could go on and on, but I don't need to because you'll hear it for yourself. So let me just mention how hard it is to build an enduring generational brand. It's really hard, especially when it comes to toys. There are just a handful, and you probably know them.

Lego, Barbie, Hot Wheels, Monopoly, Mr. Potato Head, Etcha Sketch, Super Soakers, and not many others. Kids are among the most fickle customers on earth. A hot toy is likely to be hot for a very short period of time. Remember Pogs or Couchballs with the Steve Urkeldoll? Enough said. But here's the great insight that Ronin Harari and his co-founders at Spinmaster had back in the late 1990s when they were just starting out.

The specific toys kids like may change. But their patterns of play. Don't. Since the beginning of recorded history Kids around the world have played with balls.

dolls, puzzles, and their imaginations. The key to figuring out what works is to find something that fits into those play patterns. Since founding their Upstart company in the mid-1990s, Renin and his co-founders, Anton Robby and Ben Verity, were relying on their own intuition to figure out what makes a toy great. So they tried stuff, stuff they thought they'd want to play with as kids. And it meant that it would take them many many years of trial and error.

before they built a company that produced a truly intergenerational brand. If you were a kid or have known a kid over the past twenty years, then you know some of the iconic toys that these guys put out into the world. Bakugan, airhogs, flix tricks, and most iconic of all? Paw Patrol.

It's not an understatement to call Paw Patrol one of the most successful kids brands in the past 20 years. And the remarkable thing about Paw Patrol is that Spin Master built it. Very intentionally. as a 360 degree brand from the beginning. First as an animated cartoon, then as action figures, and now

as a brand that is on everything from pajamas to lunch boxes to stuffed animals. Renan Harari was born in South Africa, but his parents moved the family to Toronto when he was around five years old. His dad ran a carpet business in the city and Ronan grew up working at the shop. He remembers being an average student in part. because of a learning disability.

It's a learned disability called dysgraphia. So it's the the inability for your hand to keep up with your writing. And then my handwriting's not very legible. And then I gotta go back and I gotta correct the what I wrote. And then when you go back and you correct what you wrote. You know, you lose your stream of consciousness of what you were thinking and then you gotta stop and then it's like rebooting. You have to reboot a ton. Yeah.

So for me to like Write an essay would take me twice as long. Right. But the nice thing was I actually I call it learning gifts. And the reason why I call it learning gift is because

Your brain is wired slightly differently. And as a result of that you get some Extra benefits. My my attention to visual detail is is very high. Like when we were developing in toys or engineering, I could see like little changes when we were debugging the toys and

People would use rulers and I could just see it with my eyes. So I think that's the wonderful thing about um having a learning gift. It's just The challenge is that the school systems are is set up for the majority of people. This is not set up for individuals and and that's what makes it difficult.

You know, it's interesting'cause you say you're an average student, but you went to the University of Western Ontario and from what I gather that's a pretty good University, right? It's not not super easy to get into. Am I right about that? I think it's it's in the middle. It's in the middle. Okay. No, it's definitely a good school. Listen, I don't get me wrong, I mean I I worked hard and my my grades were Decent.

But I I didn't get many A's. I can't remember any A's in my In my days. It was mostly B's and some Cs. Yeah. But I actually knew from a very young age that I wanted to go into business. Why d why did you know that? Well, I was average at sports.

And academically I was average, so I figured that business was the right path for me. I saw it as something that had endless potential. And

Not a lot of constraints. Mm. And I guess w while you were in college, you actually launched a business, right? It was uh it was with a friend of yours from childhood, a guy named Anton Robby I think it was like a like a poster company. Is that w like tell me about it. Yeah, well f well first after our first year of university, Anton and I actually sold

fertilizer door to door. Because both of us had to pay for Part of our education. Oh, you you worked for like a fertilizer company? Exactly. We worked for a fertilizer company. And then we started this poster business.

So the business was actually taking ki pictures of kids during Frost Week. And then creating a a uh collage of all the pictures. Frost week is the first week for freshmen, presumably, right? Exactly. Exactly. Okay. So we would take pictures of the kids during Frost Week. Okay. And then we'd cut all pictures out. We'd create a collage and then around the perimeter of the clos, we would sell advertising and then we printed up nine thousand posters. And then gave it to the students for free. Wow, that was a business. That was that was a business. That was a business, yeah.

five universities across Ontario by the time uh we graduated. I think we we grossed about a hundred thousand dollars. And then what happened when you graduated? Yeah, what what actually happened was

So I graduated after three years. Anton uh was in a four year program. And then just before Anton Graduated. My mom was reading the Yidot Ahrnot, which is the largest Israeli newspaper, and in there there was an article about all these six different Israelis that were manufacturing this this product called the grasshead.

It was a small little potato head made out of grass seeds, nylon, sawdust, and had a little happy face on it, and you'd put it in water and grow grass for hair. So similar to like a chia pad. It's like a I guess like a little ball. Imagine like a little like nylon, like pantyhose, nylon ball. Stuffed with Sawdust or whatever and and seeds. And you would what like

Drop water on it with a dropper and it would eventually grow hair. No, you'd have the top You would fully immerse it in water. Oh you'd immerse it. You'd immerse the whole thing and then just let it sit. And like because the sawdust held the water, seeds were able to germinate at it. So She read about it, she translated the article for me, and in the article it said that there was all these six different people in Israel that were selling them and that literally every person in Israel bought one. And it was just like the biggest the biggest craze in the country. And two weeks later, my late grandmother. came to Canada for a visit, and she brought me and my sisters one as a gift.

And so I looked at and I was like No one's manufacturing and selling them here in Canada. Why don't we why don't we do it? And so I spoke to Anton, I was like, Why don't we sell these these Earth Buddies? We called it Earth Buddies. Um And he looked at me, he thought that I was literally crazy. Yeah, I mean, it does sound crazy, because why would you think that I mean the um the first thing is why would your mom read that article and go

Hey, I need to translate this article. Like out of all the articles, like not the one on the peace process or I don't know, some like I want to t tell you guys about the these grass and things. Something about that she thought was interesting. And I'm just trying to figure out why. Like how did you See that and say, Hey, this could be something.

To my mom's credit, she's very entrepreneurial and she's she's very much a doer. Uh. She's like, Well something's happening. So I said to Anton, I was like, Why don't we do it? And we literally went to Kmart. And we bought

Panyhose and we bought uh sawdust and uh grass seeds and everything, we start prototyping the products. And we had a solarium in my house and we were growing everything in in the solarium. And they kinda look like um like uh nature's troll dolls a little bit. Yeah, it's a pretty good guy. It's a fair fair description, right? Great description. All right. So you convince Anton

To join you on this. Journey to make the Earth Buddy. And presumably you didn't need to license it, right? This was not like a patented technology. You were just Making what

was out there, uh am I right? Yeah, that's correct. You know, in the in the article it said The original inventor or the product came from somewhere in Turkey. And no one really knew. Um who it was.

Anton. Start to just stuff These little buddies and and this is nineteen ninety four. And what was the plan? Wha the plan was to

Make tons of them and then just Sell them, I don't know, at a craft fair? Like what would you the what was the next step? Yeah, basically we said, Let's make five thousand pieces for Mother's Day. and go from there. And that was the plan. And so we got my sister and my brother in law.

involved. My sister designed the packaging. My brother in law, ex brother in law, who's an incredible engineer. He designed the contraptions so we can manufacture these things at at some sort of scale. What was a contraption? Like a feed tube?

Yeah, it was like a plumbing tube. You could take the nylons and wrap it around the tube, and then on the side there was a feeder where you can dump the uh seeds and the sawdust, and there was a way for you to tie it off. It was it was actually really clever. Uh we found an a small factory. Space, warehouse space. And did you Finance this with the money that

You had from your poster company? Pretty much. We started with ten thousand dollars. But but before you started to when you guys said let's make five thousand of these for Mother's Day. Presumably you're thinking. We're we're gonna sell these, so where were you gonna sell them?

Well, we s we saw them on the street. We set up tables at eight different corners all around Toronto. And we sold basically eight hundred out of the Five thousand. And we came into the office Monday morning and were like, Okay, well we gotta figure out some other distribution.

And then we found a gift distribute computer. who took on the product and started selling it to the gift channels. And then again. Through my mom, she had a contact of a company that sold toys. Called Sampco Sales.

And showed him the product and I said to them Would you guys be interested in distributing the product for us. And they said, sure, no problem. And two weeks later they called us with an order for 26,000 pieces. From where? From Walmart, Canada. Amazing. Yeah. But but now you guys are renting a warehouse space to make these. And

I guess at this point you bring in Your third Founder uh this guy Ben Varati. Yep. And what did he know about like manufacturing and you know, was he an expert in in like uh Matter R factoring? He actually had no manufacturing experience. He came to our office And we literally made a deal within 45 minutes.

And then he went down and started running the factory. You know, Ben was he's a smart guy. I mean, he went to business school and He just figured it out. Um, but Ben would tell you that he wouldn't have gotten through the manufacturing. if it wasn't for this gentleman by the name of Bob Wakelum. So Bob actually when we started, the first place we actually went to look for people to work in the factory was we went to homeless shelter. It was just

people that needed work, so that's where we went. But there were two individuals, there was Bob and this other gentleman, Grenville, who ran shipping. Both of them were homeless. They were living in a homeless shelter. Correct. And so Bob walked into Ben's office one day and he said No Ben like I used to run a factory. Will you let me help you?

And Ben said yes. And literally within two days he had all these like Gant charts up and this, and he started like balancing out the lines between the workers and the raw materials and all this type of stuff. So you get this order, this order for twenty six thousand. Earth buddies from Walmart, Canada, which is pretty great. Um

And how did they do? Did it great? They started selling like crazy. Alright, so You would eventually get a massive order.

Fmart. Which would prove to be transformational. How did you even get on their radar? You know, the universe in funny ways. Anton was backpacking.

In Europe. A couple summers before. And he met this guy. Who

Came from a very uh well connected family. And uh when we wanted to break into the United States, Anton call them. And he said, Do you have in touch with this guy. He kept in c in touch with them. Well that's one of the

things Anton does extremely well. He's he keeps in touch with everybody. And so he called me, said Do you have any relationships that Kmart? And they said they did. So I don't know why, but I was the one that actually took the meeting.

And so I drove down, it was in Troy, Michigan. I pitch the buyer do like a thirty minute pitch. out of full box of earth buddies. Looks fun. And after thirty minutes the buyer said to me, He goes

Thank you very much for coming, but I'm not the buyer. And I'm like and I'm like, This can't be true. I'm like, who are you? Well why am I talking to you? Yeah, like and then I'm like, Okay, well Could you mind doing me a favor? Can you find out who the buyer is?'Cause I drove all the way from Toronto. So he comes back. With uh this name written on a piece of paper.

Um and said Adrian Zach. So I said thank you very much and I took my box of earth buddies and I started walking around. the office of Kmart looking for the spire. She was sitting at her desk when I found her. And she said, Okay, I'll see you at three thirty.

And then the guys that we came with, they're like, let's go for lunch. Da da da. And I said, I'm not gonna go anywhere. Like maybe she'll call me early or something like that. Or maybe they won't let you back in the building. Or maybe they won't. Like I just Yeah. So I waited there till three thirty. And the craziest thing is as I walked into her office

On the left hand side. of this counter. She had about eight other Earth buddies. There.

Exactly the same under different names. Were they f the these products from Israel? No, no, no, no. They were they were other manufacturers. So you're thinking I'm never gonna make this this is crazy. No, what went through my mind was we were gonna charge her two dollars sixty five cents. U S

Mm-hmm. And I dropped the price to one sixty five in my mind right then and there. Because you knew that if you could get it If you could offer the most competitive price, then she wouldn't go with the others. I knew we can still make money, especially because of the

The Canadian dollar was low at the time. I didn't want price to be a factor and I figured she's got so many options here, so we better give her a compelling reason to go with us. And so I pitched her, I showed her exactly what we were doing. And she gave me this big book, which was the vendor agreement, she said. Okay, well I'll give you an order for 48,000 pieces, and if it goes well, I'll give you an order for half a million pieces. Wow. Yeah.

All right, so she does forty eight thousand orders. Correct. For a dollar sixty five a piece, that's a almost eighty thousand dollar order, which is pretty great. You go back to Toronto? Were you guys able to scale up to forty eight thousand pieces quickly in your little Facility in Toronto?

Uh, we had to move again to another facility. Every time we got more orders we would move into a bigger factory and built more machines, and we just hired more workers and how did you Finance that. Do you remember?

Yeah, we I the product was selling very well. So we had money coming in from the other sales. And I mean in our peak We were producing seventeen thousand five hundred pieces a day. And by the end of that year, I think

Earth Buddy, your sales, from what I understand hit Oh one point eight million dollars. It's pretty great for a company that you started earlier that year. But at what point

Sort of did the three of you say, you know, we should focus on toys. Was it Already in nineteen ninety four after Earthbody took off or not? Not quite yet. No, it was only in ninety five. when we started selling a product called Double Sticks. Okay. That product did really well.

And so it was after that, after the devil sticks. Okay, so Devil Sticks is your next product'cause You know, as we know, the life cycle of novelty items is sh can be short, right? And you probably saw that at that point. You you probably knew that you needed to go to the next thing. You couldn't build a sustainable company. Based on that product alone, I'm assuming. Yep.

A hundred percent. It was novelty, it was gonna run its course and and what else are we gonna have? So the next thing that you come across are these things you call devil sticks and they're like these um batons. You can it's like a baton and you can juggle this other baton in between them and do tricks and I remember this. This was like the mid nineties. I'm in college. And you had those kids who played Hacky Sack and Devil Sticks. That's right. Am I right? Yeah, the that's the demo, right? Correct. Grateful Dead shows, exactly.

So this was a product that existed. Well tell me the story. Did you you you kind of rename them devil sticks, how did you come across them? You know, I actually I played with them when I was in high school.

For some reason in ninety four we started noticing that the lot of kids in the schools We're actually playing with the devil sticks. Mm. So Maybe there's a little bit of a trend going on. We had our factory.

So we said, Well why don't we figure out how to mass produce The devil sticks and and we'll we'll sell them. So it was just based on this trend that we saw as we designed this packaging, and the same distributor that got us The sale at Walmart, Canada. They introduced us to

their partner in the United States called Uniworld. And so suddenly we found ourselves a Toy Fair in nineteen ninety five and Toy Fair was in in New York? In New York, yes. And this is a convention where you'd go and you'd show your products, but so let me understand what the devil The devil sticks are these batons of you know that you juggle. And this there was no patent on them. It's anybody can make'em. You basically created a brand called Devil Sticks, you you gave it that name? No, Devil Sticks is the generic term. And so we called ours a spin master devil sticks. So that's that's actually that's the origin of the company name is uh from the devil sticks. At that toy fair, uh did you Who was doing the demo? Were you doing the demo? I I did the demo myself. You did the demo? So you know how to juggle the devil stick. Yeah, yeah, I told you I played with them in high school. So I did the demo.

Okay, a and and as I understand it. Pretty soon after that toy fair, you manage to get those devil sticks into like like two of the biggest uh toy retailers in North America at the time. Toys are using K B toys, which is huge. I mean there was one thing that was working in our favor, which was There was something in the Zeitgeist at the time.

That made devil sticks appealing to young kids. It was like seven year olds, eight year olds, nine year olds, ten year olds. You know it was like analogous to like the yo-yo. So we did the marketing, but I don't think I think the marketing helped, but there was something in the zeitgeist that actually made the product. Uh. Um, there's a a documentary that Spinmaster made, I think on the anniversary of twenty years, and I watched it, and at that time you said We weren't sleeping a lot.

We were definitely stepping on each other's toes. And there were a lot of disagreements and fighting. Which I think is very normal when you've got three strong partners in a company. Were you stressed out about the disagreements between the three of you at the time? Uh I don't know if it was stressed out, but I think that

We would just fight. And so about like strategy, about product, about who to work with about Where to spend money, all those things. I think it was everything.

But the one nice thing is that Through the fighting and it wasn't like When I say fighting it wasn't like You're angry at the person. It was just advocating for your

Opinion. But You know, we we were young guys and and very excited. Um Everybody really wanted to win and everybody wanted the success.

So maybe we were A little eager. Was it um I mean And this is a question that's come up in a lot of episodes of the show with with co founders, which is Everybody has a different perspective. Um

How did you Resolve. Disputes. We've always Shot for

unanimous consent. And we would keep on debating till we actually got the consent. And then there was one other thing which was If we stepped over the line, everybody Was

Able to say sorry. Which I think is a huge which is a huge thing. Sometimes if you weren't if you didn't say sorry You asked for the story. And you always got the story. It's actually my favorite.

Word and Canadian. Yeah. It's a great Canadian word. Um At that time, right? Okay, so you've got two hits now under your belt.

You've got Earth Buddy. Devil Sticks. You know, you're probably doing four or five million dollars in revenue by year two. How big were your ambitions? Were were the three of you all already in year two of your business saying

We're gonna be a huge toy company. Was that the ambition or was it just like let's just Get this thing, sell this and we'll figure out the next thing. It was let's just keep on going. Let's find some other products to sell. We did make a couple of strategic, like macro decisions, which were

We didn't want to after Earth Buddies and Devil Sticks, which were both, you know call it public domain products. Yeah. We said we want to design and develop our own products and we want to sell them globally around the world. And we don't want to just be a Canadian distributor. And then we said we're open to ideas wherever they come from, and let's go search for for these ideas.

So In ninety six we started meeting with uh toy vendors. And so Ben was living with this girl by the name of Jen Irwin. from the Irwin Toys family, which is a famous Canadian toy company. And That's great. Wow. That was that was who he was living with. Yeah, very coincidental. Yeah so between her and Austin's company called Canada Games, which was run by the Albert family, they told us that there's a whole network of toy inventors globally around the world that come up with ideas, but they don't commercialize them.

And so Ben started going around with our wearers and meeting all these toy inventors and trying to solicit uh ideas from them. And by the way, was that hard to do because you were so small? At that time? Uh, you know, they weren't put it to this way, they they were not showing us their That like Hasbro and Mattel wouldn't even Wouldn't even look at correct. But they were showing us stuff and uh we were getting to look at stuff and we're developing relationships and contacts. And so in ninety six we actually came across

This invention, which was an airplane. That you pumped up. and would fly for about 45 seconds. and it came from these two British inventors, John Dixon and Peter Manning. They actually came to Toronto.

came to visit us and we flew this airplane and it was probably one of the most magical experiences seeing this this plane fly. Describe what it was. It was like a airplane with what? Syrofoam airplane that you pumped air in into it? Yeah so it's it's basically it's a plastic bottle, foam wings on top, foam fuselage. and they had developed this pneumatic engine. that um literally the air would actually drive the piston up and down. Spin the propeller and fly the plane. A hundred m a hundred yards, right? Yeah, it was a hundred. It would fly forty five, fifty seconds.

Fly in a circle. Had they demoed this for other toy companies? Yes, we we didn't realize after we signed the product, we didn't realize that every toy company had turned it down. Wow. So you see it and you're like, this is amazing. Yeah, but incredible. But ev but but they had not had any success getting anybody to bite. Correct. I think they were trying to sell it for five years. Alright, so you guys love it.

And what did you do? You you basically bought the license from them? Yeah, the way it works in the toy industry is you license the product in perpetuity. And you pay a five percent royalty on your sales. Got it. So you get the idea, but really what you're then doing is building a brand around it. W I'm assuming it was a kind of um

crude, right? It wasn't like a fully developed toy. It was a a plastic bottle and and and a Playing with Tyrofo, right? There was no branding or logos or shape to it. Yeah, exactly. The difficult thing with

with the air hogs, which is what we called it. was how do you mass produce it? Um we ended up finding this company called K Development. And they did all the design work. in terms of how the engine is gonna actually function and work and and we actually didn't have a lot of money to pay them at the time. So we they agreed to do a

A backend royalty deal. And uh literally we spent probably year and a half, two years. building the prototype, rebuilding the prototype, testing and see if it's flying and see if it was reliable and durable and all that type stuff. Okay.

Got all the engineering done. Um, and then we went to China, found a factory, which was called Kin Sing. And so we sent all the plans there and uh They started actually building out the product. For us. You were making a big commitment. You were putting a lot of eggs in in this basket. Did you have orders already for the air hog? You know, we did everything in parallel.

I would say this when we when we signed the product, we basically put all the money we'd made to date into the design and development. The design and development was very, very expensive. A million dollars more or less. I all I remember was it was pretty much all the profits that we had. Yeah, that you had. Yeah. Everything was going into this product. Everything's done in parallel, so

You know, we had no orders at the beginning, but as we started designing and developing it. Then you start the sales process and we were going to the toy fair and at the toy fair We were starting to sell it. And so before we actually got into production, we did have orders. So here here's a question. This is a big commitment in money.

And it was a two year process, right, from nineteen ninety six when you got this license to when it actually debuted, I think two years later. How did you No. that it was going to work. I mean Did you do market research? Did you test it on kids? Did you what kind of research did you do, if any?

We did no research. Nothing. You did no market research, you went to no kids, you went to no schools, nothing. You're just like, Yeah, we love this is cool, let's do it. Yep.

So it could have been a hundred percent wrong. Correct. And that would have been a d a disaster. You correct you just thought it was super cool. Which it was. Yep. Loved it. It was just so much fun to fly. Why don't we come back in just a moment?

how the team at Spinmaster began to realize that succeeding in the toy business means never staying still. If you have one hit idea, you'd better start thinking about your next one and the one after that. Stay with us, I'm Guy Raz, and you're listening to how I built this. Hey, welcome back to How I Built This. I'm Guy Raz.

So it's 1998 and Spinmaster starts selling the air hog at toy stores. And unlike the Earth Buddies or the Devil Sticks, the airhog is much more complex and requires a lot of engineering. We took so much care and t that's why it took so long. It was like how to make the propeller safe. put a foam nose coat on it. Uh super light. The wings would uh pop off so they wouldn't break. And

You know, one of the biggest things was Usually it got stuck in a tree. So people you're done. Well, or you climb the tree. Or buy another one. Um, so here's here's the thing. So you you make this product, right? You get this Chinese company to make them and do you remember what how many Did you initially intend to make? Like A million, half a million?

You know could just tell you that by the end of nineteen ninety eight, so we started marketing in that year. We had gross thirty five million dollars in sales. Wow. I think we've sold over a million in A million a half piece or something like that. Mm-hmm. And I think our whole sale was about

twenty dollars at the time? And it cost you probably ten dollars to make them. Nope, it costs about five fifty. How did I mean aside from the fact that it's super cool, I remember airhogs and they're still around, but how did you um how did you market it? Did it Did you have to do anything at all to market it, or was it just a product that sold itself? No, we did a lot of m we we did the T V commercial, we bought media against it.

We found distributors around the world. We came up with these really creative point of sale. displays where you could actually pump up And here the the magical sound that came from the motor. And I think we had them at like Walmart and Kmart and at a lot of places. So that was definitely in the marketing budget.

Alright, so this this comes out. And by the way, is had you guys raised any money? for the company? Are you entirely Self financed. Entirely self financed. Other than

the bank would actually let us borrow. against our inventory and receivables. So we were able to use those monies, which weren't our monies, but at least they were Up against the the orders that were gonna come and again apply that to actually purchasing the goods and Doing marketing and all that other type of stuff.

This product blows up. So you're you guys are growing really fast. When do you remember Thinking to yourself. This is different.

This is Next level. Oh yeah. I mean I mean the engineering development. It was A priceless education. designing and developing and marketing that product.

was priceless. It was so difficult. It was so we we taught ourselves everything. Close to that. It's not really even a toy.

It's a mechanical flying, you know, object. So We really stretched ourselves to actually get that to market. But the nice part was All the inventors. that we were visiting, they were like, wow, these guys can actually design, develop, and manufacture something. And so that really opened up the doors to future products for us.

Here's here's what I wonder. I mean The Airhogs Takeoff in nineteen ninety eight. At that point Can you just focus on that product and really build that out for the next few years? Or already Do you have to start thinking about the next thing that's gonna come out after that?

You do both. And is that because kids are fickle and they just the life cycle of a toy is short? The toy business is all about fresh and new. Even if you have a brand. within the brand you still need to bring fresh and new. So we knew straight away.

after our first product, we were like, okay, what other innovation can we do in flying toys? So we came up with the the B Wing. which was like a stealth flying plan. And then we were thinking about other types of f flying toys. So yes, you always have to be innovating within the brand and then We also wanted to diversify as a company, so we were thinking about what other categories can we get ourselves into. To me, it just seems like

My god, you guys were just playing with toys, like how joyful, like how amazing, how fun, like But this was real serious business. You guys were Heads down like Really?

Focused or or was it? throwing nerf balls around the office. I don't know what what what was it like. No, it w it wasn't that much fun in games. It was it was serious. First of all, toy business is very competitive. hyper competitive business and it's very fast paced.

And You know, the three of us wanted to win. So we were actually quite serious. I think we were probably too serious. We didn't have the foosball tables, we didn't have the pool tables, um It was more about

When we're in the office. Let's do the work. and then let's go enjoy our time afterwards. It's intense. The other thing about the toy industry is that you're dealing with kids and you're dealing with safety and and and you gotta make sure that everything's You got a manufacturer.

Something at a low cost, that's safe, that has an innovation attached to it. So nineteen ninety eight really is a pivotal year for you guys because the the airhogs just takes off. You you successfully manufactured a product now overseas. And now you've got a strategy. You are going to really begin to Assess.

A bunch of inventions I read. Um You grew to twenty eight employees. you were assessing about a thousand inventions a year at that time. So were were people just coming to Toronto and showing you stuff or were you was it all happening at toy fairs or were you actively Tapping into this network of inventors or all three of those things.

Ben Verity and Ben Dermer. On the road. Ben Durmer was a was another person you hired at that time to help out. Yeah, he helped Ben with the inventor relationship. And so they would literally go from city to city to city and visit the inventors. And go to their offices.

And I'd say that was like eighty percent of the The work was done that way. On location. So you did zero research for the air hogs, but it really took off. Yep. Did that make you

And I'm not trying to ask this in like a a snarky way, but I I just I think that if I was in your shoes I'd have been like, Oh my God, look at my judgment's amazing I can do no wrong. Like I might have become a bit arrogant at the time thinking We know how to pick hits.

Did you guys have any of that at all? No, because we we had some other products that Alongside of the air hogs that failed. We had a product called Don't Free Freddy. And it did not do well.

It was basically a Little furry monster and his hands were handcuffed together. And then you press a button and he the handcuffs would pop open and his arms would flip up and he would roar at you. And we just thought it was funny. But the kids didn't think it was that funny.

And how did you In those early days, how would you give something in the green light? Did you have to have total consensus? No, sometimes there's certain products that I loved. And I would win Ben over, but He wouldn't come very easily.

But the one thing that we did find over the over the years is that When we did have universal consensus, the likelihood of success was much higher. Alright, so you have airhogs and you're uh like assessing like a thousand inventions a year at this time. And uh you uh the next thing I think you come across is these little um like miniature

BMX bikes, um which are called Flick Tricks. And I think the gu who pitched them to you was this inventor named uh Jeff Ray Kemper. Yeah. And then uh The one thing you have to understand about inventors, okay, and the reason why you want to go visit the inventors rather than them coming to you is like they're really the kids in the equation, okay? And when they invent something, they want to show it. They get so excited about it. So on one of my trips to Chicago when we were developing the the air hogs.

Jeff actually. showed me the little flick tricks. And Straight away, I was like, this is so much fun. Again, any market research, taking into kids, to sitting behind two-way glass, watching them play it, anything like that. Nope. Nope, nothing like that. Nothing. Other than the fact that kids were really into BMX bikes at the time. Yeah.

Would you analyze like market data around that? Did you have statistics? Zero. Nothing. Wouldn't even know where to get'em. So you are literally just saying, Yeah, I think this is cool. I'd play with this. It was so much fun. The key to being in the toy business is you gotta always think and feel like a seven year old. Is this common, by the way, in the toy industry? Or am I just compl'cause I'm have I talked to too many McKinsey consultants? You cannot consult yourself in the toy industry. It is the one of the most intuitive creative industries.

out there. It's a feel industry, but it's also a history industry, like you need to know What happened in the past. What did well, what didn't do well.

And then it's very iterative, like Everybody's adding on an innovation from the past and everybody's looking for like play patterns. Yeah. So it's all about the play patterns and stuff like that. So You know, kids played with die cast cars. Sure, I did. I love them. Hot wheels today.

And so the association was, Well, this is kinda similar to to Hot Wheels' die cast. There's a collectible aspect to it. You know, we went out and we licensed all the BMX bike companies at the time, like Hoffman and Red Line and all that type of stuff. So you can collect them, you can play with them. So w there was an association. and a confidence in the play pattern. So this is so different from so many other industries. Essentially what you're what you're saying is It's very hard to create a toy for kids in a boardroom with all the market research and looking at kids through two way glass. Like actually

That doesn't Work that often? Not really. I mean you could you can get some false positives too. I mean, kids get excited about a lot of stuff. Yeah. You can see if kids are really bored.

You can probably see if they really don't like something, but then again it's like What's valuable is is more like Is it too big for their hands? Is it too small for their hands? Can they hold it? That type of stuff. More functionality. But

Testing the magic. Very difficult. The only way you're gonna test it is by putting it at retail. But this play pattern idea is really interesting. I mean you know Like

When I was a kid I used to build Lincoln these elaborate Lincoln Lodge. houses or you know, kids have played with Lego for a long time, had mecano I loved action figures. Mm-hmm. And so what you're saying is elements of all those things

They've always Existed. through time immemorial when humans were in Neolithic villages they played with they played in the same patterns. Kids played in the same patterns but just with the rocks or whatever. Yeah, I mean it's interesting th for you to go that far back in time, but I guess I would say like in the last

A hundred years. Like the play patterns started to solidify. Like there's eleven categories in toys. So you got plush, which is stuffed animals. Like there's a way for kids to interact with plush.

And then like you say, action figures. Um How do you play, you know, action figures is all about, you know. fantasy and and trying to become that character yourself. Yeah. So the toy companies creatively were able to create around The way kids like to interact.

And so Now it's like can you bring something new and different? to the play pattern. To spark joy in the kids to get them excited. And that's what that's what we look for all the time. Mm-hmm

So So I guess Like around two thousand one. You guys ha had what I think w was your first like

large scale failure. Um which was a product called Key charm cuties. And I guess y you were competing as a like a Mattel product that uh something that the Mattel was putting out. Yeah, against Polypocket. Right, right, right. Poly Pocket. So wha what what was the thing you guys were making?

It was these small fashion dolls and and uh you can change their clothes in a unique way and they came in these purses that you can carry them around with. And when it came to key charm cuties. This really We were up against Mattel and their marketing and their design. And

Our design. Couldn't compete. Like our dolls didn't look as as nice as theirs, our patching wasn't as good, our commercial wasn't as good, we didn't have the brand, we didn't have enough money to develop a brand. So we that was our first lesson against the the big guys. Did you conclude that it wasn't worth it to go up against a a Mattel or a Hasbro? No, because I mean I've the The Flickricks were going right up against Mattel, it was going up against Hot Wheels. We have no problems competing with Hasbro and Mattel?

We al always like respected them and learned from them. But we actually had no choice. If you wanted to be in the toy industry, those were those were the players that you were competing against. All right, so From what I understand, you started to go to Japan in two thousand. Yep. Um and I lived in Japan when I was a little kid. From age four to six. My dad was there and I still remember The toys were unbelievable, like years ahead. You start to go to Japan in two thousand. Presumably because Japan, I think is

Still, like when it comes to toy innovation, probably the center of the world, right? It's it's one of the most creative places you can go. But it is. Probably v it's very seminal. Two

the journey the company has taken. We actually went there with a with a mission in hand, which was to try to find products in Japan that we could bring to North America. And what is it about, in your view, what what is it about Japan? Why is Japan this sort of the The Silicon Valley, let's say, of toys.

I just think that their minds are very open and they I think they just look at the world very differently and they w look at things differently. And what Would be strange to us. is normal to them.

No, like when you think about like the Tamagotchi. Like what a unique toy to come up with something like Ampamon. I don't know if you've ever seen the preschool show Ampamon. Mm mm. It's the one of the strangest.

Or like Japanese candy. It's just amazing. Yeah. I haven't eaten a lot of candy, but I think they like they just They're just into doing different. They're good with different. W one of the decisions you made in two thousand five, which I think is a pivotal decision, maybe I'm wrong, but I think it was

is you moved your director of global licensing to Japan. And you really kind of wanted to Figure out. How to bring something From Japan.

'Cause I think two thousand five would eventually, a few years later, lead to Your biggest toy of all time up to that point. Wh which was Bakugan. Am I right that that story begins in two thousand five? Yeah, uh background.

Two thousand six. Um and can you can you explain what Bakugan was? It was like Marbles meets transformers. Yeah. So they're these marbles and that you roll on the table. And you're aiming towards the card. A card, okay. Embedded in the card is a sheet of metal.

But as soon as the ball hits the card The magnet inside of the ball has a s activates a spring and then a pops open and transforms the The character.

the ball into a character. This idea came from some like a kid, a twenty three year old Named Aldrich or Aldrich Saucier. True. submitted this idea

to Spinmaster you had did you have like a An open submissions like a way to submit ideas? He act no, it actually came. Aldric invented the item. So his uh his genius was the idea to put an action figure into marble.

Yeah. And We took it in, we s we did a whole bunch of development. And then what happened was We said well, you know, you

In Japan, they're so good with these like micro mechanisms. maybe we can partner with someone in Japan. So we did a trip over there. And we took it to Sega Toys. And we presented it to Mr. Cocoban. Who doesn't speak a stitch of English.

He's the founder or the CEO of Oh Sega at the time. He's the president of Sega Toys. Sega like the video game company too. Yeah, exactly. But his history

was he was an incredible toy inventor. and a real true blue toy guy. So he saw the magic and he saw the potential and he said, Sure, we'll partner with you guys. And you knew because of play patterns. You knew that kids like marbles because of like marbles for right a long time and they like to roll things on the ground and They like transformer things and you knew all those elements suggested that this would take off. Yes, I mean when we licensed a product it had two elements. It had the marble and it had an action figure and a marble. So those were the two two play patterns.

with a really really cool magical sensation like when it popped open, like you got excited. And then your ability to close it. was automatic, like you just just took your two fingers and it closed. So there was a like it was very fidgety in terms of opening and closing and opening and closing.

Alright, so you're developing this toy, this new toy, Bakugan, and I guess you decide to do something that you'd sort of learned about in in Japan, which is When you launch it, you also launch a cartoon. about about the characters. Yeah. Oh yeah. And I I don't hopefully this this doesn't sound crass,'cause it's not like I mean this is a business show and I think that from a business perspective, this is absolutely a brilliant strategy, but I mean a cartoon is essentially a 22 minute advertisement for for the product, right?

I would say it it's a way to actually accentuate. the magic of the toy. And it enhances the toy because how are you gonna know the characters of the Bakugan unless you can see them on the screen and hear them talk and see how they battle and how they work and all that type of stuff. So so what happened when Bakugan was released to kids I mean I remember through the 2010s, seeing that toy. E in the hands of every

Kid. between the age of five and Ten twelve. It became a billion dollar franchise at it. Billion dollar franchise. Yeah, so a billion dollar franchise. It it aired in literally hundred and fifty countries around the world. We did four seasons over two hundred episodes.

It just captured the hearts and minds of kids. And I think around two thousand eight you transitioned from being a toy company to a three hundred sixty media company, which you I think is fair to describe you that that way today, right? Yeah. That was one of our one of our goals was to have an entertainment division. And uh Bucagun was a genesis for it.

And then after Bakugan we We launched a show called Redi Kai. Which was Based on this really Innovative.

card system that we created. Everybody was excited about it. All the retailers bought into it. And it was a huge disaster. Like you you could not give the product away. Hm.

It it probably took the retailers like two, three years to actually Clear out the products. What happened with the recession of two thousand eight, nine and beyond? I mean, did does that affect toys or are toys relatively you know, inelastic.

We actually had our best years in two thousand eight, two thousand nine during the recession. So we didn't we didn't really feel anything. Parents are not gonna cut on they're gonna cut on their kids. Last. In terms of uh consumer expenses and stuff like that. It's quite recession proof.

The flip of the toy industry is not a high growth industry. But it's just very it's just very stable. Alright, so You got the Bakugan. I think by two thousand ten it was driving

almost half of your sales. It was um over forty five percent. of your income came from Bakugan, which is great, but also kind of scary, right? That one product is so Dominant. That revenue stream dries up.

you're in trouble, which I think kind of started to happen around that time, right? That's exactly what happened. So basically in two thousand eleven the sales started to go Down. And so basically Our sales went from Two thousand and ten. I think we peaked at about

Nine hundred and fifty million. Yeah. And then by two thousand and Thirteen. The sales were down to five hundred million. Wow, that's a huge

Decrease. Yeah. And that's because you put too many You rely to heavily on Bakugan? It was a combination of that and all the products that we had coming up behind Bakugan.

Those products didn't work. They didn't connect with the consumer. The product line just wasn't robust. That was following up Bakugan. Why did it happen now, by the way? What do you think happened? You know, I think it's just I think it's actually natural is is that Those types of toys have a certain life cycle to them.

and they're usually a it's a three or four year life cycle and then they actually go down So by two thousand thirteen we were we actually retired Bakugan. So It went from like hundreds and hundreds of millions of dollars a year in sales.

two zero. Let me come back after the break. How Spin Master is airlifted out of its slump. By a ten year old boy named Right.

six search and rescue dogs, otherwise known as Paw Patrol. Stay with us. I'm Guy Raz and you're listening to how I built this. Hey, welcome back to how I built this. I'm Guy Raz. So it's two thousand twelve and for the first time since the company's launch

Spinmaster is not turning a profit. In fact, it's losing millions of dollars. And Runan understands that in order to keep going The company needs to come up. with another hit. But until that happens

he has to make some hard decisions. We had to do two things. We had to lean into developing and like really keying in on What are the right categories? What are the right products that we should be launching?

I think we got to the point where we had a lot of hubris and and we were like, Whatever we're gonna put out there, it's gonna go and And um'cause you had so many hits. We had so many hits and we had so much success, and everybody gets excited, like So we had to become much more judicious in the product selection. And then on the flip side, we have to restructure the company. At that point in time, I think we had about nine hundred employees.

And we had to l let go three hundred and fifty people in a matter of twenty four months. A third a third of the people. Wow. And we've never done it before. It was an excruciating process. Um and we did it four times, four restructurings. Just because You know, no one really wants to believe that the sales are gonna go down. And so When we did the restructuring, everybody was like, you know, we don't need to let go of that many people, you know, the sales are gonna pick up, et cetera, et cetera. And it just never happened. So it was like it kept on jerking in the whole company, you know, like

Every single time you have to go out and make an announcement and and make people feel comfortable and the company's okay. So when you do it four times, you know, you you lose a lot of credibility and it's hard to keep the morale. Um hi. I'm sure. I mean four rounds of layoffs.

People must have been really worried. And nervous about their jobs and it it it has to affect. Uh the call the the atmosphere. That was stressful. The other stuff wasn't stressful. This was stressful. Yeah. But I will say that that we really

It was the time where we actually dug in and And we're like, we need to tighten our marketing, we need to reduce our SKU counts. We don't need to do as many things. financially, we we actually had no choice because

In those two years the company lost money. And substantial amounts of money. So There really wasn't any Any options.

But to write the ship. And then In addition, you had to come up with a new magical product, the next Bakugan, the next airhogs. What did you do? We just got really focused.

The one thing we didn't do is we didn't cut our R and D budget. We kept that and we kept on spending and we kept on investing. And we were like, let's keep on trying. Let's keep on trying with new television shows. Let's keep on trying with new toys. And we'll just be a smaller company. But let's just be a profitable company. Renan, did you

you've basically been profitable every single year and you'd been growing every single year And then all of a sudden you're not only unprofitable, you're losing a lot of money. Um, were you worried? But whether you guys are make it. No, I don't think I wasn't I wasn't nervous.

I actually personally myself I rise in a crisis and I'm actually better in a crisis. That being said, I mean it the relationships definitely frayed. We have a saying, you know, I'm sure you know it's like growth hides a multitude of sins. Yes. And when you're not growing, all the sins come out. So everything came out. Our relationships got challenged, um uh and tested, uh, you know. Even among the founders. Oh yeah, yeah. Amongst the founders came out some uh inefficiencies in the business, the way we're organized.

Everything came out, but I don't think that Anybody was in a panic. It was more of like this is not easy. And This is why older people have grey hair.

You know, when people say they have grow grey hair from something, like this was our seminal gray hair event. Yeah, and you have some grey hair. I have a lot of grey hair. You restructure the company, but but you're also Trying to find the next

Thing and um From what I understand this This concept you knew that the concept of an animated show and and products was successful and um And and what? Like you put out like a request for proposal from from different creators you knew for for like a new kind of animated show? Uh tell me

Tell me the genesis of Paw Patrol. What how how did it start? So I think one of the things that dawned us is like It's very hard to get.

success in the same genre. More than once. So why don't we take focus on the pre school category? And we'd we were like, Well, why don't we do a show for preschoolers? And we said, What if we took the magical

aspects of transformation the kids loved in Bakugan and they love in Transformers. And why don't we bring it to a pri scul audience? And by the way, a pri scul audience because That is You know, is it a good demo for I don't know, for toys?

It's an incredible demo for toys, very steady demo for toys. Um And no one had ever done anything with that play pattern. for that demographic. Mm-hmm. So we put out this brief. Can you come up with a conceit or a a story?

Around transformation for preschoolers. We sent to the five different creatives around the world. And we got back a whole bunch of interesting proposals.

And the one that we like best came from the creator of Bob the Builder, his name is Keith Chapman. An incredible human being and uh He came up with this great idea. What was the idea?

What's this concept? So his his idea was it was called uh Robbie and the rescue pups. And it was this idea of these five dogs that uh each had their own personality

One was a fire dog, one was another construction dog, another one was uh Please dog. And they go out and they solve difficult situations that happen in the town. So he sends you this concept.

And uh it's not gonna be called Robbie and the rescue dogs. Correct.'Cause Robbie becomes writer. Later on, I think, right? Correct. Did you all say this is it? This is the one. Yeah, that's what that's we landed on and we were like

Mm-hmm. Saw it as having Incredible story potential. Incredible. character potential.

And then we said, Well, how do we figure out the transformation? And we said, Well It'd be magical if we put backpacks on the pups. And the backpacks transformed. And what if their dog houses transformed into vehicles?

And that's how we marry it up. So we had the transformation. Plus straight story. Good character. All that stuff mixed together and we were like let's let's move, let's try. And I think I think the show Paw Patrol uh debut in in twenty thirteen, is that right? Twenty thirteen. And did it take off right away?

It took off pretty quickly. But I will say this much is that The show got Developed and refined. Over time. Awesome.

And through that That concept. Right. you can do I remember the the I mean I don't know the action figures, the It's everything. It's it's toys, it's stuffed animals, it's pajamas, it's lunch boxes, it's

I mean I'm just scratching the surface, right? It's endless what you can do with A character that sticks. Yep, you're exactly right. I mean there's that's the magic is when you have a character that kids love and trust and can relate to. then they'll want to spend time with them in in different form factors.

So It definitely helped turn around the business. It's hard to Over state. How

All those elements came together. into this perfect match because I believe That Paw Patrol. As a franchise. Is

One of the biggest. Hoy franchises since um Mighty more from Power Rangers. Yes, it is it is a Once in a lifetime, once in a generation.

Franchise it. That is Exceeded All expectations. And uh

It's something that that we've worked towards. You know, originally we had paw for five, then we had paw for ten, you know, we're coming on the tenth anniversary. And now we have we have a motto which is Paw Forever. Our job is to Just keep it fresh, exciting, you know, we just came up with the movie. Came out this past uh August.

The first time we did a feature. Like the Film, animated film. And so that was a milestone for Paw Patrol. We're gonna do another film and Two thousand twenty three.

You know, we want Paw Patrol to be around for For a hundred years, you know, it's it's our Mickey Mouse. Yeah, what is it about a character that makes it enduring? I mean why does Mickey Mouse and Door and But not

You know, I don't know. Garfield. who I watched when I was a kid or the Smurfs even. I mean yeah but the Smurfs aren't as big as they I don't think they're as big as they were when I was a kid. I think a lot of it has to do with keeping them relevant. You know, if you look at let's say like

Franchises like Spider Man. They're always doing movies. They're and they're taking risks with their movies. You look at Transformers, they did films and and They were really innovative with their films. They're so different from the cartoon that I watched as a kid. Yeah. Yeah, so they're

They're relevant and they're timely and I think the you know stuff other franchises They just didn't keep things. Fresh. And kids they can sense it.

So it's uh I think that we're we're following that model. What do you think the value of that franchise is today if you Priceless.

It's multi billion dollar franchise. Yeah. You decided to go public in twenty fifteen. So twenty years after you launch.

imagine for a variety of reasons. One is to raise money, but two, you know, to reap some of the rewards of what you you had built. Is that the decision behind why you went public? No, it really wasn't. the real decision why it went public was to actually set the company up for

success in the future. We felt that For the company to outlive the founders. it's best for the company to be in a public construct rather than a private company.

It was like we knew we were getting a little bit older, who knows what happens in the in the future. And as an entity, it's not reliant on three shareholders. At the end of the day. You had this

challenge with Bakugan where it was accounting for forty four percent of your revenue. And then when the sales went down you took a hit. And presumably you learned a lesson from that. But I have to assume that the Paw Patrol is still the biggest driver of revenue. For the company.

Is that fair to say? You know what's significant? That being said, after what happened in the downturn years, We became very conscious on Diversifying our revenue.

And so we went out and we bought a company called Swim Ways, which specializes in in the pool swim toys. Uh floaties. You got Etchasketch? At a sketch we have a whole activity part of our business, which is at a sketch. We also diversified into um the games business. So that's very stable recurring revenue. We bought a company called Cardinal.

in two thousand and fifteen. So we're the largest manufacturer of Puzzles and chess sets and poker chips and all that type stuff. It is, and I don't mean as a pun, head spinning. Spin master's head spinning to me. The industry's head spinning to me. I've a vertigo just thinking about all of the things that you're part of. Twenty thousand products, um a media arm. games, digital products, um It seems like in this industry you just can't you have to continue to move. You cannot stop, or else you

You die. I think that's entertainment. That's the essence of the entertainment business. I mean I mean the way you describe it it sounds like exhausting. Yeah, it does. But uh but I think at the same time, you know, the flip side is that it's exciting. It's exciting to work on new and fresh and to design stuff and to create stuff. And I think the creation process is is uh is where the magic is.

No, sometimes I wish we were just like a a one product company or one, you know, one idea. But uh I think it would actually be boring. We just it was just one product and And that was it. Now that you um

decided to step down. I I can't believe you I like to I like to use the I like to use the word step up, actually. Step up, okay, yeah, but I'm I can't believe you were in the leadership position with the company for twenty five years, a long time. You're still young. I mean I think you're Maybe close to fifty or just fifty. That's great. You can still you still have a lot of time to enjoy your life, but I mean, man.

I imagine that that was your thinking. You're like, I'm done, I did it, I can play a different role in a company. Uh No, that actually wasn't That wasn't a hundred percent the thing that it was

the the co CO model that Anton and I had. And then It traditionally is not a good model. So it's incredible that it lasted this long. And

One of our biggest goals is for this business to live beyond the founders. And so this was part of the transition plan to enable that to happen. So Or very much.

connected to the business and and engaged and And want to guide and shepherd it into the future. We'll just guide and shepherd it. Differently. Uh Ronan, when you think about

This trajectory. Yeah, you started this business. With the Panny hose stuffed a sawdust and grass seed. And turned it into a

A four billion dollar company. How much of that do you attribute to how hard the three of you worked and and and your intelligence and how much do you think has to do with with getting lucky with with toys and products and ideas. I think we're lucky that we found each other.

I think we're lucky the people that decided to join our company. the people that we've been able to attract and partner with and people that wanted to take the the journey with us, whether it was Bakugan or Paw Patrol and these partnerships. I think that's where the luck came in. And then you know, we put in the time.

You know I have a saying, you know. You don't go, you don't get. And We went out a lot. You know, Anton like He opened up all the offices in Europe. He, you know, he did all the sales with all the retailers, managed all those relationships.

Ben was constantly going out, meeting with the inventors, going to their offices. Doing inventor trips. We did all that stuff. And the last thing I'd say is that We never blamed anybody for failure.

'Cause it's too complex in our business. There's too many stakeholders when you're doing creative things. that you can blame one single person. So For sure, listen, the universe works in strange ways and a lot of it is is out of our control. But we need to show up too.

at the same time. So it's it's a combination of both. That's Ronan Harari, co-founder of Spinmaster, and since this episode first aired back in 2021, Spinmaster announced a$950 million deal to buy another large toy company, Melissa and Doug. The acquisition was completed earlier this year, and by the way, Melissa and Doug have also been on how I built this. It was one of our very first episodes way back in 2016, and if you haven't heard it, scroll back and give it a listen. And thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show and as always it's free. And don't forget to sign up for my free newsletter at guyras.com.

This episode was produced by Casey Herman with music composed by Ramtine Arablui. It was edited by Neva Grant with research help from Clara Murashima. Our production staff also includes Chris Massini, JC Howard, Alex Chung, Catherine Seifer, Sam Paulson, Carrie Thompson, John Isabella, Carla Esteves, and Elaine Coates. I'm Guy Roz and you've been listening. how I built this.

What you see above is a preview of the first minutes. One unlock costs 3 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.