This story begins in a land not so far away in a time not that long ago.
Cincinnati, Ohio in 1973. I was a new Product Manager for the Kenner Toy Company. Kenner was owned by General Mills at the time, and I transferred here from earlier
positions with General Mills in Minneapolis marketing Wheaties, Trix and developing Nature Valley cereal.
As the new kid at Kenner I was honored to be assigned a new product line that was going to really put the company on the map… a line of Boy Scout action figures. As an Eagle
Scout this was a dream assignment for me. It was the idea of Kenner president, Bernie Loomis, who had personally negotiated the rights with the Boy Scouts of America. With
this visibility and commitment, how could it miss?
Steve and Bob Scout and their adventure camp sets were introduced to the trade at a preview show in Chicago January 1973. Lots of hype and TV commercials followed.
Later that year we all knew the line had bombed. In toy trade parlance Steve and Bob Scout were “stiffs”. Kids didn’t buy them. And nobody knew why. This was my big opportunity. It was devastating. And then I came down with hepatitis from eating some bad oysters, and missed three months of work.
At that time, almost all new toy concepts at Kenner were exposed to children early in the development cycle. It was part of my job to attend and observe child “play tests” of all promising new toy prototypes that were in my assigned categories.
It was a dreary, rainy day at Mt. Airy elementary school in suburban Cincinnati. I was standing behind a one way mirror watching two boys playing (unenthusiastically) with a new robot toy prototype we were evaluating. Suddenly one boy grabbed it and said “I’m the Six Million Dollar Man” and started some very interesting “play patterns” as we
called them. After the play session I asked Delores, who conducted our play tests, if she knew who this was.
Shortly afterward he reported that ABC had recently begun airing a new prime time series about a bionic man called the Six Million Dollar Man™.
She didn’t. When I returned to the office, I asked our advertising VP, Hugh Kaiser, if he knew and he said he would check it out. Shortly afterward he reported that ABC had recently begun airing a new prime time series about a bionic man called the Six Million Dollar Man™. It was receiving very strong Neilsen viewer ratings by adults and children. It featured a fictional NASA astronaut who, after a severe plane crash, had been surgically repaired with futuristic ‘bionic” features including an eye with telescopic range, a right arm with super strength powers, and both legs that enabled him to jump tall buildings and run like the wind.
When I presented this information at our weekly new product committee meeting, Bernie was instantly ready to go for it. At that time Saturday morning cartoon shows provided almost all of the toy licensing opportunities. But we would not be able to have toys in the marketplace until the second half of 1975 (next year), and by that time the new show could be off the air. Despite this risk we contacted Universal Studios who produced the Six Million Dollar Man™, and negotiated worldwide licensing rights for toys based on the new program.
Dave Okada, Kenner Vice President of Preliminary Design, and his design team worked feverishly to create the fantastic action figure prototype. It included:
- A see-through bionic eye, made from a modified fisheye lens from a door security viewer, that magnified
- “Roll up” bionic skin covering the right arm ( a section of penny balloon that entertainers use to make into inflatable animals) revealing the replaceable bionic module in Steve Austin’s right arm
- And a power lift mechanism in Steve’s right arm activated by pressing a button on the figure’s back. Kids could act just like the TV character now!
- Our figure was designed to be larger than the standard Hasbro GI Joe, Mattel Big Jim and Ken action figures at that time to accommodate these special features. This was a gamble we needed to make.
Bernie and I made a trip to Universal Studios in California to show the prototype to Lee Majors and Universal executives, and they loved it.
We also developed the Bionic Transport and Repair Station, as well as the Crystal Radio Backpack Communicator accessories.
We invited Lee Majors, who played Steve Austin the Six Million Dollar Man™, and his wife Farrah Fawcett (of Charlies Angels fame) to attend the big introduction at Toy Fair in New York City in February 1975. One of my jobs was to meet them at the airport and escort them to their Park Avenue hotel. This was an exciting change for me from Steve and Bob Scout.
It was a fantastic Hollywood experience, and the Six Million Dollar Man™ was a huge success, increasing Kenner’s total sales by over 50% that first year from $60 million to over $100 million. It was the #1 toy on the Toy Hit Parade for 1975!
We followed up in 1976 and 1977 with Steve’s boss the Oscar Goldman action figure and his exploding briefcase, Maskatron™ (Steve’s evil mechanical nemesis and I believe one of the greatest toys ever created) and The Bionic Woman™ action figure, played on TV by Lindsay Wagner. She was Steve’s TV girlfriend who was also rebuilt with specialbionic parts after a near death experience. Some may remember that she actually died during the last episode of that season, but there was such a fuss from viewers, that she was dramatically brought back to life the very next season in the world’s first bionic resurrection! The Bionic Woman was then spun off as a free standing TV series.
Kenner was on a roll. And I was promoted to Vice President Marketing and Product Planning at the age of 29. Part of my job now was to make sure that we had the first opportunity to license all promising new TV properties, so I was in California periodically networking with key studios and producers. Bernie and I shared what may have been at that time the only subscription to Hollywood Reporter in Cincinnati to keep abreast of the entertainment industry.
We discovered, licensed and developed great toys for two promising new prime time action/adventure programs…
We discovered, licensed and developed great toys for two promising new prime time action/adventure programs… The Invisible Man (played by David McCollum of Man
From Uncle fame) and The Man from Atlantis (played by Patrick Duffy before he became a star on Dallas). The Invisible Man was a real challenge, but Dave and his team
created some very clever features and accessories.
Both shows were cancelled during their first season. We lost our advance payments and development expenses. But that was the game we were playing. And we were not deterred.
It was also my responsibility to nurture relationships with independent toy inventors to assure that Kenner saw their new creations first, so that we could license the most promising ones for our line. We would meet with the better known designers at our offices in Cincinnati or travel to their locations in Chicago and Los Angeles for dedicated meetings. For several days at the annual February Toy Fair trade show in New York City I would have appointments scheduled from dawn to dusk with the lesser known inventors who found it efficient to try to reach most toy companies at one time in one location. Most of the ideas and prototypes they brought weren’t very exciting, but occasionally a gem could be found.
Toy Fair was an exhausting time for me, and by the end of each day I was done. At Toy Fair in February 1977 I received a call from Charlie Lippincott, who I had never heard of, who said he represented a movie that was going to be released late that Spring. He wanted to show me the movie trailer “preview” to see if Kenner wanted to license it for toys.
My first thought was why bother… most movies are only shown for a few weeks at most… and we need a year to develop and produce the toys. It had been a long day, and he wanted me to take a cab across town in rainy rush hour New York City traffic to see this short clip at 6pm.
It was my job, so I went. What I saw was a brief preview of an exciting new space movie with lots of very interesting robots and vehicles. A virtual toy line! It was called Star Wars. I asked Charlie for a copy of the full movie… he said he couldn’t do that since it wasn’t finished yet. I asked him for a script, and he said he couldn’t provide one. I came back to Cincinnati with only the preview.
And all we knew was that the young creator George Lucas had only one successful movie to his credit, American Graffiti, and that 20th Century Fox was the distributor. It was now the end of February and the movie was to be released in May 1977. After returning to Cincinnati I showed the clip to Bernie, Joe Mendelsohn ( Executive VP) and Dave, who were also intrigued.
In a discussion with Joe I recommended that we proceed with this license, because even if the movie was a dud, there were such great characters and vehicles in it that Kenner with its recent successful track record with action figures would make it a success.
Meanwhile I became aware that another young movie maker named Steven Spielberg was finishing a new movie called Close Encounters of the Third Kind, distributed by
Columbia Pictures, that may also have toy potential. His only significant credit at that time was Jaws. But his new movie was also coming out late that Spring.
We made appointments to visit with both George Lucas and Steven Spielberg in Los Angeles. At 7am one morning Bernie and I met with Steven Spielberg, who happened to grow up in Cincinnati, and the Columbia Pictures representative at Columbia Studios. Steven was busy finishing his movie and apologized for the early hour and limited time to talk. We weren’t allowed to see a preview of his movie, understand the plot or see a script. Steven also apologized for being so secretive. He and George were good friends, and he volunteered that George’s movie would be a much better toy licensing property than his film. This was easy for him to say because at that time only George Lucas had the foresight to retain merchandising rights for his film. Normally the studios retained such rights. The Columbia Pictures representative choked, and we moved on to our meeting with George Lucas and his team later that day.
In that meeting we agreed to a relatively modest advance payment of $25,000 against an annual guarantee of $125,000 and standard 5% royalty arrangement for all “intergalactic” rights to license Star Wars and all sequels for toys, games and crafts forever. Little did we fully realize at the time what this would mean. The movie was still coming out May 1977 and this was March.
Dave and his team got busy creating prototypes for the action figures and vehicles.
But the toys wouldn’t be ready until the following year because of the long lead time for tooling.
One of the many product development challenges for this line was that there were dozens characters and robots in the movie, and we had recently established a new standard (13inch) size for action figures with the Six Million Dollar Man introduction. This would make it difficult to sell our 8 year old customers multiple higher priced action figures. The vehicles would also have to be huge and expensive. Dave and Bernie came up with the “out of the box idea” to shrink the figures to a size just like the toy soldiers we all grew up playing with. A simple but daring move at the time. How would we include special features like the light saber with such small figures? Dave and his team found innovative ways.
When Star Wars opened in theaters May 25 we knew we had a once in a lifetime hit. General Mills company stock rose by several dollars just on the announcement that Kenner had the Star Wars merchandising rights.
But how could we capitalize on this right away?
Bernie created an outrageous new product idea. Lets sell kids a paper gift certificate right now good for a set of Star Wars figures to be mailed to them next year as soon as the toys are ready. This had never been done. In our immediate gratification world, especially with children, this was crazy. It was a brilliant way to demonstrate the power of the movie to drive toy sales, and increased our confidence to commit even more heavily to additional products for the following year.
Bernie created an outrageous new product idea. Lets sell kids a paper gift certificate right now good for a set of Star Wars figures to be mailed to them next year as soon as the toys are ready.
The first full year Star Wars toy sales in 1978 of over $100 million more than doubled Kenner’s total sales at the time. But this was only the beginning.
Star Wars toys have generated Billions and Billions of Dollars of manufacturer sales since then, and are continuing to do so for Kenner’s current owner Hasbro.
I believe this is the most successful toy license in history.
Here are six lessons from these experiences that you may find useful in your everyday business life:
1 – Think and Act like your Customer
Everyday at Kenner I tried to be an 8 year old boy. Some may say I acted like one at times too. I would watch Saturday morning kid TV shows and all the breakfast cereal and toy commercials almost every week, attend as many new toy concept “play tests” as I could, and try to look at new toy ideas, our TV commercial storyboards and proposed new toy retail packaging from the Customer’s point of view. Kids can be very detail oriented. It became clear to me why Steve and Bob Scout had bombed. Many of our target customers were already Scouts or had big brothers who were.
For Six Million Dollar Man we developed a special mail in Membership Club kit including a signed color photo of Steve Austin, membership card, sticker, and certificate for a self liquidating price of $1.
Camping and hiking were things they could do now. For them the Scouts provided limited imagination and projection into unattainable fantasy roles such as Six Million Dollar Man. For Six Million Dollar Man we developed a special mail in Membership Club kit including a signed color photo of Steve Austin, membership card, sticker, and certificate for a self liquidating price of $1. We did this because such a club kit had been very important to me as a kid watching Captain Midnight on Saturday morning TV. It likely significantly strengthened our ongoing brand franchise.
2 – Enjoy and be Passionate about What You Do
We worked very hard at Kenner. I believe the entertainment industry in general is one of the most demanding fields there is. We also thoroughly enjoyed what we were doing, made sure we had a lot of fun, and focussed on being the best. I think it was Jefferson that said “the harder I work the luckier I get.” None of our successes came easily. Each day at the office I knew that 30% to 50% of this year’s sales would disappear next year due to short toy product life cycles. So we had to replace those sales every year just to stay even, and then try to grow our business. That does focus your attention. Our company philosophy at Kenner was that “The Product is King”. That meant that our passion to create, develop and market very special products always came first. It was one of the glues that kept a wild bunch of aggressive toy men and women united and generally aimed in the same direction. If I hadn’t taken that cab ride across town after a long day to see the Star Wars preview, who knows what might not have happened?
3 – Place a Number of Appropriate Bets on an Ongoing Basis, and Avoid Betting the Farm
In our high risk environment it required consistent discipline to bet on unproven new ideas and properties, take our losses, and then continue to bet. But that was what success required. We lost sizable amounts on The Invisible Man and Man From Atlantis bets, but
made a long shot bet and hit the jackpot on Star Wars. We just never knew for sure, no matter how much intelligence we developed, how well we performed our jobs, how hard we worked. It takes a steely resolve to play that game.
4 – There is No Such Thing As Failure
In the toy business most new products are not successful. That was a major change for me coming to Kenner from General Mills cereals where we would usually research and test market new products thoroughly before introducing them. And even then we would still have somewhat unpredictable results. At Kenner we needed to make go/no go decisions frequently with limited time and information. The toy environment welcomes and requires risk taking. There was no stigma or even recognition of the concept of failure at Kenner, it was simply a lack of success. That can make a big difference in how you approach opportunity.. seeking success rather than avoiding failure.
5 – Try Something New and Different
During the initial filming of the Six Million Dollar Man program, the show’s producer’s originally showed Steve Austin’s ability to run 60 miles per hour with his bionic legs by speeding up the film. It made him look funny, like a Keystone Cops segment. So they developed the counter intuitive approach of showing him running in SLOW MOTION with special sound effects when he was supposedly running at 60 miles per hour. Everyone got it. But who would have thought of it? Reducing the size of the Star Wars action figures from the larger standard we established with Six Million Dollar Man was a risky decision, but the correct one. Bernie’s outrageous Star Wars gift certificate idea is a classic.
6 – Teamwork Makes It Happen
Many individual judgments, decisions and actions by different people created this Toy Story. Bernie Loomis made the tough calls, but we had a dedicated, hard charging, innovative, tenacious team at Kenner that made it all happen. We were strong personalities that didn’t always agree, but we shared a mutual respect and a commitment to be the very best that overcame our differences, and helped us to focus on the goal. It was a very special time.
Well, that is My Toy Story, and I’m sticking to it.
© 2018 Craig R. Stokely
This article originally appeared in Edition 51 of The Bugg Report Magazine
