Applegate/25″/mike1st/mark2nd
JANE APPLEGATE
Ten years ago, when Dan Lauer was shopping his new doll around to the big toy companies, the former bank vice president had quite a few doors slammed in his face. But when Playmates Toys Inc. finally bought Waterbabies, it was a huge success and made Lauer a millionaire.
After word of his success spread, Lauer became the patron saint of aspiring toy makers everywhere, receiving up to 400 pitch letters a week. Now, nearly a decade after Waterbabies hit the market, Lauer plans to tap into the talent of America’s inventors to create the first line of products for his newly founded toy company, St. Louis-based Haystack Toys Inc.
“So many great ideas never make it to market for all the wrong reasons,” said Lauer, adding that most of the big hits like Cabbage Patch Kids, the Furby and his own Waterbabies were the work of independent inventors. “Many successes come from outside the big companies.”
The Great American Toy Hunt’s objective is to scour the country for the most innovative, ingenious and creative toy ideas. Contest winners will be asked to enter into a relationship with Haystack Toys. “The Haystack Handshake” includes a $5,000 advance to the inventor, a 5 percent royalty and a $50,000 commitment by Haystack to help develop the toy. The deal also includes close communication with Lauer, and the inventor’s story being printed on the toy’s packaging.
“I was a first-time inventor, and I had to do it all myself,” said Lauer, who believes the contest is the best way to create a top-notch line of quality toys. “At the big toy companies, ideas get dumbed down. They are also driven by entertainment and licensing, and the toy itself is forgotten.”
Although toys are a $22 billion industry in the United States, sales have slumped in recent years, with single-digit growth attributed to strong sales of electronic and video games. Sales of the traditional toys Lauer wants to market have been declining.
Out of the hundreds of toys exhibited at toy fairs and trade shows, maybe only five will make it to market, according to Christopher Byrne, editor of the Toy Report, a weekly New York-based newsletter.
“Thousands of people invent toys in their garage,” said Byrne, who is also known as the “Toy Guy” when he makes media appearances. “It’s not just coming up with good ideas. It’s about what the market will take, and having the $5 million to $10 million needed to develop and bring a toy to market.”
Byrne added that “toy companies will look at something and ask, ‘How does this fit in with our existing brands?’ ”
That’s why the odds of an independent inventor getting a toy to market are about the same as an unknown writer selling a novel or screenplay slim to none.
Haystack’s Lauer plans to boost the chances for fellow inventors. “We’re looking for needle-in-the-haystack toys that are so ingenious, so involving and so well-made that they become cherished for generations,” he said, reciting the company motto. “We want to be a brand known for authenticity and quality.”
He also pointed out that the Great American Toy Hunt is not interested in puzzles, games or anything linked to licensed entertainment properties.
Lauer, who has spent the past decade investing in start-up companies, said children under the age of 14 represent a population bubble to rival the Baby Boom generation. They spend $27 billion annually themselves, and directly influence $117 billion in household spending. Their Boomer grandparents, 58 million strong, are the richest demographic group in history and account for 14 percent of all toy purchases.
Though Lauer’s company will market its toys through traditional retail channels, the toys will also be available for purchase online at www.haystacktoys.com.
Toys have been targeted as a great e-commerce commodity since the beginning of Internet retail. Amazon.com now sells toys, and competitors like eToys sold about $25 million worth last year. In addition to selling toys, Haystack’s Web site provides helpful content to parents and information about the manufacture of its products and materials.
“Amazon and eToys taught people how to buy online,” Lauer said. “We are in the second revolution, which is about finding a niche and providing content. It is about a conversation and one-on-one marketing.”
If you think you’ve invented the next Cabbage Patch Kid, the first step toward a Haystack Handshake is to fill out the online application form available on Haystack’s Web site. The form asks you to describe the inspiration for your idea, as well as determine the status of your invention. Having patents and prototypes will help you reach the finals, but inventors whose ideas exist only in their imaginations should not be deterred from entering, Lauer said.
Haystack’s panel of experts will evaluate the ideas submitted. Lauer said he also plans to solicit the opinions of his four young children. Inventors and inventions that meet the Toy Hunt’s criteria will be invited to meet with Haystack’s toy experts in the closest city to their home when the Toy Hunt begins its cross-country tour.
The Great American Toy Hunt hits the road in October, visiting St. Louis, Atlanta, New York, Chicago, San Francisco, Los Angeles and Dallas. The tour hits L.A. on Oct. 21. After the tour, Haystack will choose up to 10 finalists, who, upon agreeing to the terms of the “Haystack Handshake,” will see their toys brought to market under the Haystack brand name.
Reporting by Robin Wallace. Jane Applegate is a syndicated columnist and author of “201 Great Ideas for Your Small Business.” For more small-business resources, visit [email protected].
