Have you every heard of the Yukadoodle? It was parent’s favorite toy. Now learn how that turned into Barbie.

Dave Young:

Welcome to the Empire Builders Podcast, teaching business owners the not so secret techniques that took famous businesses from Mom and Pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I’m Stephen’s sidekick and business partner, Dave Young.

Before we get into today’s episode, a word from our sponsor, which is… Well it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.

[Tapper’s Jewelry Ad]

Dave Young:

Welcome to the Empire Builders Podcast. Dave Young here, alongside Stephen Semple. And Stephen just whispered in my ear, I have to admit because I’m a certain age, the triggering words, Barbie, Matchbox and Hot Wheels. Now the reason I’m triggered is it just brings back fights between me and my sisters.

Stephen Semple:

What, you were fighting over the Barbies?

Dave Young:

Not so much fighting over the Barbies, but fighting for space on the living room floor for playing with stuff. And maybe some heads got torn off some Barbie dolls. I don’t know. I can’t… Maybe some Hot Wheels or Matchbox cars were damaged in retaliation.

Stephen Semple:

Do you have any scars on your head from them hitting you?

Dave Young:

They would key my Matchbox cars.

Stephen Semple:

A lot of memories.

Dave Young:

Take me back to my childhood trauma. This is a therapy podcast, right?

Stephen Semple:

I was thinking about the other day, so I think we have to do part two of Tetris just to really get you into your hang socketing place.

Dave Young:

Sounds good.

Stephen Semple:

So we’re going to be doing something a little bit different because we’re talking about two companies and three products. And so this is going to become a two part episode, which is unusual for us. But when I was looking at these companies, the stories are so linked, I couldn’t figure out a way to break it apart. So I thought, you know what? We’re going to tell it as the best way to tell it. And I think that’s-

Dave Young:

Yeah.

Stephen Semple:

Looking at all three together. And the interesting thing is all three, Barbie, Matchbox and Hot Wheels, today are all part of Mattel, although Matchbox started as a competitor. But today they are all under the same umbrella. And Mattel today does like five and a half billion dollars in sales and has 33,000 employees around the world. And all three of these businesses basically started… for all three of these products, sorry, it’s two businesses, three products, started following World War II.

And in North America, when we go back following World War II in North America, we had this baby boom as the troops returned from war and there was this GI Bill stimulating the economy, but it was very different in Europe following the war. They were rebuilding and recovering and in fact the economy was a mess. So the other part that’s interesting is, the origins of both of these businesses were quite different in terms of the economic environment.

But first to California and Mattel. So Mattel was started by Elliot and Ruth Handler and a friend, Harold Matson. And the business started by making picture frames. They were manufacturing picture frames. And Ruth ran the business side and Elliot ran the creative side. Now keep in mind, this is following World War II. This is the late 1940s, early 1950s in manufacturing, and you’ve got a woman running it, which very, very out there for the time.

Dave Young:

It’s California.

Stephen Semple:

There you go. A little bit more open to things out there. So things were a bit slow, and so Elliot started to make doll furniture with the leftover wood from the making of the picture frames.

Dave Young:

Okay.

Stephen Semple:

And it starts to sell really well. And soon the doll furniture is outselling the picture frame business. So they now find themselves in the doll furniture business.

Dave Young:

Sure.

Stephen Semple:

Now they’re trying to think of other things that they can use wood for to make in terms of other toys. And Elliot loves musical instruments. So he comes up with a toy ukulele. Now, it’s one that makes no sound and it’s a toy. And they call it the Uke-a-doodle.

Dave Young:

A ukulele that makes no sound.

Stephen Semple:

Yeah. So it’s just a toy one.

Dave Young:

This is a Parent’s dream.

Stephen Semple:

Yeah, there you go. I hadn’t thought about that. No wonder it did so well.

Dave Young:

Right? Why didn’t he make a drum set?

Stephen Semple:

They missed an opportunity, I think, on that one.

Dave Young:

No kidding. No kidding. So It’s just an air ukulele? I mean, I’m sorry to be… I know we want to talk about Barbie, but I’m a little hung up on this air ukulele idea.

Stephen Semple:

That’s basically…

Dave Young:

Obviously that one, this is the product that didn’t make. It’s lost to history.

Stephen Semple:

Well, actually you can look it up and find it. Look up Uke-a-doodle, you’ll see it out there. It does do well at first. At first it sells great. They sell like $30,000 worth of these things in the first year, but then it declines. So they need to find another new toy. So they create a toy called a Burp Gun. And yes, you heard it right, Burp Gun. For promoting the toy, they take a page from Hasbro. So Hasbro was the first company to advertise a toy on TV, but they only ran the ads at Christmas. And Elliot and Ruth are much more aggressive, so they decide to advertise year round.

Dave Young:

I mean, kids’ birthdays happen 365 days a year. Christmas happens one day a year. So I’m for advertising for birthdays and other occasions. So the Burp Gun, the Uke-a-doodle, and his is pre Mattel, pre Hasbro, pre-

Stephen Semple:

No, this is the early days of Mattel.

Dave Young:

This is early days of Mattel. Probably when Hasbro invented the Whoopie Cushion in retaliation.

Stephen Semple:

In retaliation.

Dave Young:

To the Burp Gun.

Stephen Semple:

So Mattel goes from making picture frames to doll furniture.

Dave Young:

To doll furniture.

Stephen Semple:

To the Uke-a-doodle, to now the Burp Gun.

Dave Young:

Okay. Barbie’s nowhere to be seen yet. Yeah.

Stephen Semple:

Barbie’s nowhere to be seen yet. But part of what they did with Barbie is happening here because they decide to advertise year round on television. And they also decide to sponsor a show. How they decide to do it is sponsor a show that’s never been seen. So it’s a new show, that’s coming out and they decide to invest a half a million dollars a year having an ad every 15 minutes on this show that’s never been seen. So it’s a big gamble, but it turns out really well.

Dave Young:

What year is this?

Stephen Semple:

You know what, I don’t have the exact year, but you’ll know the show. The Mickey Mouse Show.

Dave Young:

Yeah. Okay.

Stephen Semple:

The Mickey Mouse Show. And this has never been done before, advertising toys on television year round on this new show, The Mickey Mouse Show. And sales explode. It is literally more than they can fill. And then again, sales fall, and again, they need a new idea. So Elliot’s stuck in traffic and he gets his inspiration. It’s the 1950s and there’s great cars coming out. People have more money to spend and the cars have details that look like rockets and airplanes and vehicles really make a statement.

So he decides to make a toy car, and It’s called the Dream Car and it’s space age looking. It’s pretty big, nine, 10 inches long. And he launches it in 1953. And it doesn’t do all that well. It’s nice looking, but it’s expensive. It’s $1.98, which in 1953 is expensive. And it looked like a toy, not a car, but it was hard to play with. So he decides to do another car, smaller, less parts, and it still doesn’t do great. The next year he does a car called the Dart. Still doesn’t sell really well. The cars are just not playable. And remember this because we’re going to come back to this.

Dave Young:

Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.

[Empire Builders Ad]

Hey Rick, how’s it going?

Speaker 8:

Okay, fine.

Speaker 4:

That doesn’t sound okay.

Speaker 8:

Well.

Speaker 4:

What is it?

Speaker 8:

My business?

Speaker 4:

What about it?

Speaker 8:

You probably wouldn’t understand.

Speaker 4:

Hit me.

Speaker 8:

Well, you know I love it.

Speaker 4:

But?

Speaker 8:

My revenues have flatlined and I’m not growing anymore.

Speaker 4:

Okay.

Speaker 8:

Well it’s frustrating and depressing and it was so much better when we were growing.

Speaker 4:

Oh, I bet it was.

Speaker 8:

And nothing I’ve tried has moved the needle.

Speaker 4:

What about talking to Stephen?

Speaker 8:

Stephen who?

Speaker 4:

You know, the guy that hosts this podcast.

Speaker 8:

Really? You think he could help?

Speaker 4:

I hear he runs a paid for performance marketing agency.

Speaker 8:

I wonder how that works.

Speaker 4:

Why don’t you ask him.

Speaker 8:

How?

Speaker 4:

Book one of those free starter sessions on the podcast website.

Speaker 8:

I don’t know.

Speaker 4:

You can’t say you tried everything if you don’t try this.

Speaker 8:

You’re right. I might even learn something.

Speaker 4:

I bet you do.

Speaker 8:

Thanks, man. Let’s go grab a bite.

Speaker 4:

Yeah, sounds good. Right after you call Stephen.

Speaker 8:

Okay. Okay.

Dave Young:

Book your starter session on this podcast website. Just visit theempirebuilderspodcast.com and click on “Get Started.” Let’s pick up our story where we left off, and trust me, you haven’t missed a thing.

Stephen Semple:

So it’s now the winter of 1966 and the family’s on vacation in Switzerland. And Ruth sees her daughter looking at a doll in the window. And it’s this scantily clad gag gift for bachelor parties.

Dave Young:

Okay. And it’s a doll.

Stephen Semple:

And it’s a doll. It’s this little doll. But her daughter’s fascinated with it and she wonders, Ruth wonders, could she make a doll like this for girls? And at this point, the only toy for girls were baby dolls and toys for housework.

Dave Young:

No fashion type things. It’s like, here’s your role.

Stephen Semple:

Here’s your role, little girl. You’re a mother, or a housemaker, or both. So she decided on making a doll that would be aspirational. In other words, what you could aspire to become. Elliot at first is not convinced, because he looks at Ruth and says, “No Mother’s going to buy a doll with breasts.”

Dave Young:

He’s saying this to the CEO of his toy company. I mean, she might be a mom, but her role is not housemaker. She’s the CEO of it.

Stephen Semple:

She’s CEO of a toy company. They’re a husband and wife, but he’s not convinced. He doesn’t think it’s going to sell, but she wouldn’t accept that. Now she convinces Elliot to drop the car thing that he’s doing. So drop doing these cars, we’re going to build this doll for girls. This is what We’re going to do. So she really invents doll design. She hires a top design school and they make these really realistic clothes for the doll. She hires a famous child psychologist, Ernest Dicker, who does these focus group tests. Turns out, mothers resist this idea. This is a gift for… Like mothers literally would say, “Is this a gift for my daughter or for my husband?”

And so she spends three years developing the product in the face of this criticism, and they come up with the name Barbie, which is named after her daughter, Barbara. And it’s ready to launch to the world. And so they go to the largest toy fair where there’s these new products and it’s really this make it or break it moment with retailers. She gets a meeting with Luke Kelso, who’s the head buyer from Sears, which at the time is the largest retailer in the world.

Dave Young:

There’s another childhood trauma moment fighting over the Sears Wishbook.

Stephen Semple:

There you go.

Dave Young:

At Christmastime.

Stephen Semple:

We’re really doing a lot to really help you out here, Dave, right?

Dave Young:

Thank you, Steve.

Stephen Semple:

So Luke Kelso gets a chance to take a look at this Barbie stuff. And guess what he says to her?

Dave Young:

I’m thinking, it’s a pan. He’s like…

Stephen Semple:

Yeah, he says, “You’re out of your mind. Girls play with baby dolls.”

Dave Young:

Because that’s all you ever hand them.

Stephen Semple:

And they got an issue here. They’ve invested a number of years in this, they’re spending a half a million dollars a year advertising on The Mickey Mouse Show. Elliot has stopped with the whole cars. They’re on the brink. They got one product and buyers are saying no to Barbie.

So Ruth pushes and pushes and then she decides, you know what? She’s going to bet on the girls. They double down on the ad budget. So remember, they’ve been spending a half a million dollars on The Mickey Mouse Show. They’re now going to spend a million bucks. This is make it or break a time. And this ad speaks directly to young girls. And this is the interesting thing. And the ad is, I make believe, I am just like you, is basically the theme to the ads.

But how many times have we seen this in other stories, Dave, where companies trying to sell B two B can’t make it go directly to the consumer. We’ve seen this theme over and over and over again where the distributor in the middle has it wrong and you go around them and speak directly to the consumer. How often we seen this theme?

Dave Young:

It happens all the time. And we could spend hours talking about this, but those buyers sometimes just have a hard time finding the empathy to put themselves in the mindset of the ultimate customer, which is a little girl.

Stephen Semple:

Yeah. And it turns out little girls want a Barbie.

Dave Young:

Yeah, they do.

Stephen Semple:

Yeah. So in the first year, they sold 300,000 in the first year. More than any toy in history.

Dave Young:

Wow. Awesome.

Stephen Semple:

The thing that they also learned from their previous toys is toy would be successful and fall off. Toy would be successful and fall off. Well, Barbie, you could create alternative versions with distinct careers and associations, clothing, accessory, houses, keep it going. And remember, they also knew about doll furniture.

Dave Young:

Oh yeah. So this is what immediately sprang to mind when you told me We’re going to talk about Barbie, Hot Wheels and Matchbox is this is a toy that is it’s the product equivalent of a subscription, right? This is like the Gillette play of, wait, we make money on the blades.

Stephen Semple:

Right? Yes.

Dave Young:

Right? It’s like, okay, you sell a Barbie doll, and now you’ve got lots of… I remember my sisters buying packages of Barbie clothing, right?

Stephen Semple:

Yeah.

Dave Young:

It’s the flight attendant gear, it’s the evening gear, it’s the swimsuit stuff. And so you’re making sale after sale after sale. And then Barbie needs a friend, and then there’s Ken.

Stephen Semple:

Yeah. And Ken comes along.

Dave Young:

And the little boys are jealous. So what’s next? GI Joe from somewhere.

Stephen Semple:

Yeah.

Dave Young:

We’re going to get boys to play with. So it’s just brilliant. It’s like eating potato chips, right? You can’t eat just one. You can’t buy just one Barbie and call it good. No little girl ever had just one Barbie doll and one outfit.

Stephen Semple:

And it’s clear this was in their minds, because they kept doing these toys that were super successful and dropped off. And they had a history doing doll furniture. So you knew in their mind, boy if we did this, there can be the furniture and there’s the clothing. You knew it was all there. And speaking about Ken, yeah, in 1961, they come up with Ken. And Ken is this dude who started off with only a swimsuit, and then they add movement. And then by 1966, they’re selling $180 million worth of this stuff in the mid-sixties. So let’s hold the Barbie story for a moment. Let’s go back to post World War II and let’s go over to England and talk about Matchbox.

Dave Young:

In England. Okay?

Stephen Semple:

Yeah. Our next episode of the Empire Builders Podcast is a continuation of this story, but we’re going to be talking about Matchbox and Hot Wheels. And yep, there’s a Barbie tie-in.

Dave Young:

Thanks for listening to the podcast. Please share us. Subscribe on your favorite podcast app and leave us a big fat juicy five star rating and review. And if you have any questions about this or any other podcast episode, email to [email protected].