The Exchanges

Q And so what would you do in your garage? Were you like melting plastic and pouring it into mold?

A Oh, it's so, it's so cool. Uh, first of all, I did all the reading I could, and I went down to the Natural History Museum in LA, where they actually embed specimens in plastic, and I talked to them, and I checked out a book from the Natural Library on embedding specimens in plastic. But of course, they're not making, there's a, there's a couple problems. One is, I wanted mine to be shatterproof and like the globes and other things are not shatterproof. So I did research on materials. I called actually industrial chemical companies in LA and arrived at polyurethane is the kind of plastic that wouldn't break, but all kinds of problems, just like you might imagine. The first problem was, you know, scorpions, if you don't dry them out, took me a long time to figure this out. They turn white, and you can't see the scorpion. So then I took, I went to Goodwill, and I, uh, bought like five or six old ovens, and I then put light bulbs in them to heat them, and then I would desiccate the scorpions inside.

AI assessment note: “I went to Goodwill, and I, uh, bought like five or six old ovens”

Q moment that goes off your head on this road trip, and... Okay, but now you've got to find somebody who is going to, first of all, you've got to get the scorpions, and then you've got to figure out how to embed them in plastic, and then you've got to find somebody to make it for you. So let's break this down a little bit. What did you then do?

A So I turned the paperweight over, and I saw they put their brand, their, their company on the back. Just, just the name, Mac. I still remember it. This is, you know, 30 years later. And, um, I thought, you know, I'll call them up and ask, ask them to make these discs for me. Right. You know, be no problem. Uh, I call them up. They said, we're not, there's no way we're going to make these discs for you, but we can sell you some scorpions if you want to try to figure out how to do it yourself. So I ordered, I got a hundred scorpions in a little jar of alcohol came in the mail or UPS. And, um, I went into my garage. I was renting a house in Pasadena, went into the, you know, from, uh, old craftsman house, Happened to have a garage. Classic. Started my business in the garage story. Went in there for six months. My wife thought I was crazy. Trying to figure out, it's not trivial, how to get a scorpion inside a little plastic disc.

AI assessment note: “I thought, you know, I'll call them up and ask, ask them to make these discs”

Q Okay, six months. So you, you successfully figure out how to embed a scorpion in polyurethane as a slammer for pogs, and then what?

A This is when I started to behave like a regular business person. Somehow, gradually, I learned about business. I went to a toy show, the Pomona Toy Show, which, you know, back in the olden days, there used to be small toy stores. And in order to buy toys, toys, toy stories would go to these toy shows. There was one in Pomona, major one in the West, for the West coast. And I rented a corner of a booth. Well, I mean like a 10th of a booth. And I had one aquarium with this all total of six scorpions that I made that I'd ever figured out how to make in this, in a little aquarium. And I was like, You know, talking to people, people were walking by, and a guy walked by who was a, happened to be in the pog and the slammer business, was a toy distributor, and he said, if you don't leave this toy show today, you know, it's the first of three days, if you don't leave today, and you sign an exclusive contract with me, I'll buy 200,000 of these at three dollars a piece.

AI assessment note: “I went to a toy show, the Pomona Toy Show”

Q And as you heard, he's got this brand, um, but of course it's a challenging in general in this industry across the board, wine and spirits, but he's got to make some, some decisions here. So, um, thoughts or questions for Mark?

A Um, yeah, I mean, my overall, I do like this idea of focusing. I do like the idea of, you know, you're really trying to tell your story about get, how do I get my story about my product out there, which is making a good story out of it. You need to get out and be the face of your product. You have to have an Instagram presence. You have to have a TikTok presence. You have to, again, you're in a highly regulated industry. I don't even know what you, You could do, but you could show how you distill, you know, the process of distilling and what makes yours better and show it. The other thought is if you could get some influence or somebody with a reputation for judging quality to endorse your product, probably out of just affection for you.

AI assessment note: “You need to get out and be the face of your product.”

Q Got it. Carlton, uh, please say hello to Sean. Before we answer his question, do you have any questions or thoughts for Sean?

A I think I understand. So, you know, Again, I've been in the toy business for a long time. I do know that, you know, a very, very traditional way of getting your game out there is to bring it to a publisher, a toy, another toy company. And I think that's a super solid way to do it. Um, you know, I would often suggest to people who invent toys, it really depends on whether you love being in business. Like, which I did. You know, I do. I mean, the day I started doing Scorpion Pogs, I was like hooked for the experience of selling and packing up the stuff and sending it out and bookkeeping and everything. I loved it. So if you love being in business, be in business. If you love inventing toys, then I would say, um, you know, I would license it for sure.

AI assessment note: “So if you love being in business, be in business. If you love inventing toys”

Q Why were these so popular? What's your theory? Why did, why was there such a craze around these things?

A That's a good question. I mean, I, I sort of take these things on face value. Um, but scooters have always been popular, but these were small, made out of aluminum, so super light, and they had ball-bearing, you know, uh, uh, wheels from rollerblades, and that is, made them much better at scootering than the old fat, better, sort of like the brain, like a technological improvement. They were, um, aesthetically beautiful. Which isn't always the case. They were culturally, they were used by adults and children. That was, I think, influential. So adults could talk about them and ride them in a way that, like, yo-yos were never used by adults. So it had a broader appeal. You know, and it had something to do with, you know, the internet coming, and they were used in Silicon Valley, you know, in warehouses, and, you know.

AI assessment note: “these were small, made out of aluminum, so super light, and they had ball-bearing”

Q So what, I mean, why would, I mean, you already had some experience, clearly, with the yo-yos, and the pogs, and the, and the, the, the, the fingerboards. How did you convince them to give you the license?

A No, this is a great question. I mean, this is, this is, like, an amazing part of, like, how this happens. I mean, basically, it was based on trust, and Robert and Is like, I want it. It's hard to express how good a person and honest Robert is and Gino too. And we all, and I like to think of myself that way too. And we got in Robert and I had an immediate connection. And, you know, a lot of untrustworthy people were approaching him, you know, not with, and also they didn't have this grand vision, you know, the grand vision is stop what you're doing, which is a big risk on their part and own a brand. Uh, and, uh, and the brand is everything. I, I mean, I clearly like any number of people, I had my relationships with Toys R Us and Walmart and Amazon and not Amazon, uh, Target, you know, all the players and I could bring them to the stores. But, but of course they were not selling to the stores. They were selling to distributors. And so I was going to get them wholesale prices instead of them selling it through a middleman who then sold it to Toys R Us or Walmart. So there was a big opportunity to capture more profit for them. But the big concept was branding, you know, and, and building a company for the future.

AI assessment note: “basically, it was based on trust... I had my relationships with Toys R Us”

Q Okay, before we find out what happened, What about the, the, the inventory that you had? I mean, you had all of this inventory. What was going to happen to that inventory?

A Um, really what, what happened was, so to be really candid, is that Gino was a great partner. And, you know, these scooters did not cost very much to manufacture. You know, he owns, owns Razor with me. But he also owned the factory that made them and he charged us a pretty penny for those scooters. And so we owed him a lot of money for these like leftovers. We'd already paid them for all the other scooters, but you know, but for the leftover scooters, he said, listen, I'm going to, you know, help you with that. You know, you don't have to pay me the full price on those scooters. And so, but that came out of all the, you know, all of our profit essentially. Um, but he took a hit. We took a hit. And so I just sat on him. I sat on him, but you know, after a certain amount of time, the retailers were able to work through their inventory of their extra inventory. And then they needed somewhere between two or four million scooters a year to keep going.

AI assessment note: “I just sat on him... after a certain amount of time, the retailers were able to work through”

Q And so what does that mean for your business right now?

A I mean, it's, It was an unmitigated disaster. Like, we were, I was literally, I have, you know, made money every single year. I was actually thinking we were going to lose money this year. You know, you're getting hot news, I suppose. I mean, I don't know who else you're talking to, but our prices are significantly higher at retail. We're not benefiting from it because it's really, you know, retailers who forced to raise prices because of the tariffs, but they're using it to pay the tariff and they don't pay us anymore. And our sales are going down. Their sales are good. And, you know, if you look at their total dollar volume of sales, they've raised the prices. They're selling fewer units, but their overall dollar transaction is good, but our sales are going down, but not, we're not crashing, but it's a terrible situation.

AI assessment note: “It was an unmitigated disaster... our sales are going down”

Q like, the analogy I think of is like, going to the beach with a metal detector, you know, and you're just It's like bottle cap, bottle cap, bottle cap, bottle cap for hours and hours, then maybe you, you know, you get a quarter, and then if you're really lucky, you get a silver dollar, like once every month. Is looking for the next big toy kind of like that?

A It depends how energetic you are. And I think that what's been very satisfying to me is that in going, trying to develop this algorithm, I'm exercising that, uh, organ much more aggressively than I have been in the last several years. I think for many years I was even, I might say passive, just like, I don't have to go out and look, I'll just spot it when it comes. And it did, you know, it always came through for me, but now In the process of trying to make this transition, and I'm seeing a lot more opportunity. I think if you're really out there looking, you can see more, but it is rare. The things that really shift the culture are rare. But if you keep your eyes open, there's more than you would on an early thing. Um, uh, one that's probably people already know just burst like maybe two months ago is hacky sacks are coming back in a huge way.

AI assessment note: “The things that really shift the culture are rare. But if you keep your eyes open”

Q Yeah. All right. So you, so you're going to come up and that's great because all these stories are not, I mean, they're in the public domain. So you could have a fairy tale book and hire some artists and Uh, and you get a children's book. Okay, that's interesting. Did you pitch this idea to anybody?

A I, um, so that, the problem was I didn't understand business at that point. At all. But I did get, I got a lot of meetings out in New York. It was very fun. I read, you know, went to the big, beautiful publishing houses, and I, now I know that what you do when you have an ideal dad is you print up the books, and you go to the bookshows, and you start selling them to the bookstores, and you build a teeny little company that eventually gets big. Did not understand that at that time. But while I was doing it, I, um, was working with illustrators, and some of the illustrators were, um, involved in this craze called Pogs and Slammers. And that's what got me interested in Pogs and Slammers.

AI assessment note: “I got a lot of meetings out in New York... went to the big, beautiful publishing houses”

Q When, when did that start to shift to Amazon and to online?

A You know, when it, the day Amazon started buying, we started to shift with them. We were very early on Amazon. But we had two dramatic shifts. The most saddest dramatic shift for razor has been the loss of Toys R Us. You know, not only is it a loss from the kids perspective of a fantasy place to go, but they actually always carried our entire line. And when we came out with something innovative, they got way behind it, you know, and we could always rely on three big customers, Walmart, Target, and Toys R Us. If we're going to put something on television and That they would get behind it and support it. And now, without Toys R Us, you lose a third of the triad, and we really lost a very significant part of our sales when Toys R Us went bankrupt, and it was not completely replaced by the other people.

AI assessment note: “We were very early on Amazon. But we had two dramatic shifts.”