Opinion
Harari: Consulting does not work in the intuitive toy industry
“You cannot consult yourself in the toy industry. It is one of the most intuitive, creative industries out there. It's a feel industry, but it's also a history industry.”
Insight
Harari: The only real way to test a toy's magic is at retail
“Testing the magic, very difficult. The only way you're going to test it is by putting it at retail.”
Insight
Harary: Toy Industry Barriers to Entry Have Fallen Dramatically
“Because I would say that the rate of innovation is very high now, and the barriers to entry for people to enter into the toy business or children's entertainment has gone down a lot. So we have to be very, very quick as a company.”
Disclosure
Harary: I Have Taken Five Lunches in 30 Years
“In, in like, 30 years, I've taken like five lunches. I eat them at my desk, I do everything in the office, but then when I leave the office, I know it's my time at the end of the day. And the other thing that I do is, is I don't talk about work to my friends o…”
Insight
Harari: Standard toy industry licensing offers perpetuity for 5% royalties
“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.”
Assertion Not checkable as stated
Harari: Spin Master did zero market research before launching Air Hogs
“We did no research. Nothing.”
Insight
Harari: Toy industry is recession-proof because parents cut kids' spending last
“Parents are not going to cut on, they're going to cut on their kids last.
in terms of consumer expenses and stuff like that.
It's quite recession proof.
The flip side of the toy industry, it's not a high growth industry, but it's just very stable.”
Assertion Supported
Harari: Spin Master sales dropped from $950M in 2010 to $500M in 2013
“So basically our sales went from 2010, I think we peaked at about nine hundred fifty million.
And then by 2013, the sales were down to five hundred million.”
Insight
Harari: Hit toy lines typically have a three-to-four-year life cycle
“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.”
Disclosure
Harari: Spin Master maintained R&D spending through 2012 restructuring
“The one thing we didn't do is we didn't cut our R&D budget. We kept that, and we kept on spending, and we kept on investing.”
Assertion Contradicted
Harari: Preschool Is a Steady Toy Market Where Transformation Was Untapped
“It's an incredible demo for toys, very steady demo for toys and no one had ever done anything with that play pattern for that demographic.”
Assertion Partly supported
Harari: Spin Master Is the Largest Manufacturer of Puzzles and Chess Sets
“We bought a company called Cardinal in 2015, so we're the largest manufacturer of puzzles and chess sets and poker chips and all that type of stuff.”
Disclosure
Harary: Spin Master Funded Melissa & Doug Acquisition With PAW Patrol Profits
“One of the things we did was we took a lot of the earnings that we made from Paw Patrol, and we bought Melissa and Doug, and the reason for that was to have, to even out the ups and downs of the toy industry, and Melissa and Doug is a very stable, you know, op…”
Assertion Not checkable as stated
Harari: Dysgraphia Gave Him Heightened Visual Precision in Toy Development
“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.”
Assertion Supported
Walmart Canada ordered 26,000 Earth Buddies units from Spin Master founders
“And two weeks later, they called us with an order for 26,000 pieces.”
Assertion Not checkable as stated
Harari: Spin Master recruited its first factory workers from a homeless shelter
“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.”
Disclosure
Harari dropped Earth Buddies price by $1 on the spot pitching Kmart
“What went through my mind was, we were going to charge her two dollars and 65 cents U.S., and I dropped the price to one 65 in my mind right then and there.”
Assertion Supported
Kmart gave Spin Master an initial order of 48,000 Earth Buddies
“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.”
Assertion Supported
Harari: Spin Master discovered the Air Hogs airplane invention in 1996
“In 96, 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.”
Assertion Not checkable as stated
Harari: Every major toy company rejected Air Hogs before Spin Master
“After we signed the product, we didn't realize that every toy company had turned it down.”
Assertion Not checkable as stated
Harari: Spin Master reinvested all past profits into Air Hogs development
“When we signed the product, we basically put all the money we'd made to date into the design and development.”
Assertion Contradicted
Harari: Spin Master grossed $35M in 1998 after launching Air Hogs
“You know, I can just tell you that by the end of. 1998. So we started marketing in that year. We had grossed thirty five million dollars in sales.”
Disclosure
Harari: Spin Master self-financed Air Hogs, only borrowing against receivables
“Entirely self-financed. Other than the bank would actually let us borrow against our inventory and receivables.”
Assertion Not checkable as stated
Harari: Spin Master did 80% of inventor scouting on location
“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, 80% of the work was done that way, on location.”
