Ep 103: Why Product Selection Is Critical For Toy Companies (AKA Why I Turned Down Settlers of Catan)
This is the script used for recording Episode 103 of our PLAYING AT BUSINESS podcast. If you prefer to listen to the podcast instead of reading it, you can just click here: https://playingatbusiness.libsyn.com/why-product-selection-is-critical-for-toy-companies-aka-why-i-turned-down-settlers-of-catan
· Hello and welcome to Episode 103 of the Playing at Business podcast.
· I’m your host Steve Reece
· For today’s podcast We’re going to take a look at Product Selection and why the process of selecting your product ranges is the fundamental backbone of your company’s success in a product driven business like the Toy & Games industry!
· Before getting into that, just a couple of up-front bits and bobs:
1. I recently began a series of Linked In Newsletters offering long form report style analysis & commentary on the Global toy & game business – just search on Linked In for Steve Reece toys or Toy Industry Journal Newsletter & you should find the newsletter. Please feel free also to send me a Linked In connection request, and then you should see everything I post on Linked In in your feed (algorithm allowing!). At the time of recording we have 27 editions of that newsletter you can check out, and with around 5,000 subscribers from across the Toy & Games business this is a Free resource you would be crazy not to tap into!
· Now a quick plug for our Consultancy business services:
1. Did you know that I have helped many companies review their Sourcing strategy & find new factories in new geographies, especially outside China in India & other places? For more info check out www.ToyTeamAsia.com
2. Do you want to increase your Toy export sales? We help companies grow their Export sales, over my career I have $hundreds of millions of Toy sales under my belt. I have to tell you though that sometimes I start helping a company & get almost instant success, but sometimes I get tumbleweed by way of feedback – some products are harder to sell than others. The difference with what I do is that if you work with a commission based sales rep they just move onto other products which will sell more easily, my approach as a Consultant on a retainer is to help the company understand why their products are not selling & how they can improve the sales proposition. To find out more about these services, just go to www.KidsBrandInsight.com/services
3. Thirdly & finally in terms of our services alongside helping companies with their export sales we also work as head-hunters or recruitment consultants to help you find the right senior people to power your growth. As we speak I am finalising recruitment for a major Asian company for a senior international role. For more details just get in touch!
· Anyway, that’s quite enough up front rambling, let’s get into the topic of today’s podcast:
PODCAST MAIN TOPIC – Why Product Selection Based On Company Self-Awareness Is Critical For Toy Companies (AKA Why I Turned Down Settlers of Catan)
· OK, so I’m going to start here in the obvious place which is to talk you through the main anecdote in the title of this podcast – how I came to turn down one of the best-selling board games of the last 30 years in Settlers of Catan.
· Before I do that though, just understand that anyone who has been in the business of Toys & Games long enough has turned down something that went on to be a big success elsewhere – if you meet someone who has been doing this stuff for decades & they say they have never turned down anything that went on to be a hit, then they have either not achieved very much or they are not being entirely truthful. This is a hit & miss industry we work in, and what works & what doesn’t can be unpredictable – over time I have seen numerous concepts which were more or less the same launch with varying degrees of success from total failure to massive success, all on the same concept executed somewhat differently into a market at a particular stage and time.
· One of my bosses of the past once turned down the UK rights to the TV gameshow Who Wants To Be A Millionaire board game which went on to sell millions of units and broke all kinds of records for commercial success! I’m not mentioning his name, but he knows who he is since he told me that story himself!
· So anyway that’s enough self-justification – here’s why I how & why I turned down Settlers of Catan, which according to the official website has now sold more than 40 million copies.
· One of the creative team at a company I worked with brought me the game – which by that stage was a major hit in Germany and said the distribution/licensing rights were available for a couple of territories I looked after.
· While I personally knew the game was great & would most likely be a success for someone out there, the question was could it be a success for the company I was managing this portfolio for.
· And the answer to that question at that time was NO, the financials didn’t work based on the financial parameters we had to work on in that company, the specialist distribution and niche marketing required to make the game work were not capabilities my company had at that point in time AND perhaps most importantly, I was already managing a portfolio of very established & highly successful Games which were already more brands and products than we could realistically get listed in enough retailers to fully exploit the opportunities.
· So I turned down the iconic ‘gateway game’ that is Settlers of Catan, with best wishes and with a genuine expression of my desire for it to be massively successful for those who owned and managed it at the time.
· At a different point in time, the company I was working with may have been the perfect partner for that game, but not at the time we made the decision to pass.
· So in essence we made the right decision despite the success the game has achieved since.
· Many companies harbour staff who constantly butt up against the restrictions and limitations of the company. If you work for a massive corporation, and you are a born rule breaking entrepreneur who wants to run whacky contentious product initiatives, you probably won’t last long in that big corporation (I am speaking from personal experience here!).
· Similarly, if you are work for a smaller company and can’t handle the uncertainty of a smaller company with less retail clout that lurches from one good year to a bad one the next dependent entirely on the listing decisions of a limited number of retail buyers you are probably going to struggle to be happy at that place of work.
· Product selection is not (primarily) about chasing whims – it is about placing a limited number of educated bets on what your company can successfully execute in the marketplace based on your relative strengths & weaknesses.
· You should take great pride in turning down products which have excellent potential, but not for your company.
· Product selection is about taking the right risks and placing the most prudent bets you can.
· You can still be creative within those parameters but don’t expect miracles from your company.
· Choosing the right risks to take is where success and failure are borne.
· Whatever you do, don’t bet the house on any one initiative, product line or new product. Far more products fail at launch than succeed, so to reiterate a point I make often on this podcast – success is about portfolio management in this game – if you launch 10 things, expect 2 to be big successes (if you are great at what you do), expect 2 to 3 absolute flops which make you embarrassed to get up in the morning, embarrassed to speak to the customers you dols those total dogs of products to and which leave you with a serious inventory problem. Then you can expect the remaining half of the products to do ok and to just about wet their beaks.
· Based on years of cynicism inducing experience of this crazy hit or miss business of ours, the trick is not to over bet on any concept and to play the numbers games to ensure the stats eventually align in your favour.
· Oh, and be ready to turn down something you know will work for a different machine than yours or risk adding to your list of flops!
· So, that’s all we have time for this time, thanks for listening to Episode 103 of The Playing At Business podcast.
· If you like this podcast or enjoyed this episode, please give us a good review or rating on the podcast platform you are listening to, and a reminder again to check out our Blog websites: www.toyindustryjournal.com and www.boardgamebiz.com
· Please share the podcast with your friends and colleagues in the industry and stay tuned for new episodes coming soon!
· If you’re interested to find out more about my work as non-exec Director and board adviser, or how I help Toy & Games companies find Export distribution overseas, just check out www.KidsBrandInsight.com/services
· If you want Consultancy help to boost your business, you can find more details on our work on any of those websites I just mentioned.
· That’s all for now, I’ve been your host Steve Reece, this has been the Playing At Business podcast and we’ll see you next time. Thanks and bye.