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Spin Master Toys Soars to Success With Air Hogs

Marketing: A young Toronto-based company turns a simple idea into one of the most popular toys in the world.

March 24, 1999|RACHEL BECK | ASSOCIATED PRESS

NEW YORK — When Spin Master Toys first saw the prototype of the Air Hogs plane in 1996, it was nothing more than a pint-sized soda bottle attached to plastic foam wings that could barely fly.

Dozens of other toy companies--including toy giants such as Mattel and Hasbro--had already passed on the idea of the air-powered plane, but that didn't deter tiny Spin Master.

They rebuilt the plane, gave it a cool design and developed an aggressive marketing plan. Three years later, Air Hogs is one of the most popular toys in the world.

"I always thought that flight is one of those magical things for kids," said Ben Varadi, one of Spin Master's founders who handles product development. "But did I think that Air Hogs would be this big? No way."

It's been a wild ride for Spin Master, a young Toronto-based company that was founded by three entrepreneurial friends: the high-strung, creative 28-year-old Varadi, the more serious salesman Anton Rabie and long-term visionary Ronnen Harary, who are both 27.

It wasn't long ago that they had to beg toy stores to look at their products. But at the American International Toy Fair last month, Spin Master was the darling of retailers from around the globe.

The success didn't come overnight. In fact, it took more than two years and $500,000 to make Air Hogs into a must-have toy. And while the company had other hits to its credit, none were as popular as Air Hogs.

"We had no clue what we were in for when we started the development" of Air Hogs, Rabie said. "We thought we might have gone too far on this one."

The company was founded in 1994 with the $10,000 that Rabie and Harary had saved from a poster business they ran in college.

Their first big seller came after they bought the North American distribution rights for Earth Buddy, a sawdust-filled stocking with a face that sprouted grass for hair. Within months, sales topped $1.8 million.

Their next success was Devil Sticks, a three-rod juggling game. Again, Spin Master set off a fad, selling more than 250,000 units in six months.

In 1996, they shifted their focus entirely to toys and went looking for business. Their first stop was the annual toy fair held in New York every February.

At the time, British toy inventors John Dixon and Peter Manning were shopping around their idea of a plane powered by air.

"All of the big guys were too nervous to make a decision about this plane," Dixon said. "But Spin Master had energy and enthusiasm, and that is what persuaded us at the end. We knew that they really wanted to do this."

Spin Master thrust its entire business into Air Hogs. They needed to make the plane light enough to fly--yet sturdy enough to survive a crash landing. They hired two outside firms to work with its engineering team on development.

"Every time we thought we were close, they would send us a model and we'd go out to the park to test it out," Varadi said. "First it would fly 12 feet, the next time 8 feet, then maybe 20 feet. It was so frustrating."

Everything finally clicked last spring. The Air Hogs Sky Shark, designed in a funky purple and yellow motif, could sail the length of a football field and more than 100 feet high.

The plane gets its power from air, which is channeled into a plastic fuselage through a "docking station"--that looks like bicycle pump.

Once the plane was completed, Spin Master still had to sell it to toy stores. It first focused on the specialty market, which is usually more willing to take risks.

"They had the perfect recipe with Air Hogs," said Tom Vellios, president of Zainy Brainy, a high-end educational toy chain and one of the first to sell Air Hogs. "Forget the batteries. Forget the fuel, just pump the plane and fly it."

While Air Hogs became a quiet hit at specialty stores last fall, Spin Master went to work to get the media to notice its plane among the millions of toys being pushed in the months before Christmas.

Its public relations director, Adam Beder, sent Air Hogs to reporters and television stations around North America, and in many cases, Spin Master employees even showed up to demonstrate the product.

By Christmas, Air Hogs appeared on NBC's "Today" show and the syndicated "Regis & Kathie Lee" talk show, in addition to getting coverage in Popular Science, Time magazine, and dozens of newspapers.

"The calls just kept coming in saying 'We need more Air Hogs,' " said Rabie. "I couldn't believe what was going on. Our sales were way more than we ever expected."

Life hasn't slowed for Spin Master. Air Hogs is now in big toy stores worldwide, and the orders keep pouring in.

Spin Master today has 28 employees and expects to sell more than a million Air Hogs this year. It also is expanding the line with at least two new planes and a race car, driven by the same air-pressure technology.

It is also taking steps to build its business beyond Air Hogs. Among its products for 1999 is "Totally Fashion," a toy line geared for girls that includes body paint and nail design kits.

It also now assesses more than 1,000 inventions a year.

"We aren't the type of people that kick our feet up and relish the moment," said Harary. "We are always thinking about how to get the next step."

"Air Hogs got us known around the world, but I don't only want to be known for Air Hogs," Varadi said. "There's too much we want to do."

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