User experience versus the imagination. Matchbox light the imagination of playable toy car and Hot Wheels rolled out the playable version.
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.
[Tommy Cool Air Ad]
Stephen Semple:
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.
Matchbox started in England, so it’s 1947, so we’re going back in time. England is still in rubble, UK’s bankrupt, there’s 2 million soldiers who are out of work.
Dave Young:
Yeah.
Stephen Semple:
Leslie and Rodney Smith start this die casting business and they’re making various stuff, but they’re not getting rich and they take on this new partner, Jack Odell, and Jack has serious skills as a designer and a caster. So as you know, casting stuff, is you make a mold, you pour the metal into it, you pop it out, right?
Dave Young:
Yeah.
Stephen Semple:
One day he gets bored because around November to December in the die cast business, things really slow down because companies start to draw down their inventory. He’s bored and he wants to fill his time, so he starts making parts for a toy company. The following Christmas, because of that experience, he decides to make his own toy. And what he sees is these steam rollers all around that are repairing the roads from the war, right? So he decides to make a die cast toy of a steam roller, and then he does different things every Christmas. Every Christmas he’s making a different toy.
1953 comes along and it’s the coronation of Queen Elizabeth. He makes this very detailed casting of a coach with eight horses, eight riders. It’s four and a half inches long, and it’s very detailed. It’s super detailed because he’s a very skilled caster. Sells like crazy. He sells a million of them.
Dave Young:
Yeah.
Stephen Semple:
Sells a million of these things.
Dave Young:
Okay, a million.
Stephen Semple:
But the problem is it’s a one-time event so he needs an idea that lasts. He then notices there’s a restriction at his daughter’s school. This is where the brilliant thing is, is noticing events. This is what again we see all the time, is they can only bring a toy to school that fits in, guess what? A matchbox.
Dave Young:
A matchbox. So let’s make a toy that fits in a matchbox.
Stephen Semple:
A matchbox. And so he goes back to an early toy he did, the steam roller and he makes it tinier and he makes it fit in a matchbox. And he creates a line of four miniature vehicles that fit in a matchbox: A tractor, a cement mixer, a dump truck, and a road roller. And it’s the 1953 holiday season.
Dave Young:
Still the four most exciting vehicles on the planet.
Stephen Semple:
Yes.
Dave Young:
I’m just saying.
Stephen Semple:
Exactly. 1953 holiday season. And guess what? It’s not a hit.
Dave Young:
Oh no, those kids aren’t into dump trucks?
Stephen Semple:
Right? So in 1954, he makes the London Double Decker bus.
Dave Young:
There we go.
Stephen Semple:
Sales takeoff.
Dave Young:
I had one of those, it was one of my faves, right? You could look in the little windows in the top half.
Stephen Semple:
And they were so detailed, right? You could actually look inside. So he expands the line, he adds cars and they’re the exact replica. They got windows, et cetera. You could look in, you could see the steering wheel and the dashboard, and they were 39 cents each. He sells millions of them, millions of them. 1955 comes, they’re scaling up production, and he keeps this tight control on quality. Jack has no office. He walks the floor and they’re making matchbox cars that look like the car’s mom and dad drive. By 1962, they’re selling a million of these cars a week.
Dave Young:
That’s amazing
Stephen Semple:
And they’re authentic looking and they’re not thinking about competition and Matchbox launches in the United States. Now, remember Elliot Handler, who invented the Barbie, and there’s Ruth’s husband. Her husband Elliot, who had been trying to create cars that kept flopping. And I got to admit, he probably wants a hit of his own. He supports his wife and whatnot, but I’m sure there’s a part of him that wants a hit of his own. And so Elliot’s sitting and his grandson is playing with a matchbox. He owns Mattel and his grandson is playing with a Matchbox toy. And he looks at this Matchbox toy and it relights his passion for creating a car. And what he notices is, there’s a way to improve on the playability. Remember, the problem that the kept having with the old cars was playability?
Dave Young:
Yeah, dude. Dude, this is where Hot Wheels was just heads and shoulders above Matchbox, was the playability. These cars actually rolled and they had the little suspension because they had a wire axle instead of a steel rod, right? They were brilliant little cars instead of, and I had both, but the favorites were always the Hot Wheels because you could put them on a track.
Stephen Semple:
You are so brilliant, Dave. So It’s 1966, and he decides to take one more shot at cars. And what does he do? They won’t roll. So what does he do? He takes a Matchbox car apart and he looks at it and he says what it needs, it has this straight metal axle. And what it needs is a flexible axle, like a reel car.
Dave Young:
And one that doesn’t have as much friction on the wheel.
Stephen Semple:
Correct.
Dave Young:
So really thin wire…
Stephen Semple:
And plastic. And they’re now been playing around with plastic with Barbie. So they’re experts in plastic. So they look at a new plastic wheel with less friction, and they have thousands of yards of wire hanging around from making the toys, right?
And so they modify. So they basically take a Matchbox car and they modify it with new wheels and axle and it rolls way better.
So before going to market, he decides to hire a real car designer. He hires Harry Bradley. Now Harry Bradley is a name you may recognize because Harry Bradley’s the guy who designed the Oscar Meyer Wiener car.
Dave Young:
Oh, nice. Yeah.
Stephen Semple:
So they get Harry Bradley, and at first Elliot does not like the designs. So what Harry Bradley is doing is Matchbox style designs, very realistic. And he wanted something that’s more fun because in California at the time, the hot rodding thing was going on in California. And he said, I want cars like that. So they just start with an El Camino, but they make it hot rodded looking. Now the other thing That’s kind of fun is Bradley also, because he’s in the design industry, gets a look at the design of the new 1968 Corvette before it’s released. So they make one that looks just like that and get it ready to basically release at the same time as the 68 Vet’s coming along.
So their first release is 16 cars that they call the Sweet 16, and they decide to name the cars Hot Wheels. Cool name. And they give all the cars these really cool names, and they launch at the Toy Fair in New York. So just as they’re getting ready to launch, Bradley decides to resign because he doesn’t design toy cars, he designs real cars, and this is a critical, critical time. And Elliot decides, you know what? This is so critical. He’s going to invite Kmart’s buyer, Ken Sanger, to LA for a sneak preview to look at this stuff. So Ken takes a look at these. He was like, these are awesome. He immediately does a huge order. The other thing that Elliot does is some really innovative packaging. So Matchbox cars came in a matchbox. So Elliot took a page from Entenmann’s Bakery. Remember how Entenmann’s Bakery packaged things?
Dave Young:
It’s a little window.
Stephen Semple:
The little window. So he did that type of packaging so you can see the car inside. And he created this red flame logo. It was fun and exciting. So on May 18th, 1968, he debuts the Sweet 16 line of Hot Wheels and they sell 16 million cars in the first year.
Dave Young:
Amazing.
Stephen Semple:
It is a massive hit. 1970…Two years later, demand exceeds supply and he now has a rival to Barbie.
Dave Young:
That’s amazing.
Stephen Semple:
By 2018, 50 years later, it’s a top-selling toy and there’s 10 Hot Wheels sold every second.
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]
Dave Young:
Let’s, pick up our story of where we left off, and trust me, you haven’t missed a thing.
Dave Young:
That’s fantastic. Without thinking about it, if you’d asked me, which came first, Hot Wheels or Matchbox I’d have probably said Hot Wheels because I would think Matchbox is just sort of a lesser than knockoff of Hot Wheels, but it’s the exact opposite. Hot Wheels is an improvement. They took the Chevy of the toy car industry and turned it into the Mercedes of the toy car industry. If that makes any sense. That Doesn’t make a lot of sense, but you know what I mean.
Stephen Semple:
And they end up crushing Matchbox. Matchbox sales dramatically decline and Matchbox, even in terms of its response, didn’t try to make the cars roll better. They started, for a period of time, making cars that weren’t replicas of real cars. They thought, oh, well, it’s this hot rodding thing. They Didn’t really understand why they were getting killed. Matchbox ends up getting sold, goes back and forth between different businesses, and eventually Mattel buys Matchbox and that’s how Matchbox, Hot Wheels, and Barbie all ended up being part of the Mattel line.
Now, one of the things that is unfortunate is Ruth was forced out of Mattel. In the Barbie movie they got it wrong. They said it was the IRS, and it was actually not the IRS. She came under fire from the SEC for doing inflating numbers in accounting, and she was charged with securities, fraud. And in 1978 she was tried and she pleaded no contest and got community service and fines. But because of that, she was no longer able to be on the board of Mattel, which is really sad because she really put her heart into Mattel and Barbie. But it’s amazing when you consider the innovation that she brought. She brought this thing, everybody said she was nuts. Did the big gamble of advertising directly to children. Really changed the toy industry. And then you’ve also got to hand it to Elliot. When he looked at the matchbox, immediately went, I know how to make this better. I know how to make this better. But even Matchbox innovative. Oh, children can only take to school a toy that’s this size.
Dave Young:
Let’s make several of them. They can take our toys multiple times.
Stephen Semple:
Yeah, absolutely. And it was still a playable toy, as you said. It was fascinating to look inside of it and whatnot. It’s just really too bad that Matchbox didn’t really understand why they were getting killed in the marketplace. If they had made a change and made it a little bit more playable, the history might be very different on this.
Dave Young:
Here’s, a weird take on this, Matchbox, much better toy for the imagination, right? Because of the detail. You could look inside the little car or the bus and see all the detailing and the molding and really kind of picture yourself inside of it. Hot Wheels is more about the experience of racing them and shooting them across the floor and just more sensory action oriented, almost introvert extrovert. Get into Myers-Briggs, it’s like sensing versus intuiting. I mean, they both had their strengths, but for the American public, the sensing toy, the hands-on racing, the zoom-zoom toy is going to win every time because that’s the nature of the majority in our society.
Stephen Semple:
And I wonder what would’ve happened if Matchbox had just, and again, didn’t have to make it roll as well as a Hot Wheel, but I wonder if they had worked on that a little bit, whether that would’ve made a massive difference. Don’t know, it’s hard to say.
Dave Young:
Yeah, you couldn’t roll a Matchbox car on a Hot Wheels track.
Stephen Semple:
Oh no.
Dave Young:
They’re the same size car. It’s the same scale.
Stephen Semple:
Yes.
Dave Young:
They just don’t roll.
Stephen Semple:
No.
Dave Young:
You could use that Hot Wheels speed racer launcher thing to launch a Matchbox car across the room or a Barbie’s head for that matter. Not that I have any personal experience with either of those things.
Stephen Semple:
But when you think about Elliot and Ruth Bandler, between the two of them creating two of the most iconic toys in history, Barbie and Hot Wheels. Talk about a dynamic duo in the toy business.
Dave Young:
Especially after they go from picture frames to the, you could doodle to the burpee gun to revolutionizing an entire industry and society even, right? I mean, we could go all day about the role that Barbies played in just the evolution of society.
Stephen Semple:
And in some ways, it’s unfortunate, the pushback that has happened to Barbie because of the body figure and things along that lines. Because the goal Ruth had, the goal she had, and maybe they could have handled things differently, but the goal she had is she did want it to be an aspirational toy. That was her goal. She was like, I want this to represent what women can become. That was her goal. And at the time, it was that because of the fact that the only choice young girls had was you get to play mom and house maker. That’s it, that’s it. And she was like, no, there needs to be another choice. And Let’s face it, she was a strong woman in her own right. She was running a manufacturing facility in the late forties, early fifties. This was a strong woman.
Dave Young:
Yeah, very cool. Very fun story to hear about.
Stephen Semple:
Yeah, and as I said, the three were so linked, they needed to be told together.
Dave Young:
It makes me want to go out in the garage and dig in. I have a box that has some things from my childhood. I don’t think I’ve got any Hot Wheels or Matchboxes left.
Stephen Semple:
It was always sort of fun with the Matchbox ones looking in and seeing. To me the part that was always amazing was the detail of the dashboard. And you would look at the seats and the seats had little graining on them. They really were, or they really are. They’re still made today really very intricate.
Dave Young:
And the detail in the undercarriage right there would be the drive shaft and the differential and those kinds of things on the bottom.
Stephen Semple:
They really were quite amazing that way.
Dave Young:
It was kind of fun.
Stephen Semple:
Yeah. Anyway, it was a fun little trip back in memory lane. And thanks for sharing your trauma.
Dave Young:
I sure enjoyed it. And now I’m off to the therapist. Thank you Steven.
Stephen Semple:
Thanks David.
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 questionsattheempirebuilderspodcast.com.
