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The Thing That Would Not Die
From:
Inc. Magazine, Mar 2000
By:
Michael Warshaw
Toy
maker Playing Mantis had a devout online community. So why did they
almost kill it?
Model Community.
This inventive toy maker has an on-line community like you dream
about. So how come they almost killed it?
A short
time ago, in a galaxy about 90 miles from Chicago, there was a hot
little toy company that had a mysterious competitive weapon: an
on-line customer community that really smoked. Only the rulers of the
company didn't quite get what a powerful weapon they had. It took a
gutsy employee (with a knack for being really aggravating) to show how
the right interactive Internet presence could help the business
generate ideas, solve problems, and tap into customer passion for its
products.
The
company: Playing Mantis Inc. of South Bend, Ind., manufacturer of
die-cast cars, plastic-model kits, and action figures. The employee:
Lisa Greco. In the physical world she is the company's
customer-service manager, opinionated and outspoken despite a
Fargo-like
midwestern cheer. On-line, however, she is something more mighty to
behold. As moderator of the bulletin board dedicated to the company's
model kits, this single mom is a nurturing guide for the adult men who
come to her bulletin board to talk about toys. She is Mistress of
Monster Models. The Queen of Styrene.
Simply
put, Greco represents a customer's pipeline into the heart of the
company. That's an incredible boon to hobbyists accustomed to
traditional toy makers, which guard product information as if they
were Napoleon Solo protecting nuclear firing codes. Playing Mantis, on
the other hand, is available 24/7 on the boards. Anyone can ask
questions or find out about new products. Moreover, toy-heads can
safely indulge their love of the trappings of childhood without fear
of being scorned as terminal nerds.
What
Playing Mantis gets is even more valuable. Through the boards it can
reach the burning core of its customer base with company news,
promotions, and quick-and-dirty survey questions. It can vet product
ideas with real consumers before committing a dime to development.
Last year alone, board members promoted new products, provided
remedies for Web-site problems, and helped bring Playing Mantis to a
new understanding of who was actually buying its stuff.
And to
think the company almost threw the whole thing away.
Before
we tell that story, let's consider a simple proposition: In this
world, men don't grow up. That is no expert opinion, nor is it the
result of painstaking research. It's just common sense. Ask anyone who
ever married one.
Once we
can agree on that, the whole story falls into place: why Tom Lowe, son
of one of the world's best-known entrepreneurs, started a company
dedicated to reissuing lines of toys from the 1960s; how the company
became successful despite the toy industry's reputation for a
competitive viciousness usually reserved for totalitarian nations; and
how both Lowe and Playing Mantis discovered the secret formula
(wouldn't be much of a tale if it didn't have a secret formula) for
building a vibrant, successful on-line customer community -- the Holy
Grail of all E-commerce companies.
Here's
the thing: most American men never, ever lose their passion for the
playthings of their past. That's why store shelves are packed with
classic hits of the '60s -- Hot Wheels cars, Etch A Sketch, and the
Duncan Butterfly Yo-Yo, to name a few. Toy makers know that parents
make the big buying decisions and that fathers especially never lose
affection for the toys they loved as kids. Which brings us to Lowe and
his company.
Walk
into Playing Mantis and you'll see drab offices, just like those of
any typical light-manufacturing company, but with one exception. There
are toys everywhere. Glass cases in the lobby display build-ups of the
company's Polar Lights line of model kits (mostly foot-tall figures of
monsters, spies, and space robots). The walls are festooned with test
shots and lineups of the company's Johnny Lightning die-cast toy race
cars. Employees' shelves are packed with Pezzes and other playthings.
Lowe's
own modest office is especially crammed with goodies. His shelves are
filled with Playing Mantis products, and the walls are covered with
framed photos of NASCAR champions and muscle cars. But Lowe's real
treasures are stowed behind a Cyclone security fence in the shipping
bay. That's where the boss keeps his personal stash of collectibles.
He has enough Johnny Lightnings and Captain Actions there to make a
grown man -- should there be such a thing -- swoon.
But for
all the play factor, the corporate headquarters is still basically a
cube farm in the unglamorous burg of South Bend. Playing Mantis,
founded in 1994 and still tiny by toy-industry standards, has only 40
employees and revenues of $15 million to $20 million. Most of the
employees are locals. Half have been hired in the past two years.
It
doesn't take too many strides for Lowe to reach any corner of his
empire. Lanky, sleepy-eyed, renowned for his prankster sense of humor,
he ambles around the building like a big kid. Stopping in his
product-development department -- a couple of banquet tables pushed
together -- he checks out some handcrafted prototypes from a new line
of toy cars tentatively called "The Dreamboats" -- family sedans from
the 1950s, real Bulgemobiles. Lowe picks up a bloated Chrysler and
offers his highest praise: "Rock on!" (Well, it's a toy company, not
the English-lit department at Columbia.)
Lowe,
40, is firmly grounded in the tail-end baby-boomer demographic his
company serves. He grew up in Cassopolis, Mich., which everybody calls
Cass, amid the richest cultural influences of the '60s:
Mad
magazine, monster movies, and good old-fashioned network television --
oh, yes, and social protest and the Vietnam War. His father was the
well-known entrepreneur Edward Lowe, inventor of kitty litter
(somebody had to) and, by a number of accounts, a
my-way-or-the-highway kind of guy. Lowe grew up mostly in the care of
his mother, who, wonderfully, did not throw away his old toys.
Never
straying from his midwestern roots, Lowe graduated from Miami
University of Ohio, earned his master's in marketing at DePaul
University in Chicago, and married his high school sweetheart. He sold
for a food broker and did marketing work for Domino's Pizza, but the
corporate life was not much fun. "I was tired of being told what to
do," he says.
In
1987, in Dundee, Ill., Lowe started his first company: Safe Care
Products. Financing the effort with his own savings, Lowe
was
the company at the beginning. From his basement he developed products
he knew he could sell to mass merchandisers. He had one hit toy -- a
Velcro football called the WhattaCatch -- but most of his 30-some
products were anonymous,
you-never-thought-you-needed-it-until-you-saw-it-on-a-store-shelf
items, such as a bathtub cushion and a Nintendo video-game lock called
HomeworkFirst. The best stuff was yet to come.
By the
early 1990s, Lowe's generation was rediscovering the toys they thought
they had outgrown. In those pre-eBay days, the bible of this loose
society of arrested adolescents was a magazine called
Toy Shop,
filled with classifieds featuring goodies from the preceding 40 years
or so. Reading it, Lowe noticed that a lot of the stuff he had played
with when he was a kid was selling for big bucks.
That
demand looked like one hell of an opportunity. Take Hot Wheels, for
example. Introduced by Mattel in the mid-'60s (
You can tell
it's Mattel. It's swell!), these little die-cast cars were
engineered to roll freely and fast. They were a sensation -- and still
are. Although new Hot Wheels are on store shelves, some versions from
the '60s command hundreds of dollars each.
Down in
his mother's basement lay all the toys Lowe had discarded back when he
discovered girls, including about 50 Hot Wheels and 8 cars from the
Johnny Lightning line. He initiated a trademark search. Mattel had a
death grip on the Hot Wheels name, but the Johnny Lightning name had
been abandoned years before.
Through
an ad in
Toy Shop, Lowe says, he bought a collection that included
30 original Johnny Lightning cars. He brought the swag to Wal-Mart,
notorious for being tougher than the A-Team when it comes to taking on
new products. "Whattaya got here? A flea market?" the buyer roared.
"I'll give ya five minutes."
Lowe
explained that he was going to re-create toys from the '60s. "I was
there for an hour and 15 minutes, explaining what my plan was," he
says.
Wal-Mart bought in. Toys R Us did, too. Lowe was ready to rock. He
sent his original Johnny Lightnings to China with a simple directive:
copy these. And in 1995, Safe Care was reborn as Playing Mantis, a
name he chose to be clever and kid friendly. "I always liked playing
with praying mantises when I was young," Lowe says, illustrating the
difference between a Cass native and, say, some kid from Brooklyn.
Lowe
has always had one measure for deciding which products Playing Mantis
will pursue: "If it isn't cool, we won't do it," he says. He means it,
too. This is his company all the way; he owns it free and clear. There
isn't even any long-term debt ("Just a working line of credit," says
chief financial officer Randy Miller), so the company has the
resources to choose and develop its own products. "Being private is an
important advantage. We can do what we want," Lowe says.
What he
wants to do is to diversify enough to fight off challenges from the
Hasbros and Mattels of the world. (Playing Mantis has already survived
trademark-infringement litigation with Mattel. The suit was settled
out of court.) He now has 2 solid brands; he'd like to build up to 10.
And he
has two secret weapons. The first: customers such as the guys on the
bulletin board, gleeful pseudo-grown-ups who share his
child-of-the-'60s sensibility. The second: his company's ability to
spin on a dime and give those guys what Lowe knows they want.
That's
how he decided to revive a line of monster models originated in the
'60s by a company called Aurora Plastics Corp. In those years, Aurora
models were bigger than
Star Trek.
Aurora produced model kits of classic monsters (like the Wolf Man and
the Mummy) as well as characters from television (like Batman and
Superman). And did they ever sell! "Those guys were easily putting out
200,000 or 300,000 units at a run. I'm sure some of the best-sellers,
like Frankenstein and Dracula, were up there with sales of 2 million
or 3 million apiece," says Thomas Graham, professor of American
history at Flagler College, in St. Augustine, Fla., and author of
Greenberg's
Guide to Aurora Model Kits. "At the time, plastic models
of all sorts were sold everywhere -- in candy shops, drugstores,
bicycle stores -- and I even found mention of one mortuary. They were
easy to find, they were inexpensive, and pretty much all your friends
were building them."
By the
1980s, Aurora was gone, a victim of bad business decisions. With it
went the entire market for monster models. The models weren't missed
until their original fans grew older and started searching for the
icons of childhood -- a pursuit that Graham claims is healthy. "The
people I know who are living long and prospering are those who still
enjoy playing," he says. "Playing with toys in particular."
Take
Lowe, for example. He built Aurora models as a kid and remembered one
with special fondness: the haunted house from
The Addams
Family TV series. "I loved it," he says. So in 1995, under
the name Polar Lights (Get it? Aurora? Polar Lights?), Lowe had the
kit re-created, offering it as a $60 exclusive at the high-ticket FAO
Schwarz toy-store chain.
The
collector's market went nuts. Original Addams Family house kits were
selling in
Toy Shop for at least $500. A year later, when the remade
kit went into wide release at less than $25, a new market was born.
Make no mistake: the days of 300,000-unit runs of a monster model are
over. Most Polar Lights kits are produced in runs of 15,000 units. Yet
Polar Lights has been successful enough for the line to be expanded to
include 60-odd kits. To date, the most successful is a new original
done in the Aurora style: a model of the
Jupiter 2
spaceship, the interstellar Winnebago featured on the TV series
Lost in Space.
Playing
Mantis launched Polar Lights just as intelligent life was being
discovered in cyberspace. In late 1995 and early 1996 -- through
bulletin boards on Prodigy, America Online, and other services --
collectors, craftspeople, and genre fans were discovering whole
communities of like-minded souls.
Lowe
and his managers caught on to the phenomenon -- sort of. In 1995 they
stuck up a quick site, just some early brochureware. But for serious
marketing, Playing Mantis held fast to traditional methods --
newsletters and print ads. Part of the reason for going slow on the
Web was that Lowe was no fan of online customer interaction. "I would
do chats and look at boards on AOL, but I found that I didn't get a
lot of new ideas from them," he says. "Besides, there are some vicious
people out there. Some of the employees who left would get on the
boards and say things that just weren't true. There were competitors
who got on there just to screw around with you. I might go on to see
what's being said, but in terms of being Tom Lowe on the boards, I
don't do it anymore."
But
Greco had no such reservations. She and Hank Hagquist, an outside
contractor who was Playing Mantis's original Web master, were old
friends from Riley High in South Bend. Hagquist was running his own
site, called Hobby Talk, for fans of radio-controlled car models. He
talked to Greco about starting a section devoted to Playing Mantis
products. "I thought they could be a good subject," he says. "I
thought the people who bought or collected their products were real
enthusiasts, people with a passion."
In
1998, Hagquist established a board for Polar Lights, moderated by
Greco. Dave Metzner, the company's product-development manager for
model kits, helped Greco answer board members' questions. But it was
she who ruled the board. Judiciously leaking product news, insisting
on cordial relations and polite language, Greco -- signing missives
with an enthusiastic "Moi!" -- gathered a loyal cadre of fans to her
cyberclubhouse. Yet even after hundreds of members had signed on, she
didn't fully understand the potency of the boards until Polar Lights
released that model of the
Jupiter 2.
The
kit, enthusiastically received, had a flaw: a hatch inside the ship
was upside down. That detail would escape 99.9% of normal buyers. But
this was the Internet, where obsessive behavior hangs its hat. Board
members were all over the error, and Metzner, with Lowe's approval,
decided to correct the flaw for the second run of the kit.
The
online critics felt as if they had spoken and the company had
responded. True enough, says Metzner. "If it hadn't been for people
telling us about it, it wouldn't have been fixed," he says. It was the
kind of action that converts loyal customers into devoted fans.
As the
online community jelled, its members got very comfortable with one
another. Their exchanges strayed way beyond toys. In the course of a
limerick contest initiated by Greco (
There once was
a monster named Frankie, in the mood for a little hanky-panky...
What say we just don't go there?), one member posted a message
revealing that his wife had left him. "Why share it out here like
this?" he wrote. "I don't know. Thanks for the support out here, you
guys."
Greco
responded immediately -- "We're here for you" -- and the board members
pitched in. It brought home for Greco just how much this community
meant to its members. The board was a sanctuary that connected them to
the company and to one another far more deeply than she had realized.
Unfortunately, Lowe was not frequenting this board (or boards that
were set up later for Johnny Lightning and Captain Action fans), so he
saw little of all that. What he did see was that Greco and Metzner
were spending an awful lot of time on the Internet. It didn't seem as
though their involvement with the boards was adding much to the
business. "That's what they were doing with their time?" Lowe
remembers asking. "Talking to people about their problems, which have
nothing to do with model kits? So we took a very hard look at that."
At the
time, in 1998, Playing Mantis was already reexamining its entire
customer-service function. By 1999 some customer-service staffers were
being asked to do more active selling.
That's
how it happened that the boards almost died. It started with Hagquist,
who was still hosting the virtual community on his site. "At some
point I was saying that here we have this multimillion-dollar company
building its name for free," he says. "C'mon, guys, feed a little
back." So he gave Greco a deadline: By the end of February, start
paying him $50 a month for each of the three boards.
Greco
filed all the appropriate paperwork, never imagining there'd be a
problem. But Miller wouldn't approve the expense at first. Look at it
from his point of view. For one thing, it is often his job, as with
any CFO, to be the one who says no when it comes to using company
resources. For another, he and Lowe were already wondering what the
true cost of the boards was and whether they were worthwhile. "It
wasn't really a financial decision as much as a decision regarding use
of time," Miller says. "Intangibles like that make for the toughest
decisions."
As the
deadline approached, Greco grew nervous. If the boards shut down, it
would be a disaster -- and not just for the company, which would lose
a resource that she felt hadn't even begun to pay off. "This
community, and I think most communities, are built on trust," she
says. "These boards are a refuge for the guys, a place where they can
be themselves. Shut it down, even for a day, and you create an
uncertainty from which the community might never recover."
She
went to Metzner for advice. Of all people he best knew what was
happening on the boards. Together they decided that even if they had
to pay the fee themselves, they'd keep at least the model-kit board
running. But first Greco wanted to reach out to Lowe directly. It
wasn't politically correct, and it would anger her managers, but it
wouldn't be the first time she had gone right to the top. (Greco was
once a guard in a prison for men, and she prides herself on being
pretty tough.) "I felt I owed the fight to the guys out there," she
says.
On
February 22, Greco posted a new topic on the Polar Lights board. Under
the title "Hypothetical Question" she wrote, "Good morning, guys!
Everyone have a cup of coffee??? Anyone bring the donuts?? Time for a
little sidebar discussion. SUPPOSE, just suppose, this BB would cease
to exist. How would you all feel about that?"
That
week the boards hummed. Members figured that something was going on in
South Bend. Member Steve Iversen, who under the nom-de-Web CultTVMan
operates a popular site for builders of science-fiction models,
E-mailed his list of 700 subscribers, urging them to register their
support. In post after post, members expressed their need for the
board:
"Polar Lights is very special to me. ... You've rekindled the joy I
once felt when buying these kits. ... You're the ONLY company who I
feel a part of."
--Lou H.
"It helps us to be kids again. ... It's easier to be a kid again when
you see there are a bunch of other people doing it: you feel less
guilty/silly!"
--David Redknap
"As I reflect back on my hobby experiences for the year, one of the
most satisfying has been the relationship formed by a large number of
us with Polar Lights. It is not their products that, I feel, sets them
apart from other model companies. It is their devotion to the
consumer."
--PCModeler.com
On it
went. By Friday, February 26, Greco had a printout the size of a
small-town phone book. With Hagquist's deadline imminent, she walked
into Lowe's office and threw the printout on his desk. On it was a
sticky note that read, "You'd better read this before 5 p.m."
And
Lowe did. Previously, when he had read the boards, "it would be all
kinds of strange subjects. I hadn't really thought it was worth the
trouble," he says. But here was new evidence that the boards had built
a bridge to customers unlike any that he or his managers had seen
before. It wasn't lost on the CEO. Over the next few days the company
made the decision to keep the online community. "Lisa
went to Tom and said, 'Pay the man,'" Metzner recounts. "That's
basically what happened."
This
was all happening just as
community
was becoming a buzzword in the world of E-commerce. Few companies had
been able to build what Lowe already had: an active forum in which
customers and the company could interact. "When we looked at the macro
picture, we realized there was this base of 500-plus customers who
were very actively involved with each other and the company and the
hobby in general," Lowe says. "Now we know that one of the best ways
to solve a customer problem is to explain it on the boards. The word
then spreads automatically."
The
customer community repeatedly proved its value in the months that
followed. Lowe, for example, had always vowed never to re-create one
of Aurora's most popular models: a guillotine. Because it actually
worked -- you could chop off the head of a little plastic 18th-century
French aristocrat -- it had been one of Aurora's biggest sellers. But
one of factors that killed Aurora was protests from parents over its
more gruesome products, including that very kit. Lowe didn't want
Playing Mantis to stir up that pot again. Besides, as a father of
three, he wasn't crazy about gory toys himself.
Yet
despite Greco's best efforts at banning any mention of the
g
word from the Polar Lights board, members were relentless in their
efforts to get the company to redo the kit. She brought their postings
to Lowe, who began to question his original decision. He commissioned
research to confirm that it was mainly adults who purchased Polar
Lights kits. And he decided to issue the guillotine after all. "After
I saw what Lisa and Dave were hearing on the boards, I went out and
looked to see how it compared with other toys on the shelves," Lowe
says. "It was tame by comparison. Besides, it was historical."
It was
a landmark for the boards, which were beginning to affect not only
product decisions but also the way the company defined itself and its
audience.
Members
of the boards came through again on September 2, 1999, when Playing
Mantis launched a new iteration of its Web site. Packed with
animations meant to charm visitors, the new site fizzled on the launch
pad. The bells and whistles jammed up the site's works. It was a bad
day in South Bend.
Well,
nerdy the boardies may be, but many are professionals and some are
programmers. Throughout the day, they surfed the site, identifying
problems and posting recommended solutions. Some wrote code fixes and
sent them in. Greco ran back and forth, delivering the information to
the company's overwhelmed Web architects. Within a few days the site
was running much better.
Now
with 3,000 active members -- plus plenty of lurkers, who read but
don't post -- the boards are a proven asset in the halls of Playing
Mantis. "There's so much merit there," says CFO Miller. "This company
was built on its connection to the collector, and the boards make that
immediate and real."
"What
better way to build brand loyalty than to have a community built by
those who have a real sense of ownership in the company?" asks Greco.
Even the boss is a convert. "Information flow is hugely important,"
Lowe says. "For a small company up against giant competitors, there's
no faster way to build bridges or get information to customers."
Lowe
believes the boards feed customer relationships that would be the envy
of any company. Playing Mantis dominates its niche, thanks partly to
the boards, he says. "The market may be small, but we've got all of
it." You can almost hear the words: Rock on!
Michael Warshaw is a senior editor at
Inc.
Readers can access Playing Mantis's bulletin boards at
www.playingmantis.com.
THE
PLAYING MANTIS
What
does it take for a company to create a cybercommunity for its
customers? According to Playing Mantis founder Tom Lowe, it requires a
few simple ingredients:
The right products.
Not every company has what Playing Mantis has: cool products that
customers want to talk about online. "Certain product attributes are
more apt for building community than others," Lowe says. "The customer
has to have warm feelings about them. If there is any kind of
nostalgia attached to the products, it probably will be something
people will want to get online and talk about."
The right people.
"It's very difficult to find employees who can grow a board," Lowe
says. "Either they have it or they don't. Lisa Greco is an experienced
customer-service manager who really cares. Dave Metzner I found in a
hobby shop, where he still moonlights. He's a builder and collector
himself. They can really talk to these guys."
The right attitude.
Lowe says the easiest way to kill a community is for management to
kibitz once the first two ingredients are in place. "You get your
people, and you really have to give them the power to do it
themselves," he says. "You can't tell them what to do. They have to be
able to be honest about what they're hearing and what they're telling
you without fear of being fired. You have to believe in 'em and let
'em do it their way."