12/27/17

Garage to Fortune 500 Series: Mattel

Lots of powerful companies were born in garages. The first that come to mind are most likely heavy-hitters such as Apple, Amazon, Hewlett-Packard, and Harley Davidson. Thousands of articles have been written about how their intrepid founders weathered challenges and defeats to triumphantly emerge from their poorly-lit, bootstrapped beginnings.

But there’s another member of the garage fraternity that often gets overlooked in these discussions. Which is odd, because it has made an everlasting impact on the toy industry and the world at large. That company, of course, is Mattel.

Mattel was founded in 1945 by Elliot and Ruth Handler, along with a short-term partner. Elliot had spent the 1930s as an artist and light fixture designer, which was anything but lucrative. To increase his money-making potential, he began creating dollhouse furniture in his aforementioned garage.

It was in 1939 that Elliot had a stroke of good luck, designing a miniature piano that took the New York Toy Fair by storm. When stores ordered more than 300,000 of the toys, the Handlers thought they had finally hit pay dirt. But they didn’t price the toys properly, and ended up losing money on each one sold. Soon they found themselves mired in debt.

Salvation came in the form of a music box. With the help of an innovative music arranger, the Handlers began placing music boxes in toys like jack-in-the-boxes and dolls. Sales took off, bringing in millions of dollars. Building on this momentum, the Handlers released a talking doll called Chatty Cathy. It also proved to be a smashing success.

For much of Mattel’s history, Ruth handled the business development while Elliot focused on toy creation. But they were a true team. It was Ruth who suggested they make a woman-like doll, which Elliot eventually created and named after their daughter, Barbie. Later, they also introduced a male doll named after their son, Ken.

To keep things diverse amidst the Barbie sales explosion (it’s still the world’s most popular doll, with a sale every three seconds), Elliot decided to focus on toy cars. He recruited real-life auto designers to help him perfect what has become the Hot Wheels empire.

How influential has Mattel been on the world? Well, Time Magazine created a list of the 13 most influential toys ever made. And Mattel had a hand in more than half of them. Not too shabby for a husband-wife duo who started out incorrectly pricing toy pianos in their garage.

Read about Apple, Starbucks, Whole Foods, and more in our Garage to Fortune 500 series.

It takes a little cash to change the world.

So what are you waiting for?

About the author

Grant Olsen
Grant Olsen
Grant Olsen is a marketing and technology writer with a B.A. in English from Brigham Young University. He has written for healthcare companies, outdoor gear manufacturers, international airports, and dozens of small businesses. Grant is a contributing writer for KSL 5 TV and Lendio News. He is also the author of the book “Rhino Trouble.”

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