Toy story three

Kiwi sib­lings mak­ing their own fam­ily fun in China

Idealog - - CONTENTS - TEXT BY JENNY KEOWN

+ IT’S A STI­FLING, hot, sum­mer day. One bright spark sug­gests a wa­ter fight, an epic bat­tle. The weapon of choice? Wa­ter bal­loons.

It al­ways seems like a great idea. The par­ent, filled with pur­pose, starts fill­ing the first bal­loon, while the chil­dren wait with baited breath.

Then the bal­loon splits. Oh well, on to the next one. One of the kids in­sists on fill­ing up the next bal­loon, and then drops it. She catches her fin­ger try­ing to tie the third.

Af­ter 30 min­utes, the chil­dren are over it, and the par­ent wants to stick forks in their eyes. Help may be at hand. Zuru, a clever New Zealand- owned toy com­pany based in China, has launched a new toy called Bunch O Bal­loons, which claims to fill 100 wa­ter bal­loons in un­der 60 sec­onds.

Zuru is owned and run by three sib­lings from Cam­bridge (the NZ one), who em­ploy 750 peo­ple and turn over $100 mil­lion – and ris­ing. Bunch O Bal­loons – a hose at­tach­ment with 37 pre- con­nected bal­loons – is the latest in a se­ries of suc­cess­ful toy launches, in­clud­ing the wildly-pop­u­lar Robo Fish.

So how does a fam­ily- owned com­pany dis­cover a po­ten­tially game- chang­ing toy?

Bunch O Bal­loons is the brain­child of Josh Malone, a Texas fa­ther of eight, who wanted to find a way to fill wa­ter bal­loons quickly.

His sys­tem al­lows you to fill lots of bal­loons at the same time, then give them a shake to ac­ti­vate the self-seal­ing rings and push the bal­loons off the at­tach­ment, ready to go. (Idea­log gave it a test drive (right) and was slightly un­der­whelmed – but maybe that was just user er­ror.)

Zuru di­rec­tor Nick Mow­bray says they dis­cov­ered the prod­uct the same way as ev­ery­one else – via the media.

Malone put his in­ven­tion on the crowd­fund­ing plat­from Kick­starter in July 2014, with the goal of rais­ing US$10,000. In­stead, he raised US$1 mil­lion in less than 20 days.

The story went vi­ral, at­tract­ing a stag­ger­ing 1 bil­lion media im­pres­sions and sto­ries in Time Mag­a­zine, CNN, and Good Morn­ing TV.

Cue, Zuru. Mow­bray saw the cov­er­age and wanted the com­mer­cial rights. He knew Zuru was up against much big­ger play­ers, which could of­fer more money. So he got on the phone to Malone and didn’t give up.

“I lit­er­ally con­tacted him ev­ery day – with no replies be­cause ev­ery­one was try­ing to get in touch with him.”

Mow­bray’s team cal­cu­lated Malone’s in­ven­tion would take 1.5 hours to put to­gether by hand, as all one hun­dred bal­loons need to be pre-tied.

“I even­tu­ally man­aged to get him on the phone and told him the only way that his in­ven­tion could be com­mer­cialised and go to

a mass mar­ket, was if it was au­to­mated.

“This sort of toy can’t be put out at a pre­mium, peo­ple can go out and buy a bal­loon and string for next to noth­ing. The au­to­ma­tion pro­posal peaked Malone’s in­ter­est and he jumped on a plane to see us.”

Zuru’s R&D team, based in Guangzhou, cus­tom-made a test-pi­lot ma­chine us­ing lasers and ad­vanced ro­bot­ics to put each ‘o’ ring and bal­loon on to the straw and as­sem­ble it.

It wasn’t easy. The first ma­chine had to be re­designed al­most 20 times be­fore Zuru had a work­ing model that could be scaled, says Mow­bray.

Malone liked what he saw and agreed to sell the com­mer­cial rights for an undis­closed sum.

Zuru will launch Bunch O Bal­loons in the US, Aus­tralia, New Zealand and South Africa this year, and in Asia, Europe and the Mid­dle East in 2016.

But Bunch O Bal­loons is just one part of a wider strat­egy at Zuru.

The com­pany is build­ing a multi-mil­lion dol­lar fa­cil­ity, the size of three football fields, fo­cused on build­ing ma­chines for many of its other prod­uct lines.

The fac­tory is lo­cated in a part of Guangzhou Mow­bray calls the “Sil­i­con Val­ley of Asia”, be­cause it is home to firms like telco equip­ment com­pany Huawei, across the road, which em­ploys 50,000 engi­neers.

“We are set­ting up the fa­cil­ity in the area due to the tal­ent,” says Mow­bray.

TOY STORY ONE

The story is ex­tra­or­di­nary: How Nick and Mat Mow­bray (and later their sis­ter An­gela) went from the horse-breed­ing town of Cam­bridge ( pop­u­la­tion 15,000) to Guangzhou ( pop­u­la­tion 14 mil­lion) and founded a toy com­pany which now has 750 em­ploy­ees across six of­fices, turnover of $100 mil­lion, and sales in 80 coun­tries.

It started small: with two small boys com­mer­cial­is­ing a minia­ture hot air bal­loon Mat had made for a science fair when he was 11, us­ing ma­te­rial like plas­tic bags and Coke cans. Ten years ago, sales out­grew the garage, and Mat and Nick reck­oned they were on to some­thing. So de­spite be­ing barely out of their teens, the boys got on a plane to Guangzhou.

They didn’t have any­where to stay (so they slept un­der bushes for the first few days), and they didn’t un­der­stand China’s busi­ness en­vi­ron­ment. But they fig­ured it out.

“We were very young and did not have much knowl­edge of how any­thing worked. We made loads of mis­takes but grad­u­ally found our feet. The big­gest ben­e­fit has been build­ing the whole com­pany out of Asia,” says Mow­bray.

The big break came in 2012-2013, with the global suc­cess of Robo Fish, an elec­tro-mag­netic toy that swims like a fish when dropped in wa­ter.

Al­most 15 mil­lion chil­dren got a Robo Fish over those two years, and the toy out­sold Lego for a while.

The pop­u­lar­ity of Robo Fish pro­pelled it in to the sights of Dis­ney. Re­cently, Zuru signed ex­clu­sive rights to Frozen 2 and Find­ing Dory. The com­pany still pro­duces 65,000 fish a day. As CEO, Mat man­ages the R&D team, and looks for the next big thing – which in­volves the team at Zuru sift­ing through many thou­sands of toy con­cepts.

Anna heads the fi­nance and oper­a­tions teams, and has driven the growth of the com­pany. And Nick, as di­rec­tor and pres­i­dent, heads in­ter­na­tional sales and mar­ket­ing and over­all global strat­egy.

Ro­bust de­bates with each other are not un­com­mon, Mow­bray says.

“Zuru has big plans. We want to strive to find new ideas and tech­nolo­gies to push the bound­aries of in­no­va­tion.

“We want to in­crease rev­enue to US$200m by next year and con­tinue to grow ag­gres­sively.”

It is also push­ing to sign big­ger li­cens­ing deals with the large movie stu­dios, he says.

“Ideally we want to look at our big com­peti­tors, Has­bro and Mat­tel, and ask: ‘how do we lift the com­pany to the next level’? We are am­bi­tious with our plans, not want­ing to set­tle.”

The com­pany is still owned by the three sib­lings, and they have grown it or­gan­i­cally over the past nine years with­out any bank or out­side in­vest­ment.

“We have ex­plored the op­por­tu­ni­ties in terms of float­ing. The val­u­a­tions and mul­ti­ples be­ing achieved in Asia right now are un­prece­dented.

“But we feel we are in a ma­jor growth phase and can drive our val­u­a­tion up with a cou­ple more years of do­ing what we are do­ing.”

Ideally we want to look at our big com­peti­tors, Has­bro and Mat­tel, and ask: How do we lift the com­pany to the next level? We are am­bi­tious with our plans.”

Left and right: Late sum­mer test run on Bunch O Bal­loons brings backyard ex­cite­ment

Above: Zuru co-founder Nick Mow­bray is only 30, but runs a $100m com­pany.

Fast fish: The suc­cess of Robo Fish and other Zuru toys has lifted the com­pany's sales to $100 mil­lion a year, with the goal be­ing turnover of $200 mil­lion in 2016.

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