MGA Entertainment: A privately-owned toy company doing billions in revenue
There&#x27;s a lot of great lessons here.<p>(1) Billion-dollar companies are often built on products that consumers don&#x27;t know what they want, until they see and experience it.<p>Plenty of MP3 players pre-dated the iPod. But the iPod changed the market and put Apple back on the game board.<p>The iPod had an experience, the form-factor, the capacity, and the horizontal integration -- being able to buy music directly on iTunes -- and once you experienced it, you realized that this was just better.<p>(2) Find your blind spots and fix them.<p>A wide variety of dolls, covering the full palette of skin colors, opened up a <i>huge</i> market for all the girls that didn&#x27;t just want an Industry Standard Barbie Available In One Skin Tone.<p>Rhianna had the same problem -- she could never find makeup that worked with her skin color. So she introduced her own makeup brand -- marketed as being for all women -- which is now valued in excess of three billion dollars.<p>We see this a lot in Japan, by the way -- Silicon Valley companies come here, and engage in what I would say are <i>aggressive</i> levels of cultural ignorance.<p>(3) Recognize the context around your customers.<p>MGA recognized that Kids These Days spend a lot of time on YouTube, so they built a product designed to be YouTubed.<p>Glock is a great example of this. The founder, Gaston Glock, didn&#x27;t come from a gunsmithing or firearms manufacturing background.<p>To create the first Glock pistol, Gaston put together a cross-functional working group, including metallurgists, plastic-manufacturing specialists, and members of the Austrian police and military that would actually use the design.<p>Focusing on how the pistol would be used -- from both a tactical and logistical standpoint -- they created something which was a total departure from everything else on the market. A completely integrated safety system. Tool-less takedown and reassembly. Easy maintenance. Most companies require a unique magazine for each different type of pistol -- Glock magazines are totally interchangeable within the same feed mechanism.<p>Today, Glock is the biggest pistol brand, and every other pistol manufacturer carries Glock-inspired design.<p>Being able to look at problems from the outside is powerful.