713. What Can Legos Teach Us about Innovation?

Hello everybody, welcome back to another episode of The Way the World Works. So today we're going to talk about one of my favorite entrepreneurs, one of my favorite inventors. And it might not be one you automatically think of or a product you automatically think of when you think of like great entrepreneurs, but his name was Old Kirk Christensen. And he was Danish and he invented Legos.

So I know parents when you think of Legos, you might think of those toys your kids always forget to pick up off the floor that you are constantly tripping over. And let me tell you, nothing will make you hate Legos more than stubbing your toe or falling on one or like walking on all of the barefoot. They feel like like weapons sometimes. So Legos are not the best in that context, but man, when I was a kid were Legos, some

of my favorite toys. And I liked them because the sky was the limit. I liked them because even though maybe it came in a pack where you were supposed to build a house or like a castle, I built spaceships. As long as you could design or figure out how to design and put those blocks together in whatever creation you wanted, you could do whatever.

And I think I don't know a lot about Minecraft other than that kids still like it and it's been around for like 12 years now, which is weird because you think people move on to new things. But I know kids still like it, I think, where I'm just way out of the loop. But I think it's similar. It's this like world building with Legos, it was similar.

You could build these worlds and you could change your outfits on the Legos by taking their heads off and putting them on someone else or whatever. So I absolutely loved Legos. Me and my brothers would play with them for hours and hours. I still today, if I'm watching my nieces and nephews or something and they have Legos, I'm like, yeah, let's do this, let's play with them.

So why are Legos so important? Why is a man that invented these tiny little blocks? Why is he so important? Well, he teaches us a lot about innovation and about learning from failure, which is one of the most important lessons you can learn as an entrepreneur because guess what? You're going to fail and you're going to fail often and what are you going to do with

that failure? Are you going to give up? Are you going to throw in the towel? Are you going to keep going? Well, our buddy, Olkirk Christensen, he never threw in the towel and look at where Legos are today.

So let's dive in. Before I dive in, I just realized I have been saying his name wrong because Olkirk Christiansen, it's a Danish name, so please forgive me for not saying it correctly the first time. So he lived in a place called Billend Denmark, Bill Lund, I think Denmark is probably how you pronounce it. He made furniture.

He was a carpenter. He made furniture. He made houses. He made just like every day wooden objects that we see in our house. So then the 1930s rule around and what horrible economic event happened in the 1930s, the Great Depression and all of a sudden his business just shrinks, right?

People start canceling orders because all of a sudden, you know, having new wood items in your house, that's not a priority. Everyone's just trying to feed their families. So at this point, he's struggling. He doesn't know what he's going to do. In the midst of all this, all these trying times, his workshop where he builds everything

burns down twice, that's right, not once twice. So he is not having a great handful of years. This is not his time to shine. So what is he going to do with this? I know this were me. I would be frustrated and I probably should be like, forget it.

I don't know what I'm going to do, but I can't do this anymore. So he pivots. He stops building big woodworking items that people can't afford and he starts building small wooden toys. Seems kind of like a big switch, but there's a few things there. One, he grew up as a poor kid.

And so I think he would have appreciated having these small wooden toys, but also the Great Depression, even though it was felt more by the parents because they were understanding the realities of the situation, kids still pick up on when things are hard, you know? And so if he could bring some joy to their life with just these small wooden toys, then he was going to do it, you know? And so he pivots.

He changes from big woodworking projects like furniture and houses and he makes these small toys and he names the company Lego. What does Lego mean? Let me try to pronounce this word. It means Danish for leg got, which just means play well, which I think is really fun. It's kind of straighten to the point, play well, you know, you're not going to get his

toys, you're going to play well. And I think that's a pretty straightforward good name. And he's actually able to stay afloat during the Great Depression once he pivots to this new model of making toys, which I think is really interesting because that teaches us this adaptability quality, the innovators and entrepreneurs have to have. You have to move with what the market needs and you have to understand that if the market

doesn't have need for something, you've got to go back to the drawing board and switch up your game plan. And that's exactly what he did. So this is my favorite part, I think, of what I like him in general, but so he has this sign on his workshop that says only the best is good enough. I'm sorry for reading that directly, but I want to make sure I get it right.

Only the best is good enough. And that was his motto. That is what shaped everything. That's how he became what he became. So he decides to pivot again from wood to plastic because that's, you know, changing what the time's plastic is becoming really big and it sought after material.

It's what people are using. It's cheaper. So he switches from plastic. So he decides we're going to actually completely update these wooden toys. We're going to switch to plastic toys, but we're going to actually make them bricks. We're going to do these little plastic bricks, but he doesn't want to rush this, right?

So he starts experimenting, trying to come up with the best possible plan for this, which seems kind of overboard for a piece of plastic, but he, what did he say? Only the best is good enough, right? He wanted it to be the best. So finally, in 1958, Legos become more closer to what we know them today. That's where you have these interlocking bricks.

That's this exact, I mean, again, it's what we have today is what we think of today. So he moved from wooden toys to then like wooden blocks to then plastic blocks. And now we have 1958, the Legos that we're familiar with today. So I told you that he had a fail a lot and that most entrepreneurs do and the early Legos failed because they weren't actually sticking together. They weren't staying connected and obviously kids were not happy with that.

They were trying to build their creations and then they weren't staying together. So that creates a problem. So he has got to figure out how to improve on his product. And again, it is his commitment to excellence and to creating the best quality work that is going to really motivate him to continue going back to the drawing board and continuing to find ways to improve what he's doing.

Now, part of the reason he was able to be successful is because he stuck to what he did well, which were these blocks, right? And that was great. So what's going to happen during the late 1990s, early 2000s, kids tastes are going to change, right? You have media of TVs.

You have new toys. You have digital toys. You have video games. And Lego wants to, they're starting to suffer a little bit. So they want to try to keep up with the time. There's nothing wrong with that.

Like I said, you ought to adapt if you're an entrepreneur, right? So they try to do video games, even tried to do theme parks, which I think is still around today, cartoon lines, right? And it wasn't working out for them because it wasn't what they were good at. I know you might be thinking like, well, what about the Lego movie? What about Lego land today?

So this was originally, and it was suffering financially. So they were able though to survive and we'll get into that now. So when they saw that they're original products and they also made like different kind of Legos, like they made these weird action figures, I can't remember what they were called, but I remember kids buying them and not liking them. So they're trying to adapt, but they're doing it so much that it's just not working and they're

creating too many new things where it's not helping them. In fact, they were on the verge of bankruptcy, Lego almost completely went under. And so he returned to first principles. He returned to what he did well, and he goes back to what is the staple? What is the foundation? Those connecting bricks, the Legos we know.

So they go back to that. They not only just try to perfect that product and focus on that product, but they start cutting costs to make the Legos more affordable to people. So they stick to what they know, and this is called specialization, right? They did this one thing well and they wanted to continue doing it well. And what happened as a result?

Well, as a result, the company not only survived, they started thriving. So let's talk about everything this poor guy survived. He has the Great Depression. He's got two workshop fires. He's got World War II, which I'm sure, you know, through a wrench in his plan because people just weren't buying toys as much, or they weren't buying anything that wasn't,

you know, it was not a great time for people, especially if you're living in Europe. So you have that, you have having to change with the changing times of media. And then originally, or then initially, ultimately, I can't get my words right today, guys, ultimately realizing that if he stuck to what he was good at, if he went back to first principles of what this special, what he was known for, the specialization that he could not only survive but thrive.

And once he focused on that, now we know what happened. I think Legoland is still around and people go there, right? The Lego movie was good. But what did they do with the Lego movie? And here's an important part because he tried to do, when he was starting to try to make like cartoons, and when I say he gave me Lego, they weren't sticking to the Lego model.

It was like other offshoots, right? So what did the Lego movie do? It's just Legos, like stop and go action. It was still the Lego was the core of their product, not some sort of new thing. And that is what helped them succeed. So so many great entrepreneurial lessons here, we have learning from failure, right?

You have this resilience, this perseverance, this need to be the best, right? You're not, good entrepreneurs aren't just trying to make a mediocre, okay product. They want to make the best product because it's not just about the consumer buying the product or what you can charge for it, it is their own legacy. Lego is his legacy. And again, we all play with Legos.

Everybody loves a good Lego session. And it's just think of all the imagination, like it's fueled kids' imaginations for decades. Almost. Actually, no. Well, Lego not for a century, but almost because he had the toy shop and everything first. So I think he's just a really, really cool guy, Ol' Kirk Christiansen, did it right

that time, worth just giving some attention to. And there's, so I did research for an article years and years ago, that's how I know this, but there is also a cool Netflix show where there used to be called Toys that made us and they get into some of this, not all of it. So if you want to hear some more stories about the Lego guy, watch that. I will wrap it up there.

As always, don't forget to like and subscribe to the podcast. And until next time, I will talk to you later.