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Encouraging Variety

Greater diversity means more opportunity for all

By Richard Gottlieb -- Gifts and Dec, 8/1/2009 12:00:00 AM

I recently attended ToyCon, the leadership conference for the U.S. toy industry. As I sat at my table and scanned the room, I could not fail to notice that there were practically no people of color in attendance. So, my mind's eye went back to Toy Fair and, as I mentally scanned the Javits Center, I again saw few people of color.

As I pondered this, I asked myself this question: If America is on the cusp of minorities becoming a majority, shouldn't those minorities be visible in the toy industry? If 42 percent of U.S. public school children are minorities, shouldn't we see in the industry a broader representation of faces that reflect the children we serve?

My thoughts about racial diversity quickly grew to include generational diversity and its impact on the toy business. Are we getting our fair share of young, innovative designers and developers? Are they more interested in working in industries that feature the things that their generation loves to "play" with, like video games, virtual worlds or social networking?

We can get some sense of the problem by looking at the attractiveness of video game development programs in American universities as opposed to programs in toy design.

There are currently two colleges—the Fashion Institute of Technology and the Otis College of Arts and Design—offering degrees in toy design, but there are at least 15 colleges and universities offering undergraduate and post-graduate studies in video game design. In fact, video game design is so hot a curriculum that some worry it's become the degree du jour for "for profit" colleges who want to entice new students.

It's a situation that makes me wonder: Are competing industries drawing young talent away from toy design, and if so, what does that mean for the toy industry's future? These are not trivial questions. An industry that does not encompass members of all of the communities that it serves is an industry badly out of touch with its end users.

Generational blind spots

Let me give you an example of where a lack of generational diversity may have contributed to a major public relations challenge for the toy business.

Two brothers from India, Rajat and Jayant Agarwalla, developed an online version of Scrabble that they called Scrabulous. It allowed people to play an unauthorized version of Scrabble with people all over the globe while at the same time communicating with each other as they did so online at Facebook. At its height, more more than half a million fans were playing Scrabulous daily, despite the fact that official licensee Electronic Arts had a traditional video game version. In this case, however, people in their teens and 20s did not want the EA version of Scrabble. They wanted Scrabulous, and when Hasbro forced Facebook to take it down, literally millions of fans were furious.

So why did the young Indian inventors succeed? They intuited something that Hasbro did not—that people wanted to use Scrabble as a way to socialize and network online as much as or more than they wanted to play the game. In other words, it was a vehicle for personal interaction.

I believe the reason Scrabulous' creators "got it" when it came to online gaming and Hasbro did not was because anybody over 25 is an immigrant to the Internet. Those under 25 are natives; they not only live the culture but have breathed virtual air their entire lives.

What would have happened if those brothers or other like-minded people worked for Hasbro? They probably would have brought a powerful extension of Scrabble into the online world and through that expanded the popularity of a classic play experience to a rising generation.

The culture club

Carol Fenster and Hilda Argilados-Jimenez created the Los Abuelitas doll line (full disclosure: Baby Abuelita Productions is one of my clients) because they saw a lack of products in the marketplace that had a Hispanic sensibility. More specifically, they realized that acknowledging the nuances between the various Hispanic cultures is as important as language and product appearance to a multicultural product created for the Hispanic shopper. The doll line, as the Baby Abuelita website puts it, "[was] designed to preserve Hispanic heritage for every generation." Its lullaby-singing dolls perform Canciones de Cuna, traditional Hispanic songs of early childhood that, today, often aren't being passed on from one generation to the next in culturally homogenized Hispanic-American households.

Los Abuelitas' creators "got" the cultural need for such a product line in a way a company not steeped in the Hispanic-American experience most likely wouldn't have. They breathed Hispanic air. And major retailers like Target, Wal-Mart and CVS also "got it," since all added the line to their assortments. Others will need to similarly "get it." As the Hispanic population continues its robust growth in the U.S., demand for products like the Los Abuelitos dolls will grow right along with it.

Stepping forward

So, what can be done to bring more of this kind of thinking into the toy industry? There are a number of moves that I think would make an important impact. In order to draw more young people:

Toy companies can recruit out of Silicon Valley and the universities that feed the video/online gaming market.
Toy producers can set up "skunk works"—officially sanctioned renegade research departments—so that these folks can have a home outside of the company's overwhelming (and sometimes stifling) traditional toy business culture.
Toy associations can invite high school and college students who are Silicon Valley-bound to attend Toy Fair as a sort of a recruiting trip, similar to how colleges go after high school athletic stars.
Toy companies can visit Silicon Valley companies and see how they treat their employees. There could be valuable lessons learned in how to not only recruit young people effectively, but how to keep them once they've got them.

Similarly, in order to draw more talent of a culturally diverse background to the toy business:

Toy companies can actively recruit on minority and non-minority college campuses, and even in high schools. Perhaps scholarships could be awarded to promising students of color.
Toy associations and/or toy companies can get involved in sponsoring toy design contests and fairs. There could even be a top award that results in a trip to Toy Fair or ASTRA's show, with a buying spree at a toy store for second and third place finishers.
We can all benefit by having speakers on minority outreach address toy business conferences on how to go about reaching out to minority groups.

Actions like these are not just nice things to do but absolutely essential to the growth of the toy industry. Take a look around your company. Do the faces you see reflect the people who use your products?

If they don't, shouldn't they?

Author Information

Richard Gottlieb is president of Richard Gottlieb & Associates, a New York-based provider of business development services to the toy industry. His "Out of the Toy Box" blog can be read daily at Playthings.com. He can be reached at richard@usatoyexpert.com.

The Legal Department: The Evolution of 'Business Method'

As with most things, the law evolves. Usually it's a slow process, but gradually the law will adapt as necessary to account for changes in the business world—and in society. Familiarity with the bounds of the law and a willingness to use 21st century technology can be a formidable combination in court. Despite its deliberate pace of change, one aspect of intellectual property law is in the process of a dramatic change: whether or not "business methods" are patentable.

Methods have long been recognized as being patentable. For example, you can get a patent on a method for manufacturing bubbles. You can also get a patent on a method for playing a game with a flying disc. You can even get a patent for a method of Internet-based interactive gaming. But where are the limits on what the Patent Office will grant a patent for when it comes to business methods? That is where the law comes in.

About 10 years ago, the enforcement by the courts of what are called "business method" patents began to garner big news in the press. Concurrently, the number of patent applications for business method patents skyrocketed. The Patent Office has now granted patents on things such as methods for implementing income tax strategies, methods for generating insurance quotations and methods for making purchases over the Internet. And though not always, the courts have often been willing to uphold these business method patents when they are challenged. What business methods can be patented? The answer is not exactly clear, but it is about to become clearer.

In a recent appellate court decision called In re Bilski, the scope of business methods that may be patented was narrowed. The Court concluded that a method is patentable if "(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing." In the Bilski case, the inventor attempted to patent a method for hedging risks in commodities trading. Based on the court's interpretation of the law, Bilski's patent application was rejected. As a result of this revised legal test, hundreds (if not thousands) of patents previously issued by the Patent Office for business methods may now be at risk of being attacked.

This is not the final word on the subject, however. In June the United States Supreme Court agreed to hear the further appeal of the Bilski case. Because the Court hears very few cases each year, this is quite unusual. It is difficult to predict whether the Supreme Court will agree with the narrow view of business method patents recently taken by the lower courts. But with history as a guide, one thing is clear: Creative business owners and their lawyers should continue to push the law to protect the intellectual property in the products and processes they develop, regardless of the Supreme Court's ultimate conclusion.

Marc S. Cooperman is a partner with Chicago's Banner & Witcoff who specializes in IP litigation. He can be reached at mcooperman@bannerwitcoff.com .

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