There’s a certain joy in putting something together. That ‘something’ can be anything from a website to Lego. Setting it up from scratch, using one basic element to lay out an entire complex structure – now that’s ART!. It gives you a unique sort of satisfaction. A set of bricks that rise to create a skyscraper or thousands of lines of code. It even allows you to be here right now, reading this article.
Anything that takes time and effort to create, if you’ve noticed, has that one concept of a ‘basic element’ in common. It’s probably the reason why people always tell us to ‘make our basics strong’ no matter what we’re involving in; because your knowledge of that one basic element can be the difference between success and failure. How you use it determines the strength of what you are using it for.
That’s the reasoning, or as some might say, the science behind Lego. Today, Lego, a company that basically sells interconnecting bricks, is a multi-billion dollar enterprise (Capitalism Level: Over 9000). The Lego Group is based in Denmark and as of today, has branched out into multiple forms of entertainment. There are theme parks based on Lego, video games, board games, television shows and even feature films.
But how did it all begin?
What drove someone to make six holes in some cubical object? and six raised indentations in the same shape? and then decide to make more of such objects and stick them together? If you ask me, sounds a lot like someone had the idea while he or she was high. Just saying, bro. *takes another drag*
To understand its beginnings we must travel far back to the year 1932. Times were hard; the Great Depression had hit everyone. Demand was low and the economy had just begun to pick itself back up. There were many good, old-fashioned, hard-working people who had lost much more than their livelihoods. In this time of strife, there lived such a man in Denmark and his name was Ole Kirk Christiansen.
It all started with wood!
Ole was a man who made products from wood. While he made a lot of stuff, most of his income came from building regular things like ladders and ironing boards. However, due to the state of the economy demand wasn’t really that high. Christiansen was struggling, also because he had a family of four children to look after. He had a woodworking shop before all this happened but in the year 1924, the entire shop had burned down leaving him with nothing. Instead of treating this as a loss, Ole took it as an opportunity to build an even larger shop.
Anyway, after the Depression period, demand for his wooden products was less, he made a major shift in manufacturing i.e. he resorted to making wooden toys and ONLY wooden toys.
He created a company and asked his employees, all 7 of them, to think of a name, promising them a bottle of wine as the reward. However, it was he who ultimately came up with the term Lego, emanating from the two words ‘leg’ and ‘godt.’ The two words put together simply mean ‘play well.’ In Latin, the word Lego also means ‘I put together.’ Yeah, that’s right.
And so, Lego was born. Just like that. No major upheaval or anything, just a guy who wanted to provide for his family and decided to move into the toy-making business. Within a few years, their company was making 42 different types of toys alongside general wood products. Business was booming.
First Milestone
A tragedy is never far behind as far as companies like these are concerned and it didn’t leave Lego alone either. In the 1940s the first Lego factory and warehouse burned down. Restoration did take some time and was quite the burden for the owners. However, once it was back on there was no stopping it and by 1943, the company had around 40 employees working full-time. A year later, the owner decided to register it under the name of “LegetOjsfabrikken Lego Billund A/S.” Try saying that three times faster.
Where do the bricks come from, though? Well, as interesting as it is, the Christiansen duo wasn’t the one who actually invented the concept of self-locking bricks as toys. The honour for that nifty little invention lies with Mr. Hilary Harry Fisher Page, a child psychologist who invented and patented the bricks. Kiddicraft sold these bricks and it was called ‘Self Locking Building Bricks.’
From Wood to Plastic
In the year 1947, Ole and his son obtained samples of these but they never really got around to producing them because of the ban of plastic in their country. However, Christiansen did purchase a plastic injection moulding machine for testing. This was a machine that allowed the melted plastic to be poured into a particularly shaped mould which, as you may have guessed, became integral to their product a few years later.
Things kicked into gear when the ban on plastic was lifted. Then several things happened during the late 1940s. The company bought a factory that was used for production of plastic toys and slowly they began manufacturing a larger quantity of toys. Within a few years’ time, the company had a whopping 200 different types of plastic and wooden toys, and yes, plastic bricks as well.
These were introduced in 1949, under the name ‘Automatic Binding Brick’ which was changed to ‘Lego bricks’ in 1953.
Global Expansion of the company
From 1949 to 1958, Lego was producing a significant amount of bricks and had even started selling ‘systems’ like the ‘town plan’ Lego set. The reason for that name is self-explanatory. Within a span of a few years, Lego had started making miniature versions of trees, flags, lights, windows and had even started exporting these toys to a few different countries; Sweden, for example.
The sales were initially quite low due to the inherent weakness of the locking mechanism and also the fact that plastic toys just weren’t that popular. They did pick up a little during the time period but it just wasn’t enough for the company to call the bricks its core product.
On the day of January 28, 1958, the modern Lego brick was patented and had a completely different design, which solved at least one of its problems. The interlocking system introduced hollow tubes on the bottom, allowing for a very strong interlock between two bricks. In fact, even if you buy the latest Lego set, the 1958 bricks would still fit. Now, how about that?
By the end of the decade, Lego now had offices in France, Britain, Belgium and of course, Sweden. It had around 140 employees and was selling its products in multiple countries. Even the concept of interlocking bricks was catching on around the world.
And as the fates would have it, it was the same year that Ole Kirk Christiansen died and his son, Gotfred took over the company.
The actual game changer!
Two years later, in 1960, the hand of God struck again and the Lego factory was burnt down by lightning. This time, when they came back up with their factory, they realised that they were done with wooden toys since their entire wooden inventory was ash. Lego focused on plastic toys, especially its construction sets of bricks, and continued prospering.
The material of their bricks was changed from cellulose acetate to acrylonitrile butadiene styrene (let’s call it ABS), which is used to date. The reasons were simple; ABS was non-toxic and more resistant to deformation or discolouration. Another thing worth mentioning is that these new bricks are also compatible with today’s bricks.
But that was never going to be enough and sure enough, in 1968, Lego built Legoland, which was literally a theme park based on Lego. I mean, can you imagine? The park was three acres and had thousands of structures that were made using Lego bricks, such as towns, buildings etc. It was Lego heaven and more than half a million people came to visit the park.
The sales reached around 18 million sets that year. Since then the park has grown exponentially and today, there are a total of nine Lego land resorts all over the world.
Following Success with the US market
The 1970s arrived with a bang for Lego. In the second year of the decade, the company finally entered what was going to be one of its most lucrative markets i.e. USA. People began buying Lego products in bulk and things were never better for the company. They began dominating the American toy market, and in 1974, they made another major change – they introduced human figures into their line up.
Jump five years later and Lego actually produced its first themed set i.e. Lego Space. 1979 was also the year when Ole’s grandson, Kjeld Kirk Kristiansen became president of Lego. By the time the decade ended, Lego had offices in even more countries like Singapore, Spain, and Portugal. A survey took place in the year 1980, which revealed that of all Western European families that had children under the age of 14, a whopping 70 percent owned some form of Lego.
Think about that for a minute.
Lego making world records
Lego was unstoppable now as it opened offices in South Africa, Brazil, Korea and Canada. Business was good and the customers decided to show their support by building the tallest Lego brick tower of the time.It was 13.1 meters high.
There was a taller one in the late 90s (24.88m) and an even bigger one in 2008 (30.48m) which also happens to hold the record. Lego became the official supplier of toys for the Royal house of Denmark in 1986.
Biggest Challenges during the run
It was in this very decade that Lego began facing some of its biggest challenges. Firstly, the patents that the creators of the Lego bricks had applied for expired towards the end of the eighties. It was no surprise, hence, that a host of competitors drove in for the kill.
Lego tried to fight back with lawsuits but most of them failed. Despite that, Lego products remained popular and in the early stages of the 90s. Lego was showing double-digit growth and controlled around 80 percent of the toy construction market. The rest of the decade went by pretty smoothly and if the company ever truly encounter challenges, it was in the years after.
Lego collaborating with Star Wars
The 90s proved to be a very eventful decade for the company. For the first time they partnered with a movie studio in producing toys. The studio was Lucas film and the theme, you guessed it, was Star Wars. The toy line, predictably, was a huge success and ever since then, Lego Star Wars has become an entire brand unto its own. You can buy your own ‘Build it yourself’ kit that allows you to build an entire Millenium Falcon. It’s expensive as hell, but it’s worth it.
The sales push that the Star Wars toys provided were extremely necessary because the company’s profits had been in a decline since 1992. They posted their first loss in 1998, the year wherein the received the Star Wars contract, making it a very timely opportunity to branch out.
However, there was a major amount of opposition regarding the concepts of violence that these toys had adopted. The figures of all of our favourite characters had guns or light-sabers with them for the first time. The word ‘Wars’ on the package did not help either.
Surplus toys and less revenue
By 2003, Lego was not doing well. Many analysts say that Lego was producing too much and investing in too many lines of toys, creating a ‘more is less’ situation. Their attention was no longer on their core product and in 2003 they posted losses upward of £217 million. The firm was facing bankruptcy, despite the enormous variety of their products.
The reasons for that were multiple. An over-abundance of variety meant that main toy lines such as Bionicle weren’t getting enough attention, despite their demand. Toy retailers began to complain about this when kids asked for them Bionicle sets and they just didn’t have any.
The advent of video games was another reason. Children were playing with the physical toy less and less and spent an increasing amount of their time on their screens, playing games like Mario. It’s understandable how something so cool would take away attention from…well, interlocking bricks.
Reinventing the Company
Jørgen Vig Knudstorp became the CEO in 2005 and he realised that the company needed to get back to basics. He sold off everything he saw as ‘useless’, such as theme parks and product lines that were going nowhere. Manufacturing was once again returned completely into Lego’s control and reinvention began.
The company had realised that despite their marketing strategy focusing on children, the largest share of their consumers were actually adults. People who were above 18 were the ones who were majorly buying Lego. The advent of the Internet led to the rise of fully formed online Lego communities which allowed people to share ideas, discuss and even design entirely new structures based on Lego.
Strategic plans implemented
The company decided to capitalize on this and was not unsuccessful. In the year 2005, Lego introduced Lego Ambassador Network; a program that consists of Lego fans aged 19-65. This allowed the company to take part in online discussions about future themes, fresh ideas or even new designs. The introduction of the Lego factory was another important undertaking.
The Lego factory was any Lego aficionado’s dream. The site allowed you to create your own designs. Then have the bricks you required shipped out to you to physically finish that design. An amazing move, as far as the marketing strategy was concerned.
Also, the website was redesigned with micro-sites dedicated to the different themes that Lego was involved with. Such as Harry Potter or Star Wars or even Lord of the Rings. Less than a decade later, as the Lego brand grew and grew, the first Lego movie was released and we all know how that went. *chants EVERYTHING IS AWESOME*
Fast forward to present times
In the past year, Lego has suffered its fair share of ups and downs. The toy industry hasn’t been faring well. Especially after Toys ‘R’ Us filed for bankruptcy, things really haven’t been looking up. Lego has had to fire a large number of employees and has doubled down on its brick production. Despite all of these problems, industry, and company-wise, Lego still remains strong. Even in the face of stiff competition from the likes of Amazon it refuses to budge.
It boasts a workforce of more than 15000 employees, after the lay-offs of course. It is represented by its offices in almost all major countries of the world. There are over 600 billion bricks of Lego in circulation right now and 19 billion more are produced every year, which means that 36,000 Lego bricks are produced every minute. By the time you’ve read this article, 360,000 bricks have already been produced by Lego factories.
All of this does beg the question as to why the history of Lego even needs an article. It hasn’t had the eventful history along the lines of Facebook, say, nor has it gained infamy in the vein of Enron. That fact in itself provides the answer to the question of why this article exists. The reason is the company’s simplicity.
Lego runs on a simple principle, providing joy through toys. That has remained and will always be the ‘basic element’ that has held this company together. After all these years, Ole’s company has done what he dreamed it would do. They wanted to provide toys to people who were willing to play with them and give them a chance to experience it. It’s a core value that has remained throughout these years.
However, I personally believe that reason for this sustainability is a lesson that has been unconsciously followed all these years. It’s a lesson which has rarely been explicitly stated but is behind every product that Lego has made and every avenue that it has pursued. A message that decades ago, was written on a board and hung in the office by a teenager named Gotfred Kirk Christiansen.