An Uncle Building a Brand
Story posted April 07, 2000
Just by hearing his title—Uncle of the Board—you can tell that Toby Lenk is a businessman with a sense of humor. But where many e-companies attack the business of business with humor of the hip and ironic variety, Lenk wants eToys, the company he founded in 1996 to have a heart.
He spoke to the audience at a recent business breakfast about eToys, the Internet and building a brand.
Lenk graduated from Bowdoin in 1983 with a degree in economics. After a few years working on policy during the Reagan years, Lenk earned an MBA at Harvard. After earning his MBA he joined the world of management consulting, then took a job with the Walt Disney company. Without the experience of working for Disney, Lenk said he doubts he would have been able to start eToys. (In fact, his advice to students in a hurry to have their own business is "relax
get some experience, and good things come in time." )
When he told the folks at Disney that he was leaving to start his own business, he didn’t even know what that business would be. They all thought he was crazy. "When you start a business, you are insane, mathematically," he agreed, because of the high failure rate of new businesses.
Even though he didn’t know what business he wanted to start, Lenk had five criteria he wanted that business to meet:
- to be a big idea
- to be something no one else was doing.
- to be consumer oriented
- to allow him to create a brand and a relationship with consumers.
-to be something he was committed to emotionally.
Toys came to mind because he found the experience of being a good uncle (and giving good gifts to his nieces and nephews) "torturous." (His title is a nod to this inspiration for his company.)
More than $250 billion is spent on children in the United States and Europe, so he knew it was a viable market. Lenk began talking to parents about their experiences buying for their children. A common refrain let him know that he was on the right track: "If you liberate me from Toys R Us, I’ll be your friend for life."
When he first started trying to raise the money for his company, one that would make toy buying fun again, he met up with many nay-sayers. ("Toys R Us will crush you like a bug.")
But Lenk knew his idea was simple and powerful. "A lot of time you have to have the vision and the faith," he said.
With eToys Lenk has set out to do something different from other toy retailers. For one, he wants to be a child’s retailer, which means selling more than toys, but also books, educational products and other items for children and parents. He seeks to sell what the customers want to buy (rather than what managers and analysts say should be sold), and to build a relationship with customers by providing content and being an "ally" of parents.
The Internet is allowing eToys to offer more products than they could in a physical store and to concentrate on the content and relationship aspect of the business. So far they have registries, wish lists, age ranking of toys and more. But, "we’re just scratching the surface of what we can do on the Internet," Lenk said.
Though eToys and e-commerce are still in their infancy, Lenk has great faith in the future of both. Many businesses fail in the physical world, and may will fail in the virtual world, he said. In the end, it’s the businesses that have a plan, a vision, and build their brand that will succeed, and he intends for eToys to be one of them.
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