We all know Silicon Valley is synonymous with innovation in the American lexicon.
But, an association with toys is less obvious.
And yet, in the early 1980’s, as the region was becoming the epicenter of all things high tech, fate was busy aligning a small group of stars in its midst, to make toy history.
A young engineer, named David Small, was fresh from college, working at various computer companies and startups. He landed at video gaming pioneer, Atari. He led various engineering activities that gave him a front row seat for the company’s rise and subsequent fall, after the infamous Video Game Crash of 1983. He was one of the last employees left when the doors closed.
His next job took him to a company that was making early multi-user computer systems and growing at a steady pace. As Director of Engineering, this company and position allowed him to settle down and take care of his young family. Life was good!
Meanwhile, Paul Rago had earned his BA in Human Biology and Master’s degree in Educational Psychology at Stanford, and was well on his way through medical school. In a turn of events that would shock most people, he abruptly walked away from medicine. A creative calling in his heart that he could not ignore came over him. And he suddenly knew with certainty that he wouldn’t find his calling as a doctor.
The Bear at the Barbeque
In 1984, David and Paul’s paths would cross in a way that no one could have predicted.
Paul’s childhood friend, a former Atari executive, approached Paul with a talking plush bear concept under his arm called, “Teddy Ruxpin.” The idea had been shopped around the toy industry, but no one wanted it because it was too expensive and complex to produce.
Paul thought the Teddy was fantastic, so they hosted a dinner party for a small group of business friends and former Atari executives to discuss starting a new toy company around the bear. Nearly everyone at that first meeting was excited enough by the idea to decide - on the spot – they would form Worlds of Wonder (WoW) and launch Teddy Ruxpin.
Paul is incredibly creative and the group wanted the very best people. He was tapped to head product development and marketing, and the company quickly started to take shape.
Many of the initial WoW founders had worked with David at Atari. The very next day, those former colleagues showed up at his house with Teddy Ruxpin in a black trash bag. David was skeptical.
When they asked him to join the company to lead engineering, David vehemently said, “No way.“ He had just been promoted to Director of Engineering at a high-tech computer company and was not about to walk away from something more stable for a risky start-up.
Undeterred, they said to him “OK, but just keep Teddy overnight and think about it.” That evening, after seeing his children’s and neighborhood kids’ reaction to the toy, David quickly changed his mind.
“Those children were mesmerized,” he said, “I knew it was going to be a hit, and I decided to leave a very good position and take the gamble.”
Launching Worlds of Wonder
At the beginning of WoW, everyone used personal credit cards for expenses, on faith they would get funding, which they did.