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Spin Master is one of the great Canadian success stories. Go to any corner of the world, and you will find young girls and boys playing with Spin Master toys. Ben Varadi, HBA ’94, was there at the beginning, running manufacturing (despite having little expertise in the area). Today, Varadi is the company’s Chief Creative Officer, and his unique strengths have found a perfect home in the art of toy making.
In this special episode of the Entrepreneur Podcast, Varadi joins Eric Janssen, HBA ’09, MBA ’20, to share his fascinating journey from leaving university to helping create one of the biggest toy companies in the world, and the lessons learned along the way.
The Entrepreneur Podcast is sponsored by Connie Clerici, QS ’08, and Closing the Gap Healthcare Group, Inc.
Transcript
Being Comfortable in Your Own Shoes with Ben Varadi of Spin Master
SPEAKERS:
Eric Janssen, HBA ’09, MBA ’20
Ben Varadi, HBA ’94
Introduction:
You are listening to the Entrepreneur Podcast from the Western Morrissette Institute for Entrepreneurship Powered by Ivey.
In this series, Ivey entrepreneur and Ivey faculty member Eric Janssen will anchor the session.
Eric Janssen:
I spent the last few months asking hundreds of individual contributors, managers, entrepreneurs, what the top skills to be teaching young people are and how we should be teaching them. And the answer has come back resoundingly, how to deal with rejection and resilience. Today's conversation is with Ben Varadi, who's the co-founder and Chief Creative Officer of Spin Master Toys; today a publicly traded company with a market cap north of four billion dollars.
With 1600 employees globally, they're well known for toys like Etch-a-Sketch, Air Hogs, Paw Patrol, Rubik's Cube (recently acquired) and Bakugan, and with more nominations for innovative toys that any other toy company in the world the creative mind behind all of this has been Varadi.
Now, you think that someone who's won the EY Entrepreneur of the Year, and featured as a Top 40 under 40 Executive, is an odd choice for the topic of resilience given the crazy rise of Spin Master toys, but every single story has its dark corners that we're gonna dig into today. So in this episode, Ben shares his story of how he got started at Spin Master and highlights not just his successes, but also his failures along the way including how he lost a hundred million dollars.
Ben shares his lessons on failing well and how to develop resilience. I hope you enjoy listening to this episode as much as I enjoyed having it, please enjoy this conversation with Spin Master Toys CCO, Ben, Varadi.
Student Team Presenting:
The Ben Varadi action figure super powers aren't limited to building successful companies. He can also strike guitar and piano (music playing)
To top it off, the Ben action figure won EY Entrepreneur of the year for 1999, Top 40 under 40 Executive for his amazing achievement. Get yours now, they are flying off the shelf around the world. Comes as shown. Each sold separately, batteries not included.
Eric Janssen
What do you think, Ben?
Ben Varadi
I love it. Great. Thank you so much. That was an exact replica of my life.
Eric Janssen
Is that exactly how it went?
Ben Varadi
Exactly like that.
Eric Janssen
I love when the teams take a little bit of a risk and read the crowd a little bit. I think they pegged you as a guy wouldn't mind a fun video. So nice work, Team.
Ben Varadi
Thank you so much. Thank you.
Eric Janssen
Where do we find you Ben? Where are you today?
Ben Varadi
I'm in the basement. 20 feet below. I'm in my studio. Yeah, a little bit of music on the side. I got a bunch of keyboards, designed to hold up garbage bags. That's basically how it goes. A lot of synthesizers and stuff I just, you know, collect for fun and play for fun. So it's always been a good outlet for me since I was a little kid.
Eric Janssen
That is awesome. Rarely on video do I find someone that outdoes my basement setup but like when you win this game?
Ben Varadi
Well the good news I don't have to change my background. Right? I see all these people have these creative backgrounds. So I just, this is my background.
Eric Janssen
Yeah, that's awesome. That's awesome. Well, we appreciate you joining us Ben, thank you so much for the time. I know the group is really excited. I'm excited. I think your company and your toys have been a part of me growing up; I think about the devil sticks that still sit at my cottage, the beat up air hogs toys, the Stretch Armstrong that I busted apart when I was a kid eventually. These are the toys that defined me growing up so I....
Ben Varadi
I busted apart a Stretch Armstrong too. So I played with it also.
Eric Janssen
Yeah. Oh, yeah. I played it out. It wasn't a defect. I played with it until it broke.
Ben Varadi
You know what it is inside?
Eric Janssen
No
Ben Varadi
it's corn syrup.
Eric Janssen
Oh, that's interesting. Interesting. Interesting.
Ben Varadi
Okay, one of your students has snuck in there, Anu. I know you're not a student. Although I never would have guessed. You look exactly like one.
Anu Sandhu
I'm here for your support.
Ben Varadi
Thanks Anu. I need it. I need it. I see a lot of faces here.
Eric Janssen
Yeah, we've got 62. This is arguably, I say the most entrepreneurial group at Ivey. So these are students that, you know, have ambitions of either starting a company right out of school, or are probably the ones that are going to do it one day. So this is the audience that you've got today.
Ben Varadi
Wow. That's perfect. That's, that's my kind of audience.
Eric Janssen
So help us rewind, Ben. When you were an HBA 2, sitting where these students were today? Where were you at? Where was your head? What were you up to?
Ben Varadi
Well, it was... are you guys first or second year?
Eric Janssen
Second year.
Ben Varadi
Second year? Okay. So I didn't know what I wanted to do. I really had no idea, and I was interviewing in a whole bunch of different places. So I interviewed at Bain and I remember they asked me how many chocolate chips, no, they asked me how many elevators were in the city of Toronto. And I said, Well, I’d just call city planning and ask, and the interview ended. And I interviewed at what’s that big advertising firm out of Chicago, what are they called? Leo Burnett! Leo Burnett! I did 18 interviews with Leo Burnett and they didn't hire me at the end. They said, and I phoned them, and I said, “Well, why don't you guys hire me?” And they said, because we felt you were too unorthodox. And I said, Well, aren't you supposed to be unorthodox for advertising? And they said, not on the account side. So that ended that. And so when I graduated Ivey, I really didn't have a job. And then I got called by merchant banking. One of the Canadian banks called me to come and interview at the merchant banking division, I asked what was merchant banking, and that interview ended. So I really didn't have, I didn't have a lot of... I mean, I could have taken something, I could have got something, but I really came out not knowing what I wanted to do. And I wasn't that stressed about it, because I got a great education. And I figured eventually something would line up and I did sort of think that I would ultimately end up doing something on my own. So that's where I was. So if some of you don't have any idea of what you want to do, I think that's okay. I think that's okay.
Eric Janssen
So how did you originally, was it Anton and Ronnen who approached you? Did you guys know each other from before? How did that moment happen?
Ben Varadi
I didn't know Ronnen. I met Anton in business school. So him and I both went to, at that time it was called, I don't think it was called Ivey right? It was called the Western Business School. And so Anton, Anton and I met each other, and we became friends at business school. And then after business school, he said to me, Ronnen and I are doing something, will you come and be a part of it? So I did. And I ran manufacturing for the Earth Buddy. But I didn't know anything about manufacturing, less than zero. And I had an amazing Ops teacher at Western, his name was Bert Wood. And he was, I don't know, if you ever met him here? He was an incredible guy, I sat in the back row and he spoke very quietly, I didn't hear a word he said all year. I thought he was great. And he was like a classic Western guy, you know, Harvard graduate, and he sort of mumbled and he retired my last year. So he was already like 75. Anyway, I knew nothing about Ops. And I went in, and I was running the factory and we were hiring. At that time, the Ontario government had a program where you could hire unemployed people, or people in homeless shelters for something like $3 an hour, and they would pay the rest up to minimum wage. So we hired a whole bunch of homeless people. And, and I remember, I was really drowning, the thing took off, and we'd never ordered supplies before. I mean, I knew sort of like basic terms that I learned in Business School, like, you know, WIP, raw materials, and finished goods; all that kind of stuff, but basically, we didn't really know what we were doing. And I really didn't know what I was doing. And one day, and the funniest thing is we had these different stations that made Earth Buddies. So the first thing is you would take the hosiery, you’d put the sawdust in the hosiery, then you'd... actually, the first thing at the beginning you would cut up the hosiery because it was actually still in pantyhose form. So you'd have to cut off the underwear and then cut the legs into five bodies. The leg would cut into five parts that made five bodies; five Earth Buddies. So we took that and then that would go to the sawdust station, you put the sawdust in, then tie it up, then it would go to have it formed. So they'd make the nose, and then it would go in it. So we go from station to station. And the funniest thing is, we didn't have any suppliers. So the line was constantly shutting down. So like, for example, the eyes - we would run out of glue. And so I would have to drive to the local hardware store and “I'll take everything you got.” So it was quite an adventure. And one day, this homeless man knocked on my door and said, “I can see you're having some problems. And I'm happy to help you.” And it turns out he was 50 years old, huge guy, you know, half a mouthful of teeth. And, and he said, I worked in manufacturing, and he ended up really being my Savior. His name was Bob, and Bob fully understood the manufacturing process. I came in the next morning and he had charts all over the walls for each station outlining the work and process, when our raw materials were going to run out, etc. And so that was sort of like we got up and running. And then we slowly built up to being able to do... we went from making, you know, 60 units on our first day or 50 or 10, I don’t even remember, to over 20,000 in a 24-hour period, all in downtown Toronto. In a warehouse space in downtown Toronto. Can you can't even imagine doing that today?
Eric Janssen
No.
Wow. Wow. So like, that was the first... if that was a little side hustle, that was a successful side hustle. 1.5 million like?
Ben Varadi
It was. It really was. I think, yeah, 1.5 million is probably right. The big order was for Kmart for 500,000 pieces. And then what happened to me in my life, it was such a wild ride, and at the end of Earth Buddy; I was so tired. I remember on one of the last days, we had to lay off a whole bunch of people because as quickly as it took off, it ended. And so, I then went with a friend and I worked on, ‘he said there's this thing called the internet and we should do something in it.’ So we then went into the internet, our name at that time was called Creative Online.com - like it was so easy to get a name you pick, any two words you wanted. And I discovered after nine months, we sold our company, and it wasn't worth anything and we still sold it. That's how, even at that time, the area was really taking off. And I didn't really understand it and I didn't like it, and the funny thing I always joke to him because I still talk to him, is we could have done anything and we didn't do anything. Right. It goes to show you that you can have success over here. Don't have success over here. Start over here, fail, start over here. Have some success. So that's a little bit of the journey and then Anton and Ronnen said, ‘Well, we'd love you to come back. So I then went back and, and we just sort of started into toys, which is a whole other story.
Eric Janssen
Yeah. And so, we've had, we've had a lot of awesome speakers come in, and guests come in and share with us their stories, and no shortage of success stories, and that the group circulated your bio in advance. So we have a pretty good idea. We'll get into it later, we have a pretty good idea of some of the wins associated with the company. But I'd love to right off the bat get into failure, because this is like every single year, across all of the entrepreneurship classes, the things that students want to hear more about his failure, tell me about the fails. Any like epic ones, any epic ones come to mind?
Ben Varadi
There’s been massive failures.
Eric Janssen
Spill it.
Ben Varadi
We've had some massive failures. Um, so let me think about it. I mean, the funniest thing, I'll give you guys a real good one. So in 2000, when was the meltdown? 2010?
Eric Janssen
Yeah, 2009-2010.
Ben Varadi
So we sailed through 2009-2010 with a huge success because that's when we launched Bakugan. So it took us 15 years to have our overnight success. So we finally had like a real runner. And in 2011, we basically took $100 million, tore it up into single dollar bills and threw it into the sewer. That year, we had to write a check back to the bank personally, to sort of guarantee the loans that we had.
Eric Janssen
So what happened?
Ben Varadi
We grew too fast. And we, we didn't watch all the signs, and I think we were drinking the kool aid of our success. And so we had this huge success when the world was crumbling. We didn't invest the money well, we invested the money badly. And we hired too many people, too quickly. And we took some bad bets, and we lost 100 million bucks.
Eric Janssen
Wow. So massive cash flow shortage that you had to shore up individually.
Ben Varadi
Yeah, we had to write a check back to the bank after coming off like this incredible high.
Eric Janssen
Wow, wow.
Ben Varad
Yeah, lots of failures along the way. And the thing about failure is, you can break failure up. I mean, you guys have all seen failure. I mean, there's personal failure, there's failure with relationships, there's failure in sports, there's failures in things you do, there's failures in business, right? So there's lots of failures along the way. These are the business failures, I'm talking about. I'm sure every one of us is familiar with failure in some way, shape, or form, and success, because you're in this program. So therefore, you have had success, you're already in the top, you know, 0.1% of Canadian students right?
Eric Janssen
Don't inflate. Don't inflate.
Ben Varadi
Sorry, sorry. Yeah.
Eric Janssen
Take me back to 2001. So I tried to do a little digging here. And it seemed like my read of it, maybe this is, you know, retrospective storytelling as we like to do. But sort of reading through the timeline of when you started the company. Of course, I'm sure there were inevitable ups and downs, and ebbs and flows. But 2001, I saw something happened with the key term ‘cuties.’ And I noted that as maybe a potential first, like commercial failure for the company that you write about on your website, what was that all about?
Ben Varadi
Yeah, well, it was a failure. It was a small doll line. I mean, we had failures before them, this was a good one. It was our first foray into like really competing against Mattel and Hasbro, the big players, and we developed a small doll line, spent a lot of money into laying a lot of design money, and it failed. So I mean, listen, failure, again, I break it down because there's you know, you can fail as a company, you can fail in a product line. I think failing in a product line is something we got used to pretty early because our… the business we're in is a big bet business. And you know, even if I'm amazing at my job, I think my odds of failure I'm still only succeeding one out of every four times really. So we learn to fail very early on, which I think was a really good thing. Because it wasn't like we'd had all this success, one after the other, after the other after the other, and then all of a sudden we failed 10 years in and it's sunk us. I mean, we learned pretty early on how to fail. Which brings me to one of the lessons that I'm you know, that I've sort of learned along the way that I am happy to share with you guys, which is you know, don't let your failures define you. And, similar, don't let your successes define you, because failure and success, at the end of the day, it's very fleeting. I mean, even success is very fleeting. And it comes and it goes, and it comes and it goes, along the way. And so what you really have to get yourself into very quickly is, enjoying and appreciating the journey and not getting too married to your ideas. Whether it's a product idea, a business idea, a marketing idea, whatever it is, I mean, you have to be flexible through the whole process, through your career. I mean, that doesn't mean you don't have conviction and see things through. But I think knowing when to jump off, and knowing when to keep going is a skill for sure. Right. So you have to keep, keep checking the data, keep checking the facts in front of you, keep checking your intuition, keep checking with others. Keep doing your research, not too much, but enough that you have all the data in front of you to allow you to make a reasonable decision.
Eric Janssen
So Ben, you said one in four, fail. Does that mean literally like one in four that actually may get out of the building and get onto the shelves are product failures?
Ben Varadi
I'm guessing, but that's probably accurate. I would say one in four, sometimes we've had more, sometimes we've had one in six, one in eight. And then sometimes we've had two out of five fail, which brings me to another point, which is we, at the beginning the level of risk you take is gigantic, right? Because you've only got one product, and then you launch another product, you're essentially launching your company over again, in a way. So as you, you always want to make sure you're not blowing your brains out, if you don't have to. When you start, you have nothing to lose, you have no choice, you've got the gun to your head, right. But as you start to gain success, a guy told me really early on over a pastrami sandwich, he said to me, “don't take a risk so big that if you're wrong, you'll sink the company.” And I've never forgotten that. And there's a lot of truth. Now, I wouldn't say it's a rule I would take, that could never be broken. There are times when you have to take a risk because the company's on the line. Because if you don't take that risk, you won't be around. But I think as you start to gain success, I think the one thing we've done well is we've been pretty good at managing the company, preserving the company, failing in product but not failing at the company. And when we do fail in the company, which even in the last two years, anyone that's watched ours, you know, sort of kept an eye on us even out of the corner of your eye, I mean, we fixed a whole bunch of mistakes in the last 12 months. Right? I mean, we got a new president and we came off a real operations nightmare that we had to fix. So even in the last, I mean, we went public in what 2016? And then we had, I think four great years, something like that. And then we got into a giant operational problem, which did, you know, a year or two’s worth of damage. And we are, and we're still fixing that, right? So it's a lot better. But I mean, we're dealing with it now. So you know, it's like you're flying a plane, sometimes you hit bad weather. And you have to make changes accordingly. You have to take the wheel sometimes, right? You got to take it off autopilot and take the wheel and stay engaged and make hard decisions.
Eric Janssen
On the creative side, Ben, since you oversee that group at the company, I'm assuming that you said the statistics or whatever, call it one and four, one and eight, whatever, there's failure that happens fairly regularly. Knowing that I mean, it's not just you anymore, you've got close to 2000 people there, how do you get people to be uncomfortable to be comfortable with the idea that they're inevitably going to screw up? Like, how do you help people bounce back from that?
Ben Varadi
Um, it's a great question. I mean, again, and I hate to get too granular, but there's, you know, when we fail, we fail as a team, and we fail as individuals. And so you hope each person is is looking at themselves and taking stock of their contribution and where they might have gone wrong. I think, you know, it's, it's not easy. I mean, I think, in a way, it's like the best comparison would be to a hockey team or any type of team sports. I mean, you're managing a team. And you have to make sure that your team is optimized. And so it's not easy because sometimes you got to you watch the team as a whole and you watch the individuals that make up the team as the person coaching the team. And so sometimes it's necessary to make changes to have the best team. So you have to look at the strength of the company as a whole, it was a, it took me a lot of years to get there, because in the early years, I tended to carry the weight on my own back. And I looked at it as like, failure was my failure, success was my success, and if the team failed, I just had to work harder to carry the team more. That's an oversimplification, but let's just take it for the purpose of, of sort of your you guys in your life. And as you go on to man, I mean, it's more complicated than that, because the teams contribute a lot, right? So for me, to put it in that simple term isn't really accurate. But I think everyone, look, we're individuals that make up teams, we're not teams that make up individuals, right. So we approach it as an individual and part of the larger team. So and then I think, as I got older, I realized, if you don't have strong members on your team, that team will affect the company. So you have to have the strength to continually improve your team, you have to continually improve yourself, you have to have an open mind, you have to listen, you have to be... you have to learn to take, the first thing I do when we fail is I look at my own actions. And I ask myself, where did I go wrong? Where did I fail? Where did I direct people badly? Where did I? You know, and then there's failure across the organization? Did we fail in the marketing? Do we fail in the product, we fell in the package? So identifying where was the failure could have been competition could have been bad luck. So I think being able to identify the failure and, and to be honest, like, as far as I tried to speak positively to people and encourage them as much as possible, and, and lean on the team. Because we are all working together. So and I'm pretty even I think in success and failure. So I don't honestly put that much time into you know, how do I put it, I'm kind of move on type of guys. So I don't dwell that much on failure. And so I would say, I don't take all that much time to nurture people on failure. I just am like, Okay, everybody get up, we're moving on. And we're gonna do better next time. And at the same time, I have responsibility to try to keep the team strong, but also make sure I'm doing my job, right, which is teaching the team. Because Listen, I got 25 years, right. So I have to, I have to shift a little bit towards teaching and making sure everybody is looking at things. Taking into account all the all the all the factors, right? Like if you guys came to work at Spin Master, you wouldn't have necessarily a ton of experience out of on day one. So I need to share that with you. But at the same time, I need to be open to your fresh thinking. Right. So I hope I answered that question. It's... it was, it's a hard question answer.
Eric Janssen
Yeah, I know. I know. It's a hard one. That's why that's why I asked the questions. Don't answer myself.
Ben Varadi
Yeah, I don't. I don't nurture that much. To be honest, I'm a more of a move on. Buck up, everybody, next one.
Eric Janssen
You know that we screwed up on the next one.
Ben Varadi
Yeah, exactly. Yeah. Yeah, that's right.
Introduction/Outro 23:20
So how do you know? So something that we spent a lot of time on today, before you came on was trying to figure out how you know when to call it and move on? versus like, no, let's keep going. Yep. Any advice? I mean, it could be specifically related to your business or more broadly, but that's the decision point, right? Like, there's so many times the stories that you read of the successful companies, you yourself have one where had you chosen like screw it, throw in the towel, then you spend master wouldn't exist today, versus the people that are able to identify like, oh, we're so close, just go a little bit longer. And then there's these massive breakthroughs to you know, super successful companies. So how do you decide when to keep going versus quitting?
Ben Varadi
Well, I guess I'm looking at multiple factors. I mean, I'm looking at do I think we'll be able to get there and what is it that's holding us back? Is it money that's holding us back? Is it design that's holding us back? Maybe we don't have the optimal design? Is it the cost that's holding us back? Or is it a safety issue that's holding us back? So I think the first thing is, is again, great self awareness and being an isolating, what are the factors that are holding you back and then deciding can we overcome these or not? So like, if it's a massive economic one, right, like or financial one where if we just keep going, we're gonna do so much damage that we have to stop, well, that would be a great indicator that we have to stop or if the risk is so big, that maybe we shouldn't be taking it because if we take it it'll do too much damage. Or being honest about what kind of shot we have, like, are we in our sweet spot? Are we out of our sweet spot, if we're out of our sweet spot, that's a factor, right? If we're more in our sweet spot, maybe we can afford to maybe have a greater chance to get this right or so it's so many different things. And the advice I would give, it's like, being open minded and honest with yourself about whether or not you can overcome it. And if you can overcome it, what's the, what's the success? And if I can overcome it, what's the damage from failure? Like one of the one of the simplest things that I do in almost every case is when someone says, let's do this product, I in my mind am quickly, quite quickly, I say, if you're right, or if we're right, and we go ahead and do this, what success look like. And if we're wrong, and we do this, what does failure look like? Right now, some things are more basic. Now we're a lot bigger. So a lot of stuff falls in quite easily. But when we're doing something new, or going into a new area or trying, then I think I mean, that's a... that's a question I asked myself, always. And I keep asking myself that question.
Eric Janssen
That's a… that's an awesome one that I like, so example...Yeah, sorry. Yeah, go ahead. No. Give an example.
Ben Varadi
I was gonna say like, sometimes success isn't that great. So we're taking a risk, and maybe we'll, we'll do 10 million in revenue. But we're going to spend all this time and energy doing something for 10 million bucks in revenue, and which, you know, I mean, it's no secret, we do about 1.5 plus billion dollars a year or something, I don't know. But, 10 million for a ton of work, might not be worth it. And if we are wrong, we'll lose a million and a half dollars. Well, so sometimes, you know, there's like that saying, it's, it's like, sometimes it's just as easy, you spend just as much time creating something that has $100 million worth of potential, some something that has $10 million worth potential. So that's, that's an equation I'll often do, and, and sort of make sure that we're putting our time to things that have high potential, otherwise, we're wasting our time, especially as you get bigger, and it costs more to run the company.
Eric Janssen
Cool. It's an exercise that I tried, and then took out of one of the courses that I teach on New Venture Creation. I had the teams write a press release. So fast forward two years, and like, what's the press release you want to launch about the success that the company has had? Like, what have you done? What impact have you had? And I found that it just got them to fast forward and say, like, okay, let's play this out. We're running a, I don't know, toy business! Two years down the road, What kind of impact do we want? How big do we want the company to be? What do we want that news article to say about us? And if that's not exciting, then choose something else? You know, like, if that's not getting you fired up, then why take that risk in the first place?
Ben Varadi
Oh, totally. And I mean, I, I think it's a good idea to do that at every stage in your life, like for you guys going out and starting a business. One thing that I noticed when I was a kid, that was like, I think it was wrong, when I look back, is like someone would say, well, you're 24 years old, and you have no money. So you should work and go earn a bit of money, and then take a risk. And then when you're 32, they say, well, you don't have that much money. So you should like, you know, you should save up a little bit more money, and then take a risk. Okay, so now you're 38, and you got a car. And, and you probably bought one that was like one step above what you should have, and you got a wife, and you got a kid on the way and then you can't take a risk. Now you've got a family to think about. So I mean, I think, you know, you got to own your own destiny. And you guys are on the best days to take a risk, because unless you need tons of financial help, right, which is obviously it's hard to get when you don't have any experience. I mean, what have Zuckerberg and Bill Gates and all these guys taught us that you can come up with something amazing at 25 years old, and change the world. You know any one of those great business people who has shown us that that you can do now again, if you need tons of money, and it's the oil business? Well, that's probably a lot harder to do. Because it's you need so much capital. Right? So I think it's like, I think owning that and and being aware of it will help you guys use that exact same formula in your everyday decision making. Right? If you're 63 years old, and a guy sits down, he says I need your advice. I'm 63 years old, and I want to start this company, I'd say well, you're 63 years old. Is this what you want to do? How badly what's the downside? You have to spend your retirement money. So I mean, I think these are, this is a lesson that's a life lesson, not just a business lesson.
Eric Janssen
Yeah, that's great. So Ben, there's, we also talked today a bit about the importance of having a mentor when you're either doing really hard things or to help you bounce back from a failure. I know in your keynote last year, you talked about I think you had a really good relationship with Peter Munk. Is that correct?
Ben Varadi
Yeah, we met with Peter Munk a couple times and not just that some of our old business faculty, like when we started, we spoke to a lot of our business professors from Western. I remember, you know, Professor Pierce helped us out. Professor Erskine helped us out. I mean, we spoke to, to some of them as well. So I mean mentors, a mentor can come from anywhere and Peter Munk was was certainly one of them. He is an incredible Canadian success story. And then a really interesting guy like they don't make them like... he made it, he had success in three completely different industries, which is like almost unprecedented. I mean, and he started from scratch in every single one.
Eric Janssen
Yeah, so for those not that don't know, Peter Munk, a Hungarian Canadian business icon, who was I guess, most well known as the founder of Barrick Gold, right? The biggest gold mine operation in the world?
Ben Varadi
Yeah. But he got his start in stereos, and then he made a ton of money in real estate in, I think Asia? So he did a lot. He was a real, he was a real special man and real character. You'll see his name on the side of the Toronto General, the Cardiac Munk, you know, the Munk Cardiac Centre, and I think also the Munk, you know, state affairs, something, something affairs (Munk School of Global Affairs and Public Policy). I see it on Bloor Street at the University of Toronto. So he's like, he's a real character.
Eric Janssen
So importance of... Were there any mentors along the way that when you face any of these, you know, company make or break decisions or challenges or even big failures that you leaned on to help coach you through them a little bit?
Ben Varadi
Oh I even asked our competitors for help. I called our competitor once that Mattel and someone I had met at a conference and said, Look, we're just starting out, and I really love your help. And she helped me for a couple years until we reached a certain size, and then she didn't take my calls anymore. So I mean, you know, I always say like, seek mentors and be a mentor. You know, so, I mean, the great thing is most people in Canada, you know, we're not starving. And we can, and I always think like success is great when lots of people have success, right? It's so it's, I think it's great. So I would say to every one of you guys seek mentors, be a mentor. And it should never stop. I get advice from people all the time, even today, for sure. And never and never, it should never change. I mean, I think now that I'm 50... I turned 50 this year. And, and my big thing right now is like never stop learning. Never stop learning. Never stop learning and trying new things.
Eric Janssen
Right? What do you do to feed that?
Ben Varadi
Ah, well, I always try to… music is one and I, and I try to like stay up on all the latest synthesizers when I work with people I love working with; maybe a young person who like I worked with a young producer who was 19 this year and he taught me a whole bunch of stuff that was super cool. And I love working with young designers as well, right? Because they bring a perspective. And I love challenging them. And I love fighting with them. And I love when they fight back. You know, it's like creative sometimes... it's like that scene in Lord of the Rings where they're making the orcs (Uruk Hai), you know, and they're putting the armor on him like it's not a... it's not a clean process. It's not a beautiful process always. It's like a very tough, you know. You got to fight through it sometimes. But I think it's a lifelong journey to do that. And I think if you, the one thing I'd say to you guys, and I really like, I would trade... Peter Munk said this to us and I'll say it to you, He was 80 years old and he said to me, I would give anything to trade places with you guys, so I could do it again. And it was really... it was a really beautiful moment. And, and I think it was a really telling moment because you're always in such a rush. You know, we're always in such a rush. And when you guys are sitting here at 22 years old, whatever you are, you're just… you can't wait to get out there and you're so anxious to have success. Right? Get out there and make something. And I think the biggest piece of advice I could give is to really learn to appreciate the journey. And, and even failure, there's so many lessons in failure and it sucks to fail. For sure. But I think like it really is failure is a moment and success is really just a moment to and and it's and you know that famous saying it's like what have you done for me lately? Well, it's kind of true, right? So I think like you got to be like that with yourself. Right? And you have, to you have to just keep pushing forward no matter what happens, whether it's failure, and that doesn't mean stupidly. Right, like and and the other thing I'll add which I think is a huge part of there's so many reasons people fail and succeed, and a lot of them are outside of our control. I mean, you take the pandemic. And it's very interesting because it's like, there's lots of different ways to look at what we're living through right now you can take a very negative view. And indeed, if you have a family member that's gotten really sick, or you had a business that was decimated by the pandemic, it's very reasonable and to take a very negative view. And I wouldn't fault anyone for doing that. But if we step back from that for one second, and we take a look at if you were born in 1900, what would it look like, you would have lived through the First World War, the first pandemic, which was way worse than so far, what we've had to endure, because 50 million people died, you would have lived through the Second World War, you would have lived through the Great Depression. So the fact of the matter is, we've had 70 years of relative calm in the West, right? I'm not I mean, not if you lived in Cambodia, but if you lived in the West, so I think it's like, you know, learning to keep going. And, and just somehow, sometimes you just can appreciate one thing, you just if you're healthy, just start there. And then just keep going, you know, keep trying and keep going. And, and the one thing I would say is, the other really important part of that is, is that out of every tough time lies the potential for success. And I think like, it's going to be so interesting to see the next five or 10 years because humanity won't stop and we'll see some really cool things happen, I think, like really cool things. And, and the thing I would say to you guys in wrapping up this statement is that one of the most most most important things is knowing your strengths and your weaknesses as a person and being really open with yourselves about that. And let me tell you something, I remember interviewing at Bain and interviewing at those finance companies when I was at, when I was at the Western Business School, at Ivey, and I knew one thing, even at that time, I knew it. And what it was, I knew, was that I wasn't going to be the best finance guy. And so like, I probably could have duped them and maybe gotten a job. But I knew it wasn't the right thing for me to do. I knew in my heart, it wasn't the right thing for me to do. And so I think knowing your strengths and your weaknesses is really, really important. And being aware of those and, and by the way, failing at something doesn't mean you're not potentially good at it. So you got to ... but having the self awareness to know that I think is really, really important. And it's, it's one of the hallmarks I think of becoming successful in your life, forget a business venture or one thing because that stuff comes and goes, but you know, and so that's where partnerships come in, right and bringing a partner in to help you and and I gotta tell you, like, I've... I've had so many of those moments over the years where I was like, Am I really good at this? Am I not and having and having that discussion over and over and over again. And then if you're not knowing that and bringing in the help, right, so if you're not a great finance person, bring in a great CEO you trust. And when you choose your partner, one of the biggest mistakes we sometimes make is choosing someone who's exactly like us. Right? and avoiding the fight right? And it ain't easy. And there's... it is I'll tell you a real ride like, but it also if you learn to embrace it on some level, it also hopefully takes you… you can get something great out of it.
Eric Janssen
That's awesome. Ben, I want to come back to a point because we've had a few few speaker a few guests and talking about who have had some success and a bunch of different ways One of them being one dimension of that being financially, and the criticism is easy for them to say, you know, they are whatever they've achieved this level of personal success. So there's this conversation around, or the anecdote is always like you know, enjoy, enjoy the journey the money doesn't matter...
Ben Varadi
Yeah, for the record, I never said that the money doesn't matter because I think it's not a good thing to say that. Only people with money can say the money doesn't matter.
Eric Janssen
I agree.
So let's... I want to tease this out because I think this is like a thread that's been pulled at but I think the students aren't happy with some of the answers that we've been trying to work through. So like, I'm looking.. I just did my homework this morning. So, Spin Master is like $3 billion company. I was just like By comparison, right? You are bigger than Cineplex, CORUS ENTERTAINMENT, and Sleep Country Canada combined. Like these are significant Canadian companies, right. You are bigger than Aritzia, Maple Leaf foods…
Ben Varadi
But wait, what's that? What's that 3 billion... we don't do that in sales is that enterprise value?
Eric Janssen
Market cap.
Ben Varadi
Okay. Got it. But it's so great that we're in that company because we can see a movie, and then we can take an amazing nap. And that's great company.
Eric Janssen
Yeah. Oh yeah. You are in, you are one of these are massive names across the country and you're a significant shareholder in that. And so would you like, would you trade literally... would you trade where you are today with the people that are in the class?
Ben Varadi
No, but that's not a money thing. That's a “I'm tired thing” a little bit. Okay. That's an I'm tired thing. It's not. It's not a money thing. Listen, I've, yeah, listen, that's a really, that's a deep question. Yeah, we would all have to get into one of those Sleep Country beds to talk about that. I mean, I'm, you know, I have to say, sometimes when I look at the journey you guys have, it feels tougher to me, because there was less pressure back then. And I, I wouldn't want to have to go through that. Like, I'll tell you guys, this is very deep... Hold on, let me just look, make sure no one can hear me. But um, you know, my kids, they're six and eight. And they said to me, “daddy, what was life, like, when you were little?” And in my head, I thought, well, it was way better. But I couldn't say that. So I said, It's way better. And then I realized it was I was speaking out loud by accident. And that and the reason it was way better is because, like, I just drank coke and ate candy, you know, and like, played outside. I think there's so much pressure on all of you guys. And I think it's, I think it's not right, and I think it's not necessary. And I think like, in life was so simple then and, and, and there was less divisiveness in the world, there was less. You know, like, all you did, like, I don't think I opened a book till I was 14, really, you know, like, I just, I really just had fun for the first 16 years of my life. And then I was like, oh, man, I got to get to university, you know. So it was like, it was a lot of fun. I had a lot of fun. And I didn't have to think about the stuff that you got, and even coming out of school. Like it wasn't as competitive and it wasn't, as you know, and I didn't think about it as much. And the expectations that I had on myself weren't that high, either. To be honest, my father used to always point at the gas station and say, that's where you're going to be working. So I was like, my standards were so low, that I didn't really, I didn't have that, like I never dreamed about being rich. Right. So it was kind of a shock when I had a few bucks. And, and I will tell you, it's good to have money. So I'm not going to make the statement that it's not. But I will tell you, you buy a few things. And it gives you peace of mind and then you realize you like... it's not really like what drives like for me I just buy instruments, right? So I mean, I buy like, you know, creative tools. So I don't want to make it sound like money isn't great, you know, like I bought... you know I've done that stuff and and I spent money but it does kind of and also even in the world today, guys like you know yourself. People don't love rich people, like rich people are in people's crosshairs. So even when I was a kid, my father used to say to me, the world isn’t a better place if there are people standing at your door with pitchforks. So, you know, I think it's great to have money because it gives you peace of mind and it's great to buy nice things, you know, and so you know, I'm happy if you want to have like a Lifestyles of the Rich and Famous conversation, you know, I can tell you a couple fun things, but, but it’s kinda like, it doesn't really define you. It's just a nice thing that came along the way, for sure. But it wasn't like something I really dreamed about. It wasn't my impetus for doing what I do. I didn't even think it at the time, because it just wasn't like today, right? It wasn't and there weren't any Zuckerbergs or like, or Amazon's or like, or Zooms or any of these are 3 billion, 5 billion, 50 billion... the world wasn't really like that. Right? We were just happy to be in the game. You know, when we started, there was, you know, one of our biggest, biggest discussions was, do we go into the US. And at that time, there was two big Canadian toy companies, there was Irwin toy, who some of you may know, they were like Canada's most famous toy company for 50 years. And then there was Canada Game. And you know, they were really distributors of US companies’ products. And the only way we could survive was to do our own products. And we didn't even really understand that I can only say that in retrospect, but the bottom line is after Earth Buddy, we had no choice but to go out and just start making toys. It just, we didn't plan it. It just happened that way. And even then we were saying, well, maybe we should open a chicken restaurant or do this or do that. Like there wasn't really a plan. It was just sort of, come up with something. So is that a fair answer. I really look around but like, I welcome anybody challenge me if you don't like the answer, here's your first lesson in business, say something? You don't like my answer unmute yourself and tell me.
Eric Janssen
Oh, it's coming I'm sure. We have a channel...
Ben Varadi
I know. I should be careful what I say right.
Eric Janssen
We have a channel up here with a bunch of guest questions. So the ones that get upvoted the most are gonna get asked. So those are coming in two minutes. So get ready. I think it's Sam, Sam, who's gonna moderate. So rapid fire one's for you, Ben, before we transition to student questions. Was there a moment or what was the moment in your career where you felt like you made it?
Ben Varadi
Bakugan. Bakugan was when.. was when we made enough money that like personally, you could feel like, “Okay, I'm doing good. I'm doing good.” So we started in... I was 24 when we started. And so when we had that moment, I was 37. So it was 13-14 years, I was 37-38. It was 14 years, 13-14 years after we started. It was a great thing. This builder told, a successful Canadian builder, I don't remember his name, he told me on a plane that it took him 20 years to have his overnight success. So just remember that it doesn't, it rarely happens quick. And sometimes when it happens quick, that's a bad thing. Right? Because you think it's always gonna be like that, right? So I mean, we were you know, we bashed around for 13 years before we had real success. So that's even after the even after the 1.8 million.. I'll tell you what I walked out with After Earth buddy. I walked out with 200 grand.
Eric Janssen
That's a pretty good first side hustle.
Ben Varadi
It is but I guarantee a lot of you will come out of business school and make 100-150 grand in your first year. So it wasn't right when I got out, it was two years after. So whatever. I mean, the bottom line is we didn't get rich on Earth Buddy, I certainly didn't. Even at that time, it was good. It was great. It convinced my father I wouldn't be working at the gas station. But I mean, it wasn't enough to retire on. And I lived in an apartment with three roommates till I was 30. And I lived in another apartment till I was 35. And I didn't buy my own first home until I was 36 years old.
Eric Janssen
Wow. Any regrets Ben?
Ben Varadi
Not really, no regrets.
Eric Janssen
Wow, what a great thing to be able to say.
Ben Varadi
Yeah, no regrets. Listen, I.. you know, and I've done better than I ever dreamed I would do. So I… and I did my best and, and I do feel very fortunate that I found something that I really enjoy. Like I really love making toys. And it's, and it's and I know how to make a toy, right? And so that's really cool. Like, I've never... it took me, it’s funny because I didn't know what to call myself for the first 25 years. And I got really excited last year when I figured it out. Because you know, you have to put it on like your customs form. And I put down, ‘toymaker.’ And it was like a big moment for me, you know, because like I never thought of myself as a toymaker. But that's what I do for a living. So that was a really happy moment for me.
Eric Janssen
And you're world class at it. So that's amazing. Any advice to your younger HBA 2 Ben? He's sitting in front of you, any advice HBA 2 Ben?
Ben Varadi
HBA 2? where is he? Shake or move around a little HBA... Oh, there he is. Oh, there they are. Okay, fine. Any advice to HBA? Yeah, know your strengths and weaknesses. That's the number one thing like, let me tell you, not everybody should be an entrepreneur. It's a really harsh thing to say. But how many entrepreneurs make it? The fact of the matter is very few. Very few... 1% right? So not everybody should be an entrepreneur. But there's lots of ways to cut the cake. So maybe it's joining a small company that's already started, where you can get a lot of shares and take your strengths that you're great at and help them. Maybe it's buying a company that's up and running at some point in time. Maybe it's going in with a bunch of people and buying a company. So again, knowing your strengths and weaknesses is so key. If you do that, I believe like, it will give you a much greater chance of all the other things that need to happen to have success.
Eric Janssen
Great advice. Last one before we turn it over to release the hounds. Can we be helpful to you at all? Ben, is there anything that this group of students or you know, call it 5-10,000 people who listen to the episodes. How can we be helpful for you?
Ben Varadi
It's a really good question. I don't know... it's... I don't have a good answer. You know, and I don't want to say something like, that sounds phony. So I don't, I don't have a good answer.
Eric Janssen
That's okay.
Ben Varadi
Go reach your full potential. That's what you should do. Don't worry about anyone else, it's time... this is a good time in your life to be selfish, you know, like, it's about you.
Bert Wood gave our class amazing advice. I'll never forget it. This is the best thing. I didn't hear what he said all year. But I heard this, that the time has come in your life, for you to stop working on your weaknesses and focus on your strengths. And he said your whole life, you're not good at math, they tell you to go go practice your math, you're not good in English, they tell you to go practice your spelling or, you know, you don't know how to hit a basketball net. So you got to go practice your free throw. He said The time has come in your life, when you need to take your strengths, and go focus on making them stronger. And I thought that was like world class advice that he gave, and I think you guys should go out and be selfish and reach your full potential, whatever that is for you, right. No one else can define that, only you can define that. And you don't have to answer to anybody on that. You know, that's a huge decision. And you know, you guys are the future because you've gotten into one of the best programs and I can tell you, I face people from Harvard, I face people from Stanford, all the best business schools on the planet and we hold our own 100%. So I think like, you guys have already started an amazing journey.
Eric Janssen
Ben, thank you so, so much for your time. We appreciate it. I think the group that introduced you wanted to wrap it up, so we'll turn it over to them.
Ben Varadi
Okay. Yeah, absolutely.
Students
Thanks again, Ben for taking the time today. We're really super fortunate to have leaders like you here. We all really appreciate it. But on behalf of the class to show our gratitude, we've made a $40 donation in your name to Toys for Tots, Canada, which is a charity focused on providing toys to Canadian children in need. So thanks again. We really appreciate it.
Ben Varadi
You're so welcome, guys. I can't tell you, I guarantee I enjoyed it more than you. Thank you so much for listening..
Eric Janssen
Thanks Ben. Thank you.
Ben Varadi
Bye, everybody. Take care. Good luck.
Eric Janssen
Thanks.
Eric Morse:
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