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Aliens, rovers and energy crystals: How Lego’s obsession with detail has kept fans hooked for 92 years and counting
By Prarthana Prakash | Fortune Magazine | August 25, 2024
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In 2024, few companies have been able to replicate Lego’s success. Its toys span generations, from adult hobbyists reconnecting with their favorite toys to the next generation. Since its humble beginnings in 1932 as no more than a carpenter’s passion project, Lego toys have become an indispensable part of childhood. Over the decades, Lego could very well have been replaced by more addictive and appealing electronic gadgets. But that wasn’t the case—if anything, things couldn’t be better for the family-owned Danish company. It outperformed the toy market with record sales in 2023, with a 2% revenue growth, notching DKK 66 billion ($9.7 billion) against a 7% decline in the broader industry.
What, then, is Lego’s secret sauce to keep kids (and, more recently, adults) hooked to its colorful bricks?
One of Lego’s long-standing themes—space—illustrates what makes its approach unique and helps it stand the test of time. Space was one of the company’s three official categories within which it developed toys (“castle” and “city” were the others) dating back to the 1970s. Space’s popularity with kids has endured through the years as it has captured kids’ imaginations as a realm of endless opportunities
Lego realized early on that there was no proxy to understanding what kids want without hearing from them directly. The quality of Lego’s bricks is another factor that sets it apart, as sets can get passed from one generation to the next. Unlike mindless games, parents think their kids could gain something good from Lego toys, whether that’s engineering abilities or using their creativity.
As a long-time toy maker, Lego has developed a well-oiled machine to help it constantly generate new ideas. The company does a “boost week” once a year—think of it like a rapid brainstorming session typically associated with startups that spur new concepts. Designers come up with fresh ideas or work on existing ones, giving them creative freedom outside their day-to-day schedules. There isn’t a checklist of what needs to be achieved, although the goal is to see what can be turned into a potential Lego set. The next step is to figure out how “decodable” the models are, including finding elements that tell stories and make them easier to play with, like Lego astronauts or purple collectible crystals. In addition to milking ideas from the company’s designated toy developers, the company hears directly from its audience.
Lego’s quality and complexity can make its products expensive—sometimes pricier than the latest iPhone. That’s especially true of products pulled out of the market, making them rare. The novelty of its products has made them a collector’s dream.
The company’s penchant for detail applies not just to its space creations or toy development process but also to its business. Goldin, for instance, straddles meetings that look at the company’s present performance while also discussing the pipeline for the next few years.
3 key takeaways from the article
- In 2024, few companies have been able to replicate Lego’s success.
- Over the decades, Lego could very well have been replaced by more addictive and appealing electronic gadgets. But that wasn’t the case. What, then, is Lego’s secret sauce to keep kids (and, more recently, adults) hooked to its colorful bricks?
- The following secretes: Its ability to captured kids’ imaginations as a realm of endless opportunities. Listening the kids. The quality of Lego’s bricks that can get passed from one generation to the next. Parents think their kids could gain something good from Lego toys, whether that’s engineering abilities or using their creativity. Lego has developed a well-oiled machine to help it constantly generate new ideas. Its marketing strategy enabling it to price its products pricer than latest iphone and pulling the product out of the market, making them rare. And the company’s penchant for detail applies not just to its space creations or toy development process but also to its business.
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Topics: Strategy, Business Model, Creativity, Innovation, Lego, Gaming, Marketing Strategy