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When Roger Shiffman, the man behind toy phenomenons like the Furby and Giga Pets, sold his Tiger Electronics in 1998 to Hasbro (HAS) for $335 million, many assumed the commercial genius would retire to a life of golf and cocktails at the country club.
Fortunately for toy fans everywhere, the 52-year-old Shiffman has returned to test his entrepreneurial mettle once more. In January, after just three years away (he stayed on at Hasbro through 2001), he launched Zizzle, a small toy company designed to reinvigorate a recently stagnant industry, and brought on several members of his former Tiger executive team to help him do it.
Like its predecessor, Chicago-based Zizzle will emphasize technology and electronics. It's scheduled to release its first full lineup of products in 2006. Shiffman says he hopes Zizzle's small size will help the 20-employee company stay flexible and take advantage of good ideas as they come along, much as Tiger did after its founding in 1978.
BusinessWeek Online contributor Jessica Thacher recently caught up with Shiffman to discuss why so many entrepreneurs seem unable to retire, and what he hopes to accomplish this time around. Edited experts from their conversation follow:
Q: When you left Hasbro in 2001, did you think you were retiring? Or have you always thought you'd jump back in? A: The word retire was very difficult. I didn't have specific plans where I was watching the clock counting down. I thought I was going to keep very busy with other interests and investments, and the work I did with charities.
I actually spent a lot of time working with students. I'm on the board of overseers of the engineering department at the University of Pennsylvania. Also I'm involved with Wharton. Locally, at the University of Illinois at Chicago, I was involved in discussions that helped them form an interdisciplinary program between engineering, industrial design, and marketing. I had a lot of things to keep me busy.
Q: After achieving so much success with Tiger, what made you want to try doing it all over again? A: One important factor for me was the people. We came to recognize that we had a unique synergistic relationship, and there were people who were actually pushing me and asking that we get back together and work together. Second, I felt much too out of my element not working. I felt I was too young. My age might not seem young, but my attitude has always been very youthful and childlike.
Also, it was retailers and other people in the business who I'd seen and spoken with who were very encouraging. The thing that really drove me into this business was electronic toys. I love creating product, the people, working with customers, the challenge of doing things better, different. It's less frustrating than my trying to play golf.
Q: How does a startup turn a visionary idea into a profitable and successful business? And what do you personally get out of building a business from the ground up? A: If you have a combination of the right idea and the right resources, I think it's possible. It's hard to answer on a general basis. A lot of times, it's the fortitude and drive of the people behind the product ideas. Even within our own small industry, there were people who didn't want to make a lot of great products that ended up at other companies and did phenomenally well. It also helps if Wal-Mart (WMT) likes the product and works with you.
If you succeed, you're going to get a lot of satisfaction. I look to have success for the people that are working with me. Also, if you're lucky enough to create a toy or toys that are accepted large scale, that's kind of nice. You brought some happiness to some people. If you succeed with some good product, there's a sense like having a child, bringing a thing to fruition.
Q: The sale of traditional toys has been down, and it's becoming harder and harder to compete against today's electronic gadgets like the iPod. What can Zizzle offer that current industry bigwigs like Mattel (MAT) and Hasbro haven't been able to? A: We hope to offer a combination of things. The difference is that there are so many traditional toys that some of the innovative things [larger companies] do may not seem to be as significant. I'm not suggesting we're going to be able to increase the toy business. It's a $20 billion industry, and we're not trying to maintain a multibillion dollar base.
We're looking at things that are more technology-driven. We want to use technology in a way that makes for good product. As a smaller company with less overhead, we have a certain advantage when it comes to pricing. When you use technology, it might just be that much more advantageous -- you might find a product that is more viable because of the price point being somewhat lower.
Q: What are your long-term goals for Zizzle? How big do you want it to become? A: As big as possible. We don't have any built-in limitations. The limitation is going to be the marketplace. We're going to look for some nice, steady growth. We do want to be a significant player. There are too many good people and too much overhead here to stay small. We're planning to grow this to a reasonable size as quickly as possible. It may be through a combination of our own products and also possible acquisitions.
Q: What lessons will you take from Tiger? A: The landscape of the retail business has changed in a number of ways. We used to have more flexibility in terms of when we presented product and when we could ship products. We have to become a lot more diligent in what we can do and when we deliver -- we have to have schedules we can really adhere to.
Other than that, our hope is to recreate what we all thought we had at Tiger. In retrospect, you look back and think, "Wow that was pretty good." I would have no complaints whatsoever if we could recreate Tiger in terms of how we do things here.
Q: Hasbro will rerelease an updated Furby by the end of this year. How do you feel about potentially competing against your original creation? A: I can't help but feel a little bit of pride having been the person who made that happen. I expect and hope they [Hasbro] do extremely well. In our business, we're all very friendly. Probably some of the most rewarding calls have been from other competitors, who say it's great that you're back. But when it comes down to it, we'll fight tooth and nail for every inch of shelving space. We're all going to fight for it. We're always competing against our friends.
Q: What traits define an entrepreneur? A: It's a risk-taker. It's people who believe strongly in themselves and the people they surround themselves with. They set high standards for themselves and have the fortitude to overcome problems in order to succeed and ultimately get to their goals.
Q: Any advice for young entrepreneurs? A: Don't give up, don't give up, don't give up! I think your integrity is everything. Honesty and integrity pay off in any business the same way. Face your problems straight on. Also, find great people who share your enthusiasm and vision.
Edited by Rod Kurtz
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