Lesson #3: Listen To Your Customers, Not Your Critics

Still, Warner was not satisfied. All of his toys were in the $10 to $20 range and Warner began to consider his target market. Although not overly expensive, Warner felt that a $10 toy was still too much for young kids to afford on the small weekly allowances they received from their parents. He wanted to create a small plush toy that would appeal to children, that would be small enough to fit in their pockets, and that would still fit within their meager budgets.

Convinced that there were no toys "in the $5 range that weren't real garbage," Warner set about creating the first Beanie Baby, a $5 pocket-sized toy made of polyester plush and filled loosely with polyvinyl chloride pellets. Because they were not stuffed to the brim like most other stuffed animals on the market, Warner's toys could actually be molded into different shapes by children themselves. So not only did they look and feel different than other toys, but Warner's Beanie Babies could also do different things.

But not everyone was as thrilled with this new idea as Warner was. In fact, says Warner, "Everyone called them road kill. They didn't get it. The whole idea was that they looked real because they moved."

Warner, however, ignored his critics and thought about what his target market would want. Convinced that children would love his new toy, Warner introduced the first nine Beanie Babies at a Chicago toy trade show in 1993. But there was more to Warner's strategy than that.

To entice children further, each of the Beanie Babies came with its own name, including Spot the Dog, Squealer the Pig, Patti the Platypus, Cubbie the Bear, Chocolate the Moose, Pinchers the Lobster, Splash the Whale, Legs the Frog, and Flash the Dolphin. The names helped appeal to the children's sense of imagination and enticed them into wanting to collect the complete set.

Each of the Beanie Babies had only a few colours of fabric and even fewer facial details (the first version of Spot the Dog was even introduced without a spot), but Warner wanted to keep the toys as simple as he could. He knew that children were not going to purchase his toys because of their complicated designs. Rather, if his many years of experience in the toy industry had taught him one thing it was that children took a huge interest in toys that were cute, cheap and easy to carry around. The Beanie Babies collection was just that.

Critics might have called his novel toys 'road kill' in the beginning and expected them to flop on the market, but children could not get enough of them, and that is exactly what Warner was betting on.