Meet The Billionaire Toymaker That Turned 5,000 Toys Into $2 Billion | Ronnen Harary

Ronen Harary started the company that became Spin Master at 23, straight out of school, and the business later grew into a publicly traded company generating more than $2 billion a year. Harary said he never imagined that scale at the beginning; the founders simply committed to finding ideas globally, partnering widely, building as large as they could, and advancing one product at a time.

Spin Master’s first product, Earth Buddies, came from an idea Harary discovered through an Israeli newspaper article his mother translated for him. The article revealed that roughly 300,000 units were being produced in a country of about 10 million people, while nobody appeared to be making them in Canada or the United States.

Harary needed about two weeks to persuade his business partner Anton to try Earth Buddies. They initially produced 5,000 units for Mother’s Day—not because of sophisticated demand forecasting, but because 5,000 was the minimum packaging order.

The founders used profit sharing to recruit family talent before they had a conventional organization. Harary’s brother-in-law helped engineer the product and received 5% of Earth Buddy profits, while Harary’s sister designed the packaging for another 5%.

The first Earth Buddies were sold on the streets of Toronto. They moved only about 700 of their initial 5,000 units at first, leaving 4,300, but the founders kept selling and eventually landed a 26,000-unit order followed by their breakthrough with Kmart.

Earth Buddies went from a 5,000-unit experiment to roughly one million units sold in the first year. Spin Master followed it with Devil Sticks, a three-piece juggling product, and ultimately chose to build a toy company rather than pursue the horticultural side of the Earth Buddies concept.

Spin Master’s first major retail opening at Kmart came partly through an accidental personal connection. Anton had met Aaron Hermelin while backpacking in Europe; Hermelin’s family had connections strong enough to arrange a Kmart meeting.

Harary was originally the operations partner while Anton handled sales, but Harary happened to take the crucial Kmart meeting himself. After pitching for 30 minutes, he was told repeatedly that he was speaking to the wrong buyer; he kept pushing until he was finally given the name of the actual buyer, Adrian Zaks.

Rather than leave Kmart headquarters after the failed meeting, Harary walked through the building looking for Adrian Zaks and found her at her desk. She gave him another meeting for 3:30 that afternoon, and he refused to leave the lobby even for lunch while waiting.

Harary changed his pricing on the spot after entering Zaks’s office and seeing seven competing products on her shelf. After hearing the company’s story, she placed an initial order for 48,000 units and said that strong performance would lead to an approximately 500,000-unit Christmas order.

The Kmart launch produced a 94% sell-through at a $4.99 checkout price. Over roughly two years, Kmart bought about 1.5 million Earth Buddies, including another 250,000 Easter-themed Earth Buddy Bunnies, and Harary emphasized that the company shipped every unit it committed to supply.

Spin Master’s ability to scale from handmade production to hundreds of thousands of units depended heavily on people rather than a predetermined operating system. Harary’s brother-in-law helped build machinery, while a third partner, Ben, joined specifically because the company needed someone to run the growing factory.

Harary said his agreement with Ben was effectively made in about 45 minutes on a profit-sharing handshake. The anecdote reflects how informally and quickly the early company added key operators when demand outgrew its original structure.

Some of Spin Master’s earliest factory workers came from a homeless shelter, and one of them, Bob Wakeland, turned out to have about 20 years of manufacturing experience. After revealing that background, Wakeland created detailed Gantt charts, helped reorganize production flow and effectively became a key manufacturing operator.

Harary said two early workers, Bob Wakeland and Granville, eventually left the homeless shelter, obtained apartments and rebuilt their lives. He used their story to illustrate his broader belief that exceptional capability can come from unexpected places.

Harary identifies curiosity, rather than conventional management skill, as one of his strongest entrepreneurial traits. He said he loves creation, experimentation and trying things without being overly disturbed by failure; his more business-school-oriented partners helped counterbalance that tendency by pushing the company to stay focused once toys began working.

The toy business taught Spin Master that meaningful product testing often occurs only after a finished product reaches the market. Harary said prototypes cannot reliably reproduce children’s reaction to the real object, packaging, commercial and play experience.

A failed product called Don’t Feed Freddy gave Harary a vivid example of that reality. He watched a child stare deadpan at its television commercial and immediately felt the product had failed to create an emotional connection.

Spin Master developed a disciplined response to failure: mark the product down, clear the inventory, learn from it and move on. Harary warned that excess inventory can “really kill you” in toys and said his partners deliberately avoid becoming emotionally attached to individual brands.

The company also developed a culture of avoiding blame when products failed. Harary argued that creative products involve too many people for simplistic blame to be useful and that blaming colleagues slows the organization down instead of helping it learn.

Harary considers a roughly 60% success rate exceptionally strong in the toy business. He named Tickle Secret Baby, Don’t Feed Freddy and Key Charm Cuties among early failures, while stressing that even unsuccessful launches taught the company about retailers, advertising, factories, buyers and product categories.

One of Spin Master’s most consequential mistakes was passing on Beyblade. In the early 2000s, Takara Tomy showed Harary the spinning-top concept and offered Spin Master the opportunity to bring it to North America, but Harary and his partners concluded that spinning tops did not seem exciting enough.

Six months later, Harary learned that Takara Tomy was building a television series around Beyblade and had already signed Hasbro. Beyblade subsequently generated billions of dollars in toy sales, and Harary said the missed opportunity became permanently imprinted on him.

Harary believes the Beyblade mistake came from judging an unfinished concept too narrowly and underestimating Takara Tomy’s ability to develop it. The prototype he saw lacked much of the speed, materials, execution and entertainment framework that made the finished product compelling.

The Beyblade failure directly influenced Spin Master’s approach to Bakugan. Harary said that without missing Beyblade, the company probably would not have created Bakugan, because the experience taught him to think about toys, television and development as a combined system.

Spin Master sourced many inventions from independent toy inventors rather than generating every concept internally. Harary said hundreds of professional inventors show manufacturers thousands of ideas each year; when Spin Master licenses one, the inventor can receive roughly a 5% royalty on wholesale sales in perpetuity.

Bakugan began with a 23-year-old first-time inventor named Aldrich who had drawings—but no working prototype—for the idea of putting an action figure inside a marble. Inventor representative Shelly Goldberg brought the concept into Spin Master’s network, where it was licensed.

Spin Master’s first internal version of Bakugan was much weaker than the final product. Originally called Battle Brawlers, it involved manually opening a ball and figure, and Harary concluded the company needed outside development expertise.

Tomy and Bandai both rejected Harary’s proposal to co-develop the product in Japan before Sega Toys agreed. Sega Toys president Mr. Kokobun accepted the partnership, and three months later the Japanese team returned with the spring-loaded, magnetic, card-based transformation and battle system that became Bakugan.

Seeing Sega’s transformed prototype triggered Harary’s “Beyblade moment”: he immediately proposed building a television series around it. Sega estimated the show would cost about $12 million and asked Spin Master to provide $6 million; Harary returned home, secured a Canadian broadcaster and committed the money.

Bakugan reached Cartoon Network in 2008 and became a billion-dollar franchise distributed across about 150 countries. Spin Master sold it for roughly four years, and company sales rose from approximately $450 million when Bakugan launched in 2008 to $1 billion by 2011.

Harary says blockbuster toys usually contain an intangible “pixie dust”: an unexpected reaction, transformation, surprise or other element that produces an immediate “wow.” He combines that intuition with knowledge of toy-industry history and argues that simply bringing more of what already exists gives a product a low chance of connecting with children.

Harary also sees social momentum as important: when children visibly play with the same product, a multiplier effect can develop. Devil Sticks, for example, were not fundamentally new, but caught a cultural moment that helped accelerate adoption.

Spin Master looks for acquisitions with extraordinarily high unaided awareness and then tries to add innovation around the existing brand. Harary estimated Rubik’s Cube at roughly 95% unaided awareness—meaning almost anyone knows the product from its name alone.

Spin Master had to build many brands itself because it entered toys after Mattel and Hasbro had already accumulated much of the industry’s famous intellectual property. Harary said genuinely iconic brands rarely become available, so Spin Master tries to acquire them when the opportunity and price make sense.

The Rubik’s Cube acquisition was built on a relationship lasting more than a decade rather than a sudden approach. Harary said Anton had cultivated the owners for over 10 years through his M&A work, creating enough trust that Spin Master was well positioned when the four owners eventually decided to separate and sell.

Spin Master now operates across three distinct businesses: toys, entertainment and digital games. Entertainment creates characters and stories; toys commercialize some of those worlds directly; and successful characters can also be licensed to outside manufacturers for royalties.

Entertainment is a high-failure business even for Spin Master: Harary said only two of roughly 10 shows had generated the kind of attachment that made children want the characters in their lives through toys, clothing, bedding and other products. PAW Patrol is the clearest example, with hundreds of companies licensing its characters.

Spin Master’s entertainment strategy was partly born from competitive exclusion. Harary said the young company repeatedly lost licenses from Disney, Warner Bros. and other major properties to bigger competitors, despite licensed television and movie properties accounting for roughly 26% of the toy industry, so Spin Master decided to create its own entertainment.

The resulting business resembles a hybrid of a toy company and a smaller version of Disney’s character-licensing model. Unlike a pure licensor, Spin Master can both manufacture its own toys and collect royalties from other companies using its entertainment properties.

Spin Master’s first major attempt to build digital games internally was expensive and unsuccessful. Around 2010 it assembled a roughly 100-person studio to create a virtual skateboarding world for Tech Deck, spent about $10 million and ultimately shut the project down.

Bakugan’s success was followed by a severe correction: Spin Master rose to about $1 billion in sales and then fell back by roughly $450 million. The company nevertheless stayed committed to entertainment and produced several follow-up shows that performed badly.

Harary cited Redakai and Tenkai Knights as examples of post-Bakugan entertainment failures. He personally spent about two years on the trading-card-oriented Redakai, while Tenkai Knights was developed with a Japanese partner; neither produced the consumer demand the company hoped for.

PAW Patrol was conceived while Spin Master was at one of its lowest entertainment points. The company identified preschool as open territory and believed transformation—already a powerful toy play pattern—had not been fully developed for that age group.

The original PAW Patrol brief was extremely simple: create a preschool show built around transformation. Spin Master sent the assignment to five creators around the world, including Bob the Builder creator Keith Chapman.

Chapman did not actually follow the transformation brief, but his alternative idea won the company over. He proposed five rescue puppies and a young leader in a concept originally called Robbie and the Rescue Pups; Spin Master liked it enough to adopt the core idea and later add transformation back into the franchise.

Harary had wanted to work with Chapman for years and places unusual weight on working with people whose presence and history feel “lucky.” He clarified that by “lucky” he largely means people who are comfortable with themselves, pleasant to work with and surrounded by a sense of ease—not merely people with spectacular résumés.

PAW Patrol was assembled largely as a Canadian production. Harary highlighted director Jamie Whitney, two writers and animation studio Guru as core contributors who developed the characters, visual style and archetypes with Spin Master.

Spin Master deliberately developed the PAW Patrol toys and television series together rather than treating merchandising as a later extension. Harary said the approach was learned from Japanese companies, where toy designers and animators routinely combine disciplines; the collaboration initially caused friction but ultimately helped create a more coherent property.

Nickelodeon bought PAW Patrol in 2013 and also participated in development. Harary recalled pitching it alongside Keith Chapman, Jen Dodge and others to Nickelodeon president Cyma Zarghami, after which the network used its promotional reach to build viewing around the series.

Harary credits the franchise’s longevity primarily to the show itself—its pacing, writing, character archetypes and ability to connect with children—rather than a simple advertising funnel into toy purchases. Spin Master then continually refreshed the property with new seasons, themed material, specials and characters such as Everest.

Spin Master extended PAW Patrol into feature films despite skepticism that a preschool television property could support a theatrical movie. Harary viewed the larger format as another way to tell bigger stories and prevent the franchise from becoming stale.

Harary considers international travel a core business-development tool rather than an occasional expense. He said “the magic happens outside the office” and estimated that he made around 10 trips to Japan before Spin Master conducted any meaningful business there.

His lesson from Japan is that repeated physical presence creates trust that cannot be rushed. People need to see you repeatedly, and he believes that once genuine trust has been established in Japanese business relationships, it becomes unusually durable.

Harary characterizes Japanese business as collaborative, long-term and strongly oriented toward win-win outcomes. He recalled a Japanese CEO flying from Japan to Toronto solely for the final signing dinner on the Tenkai Knights deal and returning the next morning, because completing the relationship in person mattered.

Spin Master’s first Hong Kong experiences reinforced the value of simply showing up. Harary and Ben were about 25 when a vendor collected them in a Rolls-Royce for lunch; Harary came to believe that making the effort to travel signals seriousness and can cause potential partners to treat the encounter as an opportunity worth exploring.

He sees European relationship-building as slower and more conversational than the North American push to close quickly. More broadly, he values international business because different cultures expose entrepreneurs to a much richer pool of ideas.

When someone wants to start a business but lacks an idea, Harary’s recommendation is straightforward: travel. His view is that entrepreneurs can observe what works elsewhere, meet people who will help them and recombine proven ideas rather than believing every concept must originate entirely from themselves.

Harary applied that strategy to a personal bakery venture called Broad Flour in Toronto. He partnered with a woman from the food industry, gave her sweat equity to operate the business and required her to spend two months traveling before they opened.

That research trip directly shaped the bakery’s operating model. On the U.S. West Coast she learned about milling flour inside the bakery; in Gothenburg, Sweden, she obtained recipes and a roughly 15-year-old sourdough starter from a leading baker; the business then sourced Canadian farms and combined those practices.

Broad Flour survived COVID and remained a single small Toronto bakery that Harary described as something of a cult favorite. He credits its foundation to gathering ideas and relationships internationally rather than trying to invent the entire concept from scratch.

Harary’s book is titled No Experience Necessary, and its central thesis is that a person’s 20s can be an unusually favorable decade to bet on themselves and start a business. He cites energy, fewer accumulated constraints, greater willingness from older people to help, resilience and a longer runway for compounding knowledge.

He also argues that inexperience can occasionally be an advantage because excessive knowledge can create doubt and paralysis. Harary calls this the “power of not knowing” and describes doubt as an enemy of luck and action.

Air Hogs is his clearest example of useful naivety. Harary later learned that Hasbro, Mattel and other major companies had already rejected the flying-toy concept, but Spin Master did not know that when it encountered the prototype; the founders simply loved playing with it and assumed they could solve the practical problems.

Harary remembers Hasbro-family leader Alan Hassenfeld taking Spin Master’s calls when the founders were around 25 because he was excited to see young people entering the industry rather than immediately viewing them as competitors. Harary uses this as evidence that youth can open doors that entrepreneurs may underestimate.

At 55, Harary said he had never made a PowerPoint presentation. His broader point was that deciding to start and entering the world often matters more than perfect preparation, because action begins creating the people, knowledge and opportunities that shape the eventual business.

Harary is more confident about the future of physical toys today than he was a decade earlier. He believes children and parents increasingly value offline, physical experiences and that toys remain unusually powerful tools for imagination and open-ended play.

Spin Master’s acquisition of Melissa & Doug reflects that belief in traditional physical play. The hosts referenced a roughly $900 million transaction, but Harary himself did not confirm the exact figure, saying only that it was “a lot of money.”

Harary expects screens to remain central to childhood but distinguishes between healthy digital experiences and passive consumption. He pointed to Spin Master properties such as Toca Boca and Sago Mini as attempts to provide engaging, constructive screen experiences rather than undirected scrolling.

He expects AI to create substantial uncertainty in entertainment even while remaining confident about physical toys. His view is that increasingly screen-heavy lives may actually strengthen demand for tactile, offline experiences rather than eliminate them.

Spin Master can usually tell within the first four to six weeks whether a toy is working. Harary said point-of-sale data can be extrapolated quickly enough that weak sell-through should trigger immediate action rather than months of hope.

Failed toys are marked down aggressively until inventory moves. Harary gave a typical progression from $29.99 to $14.99, $9.99 and eventually $4.99, after which remaining goods can move through lower-price retailers and other secondary distribution channels.

Late recoveries are exceptionally rare: Harary estimated the early sales signal is right about 99% of the time. Across thousands of Spin Master launches, he said only one discontinued or weak product had ever been successfully brought back—Twisty Petz.

Harary’s closing advice was to enjoy the journey, stay present, recognize what is happening while it is happening, avoid obsessing over small problems and keep ego under control. When asked how he wants to be remembered, he said he hopes to have made a little history while making children happy and giving them reasons to smile.