Q & A With Steven Kay, President of The Orb Factory

Artistic Drive and Business Savvy Made Kay's Company a Success

By Justina Huddleston
May 2012

Steven's Tips for Success

• Play, and play with kids. It will help you to reconnect with what it was like to be a child yourself, so you can remember what "cool" and "fun" means.

• Find a product that you can be passionate about. This is where you'll find your energy when things are tough.

• Be financially conservative- never spend yourself into a corner, and never take your eyes off your margins.

Steven Kay, President of The Orb Factory Limited, created his first product to raise money so he could visit his long-distance girlfriend. Rising from those humble beginnings, The Orb Factory now produces award-winning products that are sold in more than 50 countries worldwide.

How did the company get to where it is today? Below, Kay tells TDmonthly Magazine how he got started ― from making his first 10,000 products with his own two hands and finally getting the company's first bank loan, to making millions of dollars in sales each year and moving production to China ― all the while staying true to the company's main goal of producing high-quality products that inspire creativity and confidence in kids.

You can see some of The Orb Factory's products below the interview.

Career Aspirations

Q. What career path did you originally envision for yourself? Did you ever anticipate working with children’s products?

A. I originally imagined I would be a sculptor. I studied Fine Arts at University, and worked as a Ceramic Artist for a few years. I had a vision of a large room with every imaginable tool in it. I wanted to be able to make beautiful objects that I could share with other people who would enjoy them. I never anticipated working with children's products. But when I started designing toys as an adult, I realized I was actually making my way back to something I had enjoyed doing as a child.

Q. Where did you grow up?

A. Moncton, New Brunswick

Q. Where did you study?

A. I studied Fine Art at Mount Allison University in Sackville, New Brunswick, and Nova Scotia College of Art and Design in Halifax, Nova Scotia.

Inspiration for Starting the Company

Q. How did you come up with the idea for your first product?

A. In the late 80's, I was dating a girl who lived 1000 miles away. We were both students with no money. I was looking for a way we could earn cash to afford plane tickets to see each other once a month. I was good with my hands, and started looking for something I could make without any specialized tools or equipment and sell for under $20.

My first product was the Orb. It was a re-design of an old toy that had been around for thousands of years. This theme of taking something old and making it new again with modern materials is the same process by which I developed Sticky Mosaics, and other newer products.

Q. What steps did you need to take to go from the original spark of an idea to actual production? How long did it take?

A. I knew nothing about toy design when I started. In the beginning my prototypes and manufacturing techniques were very basic. I wrapped wire around broom handles, and bent smaller loops in it with wire.

Q. How much money did you need to create the first prototype and come up with a business plan?

A. I started with $50, some wire, beads, and a pair of pliers. The first 10,000 or so Orbs were made by me, with my own hands. I made enough money to start hiring people on piecework. I made my first Orb in 1988 but didn't start The Orb Factory until 1991. It took another 3 years to reach real volume manufacturing. The biggest obstacle was cash flow. Those early years developed without loans- the bank looked at what I was doing as a hobby, not a business.

I put together my first business plan very early on. My goal was to reach $100,000 in sales by the end of the second year of operation, which seemed unbelievably ambitious at a time when my only markets were craft shows.

Q. How did you raise it, and how long did it take to raise it?

A. I was not able to raise any money from outside. My only option was to invest all profits from sales back into the company.

Creating Great Products — While Keeping Costs Low

Q. What aspect of the toy industry most surprised you when you first started?

A. I was surprised by how quickly my products were "copied" by other larger companies. For a small company starting out with a great idea, this was a saddening realization. I couldn't understand why the larger companies were so uncreative that they had to copy. I decided that if I ever became a larger company, this is something I would never do.

Q. What do you consider to be your greatest accomplishment in the toy industry? Why?

A. We consider it a great accomplishment to have been nominated for the Toy of the Year Award. There has been a lot of discussion lately about the way toys influence kids, and impact on what they do as adults. We try to design products that give kids a sense of accomplishment. Hopefully this translates into a positive impact on a generation of future adults, and in turn on the planet.

I have had storeowners approach me at trade shows to thank me personally for supplying their businesses with successful products. Knowing we are providing products that help toy storeowners add real dollars to their bottom line is another accomplishment we are proud of.

Q. What were the top two or three most significant obstacles you had to overcome to achieve success, and how did you do it?

A. The business grew very quickly in the beginning, and hung between 1 and 2 million in annual sales for several years. We realized it was impossible to operate on low margins that came along with trying to manufacture in North America. Everything changed when we moved production to China. Making this transition was a huge challenge not only in terms of cash flow and business relationships, but also philosophically, in terms of giving up on keeping manufacturing at home.

Another significant challenge we faced was finding a bank that believed in what we were trying to build. We live in a small coastal city where bankers are more used to financing the purchase of fishing boats and real estate. It took us many years to find a bank that understood the types of things we wanted to do, and was willing to support us.

Overcoming Adversity to Succeed in Business

Q. What is the most disappointing thing that you have to live with as a business owner?

A. When people say something is impossible, are afraid to face a challenge, become indifferent, stop caring, or stop trying to be the best they can be.

Q. If you had to start over, what would you do differently?

A. Network, and ask for help more often. There are so many great people willing to share their experiences and provide help to small companies.

Q. What hardships did you have to overcome during your formative years and how did they help you persevere as a business owner?

A. We didn't have much money growing up. Toys were scarce, and there was one channel on TV. We lived in a very rural environment. I was an only child, and my few friends lived several miles down the road. When you don't have a lot, you learn to work with what you have. My great grandfather taught me how to make a toy out of a button and a string, miniature rockets out of tinfoil and matches, and dart guns out of rubber bands, pins and cardboard. These experiences have helped me to understand as a business owner that everything we need is right here, right now in front of us- we only need to understand how to put the pieces together.

Insights and Advice

Q. What makes your products better than the competition?

A. I believe our products are good, but good product alone is not good enough these days. We strive to product excellent products, of excellent quality, at fair prices, delivered with industry leading customer service. It’s that combined approach from a team-oriented company that makes us special.

Q. How do you hope your product/s will affect children's lives?

A. I remember how exciting it was to have success with craft projects as a child. Success made me want to do more crafts, and make every project more beautiful than the last. I also remember how frustrating it was when things didn't work the way they should. I want every product we make to give children a strong sense of success. For this to happen, our craft kits need to be well designed. Our designers need to predict and address every issue the child may have. That feeling of "I can do it!" will transfer over to other parts of a child's life, creating confidence, and a willingness to try new things.

Q. Where do you think the industry is headed?

A. Short Term
I think the specialty toy industry retailers and producers will not only survive but flourish over the coming years despite the challenges. Toy producers need to become better partners. More sensitive to the needs of stores, providing free play day materials, product samples, interesting signage and point of purchase displays, and information that helps the sales people on the floor to inform consumers on the features and benefits of each product. Stores need to become more fun, entertaining and informative, helping the consumer to find the right toy for the child's needs. It’s all about the face-to-face relationship.

Long Term
The specialty toy industry will continue to prosper because of the many talented people that are drawn into our industry. The dedicated specialty retailers, reps and manufacturers will continue to build a strong partnership. They are committed to the mission of providing high quality toys and art & craft activities that deliver excellent play value. This combination of talent and focus assures that our industry will continue to meet the needs of children, parents and caregivers, thus creating a sustaining business model.

Q. What do you think are the 3 most essential steps one needs to take to launch a toy company?

1. Play! And play with kids. It will help you to reconnect with what it was like to be a child yourself, so you can remember what "cool" and "fun" means.

2. Find a product that you can be passionate about. This is where you'll find your energy when things are tough.

3. Be financially conservative- never spend yourself into a corner, and never take your eyes off your margins.

Check out a selection of The Orb Factory's products, below.

Sticky Mosaics® KeepSake Boxes by THE ORB FACTORY LIMITED

Store your secret treasures in these super sparkly KeepSake Boxes! Follow a numbered legend and add sparkling jewels to make three special boxes. Each box features a different Princess along with her special animal friend. Launch date: March 2012. 4/4/2012 (MSRP: $14.99; Age: 5 to 10)

SparkleUps® Owls by THE ORB FACTORY LIMITED

Add sparkling jewels to these retro owls. Use 8 reusable stickers to decorate mirrors, windows, notebooks and more. Create colorful owls on their perches by matching sparkling tiles to a numbered legend. Best of all, these stickers can be peeled right off with no residue and reused for years to come. Launch date: March 2012. 4/4/2012 (MSRP: $9.99; Age: 5 to 15)

PlushCraft™ BFF Pillow by THE ORB FACTORY LIMITED

Now kids can create a pretty plushy photo pillow. Use the stylus to punch purple fabric and make this fun and easy fabric-by-number craft. Add funky foam and sparkling jewels and choose the perfect photo to display. This no mess craft teaches number and pattern recognition and creates a finished product to show off their fave photos. In the great craft traditions of Sticky Mosaics® and Rug Hooking, PlushCraft™ allows a rewarding craft experience for young crafters. Match fabric colors to numbers and decorate beautiful pillows, room decor, journals, and other soft & colorful items. Launch date: March 2012. ( Watch Video) 3/8/2012 (MSRP: $14.99; Age: 4 to 12)

Sticky Mosaics Happily Ever After Jewelry Box by THE ORB FACTORY LIMITED

Kids can custom design this jewelry box with shimmering faux jewels and colorful foam tiles. Includes more than 750 sparkling tiles and jewel pieces. Launch date: 2011.
Awards: 2011 ASTRA Best Toys for Kids
— In a January 2012 survey about arts and crafts toys, ten of 13 retailers said Sticky Mosaics from the Orb Factory were among their top two best sellers in the category. Retailers reported selling anywhere from 10 to 150 each month.
— In a March 2012 survey, 2 out of 12 retailers told TDmonthly that Sticky Mosaics from The Orb Factory were their best selling product. Elmer Caranza, manager of Doodlehopper 4 Kids in Springfield, Va., told TDmonthly that they sell about 2 dozen items from the Sticky Mosaics line each month, and that it's been a best seller for almost a year now. 1/6/2012 (MSRP: $19.99; Age: 5 to 9)

Sticky Mosaics ® Singles - Fire Engine by THE ORB FACTORY LIMITED

Sticky Mosaics bring the fun and excitement of mosaic art home. This individually packaged design includes more than 400 peel and stick tiles in 12 assorted colors and styles for a Fire Engine mosaic. 7/9/2010 (MSRP: $5.00; Age: 4 and Up)

Sticky Mosaics - Princess by THE ORB FACTORY LIMITED

Numbered templates, sticky foam and jewel tiles allow kids to easily create beautiful mosaics. Five different design templates are included, each with a short story on the reverse side geared at inspiring young artists to imagine his or her own mosaic fairy tale. Picture hangers are also included for easy artwork display.
— “The Orb Factory has a great variety of themed mosaic tile arts and craft choices,” Jeanette Lauture of Aunt Jean’s Toys & Treats in Montclair, N.J., told TDmonthly in early summer 2008 about this best-selling line in her store. “This has hours of play time. I had a dinner party and children from 2 to 12 years of age were entertained.”
― “Sticky Mosaics are terrific,” said Deran Muckjian, owner of Catch A Falling Star in Lexington, Mass., during an April 2010 survey of top-selling activity kits.
― “They're popular for both boys and girls, and they're fun and easy to play with,” Sandy Challinor, owner of Owl's Nest Toy Store in Southlake, Texas, told TDmonthly about Sticky Mosaics in spring 2010.
― Out of 43 retailers interviewed in April 2010, 10 named Sticky Mosaics as their best-selling activity kit. ( Watch Video) 8/16/2007 (MSRP: $16.99; Age: 6 and Up)