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Podcast Episode Summary: How I Built This with Guy Raz - Carlton Calvin: Razor
Overview In this episode of *How I Built This*, host Guy Raz interviews Carlton Calvin, the co-founder of Razor, discussing the rapid rise, fall, and resurgence of the Razor scooter brand. The conversation dives deep into the entrepreneurial journey of Carlton, exploring themes of timing, innovation, and the nuances of market trends in the toy industry.
Key Highlights
The Early Days of Carlton Calvin
- Background: Carlton Calvin grew up in St. Paul, Minnesota, where he was influenced by his entrepreneurial father and a creative inclination towards art.
- Career Shift: After law school, he pursued his passion for business, initially exploring children's book publishing before shifting focus to toy trends.
The Rise of the Razor Scooter
- Initial Craze: The Razor scooter became a cultural phenomenon in the summer of 2000, with sales soaring to a million units per month. Carlton joined forces with Gino Tsai and Robert Chen to launch Razor in North America.
- Characteristics of Success:
- Innovation: Features like aircraft-grade aluminum construction and quality wheels appealed to both kids and adults.
- Cultural Integration: The scooter was embraced in various environments, including schools and workplaces.
Challenges and Decline
- Overnight Decline: By January 2001, sales plummeted to zero. Carlton attributes this to the cyclical nature of toy crazes and the saturation of the market.
- Inventory Crisis: Razor faced excess inventory and pressure from retailers, leading to a potential collapse of the business.
Resilience and Reinvention
- Navigating the Downturn: Carlton contemplated downsizing but was persuaded by his partner Robert to retain employees and seek new products.
- Diversification: The company expanded its product line to include electric scooters, bikes, and innovative toys like the Ripstick, which introduced new sales momentum.
Key Business Insights
- Understanding Your Customer: Carlton emphasized the importance of thinking from the perspective of the target demographic, particularly young children.
- Partnerships and Trust: Building trust with partners like Gino Tsai was crucial for navigating the rapid changes in the toy industry.
- Timing and Trends: Recognizing cultural shifts and adapting quickly were instrumental in Razor’s success.
Lessons for Entrepreneurs
- Transient Success: The episode highlights that many "overnight successes" can collapse just as quickly; hence, understanding market dynamics is vital.
- Importance of Branding: Establishing a strong brand identity allowed Razor to remain relevant even after initial crazes faded.
- Looking Forward: Carlton expressed interest in leveraging AI to identify emerging trends within the toy industry, demonstrating a forward-thinking approach.
Current Landscape and Future Outlook
- Adapting to Change: The toy industry has evolved with the rise of e-commerce, and Carlton acknowledges that Razor must innovate continuously to remain competitive.
- Future Generations: At 63, he is focused on passing the brand to the next generation while exploring new avenues for growth.
Conclusion Carlton Calvin's journey with Razor is a testament to the highs and lows of entrepreneurship. The episode illustrates the significance of resilience, understanding consumer behavior, and the pivotal role of timing in building a lasting brand. Razor's evolution from a fleeting craze to a staple in the toy industry showcases the capacity for reinvention and adaptation in the face of challenges.
Key Takeaways
- Expect fluctuations in product popularity; always prepare for change.
- Build lasting partnerships based on mutual trust and vision.
- Embrace innovation and stay attuned to consumer desires.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:00Wondery Plus subscribers can listen to How I Built This Early Early and Ad Free right now. Join Wondery Plus in the Wondery app or on Apple Podcast. We all have moments when we could have done better, like cutting your own hair, yikes, or forgetting sunscreen so now you look like a tomato. Ouch! Could have done better. Same goes for where you invest. Level up and invest smarter with Schwab. Get market insights, education, and human help when you need it. Learn more at schwab.com. Remember dongles? Each piece of tech had its own plug and none of it worked together. That's where a lot of businesses are with AI.
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1:43Wait, so in June of 2000, you were selling a million a month. Yes. And January of 2001, you couldn't sell one. The sales stopped? Yes. It doesn't make sense. It makes no sense. It doesn't make sense unless you understand crazes. It happened to me so many times. And no matter how many times the retailers go through this, no matter how many times I went through this, everybody's thinking to themselves, this time is different. Like, this time it's going to sell a million a month for the next three years. And they can't even just do simple math that there's not that many people.
2:22Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Carlton Calvin helped turn a craze into a classic toy and built a massive company around scooters, hoverboards, and bikes. Razor. In the summer of 2000, kids all across the U.S. couldn't get enough of one thing. Scooters. But not the clunky ones you might remember. These were sleek, made from aircraft-grade aluminum. They had polyurethane wheels that glided far and fast. And the scooter was compact enough to fold up and carry anywhere.
3:12They were called Razor scooters, and within months, demand was out of control. A million scooters a month were rolling out of a small warehouse in Cerritos, California. And at the center of it all was a man named Carlton Calvin. Carlton didn't invent the scooter. That credit goes to Gino Tsai in Taiwan, along with his partner Robert Chen. But Carlton helped launch the Razor in the U.S., and he knew how to make it a craze. because he'd been chasing toy crazes for years. He tried yo-yos, he sold fingerboards, he was in the pogs and slammers business. Carlton understood something important, and it was almost intuitive.
3:53Kids are loyal to a toy one minute and then abandon it the next. And his business was all about timing. Spot the craze, write it high, and then scramble before it fizzles out. But Razor was different. It was bigger, faster, and hotter than anything he had ever touched. But just as quickly as it rose, it collapsed. Sales dried up almost overnight. But Carlton hung on and slowly rebuilt Razor into a bigger brand. And over time, Razor became more than a craze. It grew into a powerhouse. manual scooters, electric scooters, bikes, hoverboards, even a skateboard that twisted and swerved called the Ripstick.
4:39But before all of that happened, Carlton grew up in St. Paul, Minnesota in the 60s and 70s. His mom was a schoolteacher and his dad was an entrepreneur who started out in direct mail. Carlton went to law school, but he hated it. So in his early 30s, he decided to pursue another interest, becoming an entrepreneur himself. You know, I've always wanted to be an artist, believe it or not. And I made that pitch to my wife, but I also felt, you know, like I needed to earn some money. And so I thought, I'll work with illustrators and do children's books. So I thought of this idea called Masterpiece Fairy Tales, where I would tell the classic fairy tales, but I would take the paintings of the great, like, Impressionists and retell the story in their style.
5:25So it might be Van Gogh told the story of Puss in Boots, you know. And you'd find an artist to kind of paint. I found really great artists who could paint in the style of these famous painters. Now you could do all that on ChatGPT. Oh, it's terrible. It's terrible. You could just say, paint me Puss in Boots in Van Gogh style. Yeah. And it would do it. I had Puss in Boots for sure. Yeah, exactly. Yeah. All right. So you're going to come up. And that's great because all these stories are not, I mean, they're in the public domain. So you could have a fairytale book and hire some artists and you get a children's book.
5:57Okay. Did you pitch this idea to anybody? So the problem was I didn't understand business at that point at all. But I did get – I got a lot of meetings out in New York. It was very fun. I went to the big, beautiful publishing houses. And now I know that what you do when you have an ideal dad is you print up the books and you go to the bookshows and you start selling them to the bookstores. And you build a teeny little company that eventually gets big. Did not understand that at that time. But while I was doing it, I was working with illustrators, and some of the illustrators were involved in this craze called Pogs and Slammers.
6:36And that's what got me interested in Pogs and Slammers. Okay, so let's wind back for a sec. You are pitching a fairytale book idea. Yes. And you get interested in Pogs and Slammers, which we will explain what those are in just a second. Okay. Before we do that, I'm trying to understand the connection between pitching a book, a Puss in Boots with Toulouse-Lautrec style artwork, and Pogs and Slammers. So the connection is the illustrators that I was working with were getting work as illustrators for the Pogs. I see. And they said, this thing is going crazy. Okay, let's pause and explain what these are.
7:15These are, they're like poker chips, like wafer, sort of like cardboard wafer poker chips. Exactly right. That you would do what with? It's like the game of marbles. So Pog stands for pineapple orange guava. This started in Hawaii. And they would put, these are the caps that would go on a bottle and to keep it sanitary. So they're discs. And it's just like marbles. One kid comes with five pogs, and another kid comes with another five. They stack them in a stack, and then there's something heavy, which is a separate item called a slammer. What does it look like? It basically is a bigger, heavier disc.
7:59You throw it at the stack and cause the discs to flip over, and the ones that flipped over in your direction, you'd call one or heads or tails, and you'd then collect all the pogs that were in the hands. Ah, I see. You were gambling. It's a version of gambling. And I remember, this is in the 90s. Yes. I mean, I was already leaving high school and getting into it, but I remember seeing kids playing with these. My little brother actually would. So this just went wild. Yes, explosive. But at this time, so many of the crazes that were sweeping across the country would start in Los Angeles. So very fortunate to where I was.
8:42All right. So you're talking to artists, and they're like, yeah, we're making art for these things called pogs. And you're thinking, oh, this is interesting. So what did you do? The next step was I wanted them to make pogs for me. So I was going to have them illustrate, and I was going to print the pogs, and I was going to sell them. But while I was doing that, my wife is also a lawyer, and we were driving through Arizona to go on a case and I was just going along for the ride. And you stop at the rest stops and they sell these paperweights with real scorpions embedded in plastic. Yep. And they're like domes.
9:25And I looked at it and I got an idea. Which was? You could make a slammer, one of these bigger discs. I bet I could embed a scorpion in clear plastic and kids could throw it at these discs. So the scorpion slammer. Yeah, the real scorpion slammer. Inspired by the scorpion paperweight. That's right, called Stinger. Stinger was my brand name. Okay, so this is like a lightbulb moment that goes on your head on this road trip. And okay, but now you've got to find somebody who is going to, first of all, you've got to get the scorpions. and then you got to figure out how to embed them in plastic and then you got to find somebody to make it for you.
10:05Let's break this down a little bit. What did you then do? So I turned the paperweight over and I saw they put their company on the back. Just the name, Mac. I still remember it. This is, you know, 30 years later. And I thought, you know, I'll call them up and ask them to make these discs for me, right? You know, it'll be no problem. I called them up. They said, there's no way we're going to make these discs for you. but we can sell you some scorpions if you want to try to figure out how to do it yourself. So I ordered, I got a hundred scorpions in a little jar of alcohol, came in the mail or UPS.
10:43And, um, I went into my garage. I was renting a house in Pasadena, went into the, you know, from, uh, old craftsman house, happened to have a garage classic, started my business in the garage story, went in there for six months. My wife thought I was crazy trying to figure out, it's not trivial how to get a scorpion inside a little plastic disc. And so what would you do in your garage? Were you like melting plastic and pouring it into mold? Oh, it's so cool. First of all, I did all the reading I could and I went down to the Natural History Museum in LA where they actually embed specimens in plastic and I talked to them and I checked out a book from the Natural Library on embedding specimens in plastic.
11:24But of course, they're not making, there's a couple problems. One is I wanted mine to be shatterproof. And like the globes and other things are not shatterproof. So I did research on materials. I called actually industrial chemical companies in LA and arrived at polyurethane as the kind of plastic that wouldn't break. But all kinds of problems, just like you might imagine. The first problem was, you know, scorpions, if you don't dry them out, took me a long time to figure this out. they'd turn white and you can't see the scorpion. So then I went to Goodwill and I bought like five or six old ovens.
12:07And I then put light bulbs in them to heat them. And then I would desiccate the scorpions inside. Just dry them out. Dry them out. Under low temperatures. Under low temperatures, light bulb temperatures. And then I'd pour the rest of the plastic on top. And that's how you got a dish. So, all right. So eventually, I'm assuming you figure out how to make this. Okay, six months. So you successfully figure out how to embed a scorpion in polyurethane as a slammer for Pogs. And then what? This is when I started to behave like a regular business person. Somehow, gradually, I learned about business. I went to a toy show, the Pomona Toy Show, which, you know, back in the olden days, there used to be small toy stores.
12:52and in order to buy toys, toy stories would go to these toy shows. There was one in Pomona, a major one for the West Coast. And I rented a corner of a booth. Well, I mean like a tenth of a booth. And I had one aquarium with the all total of six scorpions that I made, that I'd ever figured out how to make in this, in a little aquarium. and I was, you know, talking to people, people were walking by and a guy walked by who happened to be in the pog and the slammer business. It was a toy distributor and he said, if you don't leave this toy show today, you know, it's the first of three days. If you don't leave today and you sign an exclusive contract with me, I'll buy 200 ,000 of these at$3 a piece.
13:43Wow, who was this guy? Mickey. He had a warehouse in commerce. Big, big toy distributor. Most of toys, you know, there was a whole, there's a whole business back then of importing toys from China that were kind of unbranded and like talking parrots and all kinds of stuff. And he would do that. That was his job. But, you know, the pog and slammer business was, again, an open system and everybody was getting into it. And he was in it too. So he said, he loved these so much. He was like, I want an exclusive deal. I'll order$200 ,000 of these. At what price? At$3 a piece. So$600 ,000 was my first sale ever in business.
14:21And he was going to manufacture them? Nope. I said— He needed you to figure that out. Yeah. I got to figure him out. And I didn't have any money. So I said— But did you even know that you could make them? I mean— Absolutely not. You didn't know how much it was going to cost. It might have cost you a million dollars. You had no idea. I had never bought a Scorpion before. I knew a little bit about how much the plastic costs. Yeah. But I figured, you know, but that was it. That was my only cost that I knew. But I wouldn't even, at that age, it's just so hard to remember how naive I was. And I didn't even understand what margin was or how much you need to manufacture something.
15:01So I just went ahead at that point. But I didn't have any money. So believe it or not, the world is a great place. He wrote me a check for$75 ,000 that day. On the spot. On the spot. On my face. As a deposit. As a deposit so that I could open up a factory, try to figure out how to make them. So, all right. So you get this deal for, it's amazing. It's amazing that a scorpion embedded in polyurethane could, but yeah, I mean, these slammers were going, they were crazy. Kids were buying these cardboard pogs and the slammers. I know what 10-year-old boys like is really the answer. It's just like irresistible.
15:38How did you develop that talent? I think that's inborn. And that is like the secret is that I didn't stray too far from what I am. Like I am a 10-year-old boy. My favorite story is I got into trouble while I was a law clerk because I snuck into my judge's chambers in the middle of the night because he had the most powerful computer to do video gaming on. You know, I just have a 10-year-old boy's mind for the longest time. And so I have a sensibility about, you know, naughty, dangerous things like scorpions that boys like. Okay. So now you've got a$75 ,000 check. You're in L.A. Yes. How are you going to make these?
16:29How are you going to make$200 ,000 of these things? I mean, I didn't know. But I began to go look for a warehouse near my house in South Pasadena where I could set up a factory. But the bigger problem was I immediately called Mac and said, I need 200 ,000 scorpions. And they said, no, no, you completely misunderstand the scale of our business. We go out with our kids at night in the desert with black lights. And pick up scorpions. Yes, and turn over rocks and grab scorpions. Like I could maybe eventually get you a thousand. That is a hazardous job. It is a hazardous job. Fun, but hazardous. So they're saying to you, hey, we can't give you 200 ,000 scorpions.
17:19It's impossible. So what do you, I mean, this is like 1992, 1991? 1995, I think. 95. 1995. All right. So, I mean, really kind of pre-internet. I mean, the internet's around. It was definitely pre-internet for me. Like, I had no notion of internet or email at that time. So what are you going to do? You got to get 200 ,000 scorpions quick. So I had a Chinese friend, and they said we eat scorpions in China. Or they eat scorpions in China. And I figured if they're going to, there's a lot of people in China, if they're eating scorpions. There's a lot of scorpions. I'm just thinking there's got to be a lot there.
17:58So I went down and at that time there was something called the Hong Kong Trade Council in downtown Los Angeles. And I went physically down there and talked to them. And they gave me, and again, this was at the early days of China turning into a market. And they had, you know, they had people who were importing products from China on a list. and they gave me a hand, you know, a printout, you know, with a dot matrix printer of a list of Chinese importers. I called, I had 20 of them. I called them all. You know, I only found one that could find me scorpions, but he did. Wow. And obviously these are dead scorpions that are going to be sent.
18:41Yes. But just out of curiosity, was that going to cause a problem or challenge? Like, is it hard to import 200 ,000 insects into the U.S.? level of sophistication, I didn't even think about it. Like, I didn't even understand. Like, oh, well, are they going to be annoyed that there's scorpions coming into the United States? You know, and they put them in, like, gasoline jugs filled with alcohol to preserve them. And I suppose it makes them food safe, too, for how they eat them in China. That's how they transport them. Yeah, you know, nothing ever happened with customs that I remember. So you found somebody who was going to, enable this.
19:22And do you remember how much it was per Scorpion? Yes. And of course, a little bit interesting, I think they started at like$0.07 a Scorpion. But as I got more popular and I wanted to order more, the price rapidly increased. Wow. Okay. So it started at$0.07 for 200 ,000 Scorpions. And then you get the Scorpions, but who was going to manufacture the discs? So then I asked my Chinese friend to help me find, you know, employees. And she did. And I hired her to sort of supervise them. And I opened up this Chinese scorpion factory in Southern California. Like a warehouse? A warehouse and you put what in there?
20:10Tables. You were going to hand make 200 ,000 of these things? We hand-made 200 ,000 in America. How is that possible? Like you hand-poured the polyurethane? That's right. You just hired a bunch of people to just get this? I had like 75 Scorpion arrangers. And then I took bakery racks and converted them into makeshift ovens with light bulbs. With like insulation on the outside of a bakery rack. And I would stick bakery trays in there of Scorpions. It was wild, you know. All right. So you, how long did it take you to make 200 ,000 discs? Do you remember? It probably took three months. Three months to fulfill this order and you deliver it to this guy.
20:57Yes. You know, a bit at a time. Yes. As they came off the rack. And where is he selling them? Global, all around the country. Just at toy stores. Yes. And everybody, a lot of people knew. Well, toy stores everywhere. Magazine shops. I mean, it was a, it was a craze. So they had these, you know, pods and slammers almost at newsstands and anywhere. And how, and I'm assuming these, these slammers did well. They did great. Everybody knew about the Scorpion Slammer and it said stinger on the side. I had it engraved into the mold. So it was really cute. And was that the name of your company, your business?
21:30Did you file like an LLC? No, it was Small Minds Press. So, oh, so it was still part of the original idea. I mean, of the idea. I had an LLC that was all set to make children's books. Yeah. Okay, Small Minds Press was making these. So now you have, you're like, you get a taste of what it's like to have a cool. And did he order more? I mean, was that it? Just$200 ,000? So this is, and then the day I delivered the last Scorpion, the Pog craze collapsed. They're like, nobody, nobody was buying Pogs and Slammers. It just stopped. It stopped. The whole industry shut down immediately, like in a matter of hours.
22:10It seemed like. It's wild. It was like the hottest thing. Yes. And you probably, you know, cleared. Your margins were probably pretty good. Yes. You probably cleared like$300 ,000,$400 ,000 on that. Maybe. Yeah, maybe$200 ,000. Yes. Okay. Yes. But that was it. Yeah. But of course, I was naive. And I thought, oh, this goes on forever. This is my first craze. You know, so I'm selling, you know, 75 ,000 scorpions, slammers a month. I need to order like a few hundred thousand more scorpions to be ready to. And that and the price of the scorpions went up. So all my profits were tied up in, you know, my second order of scorpions.
22:50I see. So you basically took the cash and ordered more as you as you would. Yes. But you didn't you could not sell those. No. Zero sales. So were you left with a surplus of scorpions or or slammers or both? Yeah. So I had scorpions, lots and lots of scorpions and lots and lots of employees that I was very sad and didn't want to let go. How many scorpions did you have? Like a couple hundred thousand at least. What did you do with them? So I did not know what to do with them, honestly. And again, humiliated in front of my wife, you know, this is like, oh my God, all your profits. Like, where's the money guy?
23:28And so I took them and started to just like make keychains. And, you know, for like, I was back in, you know, back in the market where I saw max paperweights. I was in, you know, Arizona selling Scorpion keychains, you know, by the hundreds. It was a really sad moment for my career. But while I was in the process of making these scorpion keychains and anything else I could think of with a scorpion in it, I was in Pasadena and I walked into a shop and like a random shop was selling yo-yos. And I'm like, wow, that's kind of weird. Weird because yo-yos were like a 50s thing? Yeah, or just like it's not a toy shop.
24:18You know, that's a good sign for a craze. Like, yeah, I didn't explain that. Yeah, it was like a random, I don't even know what kind of shop it was at this point, but they had some yo-yos. And they had like a$100 aluminum yo-yo. And, you know, it just like seemed like, wow, that's interesting. And then I got the idea. I could put a scorpion in a yo-yo. In a yo-yo. Yes. Yes. Now, at that point, it was just, I didn't understand it was a craze. But I understood that it would just be like keychains. Like it would be another thing that I could be doing to get rid of my 200 ,000 scorpions. And so I did.
24:56And I didn't have a way to make the yo-yo. So I started to make the yo-yo itself in China. But I still embedded them in my factory in South Pasadena. I see. So you get the yo-yos made in China. And then you would sort of put the polyurethane disc, basically the slammer, into the yo-yo? Essentially, yes. I mean, I actually pour the polyurethane into the yo-yo and then put a scorpion in there, bake the yo-yo, the whole thing. And it turns out that we were on the cusp at that time of the greatest yo-yo craze in the history of yo-yos. Wait, why? What happened? There was a guy who invented something called the brain, which was a yo-yo that was a high-tech yo-yo that could sleep, which means spin at the end of the string automatically without any talent.
25:48That is the essential move of yo-yo-dom. If you're an old school yo-yo, you would need to learn how to make it sleep. But this would sleep automatically and caused a huge explosion of interest because everybody could look like a pro. All of a sudden, every kid wanted a yo-yo. Yes. And that's exactly right. But you were not making the sleeper yo-yo. You were just making a regular yo-yo. But again, I wasn't making the original pod, but I was involved in a major craze that's sweeping through the culture. Again, 10-year-old boys. And I went to like the – there was a science store from public television that was in the malls at that time.
26:29and a scorpion yo-yo was perfect for them. And so that was my first time I ever sold directly to a major account. So how did you have, I mean, with the Pogs and the Slammers, you had a guy who bought, you know, who bought them from you and then distributed them. But now you had the yo-yo. So I'm assuming you had some connections in the industry at this point where you could find somebody willing to buy them and distribute them? Or did you, what would you do? It was, you know, I just was learning how to be in business. So at this point, I personally contacted the buyer at the science store. And then somebody told me that you can't do all these sales yourself.
27:09You know, you can't expect to do well if you're just going to call the buyers at the major stores. You need an organization and you need sales reps, essentially. And I hired a sales manager, and that's what transformed my business. Yeah. So you hire a sales manager to basically go directly to these retailers. That's right. And actually hire a group of reps that would go to all the retailers in the country. He put a nationwide sales network together for me overnight. Basically, sales reps know people all over the country. And so Scorpion Yo-Yos, it turns out you don't just have to sell them to science stores.
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27:46They also sell extremely well in Toys R Us. So I started to get my first big customers. And I sold millions of Scorpion Yo-Yos globally. Wow. It was crazy. And Toys R Us still in the late 90s was probably one of the biggest, if not the biggest, distribution channel. Absolutely. I think for a long time they were my biggest customer, even for the rate of scooters and stuff like that. I remember as a kid in the 80s being taken to Toys R Us, you know, and it was like magic. You know, it was just a magical store wandering through those aisles and looking at all the toys. And it was like one of the great that and a Happy Meal and McDonald's like were too.
28:29And I didn't get them very often. It was amazing. Amazing. Yes. And it's a great sadness that we don't have a specialty toy store nationwide anymore. All right. So you get these yo-yos, these scorpion yo-yos. And what? Like all of a sudden, basically your gamble on all these scorpions pays off. And I have to order more. Absolutely. I have to order millions of scorpions. And the price keeps going up with the scorpions. And I have all these employees. Still making them in a warehouse in LA. I could never get anybody else to make them. Never could figure that out. So, yes, I was in South Pasadena and selling millions and millions of scorpions, but knowing by this time that I needed to be careful.
29:17Because you knew that the craze would end. Yes. Essentially, with these crazes, eventually, my theory is everyone gets it. You can't sell, you know, infinite number of yo-yos to the same people, essentially. So already once those yo-yos went out and they sold well. Extremely well. Order, reorder, reorder, reorder. Yep. So you were like making pretty decent money already. Yes. At that point, I was on paper making lots of money. Way more than I would be as a lawyer. Right. And I'm very grateful to my wife for her patience because she was a lawyer. That meant I could reinvest all the capital to keep the business growing.
30:02So I didn't really wasn't really able to take out a big salary or any salary, really. All right. So you are you know that this is not going to last. And does that mean you're already starting to keep your eyes peeled for what the next? Absolutely. And what were you doing? Were you just reading, looking, like going? I don't know. I don't know. Honestly, I don't know why this is part of my personality. Like, I don't know exactly why, but I'm just just keeping the only way you can describe it is keeping your eyes open and talking to everybody and seeing what's happening. And somebody I met introduced me to somebody who was selling something called fingerboards.
30:47Oh, yes. And people know them today as Tech Deck. Yeah. They're like little skateboards. Miniature skateboards. That's right. And you'd use your fingers to like, you know, play with them. I remember my nephews used to play with them. Yes, exactly right. And they still do. But this was a very, again, Southern California, very organic movement. first you know it was just kids doing it with cardboard cutouts of skateboards then the person that i met had the idea to brand them he had arrangements with all the skateboard companies to put the branding of the skateboard in the fingerboard and they were called fingerboards but the person that invented it didn't have access to major companies like toys r us and Walmart and all that kind of stuff.
31:42Right. And I did. So we struck a deal and I manufactured them. And these are just finger skateboards. Finger skateboards at first. This was a major craze. And of course, you know, by this time I learned about product differentiation. So I made all kinds of like parts of the street landscape, like barrels, 55 gallon drums and little barrels and street cones so that kids could fantasize playing with their fingerboards. And then I also, branched out into things like BMX bikes and surfboards and pretty much any other extreme sport. I would go and get a famous brand and put it on it and, you know, sell it.
32:23And where were you manufacturing these? China. The guy who made the yo-yos was my connection. And he started to make all this stuff for me. It was, again, they were flying off the shelves. And I had, of course, the original brand name, which was Fingerboard, TechDeck came out as a competitor, and they were more authentic looking than mine at the time. You know, I had the original old school one, and they had a sort of more authentic looking piece. This is, the company's called TechDeck? Yeah, it was called TechDeck. Now it's owned by Spin Master, who are good friends of mine. And they basically kind of copied the idea?
32:57Basically, they did. Yes, absolutely. And so, what happened? I mean, you had these products. Did they kind of take your market share? They did, yes. I had a niche, but they were far more experienced and advanced in the toy business than I was and had deeper relationships with all these retailers. And at the time, they sent around a letter saying that I was infringing their intellectual property, even though the exact opposite was true. So it was really dirty, actually, in my understanding of the world. All right. So you're pushed, kind of pushed out of this business. A little bit. But I also knew that whatever the situation is, it's not going to last forever because it's such an amazing craze.
33:43Carlton, let me ask you a question. Yes. Did you ever get, like, already at this point, were you thinking in your mind, I have got to find something that is more long lasting, like a more enduring toy? No. No. I mean, I just couldn't. This is how I thought toys were. Period. This is, I mean, this is my only niche and I was just moving a million miles an hour. And it was emotionally draining to have your whole business collapse every year or year and a half. So at any moment, I thought this whole thing is going to just stop, you know. The whole business. Yes, absolutely. It was terrifying. When we come back in just a moment, Carlton goes through yet another boom and yet another bust.
34:33This time with the Razor scooter. Stay with us. I'm Guy Raz and you're listening to How I Built This.
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37:42Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1999, and Carlton has lost his grip on the fingerboard craze. And he's looking for an idea that could be just as popular. So I'm reading an article in the L.A. Times, and there's an article about adults in Japan, in Tokyo, riding scooters called the Razor Scooter. and I thought to my immediately thought to myself well I'm in the craze business and I also make miniature extreme sports items this is going to be my ticket to kill you know tech tech you know I'm going to be the guy that gets the razor scooter license to make miniature razor scooters it went because I just know this is going to I sense this is going to come to the United States and be huge.
38:35And so somehow, I got the telephone number of the company, JD, you know, JD Scooter Company, you know, that was making these scooters, invented the scooters. And these were making, they were making them in China? China. And they were called Razor scooters? They were called everything. But they're, when they started, they put a name on the ones that were coming directly from them. But they were a Chinese factory. So they would make under, They were made under many different brands in Japan already. And already they were getting orders from other people. You know, I'm not the only guy for sure that wants something that's super hot in Japan that figures this is coming to the United States.
39:16Yeah. Okay. But to be clear, your vision was not to import these ride-on scooters, right? It was to have the company that makes them make miniature versions, like a miniature Razor. Exactly right. But then I guess there must have been a point where you're where you're thinking, wait a minute, I'm focusing on the wrong thing here. Like, why don't I why don't I just sell the actual scooter like the life sized version? Absolutely. For the first time in my life, I was not going to be somebody participating in a craze. I had the notion that I could be the craze, you know. Yeah. And that was it. I had this, like, why should I make a knockoff, essentially, of a Razor scooter?
40:03You know, knockoff is not a very nice word. Like, my Scorpion yo-yos weren't really knockoffs. They're innovative, blah, blah, blah, but they were still just participating in a craze, not owning a craze. Right, right. Okay, so you decided to sell the actual scooter in the U.S. And from what I gather, like to get the ball rolling on this, you connect with two guys who will soon eventually become your business partners, starting with, there's a guy in L.A., it's a guy named Robert Chen. And who exactly was Robert? So he was an inventor and he was doing folding bikes that he invented. So he had a warehouse in Cerritos, which is where our headquarters is now, and also was getting interested in, you know, helping Gino with the Razor scooter business because it was just going crazy in Japan already.
40:54Gino Tsai. I'm sorry, Gino Tsai. Sorry to introduce him. A genius, amazing human being, wonderful human being too. who was the inventor and the creator and the original Razor Scooter guy. Gino had been an entrepreneur for, he and Robert are older than me, and they had been entrepreneurs for longer. He didn't waste time going to medical, I mean, law school. And, you know, so they knew business. He had maybe 10 different companies at that time. He was a wealthy man already. So what, I mean, why would, I mean, you already had some experience, clearly, with the yo-yos and the pogs and the fingerboards.
41:37How did you convince them to give you the license? You know, this is a great question. I mean, this is like an amazing part of like how this happens. I mean, basically it was based on trust. And Robert is like, I want it. It's hard to express how good a person and honest Robert is. and Gino too. And we all, and I like to think of myself that way too. And we got, and Robert and I had an immediate connection and, you know, a lot of untrustworthy people were approaching him, you know, not with, and also they didn't have this grand vision. You know, the grand vision is stop what you're doing, which is a big risk on their part and own a brand.
42:23And the brand is everything. I mean, I clearly like any number of people, I had my relationships with Toys R Us and Walmart and Amazon, not Amazon, Target, you know, all the players, and I could bring them to the stores. But, of course, they were not selling to the stores. They were selling to distributors. And so I was going to get them wholesale prices instead of them selling it through a middleman who then sold it to Toys R Us or Walmart. So there was a big opportunity to capture more profit for them. But the big concept was branding and building a company for the future. So instead of just being a white-labeled scooter, we're going to call it Razor.
43:05That's right. And you were going to get the license for North America? Globally. Globally. And it wasn't a license. I went into partnership with JD. Okay. Yeah. It was a partnership. So you become a partner. Did you have to buy into it? for not nobody had to put any capital in my businesses tend not to be in capital intensive but you know you'll appreciate this you know business people appreciate this a business of this size that we formed would ordinarily require a lot of capital but we were in very unique times and it's exclusive to crazes but these toys r us and walmart were paying cod for scooters to me Wow.
43:48I know. You would get paid on delivery, not 90 days later? Not 90 days later, not five days later. How? How? They needed them. They wanted them. And that's, I never could believe it, but that's how I financed the company. But this is before you, when you, I mean, when you got, when they agreed to work with you, you still had to pitch it to Toys R Us. So what, did you go, where was Toys R Us headquarters at the time? New Jersey. So did you fly to New Jersey with one of these things? Absolutely. Yes. And right away they were like, we're in? Yeah. No, this is the biggest craze. Like, and maybe they were already being sold by knockoffs even faster than Razor could get into the market in the U.S.
44:30They might have been being sold in, like, convenience stores in L.A., you know, just like the Pogs. And certainly as it progressed, it got to the point where you could go to a pizza shop and they'd be selling knockoff scooters. Wow. Not Razor scooters. Right. So your pitch to Toys R Us is we get these in fast at scale. That's right. We've got the manufacturing capacity. From the original. You don't have to deal with these knockoffs anymore. Right. Yes. And Toys R Us says, all right, we're going to order these. We're going to put in an order and we want them in all of our stores. Absolutely. How long between the time that you get the green light until the time they're actually delivered?
45:12Was it quick? Yes, I think they were like, no, like a month. Wow. Yes. They were just cranking them out in China. Yes, yes, in anticipation. And they shut down all these other customers, so they didn't have to make them and slap all these other weird brands on them. They could just put razor on all of them and ship them to me. And I would ship them to Toys R Us and the other retailers. Did you need a lot of employees in the U.S. to make this happen? I immediately scaled up to a real company. I had three employees selling fingerboards. And I put together a whole team. Like I had a, you know, president.
45:51I had vice president of sales, marketing. Just the skeleton, but, you know, customer service, every kind of. And I didn't even know, honestly, I had no idea what a company looked like. Like, I didn't know that you needed a marketing VP or a finance VP or a sales VP. I had no idea. I just thought, oh, you just do it all yourself. But that's not it. Nope. And you're eight years into doing this kind of work. No, I'm only like been doing like serious, you know, it took me a long time to get from, you know, making children's books to actually doing the pogs. You know, that was a, and then from the Pogs, it was probably just three years.
46:29So now at this point, do you rename the company Razor? Yeah. So you create a completely new entity called Razor USA? Yes. Yep. Okay. With real like experienced people, you know, in real jobs and me. Okay. And how, and, and, and how much was each scooter going to, going to sell for? The scooter sold for retailed at$100 for the, and immediately I came up like in really incredibly quickly with all like good, better, best classic. Like just because I'd already been in business a little bit. Yeah. So it went from like$100 retail for the base model to like$140 for one with some parts to it. Like a suspension or wheelie bar, all kinds of, you know, little, like we had the A, the A2, the A3.
47:21and we were golden. So I, from what I understand, it's around June of 2000 when they start to get sold in the U.S., the Razor scooters. Yes. And I mean, craze is an understatement. Yes. What happened? So I was selling a million scooters a month. From the get-go? From the get-go. Just because they were at Toys R Us and Walmart and where else? Yep, Target, I think. Sharper Image. I mean, everywhere. Everywhere. You know, places that would normally, all the sporting goods stores I sold to, Dick's Sporting Goods, Sports Authority. You know, I don't even, it's so hard to, you know, it's like, you know, Beanie Babies or, you know, Cabbage Patch Kids at the time when, you know, parents are scrambling for them and can't get them.
48:10It was ridiculous. It was once in a lifetime experience for me and just once in generational sales. Why were these so popular? What's your theory? Why was there such a craze around these things? That's a good question. I mean, I sort of take these things on face value. But scooters have always been popular. But these were small, made out of aluminum, so super light. And they had ball-bearing, you know, wheels from rollerblades. And that made them much better at scootering. than the old fat, better. It's sort of like the brain, like a technological improvement. They were aesthetically beautiful, which isn't always the case.
49:00They were culturally, they were used by adults and children. That was, I think, influential. So adults could talk about them and ride them in a way that like yo-yos were never used by adults. So it had a broader appeal, you know, and it had something to do with, you know, the internet coming and they were used in Silicon Valley, you know, in warehouses. And, you know. Yeah, people would use them like they'd fling them over their shoulders. That's right. Unfold them. There was this vision of future transportation where adults would be riding scooters. That helped popularize it in local. There was a, my favorite thing, a cover of The New Yorker of a guy riding, you know, Razor scooter and then another man riding a tricycle.
49:45You know, just infuse the culture in a way that like yo-yos didn't or other other crazes happened before. All right. So this is like the year 2000. Yes. It's going nuts. Yes. And you're selling a million a month. Yes. And just overwhelmed. Yes. Just totally overwhelmed. But but and this sounds like it was different, that this wasn't not going to be a flash in the pan. This is going to be lasting. Did you feel that way? I had no idea. You know, I probably in the back of my mind was thinking, how long is this going to last? Honestly. Yeah. Yeah. Okay. So what I don't understand is, I mean, you've got this thing.
50:28It's selling like crazy in the summer of 2000. Where's Mattel? Where's Hasbro? Where are the big toy companies? Why aren't they jumping on this and just cranking these out? They can't move that fast is essentially the answer. It's just too fast for them. And also they're probably wise. They're like wise, but incorrect. They're like, oh, this is going to be over by before we could get into it. So we won't be able to sell any. Right. And what when did the the copycat start to come? No, they were there at the beginning. They were because they knew. And that's right. And they're quick acting. Yes.
51:08And did you have, I mean, I remember, you know, I've ridden Razor scooters and like it had the fender on the back that was the brake, for example. So was it a patent? Yes, this was where my legal training came in handy. But yes, we had a patent. And that could also be a reason, but I'm not sure that other bigger companies didn't get involved because they were aware of our patent. We certainly publicized it right away. but mostly people ignored our patent you know the fact that we had a patent and this is already the beginning of like you know chinese factories starting to just crank out you know copycats of absolutely of products yes how so you have a choice you have an option here you can just ignore them and just really double down on your brand or you could go after them i think you chose to start to sue them we did we did a major lawsuit and this is in 2000 in 2000 in the fall and did the litigation instantly stopped their sales?
52:07Like, did you have an injunction? We prevailed quickly. I believe we got a preliminary injunction. I believe that the lawyers were great and we were able to have an injunction against everybody. Did you, but did it eat into your sales? It did not. I sold as many as I could manufacture during the time I was selling them. So I couldn't have sold any more than I did. But they sold a lot and helped cause the thing that always happens, which is the sales completely stopped on a dime. Wait, how? What do you mean they stopped? Stopped when? They stopped in spring of the spring. Of 2001. Yes. They stopped on a dime.
52:57I could not sell a single scooter out of my warehouse. Wait, so in June of 2000, you were selling a million a month. Yes. Through the rest of the year. Yes. You're selling a million a month at least. Yes. And in the spring of, so like by March of 20... January. January of 2001. Yes. You couldn't sell one. The sales stopped? Yes. It doesn't make sense. It makes no sense. It doesn't make sense unless you understand crazes. It happened to me so many times, which means... So this is how it relates to the knockoffs. They were also selling at the same time. So between the two of us, we sold a scooter to every single kid in America who wanted one.
53:40Like literally everybody between the age of, you know, five and 11 or 12 got one. Like 10 million scooters, maybe, maybe more. Maybe 15 million. Yes. Maybe 15 million. Wow. And so I maybe only had a third of the market, believe it or not. You know, and others were cheaper. you know, I was at$100 and$130. There were a lot of scooters sold. And no matter how many times the retailers go through this, no matter how many times I went through this, everybody's thinking to themselves, this time is different. Like this time it's going to sell a million a month for the next three years. And they can't even just do simple math that there's not that many people.
54:19Right. And so as much as I was trying to tell everybody in my organization, we can't keep We still had like a million scooters in the warehouse for the next month's sales, which then were zero. Okay, by the spring of 2001, what, are retailers just stopped ordering? Toys R Us stops ordering them? Yes. Nothing. Nothing. They've gone from, we will pay you whatever it takes, to, we don't want these anymore. This was the olden days. Do you know what they said? They said, we want you to take all these back. We've got too much inventory. And what did you say? We said, no, we don't have any room in our warehouse, which has a million scooters in it.
55:01But it was a major conflict that I had. It was my first hardball experience with retailers where they're like... They'd already paid you for them, right? They'd already paid us for them. Yeah. I mean, my reaction was because I am... I mean, of course, I'm struggling to do everything I can. You know, it's sort of like after the pogs, I tried to make keychains. So I'm trying to think of anything I can do. Yeah. But not having had a lot of success with keychains, my impulse was to fire everybody. That was my impulse. Just basically kind of collapse the business and cut back. Yeah, like I could do it myself.
55:46Like it would be me and Robert and a couple people. You were that concerned about the business surviving? Absolutely. Because I never had a craze that continued before. I never had a craze that continued before. And I never had a brand before. And I didn't understand what it meant to own a brand. I thought I just had the next yo-yo or the next, you know, fingerboard and that it was just all over and that there was hardly any business here, you know, that I couldn't handle just by myself because I handled fingerboards and, you know, pogs by myself. So you are thinking about, and how many employees did you have at the time?
56:20Probably 45 or 50. Yes. This is like the fourth time that my entire business has completely collapsed. And I'm like, and now I got all these people looking at me and like, okay, now come on, where's your next hit? But I don't think I'll be able to do it again. And I'm just a very, very frugal, you know, and not optimistic, skeptical person. And I just said, it's over. We should just save every penny we can. When we come back in just a moment, how Razor scooters turn a corner after going electric. Stay with us. I'm Guy Raz, and you're listening to How I Built This.
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58:21Hey, welcome back to How I Built This. I'm Guy Raz. So it's early 2001. The razor craze has collapsed, and Carlton is ready to fire a bunch of people and manage the business by himself. But his partner, Robert, he says no. He's just like, you shouldn't do this. You just have to have more faith that we'll be able to come up with new things. And we should keep all these people. And, you know, I really respect Robert so much. And, you know, again, for so many years, we just had this partnership where we talk over everything. And I don't get set in my ideas, I like to think. I think I'm open-minded.
59:04And he has a lot of influence over me. And he persuaded me. It's really the answer. And I just did. I just kept going. Okay. Before we find out what happened, what about the inventory that you had? I mean, you had all of this inventory. What was going to happen to that inventory? Really what happened was, so to be really candid, is that Gino was a great partner. and you know these scooters did not cost very much to manufacture you know he owns owns razor with me but he also owned the factory that made them and he charged us a pretty penny for those scooters and so we owed him a lot of money for these like leftovers we'd already paid him for all the other scooters but you know but for the leftover scooters he said listen i'm gonna you know, help you with that.
1:00:04You know, you don't have to pay me the full price on those scooters. And so, but that came out of all, you know, all of our profit essentially. Um, but he took a hit, we took a hit. And so I just sat on him. I sat on him, but you know, after a certain amount of time, the retailers were able to work through their inventory of their extra inventory. And then And they needed somewhere between two or four million scooters a year to keep going. You know, at that time, you know, there were four million new customers turning from four years old where they couldn't ride a Razor scooter to five years old.
1:00:46So there was still all the new kids. So wonderful. They were not a flash in the pan. That's basically the answer. That's what happened. Yeah, because so so it was this craze, right? All of a sudden, everybody had one. But really, it was the beginning of a kind of a classic toy. Absolutely. Which is so rare. Yes, exactly right. It became a foundational part of childhood and is. You still sell them today. Yes. I mean, I think that, you know, to be just totally fair, our patent has expired. Yeah. And, you know, at lower price points, I'm more of a quality-based, you know, higher-end scooter, even at the basic$30 scooter.
1:01:32So I don't have the market share that I had of that product that I did originally. But everybody gets some form of the scooter that I sold. Right. Like you think about sort of foundational toys like a bike and a skateboard. It's even more than a skateboard because it doesn't take as much talent as a skateboard to ride. But now you are in a category which is wheeled mobility toys. Yes. Right? Yes. This is different than the Pogs and the Slammers. And so now I'm assuming you're trying to find things that work within that category. Correct. And also for the first time I had a brand. So when you have a brand, I began to think of brand extensions.
1:02:16So just commonsensical things. When we came up, you know, it was just like a theme, but that we would try to do what we did with the scooter, essentially. You know, which is look at the classic toys that young kids have, like, you know, power wheels or pogo sticks. Or we had a lot of them. And we would just razorize them. So we'd bring them out in shiny aluminum and higher quality and some innovation. I always wanted to do something innovative with the product, too. So, you know, updated versions of classic product. Like big wheels, which were made out of plastic. Originally, and we made it out of aluminum.
1:02:53Aluminum, okay. And actually, when we did it, the market was primed and accepting. It really was like anything with razor on it had appeal. And so that item sold well. It wasn't a crazy hit, but it sold well. And it was basically an updated version of a big wheel, which is an updated version of a tricycle. That's right. Yeah, we called it the scream machine. So the business began to thrive almost immediately because both scooters began to sell again, like, you know, maybe after eight months or something. And people were buying these new products from Razer. They were very supportive. Toys R Us supportive.
1:03:35People believed in Razor as a brand. And they were good products without, you know, being crazy hits. But of course, me as my personality, I'm looking for something magical. Always. And what was the next magical thing? The next magical thing was an electric scooter. So this is already in like, this is back in like 2005, I think. Yeah, very early on. I mean, this is before people, it was even on people's radar screens. Way before, right. It was basically a battery powered scooter with a throttle and a brake, right? That's right. And actually the first iteration was really outside inventor. they made a battery powered motor that could mount on a Razor scooter.
1:04:30And that sold well, but it didn't take me long to realize that was not the way to sell an electric scooter. You don't want to just like bolt one on. You want to make it from the ground up as an electric scooter. And this really begins your, I wouldn't say a total shift, but a kind of a shift into a powered, electrified, ride-on things. Like not just scooters, but then dirt bikes and like sort of ATV style vehicles. But that were not ATVs or dirt bikes that were thousands of dollars, but that were more like toys. Exactly right. This was transformative. This was explosive. again this so the the the electric scooters as soon as i put them out there they flew off the shelf it was great sales and then but you didn't you didn't abandon analog things you did there's a product that you guys bring out in 2006 called the ripstick which is um i still see them it's like basically imagine two sort of platforms connected by a by a rod and it's like a kind Kind of a skateboard meets a, I don't know what.
1:05:43And it's, it like, I've tried to stand on these things. I don't have the balance, but this thing, how did this thing come about? So this is, again, I was in my own neighborhood and all of a sudden I saw like five kids on something called the wave board. And I said, okay, this is, this is a craze. so I called a couple of my people's you know who sold into smaller venues and he goes yeah this is crazy and so I contacted the inventor and I said you got to do it with us we're gonna we're gonna make this a giant craze and we did and and again it was like the formula was let's come up with something we'll put it in in Toys R Us yes and in Walmart and so it was like if you build it they will come kind of absolutely it sold itself it was just out of control when when did that model start to shift what do you mean like like i mean obviously toys r us isn't there anymore and you know walmart and target still sell toys but it's somewhat different i mean was there a point where it you couldn't just make a toy put it there and i think there i so there's a distinction Like if it's a craze, that still works.
1:07:03Very few crazes. So we also discovered television. And so we could take innovative items that were not organically growing like the, you know, Ripstick was. That had an organic momentum, word of mouth that exploded into the culture and everyone had to have one. But we were coming across very good items that didn't have any organic momentum on their own, so they needed television advertising to get them going. And through a very long phase of making real goods, which nobody had been doing, and putting them on TV. But it sounds like by the time you start to release these electric versions, these are battery powered versions of, you know, of little motorcycles and go karts and dirt bikes and then the ripstick that you start to you really find a way to create some kind of stability in the company, the brand.
1:08:07Oh, yes. The Razor scooter was notoriously, you know, something that was created and lasted forever. And actually, these electric motorcycles and scooters, they just keep getting stronger and stronger and stronger. And they're not as easy to knock off as the scooter. Or, you know, they're not, it's not so much the patent, but the actual technology in making them is quite challenging, you know, to do it well. And so that is, we have a very, very steady business on our evergreen items. Let me ask you about, because I want to get into really the other product that would also blow up called the hoverboards, which is not a hoverboard.
1:08:52It's not hovering like back to the future. It looks like it. But it's basically like a Segway without the handlebars. And this is kind of begins around 2015. Yes. Before we get to that story, what were you doing about copycats? Were you still suing people who were knocking off your electric scooters and things like that? Or were you just saying it is what it is and let's just focus on it? Yeah, it is. I mean, basically my patents on the scooters were expiring. and people can't successfully, haven't yet. So there's the measured pessimist in me, haven't yet successfully knocked off the electric product.
1:09:37Right, okay. And your main sales channel was still the retail stores. Yes. The physical stores. Yes. When did that start to shift to Amazon and to online? You know, the day Amazon started buying, we started to shift with them. We were very early on Amazon, but we had two dramatic shifts. The most saddest dramatic shift for Razor has been the loss of Toys R Us. You know, not only is it a loss from the kids' perspective of a fantasy place to go, but they actually always carried our entire line. And when we came out with something innovative, they got way behind it, you know? And we could always rely on three big customers, Walmart, Target, and Toys R Us.
1:10:19if we're going to put something on television, that they would get behind it and support it. And now, without Toys R Us, you lose a third of the triad. And we really lost a very significant part of our sales when Toys R Us went bankrupt. And it was not completely replaced by the other people. All right, let's talk about the hoverboard. So this is a product that I guess is brought to you by an inventor. Yes. Or you discover it and some it's a guy named Shane Chen. Yes. And tell Tell me about how you came across this product and also why you thought it was going to just go crazy. So I had a really good relationship with Shane.
1:10:55And every year he would show me these wild and crazy inventions that he made. And I'm like, yeah, yeah, yeah, yeah. You know, I'm happy to keep showing me. You know, we could try a little bit, but I don't know. It just seems too odd. And amongst the things that I kept rejecting was the hoverboard. and I kept saying, um, you know, it's too hard to use, you know, I can't, I can't ride it. And if I can't ride it, you know, I don't want to, I don't want to sell it. Right. And then I had my incredible, you know, marketing guy who has been with me from the start, Ollie, he, he even was like, he could ride anything.
1:11:36And he's like, this isn't so easy to ride. But then at some point, like everything that is really going to be a phenomenon, it began to catch on on its own without my help, without anybody's help. And I said, Shane, it's time to be in business again. And that was that. And he invented it. He had the patent on it. And we signed a deal. Now there was, you know, I had to like fend off as I often do, you know, fend off other people who want to sell it. But I was successful and I have a long relationship with Shane, so it wasn't impossible. and we got it and it was like another incredible it was like our peak year it was the second major cultural event that we were involved in jamie foxx like came out onto the tonight show on one at one point yeah justin bieber had one and everybody all those all it was again a huge cultural phenomenon so really i mean you were you know just expanding constantly expanding your line I mean, today you've got so many.
1:12:38How many different products do you sell? I mean, we probably have hundreds of products, but I would say we still have a solid 50 or 60 different important items, good items. Right. Yeah. And what is your best selling product today? The electric motorcycle and the electric scooter. I mean, in terms of dollars, in terms of dollars. And then the scooter obviously sells quite a bit too. So we're back to sort of Steady Eddie, you know, looking for our next craze. So the year after, last year was quite good for us. And this year looks, well, this year is another horror show. Because of terrorists. Yeah, because of terrorists.
1:13:21Because everything you make is coming from China, basically. Yes. And we have a little bit of operations in Vietnam, but China. And so what does that mean for your business right now? I mean, it was an unmitigated disaster. Like, we were, I was literally, I have, you know, made money every single year. I was actually thinking we were going to lose money this year. You know, you're getting hot news, I suppose. I mean, I don't know who else you're talking to, but our prices are significantly higher at retail. We're not benefiting from it because it's really, you know, retailers who forced to raise prices because of the tariffs.
1:14:00but they're using it to pay the tariff and they don't pay us anymore and our sales are going down their sales are good and you know if you look at their total dollar volume of sales they've raised the prices they're selling fewer units but their overall dollar transaction is good but our sales are going down but not we're not crashing but it's a terrible situation yeah and so how do you what do you do? I mean, at first, you know, I've got a really great team and we just madly began to figure out how to ship from Vietnam or, you know, Vietnam essentially, or Thailand. You know, we began to move everything until it was a pause.
1:14:44And then we sort of moved everything back. But we're just basically running around like our chicken with his head cut off, trying to respond to what's ever happening next. What about looking for the next thing? It's still part of your ethos. It is part of our ethos, but this is a very interesting time because I am looking to make some art at this point. So maybe looking to sell the company. Well, not so much sell the company, but I want to pass on to the next generation. I'm 63 years old. You've got kids. Are they interested? Not at all. Nope. They want to be filmmakers. Because it's still privately owned.
1:15:32Still privately owned. Yep. And so I'm really looking to empower the next generation. I just would, in some weird idealistic way, I would like to see it live forever, essentially, the company. What do you think could be the next Razor scooter or hoverboard? Oh, you know, if I knew that. But actually, what's interesting, what I'm working on is that intrigues me, and this is going to just sound boring at this point, but I think discovering trends using artificial intelligence or some other method of combing the culture for what's happening and finding it early. that's what was in my weird brain and being able to figure out how to do that you know algorithmically is very intriguing to me i mean i don't know that it's going to happen i can't promise it's going to happen that's one thing that's very exciting to me and in fact exciting to me in general is artificial intelligence for the business for sure i'm very interested in how that could could roll through the business carlton when you think about you know the just the journey you took i mean you know went to law school almost became a lawyer and kind of fell into the toy business because you wanted to make you know fairy tale picture books um and start with these these pogs and then kind of kind of cut the bug and built a really you know significant brand here with razor how much of of it do you attribute to the work you put in how much do you attribute to luck and timing.
1:17:09I love the luck story. You know, there's like, what if I didn't read the article in the LA times that the razor scooter was going crazy in Tokyo? And what if Robert hadn't been such an amazing person, such a visionary to put, you know, me and Gino together with him and start the company? And what if what we had shut down, you know, because I was discouraged the year after, You know, there's always like luck is so humbling as part of success. And, you know, things happen in a cultural moment, which means you can never bring back the hula hoop. Like, how do we explain things like this? I often think that, you know, the Beatles, if you brought them into the market today, might not, you know, become famous.
1:17:58I mean, I feel I do have this like weird ability to like hone into the culture early and act quickly. But luck is such a wonderful thing. There's just no way around it. That's Carlton Calvin, co-founder of Razor. By the way, pogs and slammers, they've not totally gone away. You can still buy them on Amazon and you can find the slammers with the scorpions inside on eBay. And because the phrase scorpion slammer is so unforgettable, it's also the name of a very hot hot sauce made, of course, with scorpion chilies. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of this show.
1:18:49And if you're interested in insights, ideas, and lessons from the world's greatest entrepreneurs, please sign up for my newsletter at GuyRoz.com or on Substack. This episode was produced by Kerry Thompson with music composed by Ramtina Rablui. It was edited by Neva Grant with research help from Sam Paulson. Our engineers are Patrick Murray and Maggie Luther. Our production staff also includes Alex Chung, Carla Estevez, Casey Herman, Chris Messini, Ramel Wood, Andrea Bruce, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.
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From the publisher
In the summer of 2000, Razor scooters were everywhere—on sidewalks, in schools, even in Silicon Valley offices. At the center of it all was Carlton Calvin, an ex-lawyer turned toy mogul who had already ridden—and crashed—multiple crazes, from Pogs to yo-yos.
Carlton knew how to spot what kids wanted before the world caught on. But when Razor went from selling a million scooters a month to zero almost overnight, his business teetered on collapse.
This is a story about timing, obsession and instinct: knowing kids would snap up Slammers with scorpions inside, seeing the potential of a sleek new scooter from Taiwan, and learning how to turn a craze into a lasting global brand.
In this episode, you’ll learn:
- Why most “overnight successes” collapse as quickly as they rise
- The power of partnerships– and trust– in scaling quickly
- How to think like your customer (in Carlton’s case, a 10-year-old boy)
This episode was produced by Kerry Thompson with music by Ramtin Arablouei. It was edited by Neva Grant. Our audio engineers were Patrick Murray and Maggie Luthar.
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