The hack that saved Lego

Lego recently turned 80, but getting here hasn't been an easy journey for the iconic toy brand, especially as technology changes how we play.

Lego recently turned 80, but getting here hasn't been an easy journey for the iconic toy brand, especially as technology changes the way we play.

Despite the multitude of digitally oriented options on the market, Lego is still around and thriving.There are many arguments as to why this is the case. Perhaps it the quality of their product, or even the prestige of their brand. But a closer look reveals a more curious reason and it all began with a single hack.

This one event triggered a change in Lego’s strategy. It re-defined the company as one that gives its customers some level of control over its brand and has set it on a path that sees its traditional plastic brick products co-exist with the company's technological advancements.

Returning from the brink

Devout Lego fans may argue that the brand will never die but it’s an accolade that Lego Australia’s managing director Glenn Abell doesn't accept easily.

According to Abell, the brand is “very, very strong”, but he still shies away from labelling it as immortal. 

There's a good reason for Abell's reticence he knows how close Lego came to the edge of the precipice.

Abell started at the company in 2002, well before the renaissance that has seen it re-emerge as the world’s leading toy brand. 

Back then Lego was looming dangerously close to bankruptcy. 

“We were getting into all sorts of licencing, like bed sheets and T-shirts and Tennis shoes, we were developing theme parks and running Lego airways in Europe” Abell says. 

“We were getting into businesses that we had no business being in.”

Abell says that the company went into an overhaul over the next couple of years. Cutting jobs, axing departments and slowly returning the business back to a profit. 

It was during this period that Lego received a technological blessing in disguise... it was hacked.

The hack that redefined Lego

In 2005 a group of keen, technologically savvy lego enthusiasts began tapping into the company’s premiere software tool, Lego Factory. 

But these weren't your typical hackers They weren’t after money or information, but were rather looking to make the software easier to use. 

Lego Factory gave its users to develop and send in their own construct designs to Lego. The company would then ship back to the user the parts needed to build what they designed. 

It was a good idea in theory, but in practice the system was clunky and inefficient. Lego’s software forced users to buy bricks that they wouldn’t end up using in their construction. In fact, according to one of the hackers, a typical Lego Factory creation cost their users anywhere between $400 to $500. 

But the Lego adult fans wouldn’t have it. They found out how Lego Factory system operated, and they altered the software to bring down the cost and reduce wasted bricks. And oddly enough, Lego went along with their changes.

“We welcomed them with open arms,” Abell says. The hackers were welcomed to the company’s HQ in Denmark to help them further alter the software. 

“That was actually a turning point for us in how we engage our fans.”

Lego’s crowdsourcing future

Ever since that point, Lego has worked towards tapping into its underlying fan base for ideas. 

In 2008, the company launched its Lego CUSSOO website, which was based on the idea of crowdsourcing. Users can log on, lodge and idea for a model, and then the general community votes on it. 

If the model receives over 10,000 votes then Lego will consider putting it into mainstream manufacturing. 

Though Abell says the company can’t guarantee that every model that reaches over 10,000 votes will be mass-produced, as some more elaborate Lego constructs wouldn’t be economically viable.

Lego’s flock always seem to get it right. The last model they voted into existence was Lego version of the Mars rover Curiosity - a guaranteed hit given all the hype over the recent space mission. 

Abell says that mastering social media will be the company’s next goal in further reinforcing its relationship with its fans

“We were actually a late adopters when it comes to Facebook. And that's mostly because we didn't want to dip our toe in there until we were ready to fully commit,” Abell says. 

He says that the tool has been essential in managing any complaints that emerge about the brand. Trawling through the company’s Twitter or Facebook feed and it seems these queries fall into three categories: squashing the occasional product leak, requests for replacement parts and the odd tale about a child swallowing a bit of Lego. 

But it seems Lego is also using social media to promote its fans and its brand. The company’s Facebook page is littered with photos of its flock’s creations - promoting individual feats of toy construction to the masses. 

The building blocks of its success? 

When asked that golden question - what is the secret to Lego’s success? - Abell’s answer is simple. 

“As we long as we nurture our brand and keep producing really good products that appeal to kids, I think Lego's got a bright future moving forward.”

But, that would be discounting how efficiently Lego is harnessing the affinity it has nurtured between its fans and its brand. 

Lego practices in what Roberto Cappuccio, the R&D director of market research firm Direction First says is an underrated form of digital marketing.

According to Cappuccio, while many international brands crowdsource, few do it consistently or have set up platforms exclusively for it. Most stick to the mainstream methods of market: focus groups and surveys.

Perhaps the main fear that plagues digital marketers is the worry that the audience simply won’t respond.

If Lego’s success has any implications towards this idea of digital crowdsourcing, it’s this: a company can’t crowdsource if its customers don’t have a relationship with the brand.

Lego’s move was a risk, but it appears to have paid off for the company. In a way, the move has forced Lego to keep its core product intact and resist the temptation to overhaul the brand as a result of technology.

You wouldn’t define Lego as a technology company, but somehow in its 80 years of existence Lego has reached a point where it is emulating the blueprint of the likes of Google and Amazon.

Lego is using technology to empower and work with its consumers rather than dominate them.  

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles