Oral History: Tickle Me Elmo Turns 21

Getty
Getty

Location: Walmart Supercenter, Fredericton, New Brunswick, Canada. Date: December 14, 1996. Victim: Stock room employee Robert Waller. Injuries: A broken rib, pulled hamstring, and concussion.

Cause of emergency room admission: Tickle Me Elmo.

The 27-year-old stock clerk had been working the overnight shift during the holiday rush when he was spotted holding the giggling, vibrating toy by a crowd of frantic shoppers. The ensuing melee left him looking like he had just been in a minor car accident. Someone had even torn the crotch from his jeans. The last thing he saw was a white Adidas sneaker kicking him in the face before he lost consciousness. 

All across North America, shoppers and retail workers alike were reduced to their primal instincts in an effort to obtain Tyco’s must-have toy of the holiday season. Tickle Me Elmo combined the appeal of Sesame Street’s breakout character—a three-and-a-half year old monster with charmingly clipped speech—with a novel design that allowed him to be “tickled” until he was practically out of breath.

It was impossibly adorable, and impossible to get: Tyco, which was anticipating a modest success, found themselves chartering private jets in order to get inventory from China more quickly; John Gotti Jr. made headlines for a top-secret Elmo pick-up at a Queens Toys "R" Us; bomb threats were called in to Tyco; one Elmo disappeared from a New York City police station; a toy designer carrying parts through airports was suspected of being the Unabomber.

With Hasbro re-releasing the toy for a new generation of kids this winter, we assembled the inventors, designers, marketers, and industry insiders who helped make Tickle Me Elmo one of the biggest success stories in the history of playthings to talk about how the furry red monster became a pop culture phenomenon—one that parents would literally step all over someone to get.

I: TICKLISH

Tickles the Chimp. Courtesy of the Strong, Rochester, NY

With an interest in art and a degree in clinical psychology, Ron Dubren had been making board games and toys for 15 years. A mutual friend had introduced him to the late Stan Clutton, who held inventor liaison positions with a number of companies. Clutton was always willing to listen to Dubren’s ideas, but had rarely said anything other than "no." That’s not unusual in the toy business, but it was still gratifying when Dubren—who had only had modest success with games like Babble On—finally heard Clutton say “yes” to a prototype he made: a chuckling primate named Tickles the Chimp.

Ron Dubren (Co-inventor): I had been in the park one day watching a bunch of kids tickling each other. It brought back childhood memories—how much I loved tickling or being tickled. There was usually a kind of build-up of this laughing jag until you just finally lose it. I thought that would make a great toy.

Patricia Hogan (Curator, The Strong National Museum of Play): There was some precedent for putting electronics into a plush-type toy. There was Teddy Ruxpin, who had a cassette recorder in his torso. He read the story to kids like a sort of surrogate librarian.

Dubren: I can’t tell you why I used a chimp. I somehow associated chimps with laughter, or maybe I saw J. Fred Muggs on the Today show when I was a kid. I don’t know.

Mark Johnson-Williams (Electronics Designer): I had been doing design for Tyco for years. There had been talking dolls since you could pull a string. What made this different was the right sound and right personality.

Dubren: Sound was becoming inexpensive for toys at that point. We were getting into sound chips. It was too expensive to make one, so the prototype had a cable connected to a computer.

Johnson-Williams: Later on, I basically wrote the program for the circuit board that tells the motor what to do. I had done a talking Cabbage Patch Kid.

Dubren: I called up [co-inventor] Greg Hyman, who was a sound engineer and had recently lost his business partner. The original idea was a chimp that tickled you, but it wasn’t feasible. Greg and I worked on developing a prototype to show around. We were turned down by 12 different companies.

Dubren, who refers to the toy business as “the failure business,” wasn’t dissuaded. He finally came around to Clutton, who was working as vice president of marketing at Tyco’s Preschool division, in 1994.

Dubren: We showed it to Stan, and his immediate reaction was, “This would be great as an Elmo, but we don’t have the rights.”

Janice Yates (former Associate Vice President of Marketing and Development, Tyco Preschool): We had the plastic rights. Hasbro had the plush rights.

Dubren: The meeting lasted about 15 minutes before Stan referred me to another guy at Tyco, Gene Murtha. He knew that side of the company had the rights to Looney Tunes. I met Gene that day.

Gene Murtha (former Vice President of Marketing, Tyco): I instantly liked what he had. It was kind of reminiscent of Curious George.

Dubren: He looks at it and says, “This would be a great Tickle Me Taz.”

What remains of Tickle Me Taz. Courtesy of the Strong, Rochester, NY

Murtha: I don’t think I said it to Ron, but I thought it would be a great feature product for our Looney Tunes license, which we had at the time.

Yates: The concept was when it came in that you’d tickle it once and it would laugh. Tickle it a second time and it laughed harder. Tickle it a third time and it went hysterical.

Dubren: That escalation was important. It just keeps laughing harder and harder. There was a beginning, middle, and end.

Murtha: We might have looked at doing Tickle Me Tweety. But at the time, Warner Bros. was pushing the Tasmanian Devil and had all kinds of research indicating how popular he was. Boys loved the gruffness of him. The market was reaching a saturation point with Tweety. There had been a lot of Tweety.

Johnson-Williams: No one wants to take care of a Tasmanian Devil. You don’t want to be his friend.

Murtha: We did do a Taz prototype. It was functioning, with the electronics and everything. We had someone do a voice to simulate his grunting sort of laugh. I remember taking it to Warner Bros. and they were like, “Yeah, fine.” It wasn’t memorable on their part. They could have had the Tickle Me license under their property.

Despite Murtha's enthusiasm, Taz would not get the opportunity to become the must-have toy of the year.

Hogan: When you think of that character, tickling doesn’t seem the least bit compatible.

Yates: It was good for Taz, he had a crazy personality, but during the evaluation, Tyco decided not to renew the Warner Bros. license.

Murtha: In those days, Tyco had no email system. We all communicated via fax. I remember being at the offices in New York after hours—it was me, Stan, and a few others. I walked past the fax machine and it was spitting out a notice that Tyco had dissolved their agreement with Warner Bros. I walked to Stan and said, “Why don’t you take this and make Tickle Me Big Bird?” And he said, “No, it would be Tickle Me Elmo.” And by this point, they had gotten the Sesame Street license.

Dubren: The guy Stan worked for, [former Tyco president] Martin Scheman, had the idea to pursue the license to Sesame Street and create feature items they’d promote on TV. Marty went to Stan and said, “I need a feature item.” And Stan said, “I’ve got an idea.”

Yates: We had a long-term relationship for plastic toys for the Sesame license. The relationship had grown and they gave us the opportunity to bid on the plush portion and to become the master toy licensee.

Ann Kearns (former Vice President, Licensing, Sesame Workshop): StoryMagic Big Bird was really our first big item. It was pretty low-tech, but it was a huge success. Before Elmo came along, Big Bird was the star of the show. He was the quintessential 6-year-old and Elmo was the quintessential 3-year-old.

Sesame Workshop

Dubren: I got a call from Stan saying, “Guess what?” That’s when I came up with Elmo’s Law: Anything that can go right will go right.

Yates: From the time it got kicked back to us, we all felt the best use for the concept would be with Elmo.

Murtha: I was delighted for Stan to take it over. It was 70 percent done. I was able to take the internal development costs, which were between $50,000 and $100,000, and move them over to Stan’s profit and loss margin.   

Bruce Maguire (CEO, Freeman PR): Elmo hadn’t really been translated into toys yet.

Yates: Elmo was starting to come to the forefront on Sesame Street. This was around 1995. He was becoming more and more popular with parents and children.

Kearns: We didn’t do a lot of Elmo products at first, but in the early 1990s, we started getting calls from parents. “My kid loves Elmo, my kid wants to go to sleep with Elmo.”

Dubren: At the time, Sesame Street was sort of a sleepy license for toys. They were perceived as educational, and that’s a death knell for toys.

Johnson-Williams: The character had to be on long enough for people to go looking for him.

Murtha: The whole character changed with Elmo’s skin. It gave it a gentle, loving ambiance.

Yates: His character lent itself to the laughing and giggling element. It was perfect.

II: GOOD VIBRATIONS

Courtesy of the Strong, Rochester, NY

Work began on turning Tickle Me Taz into Tickle Me Elmo in early 1995, with the expectation that it would be ready for a February 1996 debut at New York’s Toy Fair. Dubren and Hyman had licensed their concept and would be paid a royalty, although the end result would be markedly different from Tickles the Chimp.  

Dubren: I don’t have a proprietary feeling about it. A lot got changed, developed, and improved.

Johnson-Williams: I have a lab near a main street and there are windows. At one point, there were Elmo skins all over without any of the electronics. It looked like a toy factory exploded. People would walk by and go, “What happened?”

Murtha: The next pieces they put in were friggin’ awesome.

Yates: We brought in our ad agency to take a look at the concept. Bob Moehl came to the meeting. He looked at the toy and there was just dead silence.

Maguire: It was a line review. I remember being there. They said, “This is going to be our lead item.”

Bob Moehl (Advertising): I, as the ad man, said it was a waste of money to advertise a sound toy. Television is about motion. The thing ought to move

Yates: He said, “It’s adorable, it’s great, but television is a visual medium.” And off he went.

Maguire: Bob said, “It’s great, but can you make it shake, like a Santa Claus belly?” That one little change had such a payoff.

Dubren: I think what happened was, someone had remembered seeing a shaking monkey that had been on the market.

Neil Friedman (former President, Tyco Preschool): The line review was just about the time I had come on board the company. That mechanism became the third component.

Jerry Cleary (former Vice President, Sales, Tyco Preschool): With the laughing and shaking together, I thought we had something compelling.

The secret to Elmo's success: a vibrating sound box.

Johnson-Williams: They showed me this shaking, shrieking monkey, showed me Elmo, and asked me to build one with all of those elements.

Yates: I remember at the time people had those old-style flip phones on the table. They were vibrating and shaking as they were ringing. And a light bulb went off.

Dubren: My wife actually saw Tickles the Chimp and said, “Wouldn’t it be great if it shook?” I said, “Yeah, but no one is going to put that kind of money into it.”

As with most licensors, Children’s Television Workshop—which later changed its name to Sesame Workshop—was fiercely protective of its intellectual property.   

Yates: There were serious concerns from Sesame. They weren’t sure if they wanted Elmo to shake in case parents thought he was having a seizure. It was a conversation over the course of several meetings, winning them over.

Kearns: I don’t recall that. She may have spoken to someone else about it. What I recall is that we wanted to make sure the shaking was confined to the giggle, so he was only shaking when he was giggling, and then it stopped. There’s no reason for the body to move without that.

Johnson-Williams: It was a conversation with Janice on how to get the motor to run a little, then a little more, then run full blast.

Dubren: They tested it with moms, and no one seemed to care it was going to be $30 instead of $20 because of the motor.

Yates: We did some informal research, and no parent thought Elmo was having a seizure. 

Johnson-Williams: Every licensor does this. Every one. I remember one company had to stop production on a Minnie Mouse because her bow had nine polka dots. Disney said, “No, she has 11. Start over.”

Dubren: It was a big payoff, or surprise ending. The vibration is what makes people start laughing along with it.

Johnson-Williams: At one point, we had him saying, “Stop, stop tickling me.” And there was something sinister about that. Elmo is a child and you can’t have a child saying, “Stop, stop.”

Hogan: Almost all of us have memories of being tickled or tickling. It’s fun, but it’s also a little uncomfortable. There’s a tension there that’s part of the appeal. Elmo recalled that.

Johnson-Williams: I flew the prototype back to show them. They’re professional toy people. It’s not like they clapped.

grac_rahi via eBay

While a lot had to go right in order for Tickle Me Elmo to succeed, one key component would be the notion that parents and their children would be able to see Elmo in action before spending $29.95.

Yates: Martin Scheman originated the concept of “Try Me” at retail, which means presenting a product to a consumer in packaging with batteries included so you can press it and get a demonstration. That was a critical piece of Tickle Me Elmo.

Murtha: I wouldn’t say originated, but there was a mastery of it. We had to do a lot of Try Me because Tyco Preschool wasn’t advertising on television.

Friedman: I forced the factory to put batteries in because I wanted it to be a Try Me.

Maguire: You’d be walking down the aisle, squeeze his hand, and he’d laugh right on the shelf.

Johnson-Williams: That was a relatively new idea. One of my theories when I wrote the program was, most people have an attention span of less than eight seconds. The Tickle Me Elmo would have to get to the punch line in less time than that. Any longer and people walk away.

Dubren: Try Me showed off everything about the toy. It laughs, it escalates, it starts to shake, and you get it right away.

Yates: You could experience it at the retail level but it would not wear out the batteries. Engineering had flagged us about using battery life for a toy with sound and a motor. They were concerned about dead batteries at retail if the toy played in its full mode.

Johnson-Williams: Once you took it home and pulled the cord out, it would play in the full mode.

While Johnson-Williams worked on getting Elmo to laugh and shake in the right ratio, he would sometimes be interrupted by calls or visits to his office in Half Moon Bay, California from the Federal Bureau of Investigation. He was suspected of being the Unabomber.

Yates: I was on a plane to San Francisco with a bucket of parts on my way to meet with Mark. I was interrogated at the airport because I had all these wires, batteries, and tapes. They asked me who I was going to see. That’s how they got Mark’s name.

Johnson-Williams: The FBI basically had 10,000 people on a list, and one of the ways to get on was to order a bunch of electronic parts. They were trying to find this guy and casting as wide a net as possible.

Dubren: The media picked up on that and turned it into him being the creator of Tickle Me Elmo. It got to be a little uncomfortable.

Johnson-Williams: There were some funny coincidences. He was seen in Utah, supposedly, at the same time I was shooting a toy commercial in Utah. One day he said he was going to blow up San Francisco and then I flew into San Francisco. Every few weeks, they’d make a call and ask a question.

After an 18-year search, the FBI caught Unabomber Ted Kaczynski on April 3, 1996. While that was a relief for Johnson-Williams, the pressure was building for Tyco Preschool’s core team, which had never before been charged with delivering such a high-profile item.  

Murtha: That division of Tyco was considered to be kind of a stepchild. There was a critical meeting where four or five of us sat with Dick Grey, the CEO, at Gramercy Park. And he basically scolded and berated us.

Cleary: I think he was challenging us, which was his job. The discussion was about who was going to be promoting it.

Murtha: We showed him Elmo and thought we had something special and wanted to handle the advertising. He wouldn’t allow it. I thought we’d be fired.

Cleary: In so many words, he told us we didn’t know what we were doing. And then they finally reconsidered.

Murtha: This is around the time Neil Friedman came in [as president of Tyco Preschool]. He had a very keen marketing eye for what the consumer will respond to.

Cleary: Elmo was done by the time Neil came to the company, but he did a remarkable job selling it.

Friedman: It was not done. The packaging still needed to be designed and there was more work to do.

Maguire: She wasn’t his wife at the time, but Amanda Friedman designed the original Tickle Me. A lot of people became lifetime friends from working on it.

Tickle Me Elmo’s push began during the February 1996 Toy Fair in New York, the annual event for companies and buyers to get an idea of what the coming year will bring. 

Yates: I remember waddling into Toy Fair very pregnant at the time. I was presenting it to buyers and having meetings. The reaction was positive, but it wasn’t, “Oh, my God, we have a phenomenon.” It was, "Okay, it’s cute, great."

Johnson-Williams: They stuck a bunch of them on a wall.

Maguire: The primary line at Toy Fair was Tyco’s line of RC Cars. So the media would go through this tour and wind up at Tyco Preschool, where Elmo was. It was probably one of the first animated plush licenses next to Big Bird. They may have thought, “Oh, okay, they’re just doing what they did before.”

Johnson-Williams: My wife at the time had a friend who didn’t like anything I did. She was kind of a curmudgeon. When she touched Tickle Me Elmo, she smiled, and I knew it was going to be a big deal.

Maguire: Al Roker from the Today show was there, and he loved it. This was pre-[gastric] surgery, so he was a little chunky then. He laughed and his belly laughed and Elmo laughed.

Ellie Bagli (Senior Vice President, Freeman PR): Al was being Al and Elmo was being Elmo. It was a great visual.

Maguire: It brought Elmo to life in a way that had never been done before.

Yates: Neil was at a baseball game when he ran into a buyer from Toys "R" Us. And the guy said, “Oh, my God, Neil. We just got an initial point of sale report and this thing is flying off the shelves. You guys better ramp up.” It had been out three or four weeks.

Friedman: We were monitoring it from the moment it hit shelves. It wasn't because of running into anyone. We were getting calls from buyers right away. It was selling far better than any $30 plush would have sold in those days.

III: THE TICKLE MONSTER

Getty

Thanks to Elmo’s popularity and the novel Try Me packaging, Tickle Me Elmo was off to a solid start when it hit store shelves in July 1996. But without the viral marketing of today, a toy’s best shot at hitting the stratosphere was exposure to children—and their parents—on television.

Yates: The Today show had aired a segment about the new hot toys. Bryant Gumbel and Katie Couric were sitting there playing with the doll and getting a kick out of it. It was great exposure.

Maguire: Bryant was not considered a warm guy, so for us, it was great. He was not the type you’d expect to have Elmo on his lap. It seemed to humanize him.

Bagli: He held it the entire time. I don’t think it’s ever been done before or since.

Yates: Freeman PR was responsible for getting Rosie [O'Donnell].

Maguire: Ellie was taping her show almost from the start. Rosie would create a kind of game show atmosphere and give her audience products.

Murtha: It was perfect. This was September, and the kids were going back to school.

Dubren: It helped her show as well. She was just starting out.

Yates: You couldn’t just send Rosie items. It was all about whether she liked it or not. If she didn’t, it wasn’t going on her show.

Bagli: It was early October. We had sent her son one and then she talked on-air about how he had flushed it down the toilet. So I jumped on the phone with Tyco and said, “Get every Elmo we have. Get some red tissue paper.” I got a call from her show an hour later saying, “This is great. Can we have enough for the whole audience?”

Murtha: She eventually brought Neil Friedman out and he did a great job pitching. Elmo did a great job pitching.  

The packaging, the character, and O’Donnell’s endorsement put Tickle Me Elmo on the map in a very prominent way. As the holiday season began, the media took note of shoppers waiting anxiously outside toy stores in groups resembling "Depression-era bread lines.” Unlike most dolls and many plush items, Elmo was a “gender-free” gift that boys and girls were demanding in equal quantity.

Hogan: If it were a plastic doll, chances are most boys wouldn’t have wanted anything to do with it.

Murtha: Going into September, we were forecasting 100,000 pieces. Within a week of Rosie, we were forecasting a million.

Getty

Bagli: It was virtually sold out from the day after Thanksgiving through Christmas.

Maguire: All of a sudden, demand got really strong, and Tyco was in a position of, “How many more can we make before the end of the year?”

Murtha: You line up factories for 100,000. A week later, it’s a million. There’s just no way to get them into the marketplace.

Cleary: I was on the phone with Hong Kong three nights a week. The tools could burn out on high manufacturing runs, so we were figuring out how to build new tools.

Friedman: The plush was not the limiting factor. The problem is producing the mechanism. We were building new tools every week.

Yates: We ended up not running the full TV campaign, pulling some of the back-half media because we didn’t feel it was right to continue to advertise the item to gain awareness and sales when we could barely support all of the pent-up demand.

Maguire: That’s the irony of the motor. It was made for television and they never needed television.

Following Black Friday, Tickle Me Elmo turned into the most coveted holiday item on wish lists. The scarcity led to a tsunami of media about toy aisle mayhem. John Gotti Jr., son of late mafia boss John Gotti, was seen entering a Toys "R" Us after hours and walking away with several Elmos; Cartier Jewelers offered Elmo free with the purchase of a $1 million necklace. One Toys "R" Us district manager pushed a pallet of Elmos out and watched in horror as parents tore into them without regard for anyone’s safety. He started to cry.  

Yates: People would call the Tyco offices threatening to do something if we didn’t release more Elmos. Bomb scares. “I’m going to blow the place up.” It was overwhelming.

Dubren: There were people acting primitive, but that happens every Christmas. A kid laughing with his parents doesn’t get to be a news story.

Kearns: Did it make us cringe? A little. It was nothing we promoted, but there was nothing we could do about it. It was just demand.

iStock

Yates: The media kept saying that we planned it, and it was just great marketing. It wasn’t.

Dubren: Nothing of the kind ever happens. They’re in business to sell stuff. The problem is, they don’t want to be stuck with inventory.

Maguire: The media was doing negative stories, saying it was artificial. Sometimes they want to build up a thing to knock it down. Everyone thought there was a bunch in storage somewhere. Tyco was a public company. You couldn’t mess around like that.

Friedman: Plan a shortage? No one plans a shortage. You can't just say, okay, we want a million. You need to buy chips and other materials, and that can take 60 days.

Cleary: You have a responsibility to the shareholder. That’s the last thing we’d do.

Moehl: [We just] underestimated how the thing would take off. Nothing succeeds in the toy business like shortages.

Yates: Neil was so influential in getting us more goods, as much as we could possibly produce. We went from 400,000 to shipping a million units.

Dubren: Stan thought Neil was crazy to do that, that it was way over the line.

Maguire: He wanted to put the pedal to the metal, where Tyco as a whole wanted to be more cautious. Big toys have put companies under. Teddy Ruxpin killed Coleco. You can’t flood the market. Neil convinced them.

Friedman: It was completely my decision. 

Dubren: They were shipping them by boat, but then they started to fly them in.

Friedman: We air-freighted them in on a regular basis, over and above the goods arriving on water.

As Christmas neared, it was clear not everyone who wanted a Tickle Me Elmo was going to get one. A toy phenomenon had become a cultural symbol of how determined shoppers were to land the coveted monster. To prevent thefts or fights, Toys "R" Us would call raincheck holders and leave vague messages that their “item” was in. In the store, they would be handed a pre-wrapped package so they could slip out of the store without being obstructed.

Dubren: For me, it hit home when I was on a plane to Chicago in early December and The New York Times had the front page of their business section talking about Tickle Me Elmo. It was a pinch-me moment.

Maguire: Harvey Weinstein at Miramax contacted us and sent us a bunch of Oscar-nominated movies on VHS. The Letterman people called and traded us sweatshirts. Brett Favre called Neil.

Cleary: Al Gore called. I told my secretary to tell him I’m Republican.

Murtha: Jill Barad, the [former] CEO of Mattel, walked past my office one day and saw him. “Oh, my God, you have an Elmo!” I gave her mine.

Maguire: Some people at Nintendo traded us N64s, which were the other hot toy, for Elmos.

Dubren: The internet was pretty fresh back then. Most people had dial-up. But there were a few on eBay already.

Yates: I was riding the train home from New York one night and Stan asked me to go do a radio interview. I get on the phone and did the interview. I look up, and everyone on the train is looking at me. “You work for that place? Can you get me an Elmo?” I really felt like my life was in danger.

Maguire: You had to say no sometimes to needy people who would benefit, like charities. You became the gatekeeper for this toy.

Cleary: We tried to distribute it evenly. But we were able to use it and say to retailers who were slow to pay invoices, “Look, we gotta clean this up or we can’t allocate any product to you.” And everyone paid their bills.

Murtha: We took Tyco Preschool from being the losers in New York to, “Oh, those are our guys.”

Maguire: When Tickle Me Elmo sold out, you couldn’t come home empty-handed, so you bought some kind of Elmo toy.

Kearns: It was a halo effect across the entire Sesame line. There was always another Elmo on the shelf to buy. We had T-shirts, books.

Maguire: They could have sold 10 times as many if they had them.

Murtha: Mattel was in the process of buying Tyco and merging Tyco Preschool and Fisher-Price together when Elmo was coming out. I would say the entire purchase price of Tyco [$737 million] was recovered over the next two to three years by Elmo.

IV: ELMO GETS EXTREME

Courtesy of the Strong, Rochester, NY

By the end of 1996, Tickle Me Elmo had taken his place among the most popular toys of the 20th century. Over 1.2 million of the dolls had reportedly been sold, making Tyco a name that could stand among the Hasbro and Mattel brands as a leading supplier of hot holiday items. But unlike past fads, Elmo wasn’t going to be forgotten quickly.  

Dubren: I think it took until the following June for Toys "R" Us to honor all of their rainchecks for 1996.

Friedman: I'm not going to tell you the number. We sold well over a million in 1996. And we sold many, many more Elmos in 1997. In fact, we sold more Elmos in the first quarter than we did for the entire year before.

Cleary: We sold one million Elmos in 1996 and four million Elmos in 1997.

Kearns: It may have been the first time a toy did better in year two than year one.

Yates: It was an exciting time, but Stan gave me a reality check. He wanted to know what we were going to do the next year.

Maguire: It became a franchise out of nowhere.

Yates: We did Sing and Snore Ernie, which did almost as well as Tickle Me Elmo.

Friedman: The biggest thing I found following the craze was walking into a toy department and seeing people pick up a plush toy and squeezing it to see if it would do anything. We needed to keep bringing soft toys to life, and that's what we spent a lot of time doing.

Kearns: Ernie was very popular in Europe. Elmo actually wasn’t on Sesame Street in Europe at the time.

Yates: We also did a line extension with Baby Tickle Mes—Cookie Monster, Ernie, Zoe.

Kearns: There was no Tickle Me Oscar. The toys always had to be true to the character.

Cleary: We sold 4 million Baby Tickle Mes. There was just so much demand we couldn’t fill.

Gina Sirard (former Vice President of Marketing, Fisher-Price): One of my main strategies when I got to Fisher-Price was to have people asking, “What is Elmo going to do next?”

Bagli: You’ve got to give them credit. Every year, they did a new Elmo. Chicken Dance Elmo won a Toy of the Year award.

Getty

Yates: There was a Toss and Tickle Me Elmo.

Dubren: You threw him up in the air, he’d laugh, you’d catch him, and a motion sensor switch would get him to stop laughing.

Cleary: Elmo as Elvis.

Yates: Rock and Roll Elmo was also Greg Hyman. I was there until 2008 and there weren’t any real dogs.

Girard: Pogo Elmo got a lukewarm reception. It was the only one that wasn’t really a huge success.

Dubren: To some degree, I’ve been told it saved Children’s Television Workshop at the time. The success spread to the entire license.

Maguire: As funding for public television deteriorated from the government, the private sector was coming into place through royalties. Now you were seeing the characters on applesauce and snacks.

Kearns: What I would say is that any non-profit is constantly challenged with ways to drive income. Any success story is a big plus. [Workshop founder] Joan Ganz Cooney gave a speech where she said Tickle Me was such a big success it allowed them to expand internationally.

Under Mattel’s Fisher-Price banner, Elmo made annual appearances right on through 2006. For his 10th anniversary, the company launched TMX Elmo, or Tickle Me Elmo Extreme, a doll that had to be seen to be believed. 

Dubren: TMX was fabulous. I wish I could say I developed the mechanism, but I didn’t.

Bruce Lund: (Owner, Lund and Company): We had actually shown them the mechanism for Elmo’s fifth anniversary. Later, one of us came to the other and wanted to take the concept further into extreme laughter.

Sirard:  It didn’t work out for the fifth anniversary. When he bought it back, we added the slapping on the ground and the rolling over.

Lund: It was something we used in a toy called Baby Go Boom—not the same, but an earlier version. Baby Go Boom could basically fall from a standing to seated position, then lay down, then sit back up. And then we realized we could get her to stand back up, and that became Somersault Sara.

Gabriela Arenas (Vice President of Licensing, North America, Sesame Workshop): TMX was really an attempt to recreate how a 3-year-old would laugh when being tickled—rolling on the floor, giggling, having fun. The mechanism was able to translate that.

Kearns: I remember Fisher-Price did a mock-up to show us and we just fell over laughing. It was a no-brainer.

Lund: Getting the Elmo skin on was an issue. The mechanism can work fine on its own, but the fur adds friction.

Maguire: We were able to recreate the hysteria, which was pretty huge.

Kearns: Gina Sirard was the genius behind the marketing of keeping the whole thing under wraps. Retailers would buy it without having seen it.

Sirard: We did ads with Elmo in silhouette.

Maguire: I had been working with Tyco for 25 years and it was the first time they made me sign a non-disclosure agreement.

Lund: There is satisfaction in seeing people mystified. It was a simple mechanism, but people thought it was a mechanical marvel.

Sirard: The whole goal was to make Elmo seem as real and alive as possible.

Lund: One time we had temporarily lost a sample and Fisher-Price was a little upset. We did find it. They wanted everything kept top secret.

Maguire: We stole a little from Steve Jobs and didn’t let anyone see the product until it was at retail.

Bagli: There were maybe 20 people in the world who saw it before then. We kept the product a secret until the day we revealed it on Good Morning America.

Lund: It was really marketing genius.

Bagli: The package looked like a metal briefcase with a warning, “May Contain Uncontrollable Laughter.”

Lund: We had shipped samples in a diamond-plate pattern metal with foam inside, sort of an attaché case that fit the model properly, because they were so valuable. That was ultimately the inspiration for the packaging.

Kearns: They made a package where you just saw the eyes through a tiny little flap.

Lund: It was also good because there was no on-shelf demo, and so the batteries wouldn’t wear out.

Maguire: Diane Sawyer had it in a little vault.

Bagli: Most holiday sales started on Black Friday, but this pushed it ahead two months. We called it the Elmo Effect.

Fisher-Price

Maguire: People were lined up outside of Toys "R" Us and put 10 in a cart to sell on eBay.

Bagli: It was like getting election results. You get the East Coast, and then West coast numbers pop up.

Arenas: It created that must-have expectation with consumers.

Maguire: The toy industry was in the doldrums that year. All of a sudden people got excited to go to big box stores in September and it turned out to be a good year. Everyone benefited from TMX Elmo.

Hogan: I suspect the appeal was more for adults who had grown up with Tickle Me Elmo and now had kids of their own. It was very exaggerated and very funny.

Lund: According to Mattel, it sold more toys on its first day than any other toy in history to that point. That doesn’t include video games.

Sirard: I remember getting calls every hour from Walmart. It was incredible. I think the number was 250,000 sold that day. I don’t know if there’s been a product since that’s done that.

After countless variations—including backpacks, foreign releases, and more—Elmo and the rest of the Sesame Street license returned to Hasbro in 2011. Their Love2Learn Elmo offers children guidance on potty-training; a slightly smaller version of the original is also in stores. Sesame Street, which is now premiering new episodes on HBO, still considers Elmo its biggest licensing success among preschoolers.

Dubren: Ironically, there had been a tickle-me baby on the market the same year Tickle Me Elmo came out. But there was no TV promotion and no character.

Getty

Bagli: People still use Tickle Me Elmo as the standard. “What’s the next Tickle Me Elmo?”

Lund: When I did TMX, I had people come to me and go, “Oh, man, why didn’t you bring it to us?” What would you do with it? Make a teddy bear? Who cares? When it’s Elmo, that’s when it matters to people.

Dubren: There had been big toys, but this transcended the typical toy phenomenon. It was more human than something like Furby or Tamagochi. It became something adults were aware of.

Kearns: It became what the industry came to call “feature plush.” There had been talking toys, but this was wiggling, giggling, and vibrating.

Murtha: I’ve worked on a lot of these. Strawberry Shortcake, Trivial Pursuit, Cabbage Patch—it’s what you work for. When it comes together, all you can say is wow.

Dubren: Tickle Me Taz probably would have vanished overnight.

Kearns: It was a perfect storm, the right character with the right mechanism. No one wants to hug Taz.

Dubren: It’s simple. It gave people joy. It may have only lasted a couple of moments, but that’s one of the precious things about life.

Kearns: At the time, my sister-in-law was going through some very serious radiation and chemotherapy for cancer. I would visit her and talk about what we were working on. I once brought a Tickle Me to show her and she got the biggest smile on her face. Even with all these tubes and chemicals, she smiled. All the doctors and nurses played with it. It showed me Elmo’s appeal went beyond preschoolers.

She passed away. I still have her doll. Everyone loves Elmo.

Ad Astra: The Time Earth Almost Got a Space Billboard

iStock
iStock

In the 1980s and well into the 1990s, everything associated with Arnold Schwarzenegger was big. Big biceps (22 inches during his bodybuilding heyday). Big box office (1991's Terminator 2: Judgment Day made $520 million worldwide, the highest-grossing movie of that year). So it was no surprise to open a newspaper in 1993 and see that Columbia Pictures was spending $500,000 to plaster the actor's name and the title of his pending summer blockbuster, Last Action Hero, on the fuselage of a NASA rocket set for launch that June. Schwarzenegger himself was scheduled to push the button that would propel the spacecraft into orbit.

The NASA project deal was being brokered for commercial advertising purposes by Space Marketing Inc., an Atlanta-based firm specializing in sponsorships and ads located outside of the atmosphere. The company's CEO, Mike Lawson, told the Los Angeles Times that he could've sold "dozens" of ads for the rocket, but that he and NASA officials didn't want it to "look like a pace car at the Indy 500."

The idea of promoting a movie in space was brazen, but not nearly as much as another, more ambitious project that Lawson was planning. If everything went according to plan, his Space Marketing would shoot a payload into space in time for the 1996 Summer Olympic Games in Atlanta. Once it was in orbit, mylar tubes would inflate with gas and spring open to support a mile-wide, quarter-mile tall reflective sheet that would be visible from Earth. Lawson called it an "inflatable platform," but the press—and critics—quickly labeled it something else: a space billboard.

If Lawson had his way, it would be able to make everything from the Olympic rings to the McDonald's logo as visible to Earthbound consumers as a full moon.

 

In Robert Heinlein's 1950 novella The Man Who Sold the Moon, a lunar entrepreneur hustles to sell advertising space on the moon as part of his attempt to make colonization a profitable venture. Lawson—a onetime director of marketing for his father's publishing company in Atlanta and a fan of science fiction—read the story. In 1988, he founded Space Marketing as a way to defictionalize the concept.

As fantastic as it sounded, the idea wasn't without precedent. In 1981, telecommunications mogul Robert Lorsch made a presentation to Congress that outlined a strategy for allowing corporations to "sponsor" space travel by letting them buy plaques that would go onboard spacecraft. In the same way they endorsed the Olympics, Lorsch said, corporate America could help subsidize space travel.

A McDonald's logo is visible from space
iStock Collage

The plan was a response to then-president Ronald Reagan's plea to have the private sector assist in helping the government overcome their financial burdens. While Lorsch's proposal was prescient—it anticipated the rise of privatized space exploration—the idea of having commercial sponsors for NASA didn't make it through the Byzantine maze of Washington bureaucracy.

Lawson thought the idea could be taken further, and not necessarily with the cooperation of government. Partnering with scientists at the Lawrence Livermore National Library and the University of Colorado, Lawson developed a plan to allow instruments developed by these institutions to go into orbit and collect information about the ozone layer. To underwrite the project, he would solicit commercial advertisers for the mile-long mylar sheet that would exit the atmosphere rolled up and then expand to full size once it reached orbit. The aluminized lettering would reflect the sun's rays, making whatever graphic it displayed visible for 10 minutes at a time at any given point on Earth. After roughly 20 days, it would disintegrate, leaving the sensors behind to continue collecting data for researchers.

'We could actually fly [the] Golden Arches in space," Lawson said in May 1993, referring to the ubiquitous McDonald's logo. With an estimated launch cost of $15 to $30 million, companies buying ads would cover expenses as well as contribute to a profit for Space Marketing—perhaps paying as much as $1 million for every day it was visible.

A few months later, the city of Atlanta began investigating Space Marketing's concept as a possible advertising vessel for the 1996 Olympics. "Special" glasses given away at point-of-purchase displays with cooperating sponsors would allow people to see the Olympic rings in orbit.

That last point appeared to be a concession to a growing chorus of concern over the idea of using space as a commercial entity. While proponents of the idea argued it was similar to blimps sailing overhead and displaying corporate propaganda messages, a coalition of scientists argued otherwise. Carl Sagan called it an "abomination," insisting that astronomy could soon become a practice of exploring the stars wedged between mile-wide ads for fast food and automobiles.

Consumer advocate Ralph Nader led a group calling for an orbital billboard ban, labeling it a practice of "defacing the heavens." Other groups decried it as commercial pollution of space and vowed to boycott any companies involved. Supporters of Nader's Public Interest Research Group picketed Space Marketing's Atlanta headquarters.

Lawson tried to parry the attacks in media, saying that the phrase "space billboard" was the source of the controversy. He preferred the term "environmental billboard" and said that the whole objective was to have a global company foot the bill for scientific research.

 

Conceptually, the idea of a floating Arby's logo the perceived size of the moon was too dystopian for lawmakers to handle. In 1993, Congress submitted legislation that would prohibit the Transportation Department from issuing a launch license to any company prepared to shoot a corporate image into space. (The bill was eventually signed into law by Bill Clinton in 2000.)

None of this publicity was particularly helpful to Space Marketing, which saw its Olympic plans wilt in the face of both legislative opposition and the probability of massive pushback from space advocacy groups. They turned their attention to Russia, which had no ethical objections to space endorsements, and facilitated a 1999 project that saw Pizza Hut attach its logo to the Proton rocket that carried supplies to the International Space Station. (The chain previously considered projecting its logo with lasers on the surface of the moon but abandoned the idea when they realized it would cost hundreds of millions of dollars.)

A rocket is propelled into space
iStock

Space Marketing's investors moved on to the blimp industry and the firm was dissolved by 2007, when Lawson became CEO of airship manufacturer Techsphere Systems. As for the Last Action Hero stunt: It dissolved when Columbia learned Lorsch was threatening legal action, claiming he owned a copyright on the idea of commercial space advertising. The movie itself also failed to launch, becoming a notorious summer bomb when it was pitted against Jurassic Park.

While space has largely been off-limits to such "obtrusive" advertising by law, not everyone agrees that's for the best. Earlier this month, it was reported that NASA is looking into selling off the naming right to its shuttles as a way to recoup some of the organization's costs. When Lorsch testified before a Senate subcommittee in 2004 to review his 1981 proposal, he said that his sponsorship program might have earned NASA $5 billion in revenue if it had been implemented.

Antisocial Media: The Rise and Fall of Friendster

iStock
iStock

When software engineer Jonathan Abrams arrived in Silicon Valley in 1996, the internet was known for three things: vast amounts of information, pornography, and anonymity. If users weren't investigating the first two, they were exploiting the third to argue about movies or politics, their unfiltered opinions unencumbered by concerns over embarrassment. People were known only by their screen handles.

Abrams, who came to California to program for the web browser Netscape, had an idea. What if people could use their real names, faces, and locations online? Instead of having an avatar, they'd simply upload their existing personality in the form of photos, profiles, and interests. They could socialize with others in a transparent fashion, mingling within their existing circles to find new friends or even dates. Strangers would be introduced through a mutual contact. If executed properly, the network would have real-world implications on relationships, something the internet rarely facilitated at that time.

Abrams called his concept Friendster. Launched in March 2003, it quickly grew to host millions of users. Google began talks of a lucrative buyout. Abrams showed up on Jimmy Kimmel Live, anticipating the dot-com-engineer-as-rock-star template. His investors believed Friendster could generate billions.

Instead, Friendster's momentum stalled. Myspace became the dominant social platform, with Facebook quickly gaining ground. Abrams, who once appeared poised to collect a fortune from his creation, watched as copycat sites poached his user base and his influence waned. What should've been a case study of internet success became one of the highest profile casualties of the web's unrestricted growth. It became too big not to fail.

 

Many businesses rely on a creation myth, the idea that a single inciting incident provides the spark of inspiration that turns a company from a small concern into a revenue-generating powerhouse. For publicity purposes, these stories are just that—fictions devised to excite the press and charm consumers. Pierre Omidyar, who programmed AuctionWeb and later renamed it eBay, was said to have conceived of the project to help his wife, Pamela, find Pez dispensers for her collection. In fact, there were no Pez dispensers. It was a fable concocted by an eBay marketing employee who wanted to romanticize the site's origins.

In early press coverage of Friendster, there was little mention of Abrams looking to monetize the burgeoning opportunities available online. Instead, he was portrayed as a single man with a recently broken heart who wanted to make dating easier. Abrams later said there was no truth to this origin story, though he did derive inspiration from Match.com, a successful dating site launched in 1995. Abrams's idea was to develop something like Match.com, only with the ability to meet people through friends. Instead of messaging someone out of the blue, you could connect via a social referral.

Human-shaped icons represent the concept of social networking
iStock

Following stints at Netscape and an aggregation site called HotLinks, Abrams wrote and developed Friendster for a spring 2003 launch. He sent invites to 20 friends and family members in the hopes interest would multiply. It did, and quickly. By June, Friendster had 835,000 users. By fall, there were 3 million. Facebook's launch in February 2004 was months away, and so low-key that Abrams met with Mark Zuckerberg to see if he'd consider selling. If an internet user wanted to socialize in a transparent manner, Friendster was the go-to destination.

When users signed up for the site, they were only allowed to message people who were within six degrees of separation or less. To help endorse unfamiliar faces, Friendster also permitted users to leave "testimonials" on profiles that could extol a person's virtues and possibly persuade a connection to meet up in the real world.

Naturally, not all mutual connections were necessarily good friends: They might have been acquaintances at best, and the resulting casual atmosphere was more of a precursor to Tinder than Facebook. One user told New York Magazine that Friendster was less a singles mixer and more "six degrees of how I got Chlamydia."

Still, it worked. The site's immediate success did not go unnoticed by venture capitalists, who had been circling popular platforms—America Online, Yahoo!, and, later, YouTube—and injecting start-ups with millions in operating funds. At the time, the promise of savvy business minds flipping URLs for hundreds of millions or even billions was a tangible concept, and one that Abrams kept in mind as he fielded an offer from Google in 2003 to buy Friendster for $30 million. It would be a windfall.

Abrams declined.

 

Investors—including future PayPal co-founder Peter Thiel and Google investor K. Ram Shriram—advised Abrams that there was too much money to leave on the table in return for short-term gain. Abrams opted to accept $13 million toward building out the site. He sat on the board of directors and watched as backers began to strategize the best path forward.

Quickly, Abrams noticed a paradigm shift taking place. As a programmer, Abrams solved problems, and Friendster was facing a big one. Buoyed by press attention (including the Kimmel appearance where Abrams handed out condoms to audience members, presumably in anticipation of all the relationships Friendster could help facilitate), the site was slowing down, unable to absorb all of the incoming traffic. Servers struggled to generate customized networks for each user, all of which were dependent on who they were already connected to. A page sometimes took 40 seconds to load.

The investors considered lag time a mundane concern. Adding new features was even less attractive, as that might slow the pages down further. They wanted to focus on partnerships and on positioning Friendster as a behemoth that could attract a nine- or 10-figure purchase price. This is what venture capitalists did, scooping up 10 or 20 opportunities and hoping a handful might explode into something enormous.

But for business owners and entrepreneurs like Abrams, they didn’t have a portfolio to deal with. They were concerned only with their creation. Its failure was all-encompassing; there weren't 19 other venues to turn to if things didn't work out.

Two word balloons represent the concept of social networking
iStock

Abrams saw the need for a site reconfiguration. The board was indifferent. Eventually he was removed and assigned a role as chairman, an empty title that was taken away from him in 2005. As the board squabbled over macro issues, Abrams watched as micro issues—specifically, the site itself—deteriorated. Frustrated with wait times, users began migrating to Myspace, which offered more customizable features and let voyeurs browse profiles without "friending" others. Myspace attracted 22.1 million unique users monthly in 2005. Friendster was getting just 1.1 million.

 

By 2006, Friendster was mired in software kinks and something less tangible: a loss of cachet among users who were gravitating toward other social platforms. Though Abrams was out, investors continued to pour money into Friendster in the hopes that they could recoup costs. In 2009, they sold to MOL Global for $40 million, which would later convert the site into a social gaming destination. But it was too late. Though the site still had an immense number of users—115 million, with 75 million coming from Asia—they were passive, barely interacting with other users. By 2011, user data—photos, profiles, messages—was being purged.

In ignoring the quality of the end-user experience, the decision-makers at Friendster had effectively buried the promise of Abrams's concept. They sold off his patents to Facebook in 2010 for $40 million. Coupled with the MOL sale, it may have been a tidy sum, but one that paled in comparison to Friendster's potential. A 2006 article in The New York Times reported with some degree of morbid fascination that if Abrams had accepted the Google offer of $30 million in 2003 in the form of stock, it would've quickly been worth $1 billion.

In the years since, Abrams has tinkered with other sites—including an evite platform called Socialzr and a news monitoring app called Nuzzel, which is still in operation—and tends to Founders Den, a club and work space in San Francisco. He's normally reticent to discuss Friendster, believing there's little point in dwelling on a missed opportunity.

The site did, ultimately, became a case study for Harvard Business School—though perhaps not in the way investors had intended. Friendster was taught as a cautionary tale, an example that not every good idea will find its way to success.

SECTIONS

arrow
LIVE SMARTER