All Sorted Ep 44: LEGO Origins Part 2

On a continued episode of All Sorted Jeff and James look at the rise of LEGO.

 

In case you missed them, listen to the other parts of this series:

late 1957

  • While the LEGO System of Play is starting to sell well in several European markets, Godtfred was beginning to receive complaints about the design and quality of the LEGO bricks.
  • Godtfred designs several new prototypes that interlock better than the original “Kiddicraft Self-Locking Building Bricks” and tests them with children in Copenhagen.

1958

  • The moulds for the 2 × 2, 2 × 3, 2 × 4, 2 × 8, 2 × 10 and 4 × 4 corner bricks are immediately replaced with new stud and tube design.
  • The moulds for the 1 × 1, 1 × 2, 1 × 6 and 1 × 8 bricks would not be changed until the old moulds wear out, a process that takes several more years.
  • LEGO immediately promotes the new brick design, but does not produce a lot of new sets choosing instead to simply replace the old hollow bricks with the new tubes bricks in existing sets.
  • Sloped roof bricks appear for the first time.
  • Helge Torpe to is hired to the newly created position of marketing director.
  • LEGO begins to scale back the production of non-brick plastic toys. All new foreign markets would only be offered the Lego System.
  • LEGO installs their first telex and photocopier.

LEGO Patent
1:58 pm, Central European Time on January 28, 1958

  • Godtfred, and in-house lawyer, Ole Neilson, present their application to the Danish Patent and Trademark Office in Copenhagen for the “stud and tube” interlocking brick design.
  • LEGO considers this date to be the birthday of the LEGO Brick.
  • LEGO would eventually be awarded this patent in 33 countries.

1959

  • The Billund plant undergoes another major expansion.
  • Godtfred decides to split the company into two divisions:
    • Plastic toys would be marketed under the name LEGO.
    • The wooden toys would be marketed under a new name, BILOfix, from the Danish for “Billions of toys”.
      • Godtfred’s younger brother Gerhardt manages the new division.
  • LEGO creates a new product development group: LEGO Futura.
    • Five employees are tasked with developing new ideas for parts and sets.
  • LEGO opens an in-house photography department.

1960

  • LEGO awards a license to Courtaulds, the largest producer of Rayon textiles in the UK.
    • Courtaulds established British Lego Ltd. in London and begins sales with elements imported from Billund.
  • LEGO Finland and LEGO Netherland are established.
  • LEGO begins to improve their packaging. Gone were the old boxes featuring the Kirk Christiansen children, as they are replaced by a new box design, featuring a grey studded border and an image of children playing with their Lego creations.
  • These same photos are used in all of LEGO’s boxes, idea books and ads, creating a unified look across all LEGO marketing.
  • LEGO develops an aggressive philosophy of out-advertising and out-marketing the competition. This plan will make LEGO an expensive toy, as advertising and marketing accounts for around 20% of the cost of a LEGO set.
  • LEGO has grown to 450 employees.

February 4, 1960

  • The warehouse in Billund burns down (again) and destroys almost the entire inventory of wood toys.
  • Godtfred, having lived through four wood fires, one of which he started, decides not to rebuild the warehouse.
  • Feeling the wooden toys were too labour intensive to compete with the increasing competition from massed produced toys from European, American and Japanese toy companies, Godtfred decides to shut down wooden toy production completely so they could focus all their company resources of plastic bricks.
  • Godtfred’s older brothers thought it was too risky for LEGO to only have one product to sell and argued against dropping the wooden toys.

LEGO Samsonite
1961

  • LEGO signs a 99 year agreement with Shwayder Brothers, makers of Samsonite Luggage, for exclusive North American LEGO distribution rights.
  • Samsonite begins producing LEGO bricks in their existing Stratford, Ontario plant and imports the specialty pieces, such as the trees and HO vehicles, from Billund.
    • The sets are marketed under the name ‘Lego by Samsonite’.
  • LEGO, in partnership with a neighbouring company, Danfoss, buys a small 4-seater prop plane.
  • Later that year, in partnership Climber Air, LEGO takes delivery of a larger, Piper Apache aircraft.
  • LEGO builds their own airport, a simple wood hangar and an 800 meter grass runway, just north of the factory in Billund.

April 1961

  • Godtfred’s older brothers Karl Georg and Gerhardt leave LEGO to start their own companies.
    • Godtfred takes this opportunity to buy out his brothers and become the majority shareholder of LEGO.

1962

  • British Lego Ltd begins marketing sets in Australia, Ireland, as well as other British colonies.
  • LEGO by Samsonite begins selling in Canada.
  • Sales start in Singapore, Hong Kong, Morocco and Japan.
  • Godtfred’s brother Gerhardt moves to the nearby town of Kolding and builds a large wood products factory to begin his own toy company.
    • His goal is to turn the BILOfix toys that were cancelled by LEGO into a successful toy system.
    • Even though the BILOfix trademarks were registered and maintained by Interlego AG, Godtfred allows Gerhardt to use them in his new business.
    • The plastic components BILOfix needed were made at the LEGO factory in Billund during the first few years.
  • The first LEGO System wheels are released.
    • LEGO Futura had been developing the wheel and axel system since 1961.
  • LEGO hires Swiss engineer Hans Schiess to create a process development lab in Billund.

1963

  • British Lego Ltd. sets up a new headquarters and factory in Wrexham, Wales and begins to manufacture sets in the UK.
  • The process development lab decides to begin making LEGO bricks from ABS instead of the cellulose acetate they had been using since 1947.
    • ABS is relatively inexpensive, easy to work with, provides very tight tolerances, and is much more colorfast, stable and impact resistant than cellulose acetate.
    • Over the next several years cellulose acetate completely phased out. In North America, however, Samsonite continued to market cellulose acetate elements in certain colours, most notably yellow, until 1970.
  • LEGO Austria is established.
  • INTERLEGO AG is established in Switzerland.

1964

  • LEGO produces the first modern instructions.
    • The new format, developed by LEGO Futura and the graphics department, consists of elements laid out in a 30° isometric view. Starting with a few elements as the base, parts are added in a step-wise fashion. By comparing one step to the next children can see what elements needed to be added and where they should be placed.
    • This new format requires no written instructions, and can be understood by any child in the world.
  • Godtfred formalizes his 10 LEGO product characteristics, and gives a copy to every LEGO employee:
    • Unlimited play potential
    • For girls and for boys
    • Fun for every age
    • Year-round play
    • Healthy, quiet play
    • Long hours of play
    • Development, imagination, creativity
    • The more LEGO, the greater the value
    • Extra sets available
    • Quality in every detail
  • LEGO bricks are exhibited at the Danish pavilion at the 1964 New York World Fair.
  • LEGO’s has first sales in the Middle East (Lebanon).
  • Production plant LEGO Werkzeugbau GmbH in Hohenwehenstedt, Germany opens.
  • Gerhardt expanded the Kolding BILOfix factory.
    • At its peak in the mid-1960’s the factory is producing 40,000 blocks and 150,000 beams a day on six automated machines and is processing 10,000 birch trees a year.

November 1, 1964

  • The Billund Airport is officially inaugurated as a public airport with Scandinavian Air Lines offering twice daily service between Billund and Kastrup.
    • It consists of a 1660 meter runway, an apron, control tower and the existing Lego hangar.

1965

  • Samsonite opens a second North American LEGO plant in Loveland, Colorado.
    • Samsonite is now marketing an almost completely different assortment than LEGO in Europe. This new assortment includes sets much larger than those in Europe.
  • First LEGO sales in Spain.
  • LEGO now employs more than 600 people in Billund.

1966

  • LEGO is moulding 706 million pieces a year.
  • LEGO offers 57 sets and 25 vehicles.
  • LEGO is now sold in 42 countries.
  • Both Lego Futura and the process development lab had spent several years developing a new electric motor. It was now ready for release, and would be the key part in the first LEGO train sets.
    • The first sets run on blue track that was simply a modified plate designed to be held in place by 2×8 plate “ties”.
  • The new passenger terminal at the Billund Airport was completed.
  • The promotional models created the LEGO model shop were becoming more popular. What started as a way to showcase LEGO at stores and trade shows had became so popular that LEGO was having a hard time accommodating the almost 20,000 requests to visit the factory per year.
  • Godtfred had the idea to set up an outdoor display that would move the visitors out of his factory. In an early 1980’s interview for Willy Horn Hansen’s 50 Years of Play Godtfred stated:
    “What I had in mind first was something in the way of a large open-air show, maybe the size of a football field, where a pensioner couple could sell tickets and perhaps run a small cafeteria. But when we eventually, in the mid 1960’s, got down to putting our ideas on paper the plan and our ambitions had grown. But just about everybody shook their heads — it was a utopian notion to think that you could set up tourist attraction in the middle of the bleak Jutland moors, where people had no desire to come. But I’ve inherited a good chunk of my father’s obstinacy.”
  • As Godtfred’s plans for the outdoor attraction grew, it became clear this wasn’t just going to be an outdoor distraction, but a full-blown amusement park.
    Work began on a three acre section of land located between the factory and airport in Billund. Over the next year and a half they a complete amusement park was built on the sight.

1967

  • LEGO is making 218 different LEGO elements, not counting colour variations.
  • Between 18 and 19 million LEGO sets are sold during the year.

1968

  • LEGO buys it’s first computer, an NCR 390 for salary administration.
  • LEGO has it’s first sales to Latin America: Peru and Curacao.
  • Godtfred’s son Kjeld Kirk Kristiansen designs his first LEGO set, a Jeep.
  • The Duplo brick is test marketed in Sweden.

June 7, 1968

  • LEGOland officially opens as 3000 visitors show up opening day to see what had been built.
  • The visitors found:
    • Miniland, the centrepiece and focus of the park
    • The Legoland Driving School, a fun ride where children could “drive” vaguely LEGO looking cars.
    • The Lego Train, a no brainer attraction really.
    • A Children’s puppet theatre, because children were a lot easier to entertain in 1968.
    • Fort Legoredo. An Indian encampment, which I’m sure was tastefully done, and not unintentionally disrespectful to an entire culture…
    • An Antique doll collection, because you need something creepy at any amusement park.
    • A Lego Building area, because LEGO understood that the park would work best as a giant ad for their product.
  • The park was a resounding success, as Godtfed recounted, once again in 50 Years of Play:
    “During the few months the season lasted we had no fewer than 625,000 paying visitors. It knocked all of our planning to the moon: at most we expected only half that figure.”

1969

  • LEGO now has 843 employees in Billund.
  • In October, two of Godtfred’s kids, his daughter Hanne and son Kjeld were in a terrible accident when their car skidded off the road and hit a tree.
    • Hanne was killed and Kjeld was seriously injured.
    • This event so shook Godtfred, there was serious thought given to selling the company. Thankfully he didn’t and Kjeld would recover and eventually play a major role in LEGO’s development.

Late 1960’s

  • LEGO by Samsonite was marketing very large catalogue sets with as many as 1200 pieces.
    • LEGO felt these sets, at their lower price per brick, were devaluing the LEGO brand.
    • Samsonite was hitting annual LEGO sales of about 4-8 million USD, numbers far bellow what LEGO was seeing in Europe.
  • Godtfred realized that LEGO could now manage the North American market and didn’t want to wait the 90 or so years they had left on the original Samsonite license, so he started the process to revoke the agreement.
    • Samsonite responded by drastically scaling back their retail assortment.

1970

  • LEGO jumps to almost 1000 employees in Billund.
  • LEGO receives their first prototype adding machine.

1971

  • LEGO opens a new moulding factory in Højmarksvej, Denmark.
  • The Billund Airport runway is lengthened to 3100 meters so larger aircraft can land.

1972

  • The rights for US production and distribution revert back to LEGO.
    • As part of this agreement Samsonite continues to market sets in Canada until 1986 and Lego paid royalties to Samsonite until 1989.
  • The final 1972 LEGO by Samsonite catalogue shows just eight different sets, all packaged in simple square boxes that emphasized the Samsonite rather than the Lego brand.
    • Their considerable remaining inventory was liquidated in the form of ever-larger sets, including catalogue sets which, by this time, were as large as 1300 pieces, which were sold as late as 1974.
  • By now 1.8 billion LEGO Bricks and other elements have been produced.
  • LEGO has their first sales to the Czech Republic.

1973

  • LEGO USA is established in Brookfield, Connecticut.
  • First sales to Eastern Europe (Hungary).
  • LEGO Portugal is established.
  • LEGOLAND Sierkersdorf opens near Lübeck, Germany.

1974

  • Jorgen Kirk Christiansen (Kjeld’s cousin, who appears on the original System i leg boxes) calculates that six 2 × 4 bricks could be combined no less than 102,981,500 different ways.
  • LEGO Spain is established.
  • LEGO Overseas A/S is established.
  • LEGO Futura ApS is established.
  • The Mount Rushmore replica is created in the LEGOLAND Park.
  • The LEGOLAND park in Billund receives visitor no. 5 million.

1975

  • LEGO USA moves from Brookfield to Enfield, Connecticut.
  • The LEGO Group now has 2,500 employees worldwide.
  • LEGO Portugal is established.
  • LEGO adopts English as the official corporate language.
  • The first set to include LEGOLAND minifigures is released, 693 Fire Engine with Firemen.

1977

  • LEGO founder Ole Kirk’s grandson Kjeld Kirk Kristiansen joins the LEGO Group management.
  • LEGO Australia is established.
  • DUPLO Factory in Billund becomes an independent unit in the LEGO Group.

1978

  • The iconic LEGO minifigure is introduced.
  • Kjeld Kirk Kristiansen splits production into product ranges and lines.
    • This leads to the development of the classic LEGO Space, Town, and Castle themes.
  • The DUPLO Rabbit Logo appears.
  • LEGO Japan is established.
  • LEGO buys their first Fax machine.

1979

  • Kjeld Kirk Kristiansen is appointed President and Chief Executive Officer of INTERLEGO A/S.
    • He is now the third generation to be appointed the head of LEGO.
    • His father left the company in very good shape for him, growing the firm from 140 local employees to an international firm with more than 2500 employees worldwide.
  • LEGO had sold well over these years, with a 1980 survey finding that 70% of all Western European families with kids under 14 have LEGO bricks in their home.
  • Clearly Kjeld had the world at his fingertips. Would he be able to continue the family tradition of steering the company to bigger and better heights. Tune in to our next episode to see how he does.

On the next episode of All Sorted

We will see if Kjeld can continue the astronomical growth of his father and grandfather before him. Also, can he buck the trend of having a mojor part of his operation burn to the ground?

LEGO Fire Engine

Finally, we ask

  • Should LEGO have paid a guy to stand around with a bucket of water 24/7?
  • Just how many fires does one company have to go through?
  • Did we miss anything important about these growth days of LEGO? Let us know. Please leave a comment, or hit Jeff up on twitter, he’s @StillSorting.

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