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Spawn creator Todd McFarlane knows he’s hitting his target audience when people such as clergymen, political activists and soccer moms call his companies to complain about the latest toy, video game or music video. McFarlane has turned a comic book character he first doodled in high school into a multimillion dollar franchise by selling hip products to a different crowd that other toy manufacturers simply ignore, he told students Jan. 13 at Thunderbird School of Global Management in Glendale, Ariz.
“The sweet spot is the college crowd,” McFarlane told the students. “How do you sell toys to 22-year-olds?”
>> Learn more about McFarlane’s companies at www.spawn.com.
McFarlane’s presentation came during a two-week seminar on global entrepreneurship led by Thunderbird Professor Steven Stralser, Ph.D., a faculty member at the Walker Center for Global Entrepreneurship. Texas entrepreneur Scott Walker, the center’s namesake, kicked off the seminar Jan. 12 with a description of his latest venture, a bottle and tube filling plant near Dallas.
Other “Winterims,” which Thunderbird runs each year between the fall and spring trimesters, took students to places such as Brazil, China, Jordan and New York City.
McFarlane told the students in Glendale that he looked at other toy manufacturers in 1994 when he decided to enter the market and saw everyone competing for the same crowd: Children between the ages of 5 and 8, and their moms.
“When you’re looking at the landscape of business, very easily you see where the crowds are,” said McFarlane, a Canadian who grew up in the United States and eventually settled in Phoenix.
McFarlane said he took the advice of Willie Keeler, a baseball player from 1892 to 1910 who had a simple formula for success: “Hit ’em where they ain’t.”
So McFarlane decided to sell nontraditional toys and other products in nontraditional markets using nontraditional methods. McFarlane caught people’s attention in 1999 with one of these nontraditional methods, when he paid nearly $3 million at auction for baseball slugger Mark McGwire’s 70th home run ball.
McFarlane said people still associate his name with the purchase, and sports league executives suddenly paid attention to him. He said he had been trying for months to negotiate contracts with the National Football League, National Basketball Association, National Hockey League and Major League Baseball to manufacture licensed action figures of popular athletes.
Shortly after he added the 70th home run ball to his McGwire collection, he had deals in place with all four leagues. “If you do the math,” McFarlane said, “the investment has paid off many times over.”
Today, McFarlane produces music videos and other entertainment products in addition to toys, comic books and a variety of other pop culture products. Most of his customers are males between the ages of 15 and 50.
Spawn, his signature comic book character from the pits of hell, appealed naturally to this audience. “I live in a pop culture world,” McFarlane said. “So that was an easy opening for me to go into.”
The strategy led to two Primetime Emmy awards for the animated Spawn series that McFarlane produced for HBO from 1997 to 1999. Unlike cartoons for children, these episodes included mature themes and graphic violence.
“It’s pretty easy to be the best in the genre when you’re the only one doing it,” he said.
But McFarlane was not always separate from the crowds doing his own thing. He started his career competing against thousands of aspiring artists for the same comic book jobs.
After attending college on a baseball scholarship and graduating, he sent out hundreds of drawings to every editor of every company in North America.
He said he received 350 rejection letters before Marvel Comics gave him a job in its mail room. McFarlane said he honed his skills until the company trusted him with major characters such as the Incredible Hulk and Spider-Man.
“I took Spider-Man to the top,” McFarlane said. “I set sales records that still stand today.”
Along the way, he challenged conventions and tried to unionize comic book artists. When those efforts failed, he defected from Marvel with six other artists in 1991.
“Artists like to gripe,” McFarlane said. “But we rarely do anything about solving those gripes that we have. I was one of the guys who wanted to do something about it.”
The startup company experienced immediate success with characters such as Spawn, and McFarlane quickly had to learn how to be a businessman. Some of his friends squandered their newfound wealth and ran into tax problems, but McFarlane persevered.
He eventually established several private companies under the McFarlane brand that employ more than 200 people today. He said Wall Street investors have approached him several times about taking his companies public, but he prefers being his own boss.
He said this freedom is what allows him to respond quickly to market trends that large corporations miss.
“They don’t move on a dime,” he said. “Their turning radius is big and slow and arduous.”
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