GoKawiil0:37 Intro. [Recording date: May 28, 2026.] Russ Roberts: Today is May 28th, 2026, and I want to remind listeners before introducing today's guest that we're doing an EconTalk Book Club around The Iliad by Homer. Last week's episode was with Ido Hevroni of Shalem College, introducing the book, providing some useful context to help you get started. Another episode, or episodes--depends--later[?] in the weeks to come. We're using the Fagles' translation, but there are many others to choose from. And now for today's guest: entrepreneur, television and film producer, Ronnen Harary. He is a co-founder of the Canadian children's entertainment company, Spin Master, the co-creator of PAW Patrol, a preschool series that airs in 160 countries. Spin Master had revenue of 2.3 billion in 2024 and is the fourth-largest toy company in the world behind Mattel, Hasbro, and Lego, and he's the author of No Experience Necessary: Why Betting on Yourself in Your Twenties Is the Best Decision You'll Ever Make, which is our topic for today. Ronnen, welcome to EconTalk. Ronnen Harary: Thanks, Russ. Thanks for having me.
1:41 Russ Roberts: Now, this is a very entertaining and thoughtful book. The point of the book is to encourage young people to take a chance, start a business. And a lot more to the book than that. It has some moral lessons and life lessons, business lessons. I want to start with risk because when you encourage people to start a business, well, everyone thinks, 'Well, that's risky,' and you say it's a misunderstood concept. In what way is it misunderstood, and what do you think is the right way to think about it? Ronnen Harary: A lot of people look at the pros and cons of starting something, and you can always game out the downside. It's really, really easy to game out the downside. It's very hard to game out the upside because you don't know what's going to actually happen. It's actually beyond all our imaginations what's possible. But, if you don't start, then you miss out on the screenplay of your life. And it's kind of why I wrote this book, because a lot of people have a lot of pressure from their parents. They have a lot of pressure from society. And, they doubt themselves. So, I wrote the book actually so people can either make the case to themselves to take a risk in something--whatever it is, in business or in arts--or to make the case to not do something, and to create a conversation and to reframe their thoughts around what is possible in their life. Russ Roberts: You make the point, which I think is profound, and certainly a good economist knows this; a bad one might miss it. But, we often think about the risk of losing money. You start a business. Whatever you put into it is going to be gone. You could have a crushing disappointment. But the main thing people tend to focus on is the money. But, you point out if you don't do something, you may be misusing your time, and in many ways that's more precious than money. Nothing really goes bad often. You can recover, especially when you're young, from losing some money. Wasting your life is a different matter. Ronnen Harary: Yeah. I think that we focus a lot on the money, and we don't necessarily focus on what we want to do with our life. And, I also think about the whole notion of equity. What you trade off when you don't take the risk to do something for yourself, especially in the realm of starting your own business, is that the time that you're putting into an endeavor and by working for another company, all the upside is going to accrue to someone else. It's not going to accrue to you. So essentially, you're renting your time--right?--versus having that time accrue back to you and looking at your earnings over a long arc. So, I encourage people to look at your earnings over a 20-year period or a 30-year period. Obviously, if you start a business, your earnings at the beginning are going to be much less than they will be at the end; but divide it back over 30 years, and I bet you your yearly will be higher than the first 10 years if you rent out your time to someone else. It's a hard thing. And especially when you're young, it's hard to think that far out into the future. But, I think that the other thing about risk--I think a lot about passion, and passion de-levers risk. So, if you're really passionate about something and you don't necessarily have the experience to do it, but you're super-passionate and you have an idea, I think the passion will de-lever the risk. If you're just intellectualizing your way into a business or an opportunity, it's not going to work. But, your passion and the fact that you're super-young--you have so much energy--so if you match the energy with the passion and the fact that so many people are rooting for you when you're young and starting a business, like, everybody wants to help you.
5:23 Russ Roberts: Let's turn to your first product, which is absurd. There's maybe, I don't know, I'm guessing, I didn't look carefully, might be 10 or 15 pages about this product and how it came to life. It's really hard to believe it was a success, I have to say. It was called the Earth Buddy. So, first tell us what it is. It's remarkably unappealing, I have to tell you, when you read about it in the abstract. Ronnen Harary: Well, yeah, we should have added some pictures. Basically, it's kind of like a 1990s version of the 1970s Chia Pet. So, it's in the size of a softball. It's made out of nylon, sawdust, and grass seed, and it's got a happy face on it. You put it in water, and it grows grass for hair. Russ Roberts: And, that's it. Ronnen Harary: That's it. But, it's more than that because it's so magical because you would never imagine grass growing from this softball, and it does it over the course of seven days, and so it's quite magical. It's like a fun houseplant. Russ Roberts: The design of it, and you described this very entertainingly, you had to try some different things. It wasn't a first time out of the box, right? Ronnen Harary: Yeah. Well, if we back up, the actual idea came from someone in Turkey. No one really knows whoever invented it, and somehow people in Israel found out about it. I found out about it from my mother, who was reading the Yedioth Ahronoth, which is an largest Israeli--the largest Israeli newspaper. And there was a six-page spread about these six different individuals that were manufacturing the product. And in classic Israeli style, they all boasted about how many they were selling. Basically, I added up all the six, and it came to like 300,000 pieces in a country of 10 million. I was, like, 'Wow, no one's doing it over here, so we could sell millions here in North America.' So, that was my calculus. I didn't look at it the way you looked at it and said it was ugly. I was just looking at the numbers, actually, and the fact that no one was selling it over here. So, my late grandmother brought us--me and my sisters--three Earth Buddies for presents. They were called Grassheads in Israel. And, I took them to my business partner, Anton, who we had a small business at university, and I said to him, 'What do you think about manufacturing and selling these in North America?' He thought it was crazy. So, it took me two weeks. He was like you, actually. He was like you. So, it took him two weeks to decide. And then, he's, like, 'Okay. Let's do it.' Then, the next thing we know, we found ourselves in Kmart buying pantyhose and trying to source sawdust and grass seed and trying to figure out what's the right grass seed. Because we didn't have the recipe. We had to reverse engineer the product. Russ Roberts: So, the part that's the narrative of how this product goes from a--you're 22? 23? Ronnen Harary: 23. Russ Roberts: So, you make 5,000, and your first attempt is to sell them on street corners. And, you sell a few hundred, which you later realized was a miracle, but at the time was depressing, right? Ronnen Harary: Correct. Russ Roberts: So, you get this break. You mentioned Sam Kotzer[?] before. He buys a bunch, which is great. You tried flower shops and other things. But, the heart of the story, which is unbelievable, is you have a connection to Kmart. I haven't heard the word 'Kmart' in a while. I looked it up. They've fallen on hard times. According to Wikipedia, they have four stores left. Some say they have none. They don't have any real stores. They have a small fake store. They have some online presence. But they used to be the number one retail in the world. They were the Walmart before there was Walmart. You want to get to them. So, you have a buddy who knows someone, and you eventually get a meeting at Kmart. I'm going to read a short paragraph about this trip, which--there's something deeply romantic and beautiful about it. First, I'm going to set the stage a little bit. It's incredibly exciting. This is a dream come true. You have this funky product, which unlike me, you actually think is a great product. It's this ball of sawdust that grows hair. And you have a chance: It's the most important presentation of your life. It could change your life. It turns out it does. But you're 23; you don't know it, as you point out in the book. So, quote: The morning of the pitch, I had to wake up super early, at around 4:30 AM, to make the four-and-a-half-hour drive from Toronto to Kmart's corporate headquarters in Troy, Michigan, a suburb of Detroit. Even though I had a 9:00 AM appointment, it didn't occur to me to drive in and stay over the night before so I could show up fresh and well rested. These are the things you don't stop to think about when you're twenty-three. Plus we were trying to save as much money as possible so we could keep putting it into the business. So I just threw on a white button-down shirt and a pair of jeans, loaded a box of twenty-four Earth Buddies into my mom's red Toyota Celica, climbed behind the wheel, and headed out.
The crazy thing is that I did absolutely nothing to prep for the meeting. I didn't do any prep with Anton [Russ: --which was your business partner--] and there was no PowerPoint Endqoute. And you show up. You show up at Kmart. You've got this incredible opportunity. You get in front of the guy, and what happens? Ronnen Harary: Well, first of all, I'm just emotional just listening to you read it back, just the absurdity of it all and the amazingness of it all. What happens is I pitch him for 30 minutes, no PowerPoint, no nothing, and after 30--and he's a wonderful man. He sits quiet, doesn't say anything for 30 minutes. And then he says to me, 'I'm not the buyer for this product.' So, what's running through my head is: He's not telling me the truth. And so I pitch him again for 15 minutes, and he listens quietly, and then he says, 'I'm not the buyer for this product.' So then I'm, like, 'Okay. I got to make this work somehow.' So, I said to him--I still didn't believe him--I said, 'We'll give it to you on consigned sales, which means that we'll give you the product, and if it sells, you pay us.' So, there's no risk for him. He looks at me; he's, like, 'I'm not the buyer for this product.' I'm, like, 'Okay. I'm giving the product for free, and he's not taking it, so he's really not the buyer.' So, I said to him, 'Well, who is the buyer? I drove four hours from Toronto. Do you mind letting me know?' And he was a super-gentleman: went back to his office, and came back, and he gave me the name of the buyer on a piece of paper. It said Adrienne Zacks. I shook his hand and I left, and I started walking around Kmart Corporation looking for this person. And the craziest thing is the people that got me the meeting, I didn't even say anything to them. I literally just beelined. I got so excited. I was like, 'Okay. I got the name.' So, I beelined looking for this lady. And, lucky for me, she was sitting at her desk. And I pitched her, and she said, 'Okay, I'll give you a meeting at 3:30.' I went downstairs. I told the guys. They were, like, 'Let's go for lunch.' I said to them, 'I'm not going anywhere.' So, they left. I was so paranoid back in the day. I was, like, 'Maybe they won't let me back in the building. Or maybe she'll call earlier and I'll miss the opportunity.' So, I was, like, 'I'm just going to stay put.' So, I just stayed in the lobby, and I went up-- Russ Roberts: For five hours, which I love. Ronnen Harary: For five hours. Russ Roberts: She, by the way, she's in the horticulture department. Because this has grass growing, grass seed, and grows vegetation, she's the buyer. Ronnen Harary: Correct. Correct. And, I go up at 3:30. And boy, did I know that she was the buyer because as I walked back into her office--I didn't notice this the first time--but she had seven other Grasshead products, Earth Buddies, on the side of her shelf. So I'm, like, 'Okay. Now I know I'm in the right place.' And, I had--did--the calculus in my head. I'm, like, 'Okay. There's a lot of competition.' So, I dropped my price. I was originally going to come in at $2.60 US, and so I dropped a dollar to $1.65 US, and it was costing us about 70 cents US to make it at the time. I did the pitch for about 15 minutes. And then she did the most magical thing. She turned around, and she gave me this big fat book, which was the vendor agreement with Kmart, which is to become a vendor, a supplier. She said, 'I'm going to order 48,000 pieces from you. If it goes well, I'm going to order half a million pieces for Christmas.' And, I was completely shocked. And then I did the strangest thing ever--because I didn't believe that it was real. I asked her for her garden gnome. She had a gnome--because she was, you know, the buyer of horticulture. It [?], like, 'Can I have your gnome?' 'Yeah.' And then I left and drove back to Toronto. Russ Roberts: Well, you say, 'She gave me the gnome.' And it's a strange thing to do. You say in the book it was to commemorate this out-of-body experience you just had. I hope listeners can either have some measure of your own success in life where something happens that is so surreal, so much better than you possibly could have imagined; and it's not just that, 'Oh, maybe we're going to make a lot of money.' It's so much more than that. It's someone believes in me the way I believe in me. And it's exhilarating. It's an incredible experience of being a human being.
15:04 Russ Roberts: I want to read another quote. I love this quote. You say, With hindsight, it's clear that Adrienne Zacks already knew what she wanted before I showed up to the meeting. She was going to order the product from somebody, and the fact that I took the time to show up in person helped persuade her that we were the people she ought to go with. The other big factor obviously was price. I came in so low. Looking back now, I probably still would have made the sale even if I kept the price a bit higher. I probably sold it too cheap, giving away maybe fifty to seventy cents per Earth Buddy. But when I think about her demeanor and her attitude in that meeting, I honestly believe that something else played a decisive role in her decision in giving the business. When I walked into her office, I was barely more than four months past my twenty-third birthday, and there I was telling the biggest retailer in the United States that I could deliver on an order of, potentially, over a half a million units of a brand-new product. And she didn't hesitate to say yes. She didn't even blink. She wanted to give me the deal. And I believe it wasn't in spite of my youth, but because of it.
One of the greatest assets you have when you're young is this: Everyone is rooting for you to win. Close quote. I think that's just such a profound insight that young people struggle to realize or accept. We're on your side. We want you to win. And she saw--like you say, she didn't blink. She didn't haggle. You obviously gave her a very good price. But she just, matter of fact, said, 'This is the guy.' She probably realized you'd driven four hours with the box in the trunk. You weren't a big, fancy corporate retailer, wholesaler. And she fell in love with you. It's an incredible story. Ronnen Harary: Thank you. Yeah--no. What you're saying proved true because she invited me back four years later to speak to underprivileged youth in Detroit, and so that proved the case that she was super passionate about young people. But, it's 100% like everybody is rooting for you all the time. I also think that it's like when you're around older people, especially people that are in their middle age, you're also giving them an opportunity to give back--so, to give back from their wisdom and their insight and to share, and also to feel that youthful energy again. So, I think that people leaning into that is important and to know that you're actually giving an opportunity to someone to do some goodness in life. It's like charity, live charity. It's not even charity, but it's just live-- Russ Roberts: It's a human connection. It's a beautiful human connection. One of the themes of the book is that business is underrated. That's not the way you say it. She changed her life. She made some money for Kmart. You made some money from it; but it opened a door for you that might not have opened. You might have ended up doing something totally different that--we'll get to in a little bit, how transformative it was for you, but that little--yeah, there were seven to choose from. Maybe she liked some of the others a little better: but you're in person and you're young and you're probably unbelievably passionate. I wish we had a video of that presentation. Ronnen Harary: I'll tell you, not only did she change our lives, but she changed other people's lives. Russ Roberts: Oh, sure. Ronnen Harary: To produce that quantity, we actually had 200 people in our factory in downtown Toronto working, and two of the people came from a homeless shelter. One, his name was Bob Wakeland[?], and he was running the production. And without him, we would have never been able to produce all that product. There was another gentleman, his name was Grenville[?], and he ran the shipping department. So, it made a really big impact on more than just us. It touched a lot of people. Russ Roberts: You're selling them to them for a buck-60 [$1.60], and they're retailing them for $4.99. Ronnen Harary: Yeah. Great margin. Russ Roberts: And, they end up selling one and a half million Earth Buddies to their customers. Speculate--there's no easy answer to this--but you recognize a couple of times in the book that certain products catch fire and then they die. This caught fire in a way that I would not have predicted. I would not have invested in it on your behalf. But, why do you think it caught fire? But, once it caught fire, why did it then--you know, we call it a novelty item. It's a thing for a while, and then it's not a thing. Talk about that. Ronnen Harary: Well, novelty products are something you want to experience once or twice, and then once you've experienced it, you want to move on to something else. So, it has, like, a peak magic to it, but the magic only lasts for a certain period of time. And, it was just a moment. It was a moment. People had never seen it before. I also think the velocity sale--we sold so many, everybody got an opportunity to try it, and then they just moved on to something else. But, we were very cognizant of that. We intuitively knew it ourselves, that it was a novelty product, and so we were eagerly looking for: what are we going to follow this up with? Russ Roberts: As you're telling that story, I'm thinking about one of the--I'm not a big buyer of novelty products, but I remember the Singing Fish, which was a plaque on the wall. Do you remember this? Ronnen Harary: Yes, yes, yes, yes, yes. It was a Billy Bass. Russ Roberts: Yeah. It would sing 'Don't Worry, Be Happy.' And it's utterly delightful the first eight times. After that, it's not as interesting. But it's delightful, and you buy it for the delight. If it's not too expensive, you're happy to have it eight times.
20:49 Russ Roberts: Now, your second product, which was another fad that caught fire, were Devil Sticks. You saw some kids in a park. Devil Sticks--describe what they are, first. Ronnen Harary: Devil Sticks are what I would describe as a three-piece juggling set. You have two sticks you hold, one in each hand, and then you have a big stick that's weighted on the edge, on the ends. And it's got nice tassels. And you hit it back and forth. And, because it's weighted, it starts to spin. As a result of spinning, you can do lots of different tricks with it. Russ Roberts: So, this went crazy also. This sold for $14.99. You sold another one-and-a-half million of those. Ronnen Harary: Yep. Russ Roberts: The puzzle--why anyone would pay for sticks. So, there's tassels. The ones you saw in the park were homemade. Ronnen Harary: Correct. Russ Roberts: So, you saw an opportunity here to make something easier that they wouldn't have to go to the trouble of finding the right size and all that. Ronnen Harary: Well, it was a couple things. One is I used to actually play with them in high school myself. I used to go to some Grateful Dead shows, and my buddy made some, and he sold them at some of the Grateful Dead shows. So, in my mind, it was for people that were in their late teens and 1920s, and more for hippies. Bu, what caught my imagination was: Why are 10-year-olds playing with this? Why do they like it? Why are they making them in schoolyards or playing with them in school yards? So, it was just that notion that gave us the feeling that maybe something was in the ether. There was something in the zeitgeist for kids around this. And we had the factory, and it was: Let's just give it a try. We have a factory. We can make some prototypes, go to retail, make some packaging. It was just a sense that younger kids were excited about this particular product, and that was the analysis that we made. Russ Roberts: Do you still sell those? Ronnen Harary: No, we don't sell them today. Russ Roberts: But, you can buy them somewhere. Ronnen Harary: You can buy them somewhere. But, again, with the Earth Buddy, it was a moment in time for kids. The same thing like a yo-yo. Yo-yos had, like--back in the day, they were so big. You can still buy them today, but they're probably a 10th of what they sell when they were really hot and popular. And there's also just, like, a moment where kids, everybody, all the kids are playing with them and they're talking about them; and that's when you tap into the zeitgeist of that particular moment for kids. You get this crazy amplification effect where it's actually--it was just our product was great. It was good quality. It was a good price. It was nicely designed. But, what really sold it was the moment more than anything else. Russ Roberts: What did you do, if anything? I'm sure you tried to accelerate the fad part, the 'everybody's talking about it'-part. Ronnen Harary: We leaned in. We got vans. We hired college students, and they went on tour, and they basically went to universities, and they were flipping the sticks from school to school to school. We filmed our first commercial, and we did some media advertising with it. We were leaning into what's today is called earned media, but back in the day, it was PR [Public Relations]. So, we were getting on TV. We were getting written up in magazines, newspapers. We didn't have that much money. I was the model. You can still see my picture on the side of the van today. So, we were marketing it like crazy. We were out on the road.
24:29 Russ Roberts: And your next product--by the way, what's fun about this story is if you had said to me, 'How do you become the fourth biggest toy company in the world?' this is not how I would have imagined. I'm not sure how I would have thought about it, but you were basically just a couple of young--I was going to say kids--in your mid-20s, early 20s. You had some interesting ideas, and you're selling them, and you're making some money, which is nice. Then you take a big leap. You make these things called Air Hogs, which is a plane that flies and lands and you can use more than once. You go from a product of sawdust in a nylon stocking with grass seed; then weighted sticks with some design elements; to a airplane, which--you write about it, we won't go into it--but there's terribly challenging design and manufacturing problems. One of which is, is that when the plane lands, the wings tend to break; and it's done. So, how did you solve that problem, and was it really solved more or less? Ronnen Harary: It was solved. The first two weeks when product actually shipped, it wasn't solved. It wasn't 100%, so we had to do some quick modifications. But, yeah, no: we solved it through great engineering and design. The wings would pop off on impact. That's how we did it. So, you have to put them back on every single time. Russ Roberts: It's actually a deep lesson. We used to talk about this all the time in the eight days after the 2008 Financial Crisis, that if you want to avoid the pain from, say, a financial crisis, most politicians and some policymakers, their prescription is, 'Don't let it happen again.' Whereas Arnold Kling, longtime guest on the program, argued the better strategy is: It's going to happen again. If you keep it from happening, when it does happen, it's going to be even worse. So, instead of trying to prevent it from happening, try to reduce the cost of when it happens. So, to design a wing that breaks on purpose is a genius idea because you can put it back on. Ronnen Harary: Pops off. Russ Roberts: Pops off. Ronnen Harary: Pop off. Yeah. Pops off. Russ Roberts: I didn't mean 'break.' So, that sells 35 million in the first nine months. So, you're killing it with that again. You produce different kinds. And you're going along; and then you had a bunch of failures, which is part of life. But then, you hit two rather extraordinary home runs. I have to confess, partly because of the nature of my life and my children, I had not heard of these, but I'm sure many of our listeners--you're going to pronounce them, you'll correct my pronunciation, Bakugan and PAW Patrol. Is Bakugan correct? Ronnen Harary: Great. Great pronunciation. Russ Roberts: For those who don't know what it is, tell us what Bakugan is. Ronnen Harary: Bakugan, it's a cross between Transformers and Beyblade. Basically, it's a round marble that you roll onto a card. In the marble, there's a magnet and a little spring. When the marble hits the card, it pops open and transforms, and there's just this magical feedback that you just get, and surprise: And it opens up into this character--and we made hundreds of different types of characters. And then you would roll yours onto the card, and we would battle. Each character had a point number, and then you flip the card open, and then there were sigils [magical symbols--Econlib Ed.] that matched up to--there's signs that matched up to what was in your Bakugan, and we would start to battle. So, that was the toy. It was invented by a 23-year-old inventor who had the idea of putting an action figure inside a marble. And so, Ben Dermer, at the time, we're always looking for ideas from wherever they came from. That was our philosophy in our company. And we licensed the idea, but we only developed it to certain points, and then we actually took it to Japan and partnered with a company by the name of Sega Toys, and they added this genius of the pop-open transformation and the piece of metal that was laminated in a card format. They called it Bakugan. It was the craziest thing. I went to Japan. I'd been going to Japan for, like, five years, and we hadn't done very much business there, but they were so good with mechanisms and they're so creative that I just had a hunch that they would be able to help us with this product. So, I pitched it to Tomy [a Japanese toy company]. They turned us down. I pitched it to Bandai. They turned us down. Mr. Kokubun, who didn't speak a stitch of English--no English--he said, 'Yes.' And then I came back two months later, and he added this whole incredible innovation to the product. At which point I said to him, 'How would you feel about doing a television show?' Because, the thing in Japan is that they mastered the art form of innovation with animation, with storytelling, and they blended the two together, and they have no problems having both of them live in the same world. So, things like Beyblade or Transformers that came before Bakugan, they all have TV shows attached to the toy. So, I said to him, 'How would you feel about doing a 52-episode animation?' And he said to me, 'Well, let's do it. It's going to cost $12 million dollars. Do you have $6?' I said to him, 'Let me get back to you.' So, I went home, spoke to my partners, and eventually came back and said, 'Let's give it a try.' And, that's Bakugan. But, I do want to state something because you're going from success to success, and I will say that there's a lot of failures along the way. The precursor for Bakugan was Beyblade, because five years before that, I'd gone to Japan--and Beyblade, for the listeners, is a spinning top. It's got a rip cord. It's also a battling toy, but they're battling by movement. So, two spinning tops in a tray, and they're moving around, and they hit each other; and then when the one top gets pushed out of the tray in the arena, then the one that's still in there is the winner. But back in 2001, five years before Bakugan, I was pitched the idea from Takara Tomy, and I turned it down. And it went on to become a multi-billion-dollar franchise, multi-billion-dollar toy line. Russ Roberts: Beyblade-- Ronnen Harary: Beyblade, that went to Hasbro. Russ Roberts: And you thought, 'I'm not going to let that happen again.' Ronnen Harary: Well, I was, like, 'When we get our shots, we're going to try to create our own Beyblade when the moment arises.'
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