How does a company best known for its interlocking plastic building blocks compete in a world where digital tech is king? LEGO seems to have mastered the art, with several successful innovation initiatives under its belt, including:
- LEGO Future Lab - An innovation unit founded in 2012.
- LEGO Ventures - A venture capital arm founded in 2018.
- LEGO Ventures Incubation Studio - A corporate incubator launched by LEGO Ventures.
Exploring new growth areas and experimenting with new concepts has always been a big part of LEGO’s culture and DNA. This entrepreneurial spirit has enabled the company to successfully expand beyond its signature bricks to explore areas like digital play, learning techniques and creativity development for children.
So far, the strategy has proven successful, enabling LEGO to become one of the world’s most recognised brands and top the revenue earned by competitors like Bandai Namco, Fisher-Price and Nerf two years in a row.
Today, we’ll be taking a look at LEGO Ventures Incubation Studio and how it’s helping LEGO leverage years of entrepreneurial experience to build the future of creativity, learning, and play.
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About The LEGO Group
It all started in 1932, in Billund, Denmark, when a carpenter named Ole Christiansen started building the wooden construction toys that would eventually evolve into the LEGO bricks we all grew up with. The very name “LEGO” comes from two Danish words, ”leg godt” which means “play well”.
Under the mission to “Inspire and develop the builders of tomorrow”, LEGO has grown into one of the biggest toy companies in the world with a revenue of $6,9 B (DKK 43,7 B) in 2020 and about 17.534 employees globally.
Along with classic offerings like LEGO® City, LEGO® Star Wars™ and LEGO® Classic, sales have also been bolstered by new offerings like:
- LEGO® Super Mario™ - which blends digital and physical play.
- LEGO® VIDIYO™ - A music video maker for kids.
As explained by CEO Niels B. Christiansen:
“We know children and adults love the LEGO brick, and that will always be the heart of our business. But today’s children are growing up in a digital world, and they effortlessly blend online and physical play. We are excited to offer them safe, exciting play experiences that are fun and offer new ways to learn and be creative.”
Part of the agenda for 2021 includes accelerating digitisation throughout the corporation. The ultimate goal is to develop state-of-the-art digital experiences for customers, partners and employees alike. These efforts will no doubt be enhanced through initiatives developed at the Lego Ventures Incubation Studio.
Meet Lego Ventures Incubation Studio
LEGO Ventures Incubation Studio focuses on building promising and potentially disruptive ventures that go beyond the classic LEGO brick. Ideas and concepts are gathered from various sources, including employees, domain experts, academia and external entrepreneurs.
As described by Senior Venture Designer Siddharth Muthyala:
“LEGO Ventures Incubation Studio is a launchpad for exploring new systems-in-play and a global force for establishing and innovating Learning-through-Play … We explore new opportunities in collaboration with our incubation network, which among others, consist of partnerships with academia...”
There are two main areas of interest for development:
- Education
- Digital play
Each new idea goes through a development funnel before getting developed. As explained by COO Michael Stahl:
“First, it’s about screening, the opportunity area and the idea. Second is around really maturing the concept and validating the concept. Third is kind of building and launching the actual business in the market. Then we move into commercialisation and scaling the business. And last is actually making an independent business.”
The development team is made up of various relevant profiles, including engineers, researchers, consumer insights experts, project managers, designers and developers.
How Lego Ventures Incubation Studio works
As explained on the website, Lego Ventures Incubation Studio uses a four-phase process to develop its ventures:
Phase 1: Ideation
Ideas are developed and expanded using a multidisciplinary approach that combines design, engineering and industry expertise, resulting in experiences that delight children, parents and teachers alike.
New business opportunities are substantiated using a detailed opportunity space exploration process:
Phase 2: Validation
Each venture is tested in different areas, including its:
- Desirability: Do customers need and enjoy this product?
- Feasibility: Do you have the operational capabilities to provide the product?
- Viability: Do you have a profitable and sustainable business model?
During this phase, teams are trained in customer research, user testing, business model validation and other techniques to get the answers they need quickly and efficiently.
Phase 3: Build
During this phase, validated concepts are transformed into minimum viable products (MVPs). The process entails exploring the product-market fit, attracting the first customers and launching the product.
Phase 4: Grow
This stage is all about taking the next step, including things like building a strong team and finding potential investors.
What makes LEGO Ventures Incubation Studio successful?
These are just a few of the factors that make the LEGO Ventures Incubation Studio a great place to develop new ventures:
A strong corporate ecosystem
The LEGO Ventures Incubation Studio has a vast ecosystem of expertise to draw from, including The LEGO Foundation, LEGO Education, LEGO House, and its parent company, The LEGO Group.
Each part of the ecosystem provides valuable insights, expertise and partnerships to nurture new ventures.
An open innovation approach
Innovative ideas can come from various sources, so why not cast as wide a net as possible? LEGO Ventures Incubation Studio works with both internal and external teams, increasing its chances of building truly disruptive ventures.
A myriad of corporate assets
During LEGO’s many years in the market, it has explored quite a few growth areas, including movies, theme parks and digital offerings. Those experiences, in combination with existing assets like global networks, brand trust, funding, infrastructure and skillsets, are a recipe for venture building success.
A strong multidisciplinary team
Building new ventures involves many different talents and skillsets, and LEGO Ventures Development Studio has built a team that reflects that need. Here are just some of the people behind their ventures:
- Josephine Kruse Sørensen - Operations & Program Lead
- Siddharth Muthyala - Senior Venture Designer
- Sabine Müller - Research & Insights Lead
- Anders Søndergaard - Venture Architect
- Brenda McCulley - Venture Architect
- Isabel Eklund - Art Director
- Natalie Lam - Senior Manager, Operations and Program Lead
What’s next for LEGO and LEGO Ventures Incubation Studio?
LEGO continues to foster a strong culture of open innovation with ongoing initiatives like the LEGO Innovation Portal, where customers and fans can share their innovative ideas.
As for LEGO Ventures Incubation Studio, a recent project includes supporting the LEGO Group spin-out of Light Brick Studio after LEGO Ventures invested in it. Light Brick Studio is the award-winning developer behind Builder’s Journey.
Earlier this year, they also welcomed a new head, Cecilia Qvist, with a background in technology-driven environments that are undergoing transformational growth. Her talent and experience will no doubt help LEGO Ventures Incubation Studio reach new heights.
UPDATE: The Lego Ventures Incubation Studio website has since shut down without an official announcement from Lego.
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