Toys with the Wow! factor

Wow! Labs, which has just three employees, is focusing on toys and games, while Wow! Stuff, which employs 20 staff and is 15pc owned by the Business Growth Fund, is going back to its roots in gifts.

“We started off as a gifts company but while we were developing gifts, we were always looking sideways at the toy industry,” says Taylor, 47, now Wow! Labs’ chief executive.

“There are a lot of established players in the toy market but they tend to have a rigid, structured and forecast way of doing business. People kept coming to us with incredible ideas that they had taken round all the established toy companies and got nowhere with because they prefer to expand established products, rather than try new ones.”

Wow! Labs was formed with Los Angeles-based robotics scientists Jim Wyatt and Mark Gasson, who is in the Guinness Book of Records for being the first person to self-inflict himself with a computer virus in the name of science.

Its first product is Real FX Racing, a game that Taylor describes as a cross between toy slot car and radio-controlled racing.

“We are incredibly excited about it,” he says. “It has opto-sensors in the front and back of the cars that read the track and can tell where the car is and what angle it is at.

“With slot racing, you’re stuck in one slot. With Real FX Racing, you’re free to go left and right and can overtake a car anywhere on the track. The cars are communicating with each other all the time and it operates more like a video game.”

Getting the toy to market, however, has not been straightforward.

Wow! Labs developed Real FX Racing three years ago but had mixed fortunes when it took a prototype around toy companies.

“We showed an early version at a toy show in Dallas in 2011,” says Taylor, “and received orders for $11m-$12m [£6.6m-£7.2m] from big US retailers.

“But we decided that we could have sold a product then that was half as exciting as it should have been.

“So we withdrew it from sale and spent another three years developing it into something infinitely richer, with far greater long-term potential.”

The issue now is that the product is so sophisticated that it has been difficult for Wow! Labs to explain.

“The biggest problem with Real FX is that it does so many things differently and better that it’s quite hard to get the message across,” says Taylor.

“We had difficulty educating customers and toy retailers what it is about.”

That led Wow! Labs to decide to go it alone, raising £75,000 last month from about 500 backers through Kickstarter, the peer-to-peer funding network.

Taylor says the feedback from Kickstarter investors has been more important than the funds raised.

“We’ve spent over $1m (£603,227) developing this product and the Kickstarter funding is the validation that there’s demand for a product like this,” he says.

Ironically, it also helped Wow! Labs agree a licensing and distribution deal for Real FX Racing with one of the biggest toy companies in Europe.

“That came directly through exposure on Kickstarter,” says Taylor.

Real FX Racing will have a limited launch in Asia, the US and the Middle East this year and debut in Europe next year.

In the meantime, Taylor is eyeing Wow! Labs’ two next potential products.

Project OneB – a “digital meets physical toy concept” – has attracted interest from one of the world’s biggest media groups.

The second involves technology which has led to discussions with a major entertainment company.

“If either of them come off, they will be transformational,” says Taylor.

“The financial pressure of doing something like Real FX Racing would be difficult to justify within Wow! Stuff. It also gives us more flexibility to try more off-the-wall projects. It’s time for Wow! Labs to stand on its own two feet.”

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