BY JOHN ECKBERG
The Cincinnati Enquirer
Morris and Janice Tsai, brother and sister puzzle-makers, took the telephone call with characteristic aplomb.
On the line was an executive with the QVC cable television shopping network, a retailing powerhouse that reaches 65 million homes and has $2 billion in annual sales. He was calling because he wanted to buy some toys and puzzles -- thousands of them, in fact.
Somebody from the network saw the items created from the Tsai's 4-year-old company called Imagination Project, a division of Panda Enterprises, at a toy convention in the summer.
She loved the work and told the pair that an earlier rejection from QVC was now meaningless. The buyer thought the wall art based on M.C. Escher was splendid and said she was certain the West Chester, Pa.-based QVC would sell the puzzles, the Escher artwork and foam building blocks through its toll-free store.
The Tsais, graduates of Princeton High School, heard nothing more as days turned into weeks and weeks turned into months until the mailman brought a bound book of QVC shipping regulations. It was a good sign. The pre-holiday telephone call last week, lasting all of 10 seconds, was the
final confirmation that yet another retailing door was swinging open for this Union Township company created in 1993 at a study in a Springdale home.
Yes, Janice told Morris, QVC will be selling Tesselz jigsaw puzzles and other toys for adults and children this season.
"It's a big door," she eventually acknowledged, "a big, big door."
She did have a good question for her brother, president of the company. Was there enough inventory? Because puzzles are imported from Taiwan, it takes at least 23 days for a ship to hit a U.S. port with their cargo on board and having ample supply on hand was important.
Morris hesitated while thinking about the warehouse of products. Sure, he said finally, we're all right. Adequate inventory, high-traffic sales outlets, supply channels, payroll, competition, shelf-space and container display are among the concerns confronting this company as it enters its fifth year.
With annual revenues expected to crest at $400,000 for 1998, sales growth seemed to be slowing.
Then again, maybe not. The company has seen revenues double each year for the past four years, a brisk pace that could push revenues to more than $700,000 by this time next year.
Morris doubted that revenues would double yet again. But with QVC on board and more than 1,000 other retail outlets selling products to children and adults, Janice is hopeful that the revenue growth was definitely not going to abate.
The company has found a niche in the world of specialty toy sales. Those toy companies are usually small entrepreneurs who dreamed up their games and action figures, probably in their homes, said Janet Koerner, executive director of the American Specialty Toy Retailing Association, a trade group based in Des Moines, Iowa. "As companies grow, the next step may be to hire production people and creative people to develop a product for mass
appeal. But a lot of manufacturers choose to stay in the specialty market," Mrs. Koerner said.
Focusing on the specialty toy market is not a bad move, she said. With specialty toys representing 3 percent to 5 percent of the estimated $23 billion spent by Americans on toys -- about $1.15 billion -- the size of the specialty toy market is more likely to grow than shrink, she said.
Museum stores and upscale toy stores have been great outlets for Iproject products. Puzzles are sold in the Metropolitan Museum of Art and the San Francisco Museum of Modern Art, in the Discovery Channel catalog and in specialty toy shops in tony malls. "We're making money, but everything we make, we put back into the business," Morris said.
"There's no point taking money out right now."
There have been several AH-HAH moments in the life of this company, which began as an importer of acrylic photo frames and clocks and a collection of children's blocks.
The two soon realized that frame sales were predictable, and the frames themselves were not very special, but the blocks were fantastic. Iproject building blocks of soft foam beg to be touched, fit into a neat carrying case and generally have great appeal for baby boomers, who are now parents of another wave of children.
The product line was soon expanded to include a smaller, travel set that was perfect for entertaining toddlers in restaurants or other public settings. Black-and-white and all-black sets are great for entertaining harried business executives who have to doodle with something while on the telephone.
Another eureka moment came at the Boston Museum of Science when the siblings realized that large blocks of lizards from M.C. Escher's interlocking designs would make great wall art. They contacted the M.C. Escher Foundation, struck a licensing agreement with the foundation and began to
produce colorful arrays of interlocking lizards.
The most recent oh-my-gosh moment came when Dr. Haresh Lalvani, a tenured professor at the School of Architecture at the Pratt Institute and a leading researcher in morphology (the study of shapes) approached them at a toy convention with his assortment of tessellation diagrams.
A tessellation is an identical structure that connects in a repeating pattern to fill a surface. Superimpose a pretty picture on it -- for Iproject, it is a photograph from the Cincinnati Zoo or the ceiling of a chapel -- and an exercise of shape becomes a colorful puzzle called a Tesselz. He had a collection of tessellations, brought them to the Tsais, and the company and professor reached an agreement to produce puzzles.
Though the puzzle and building block product lines are popular, Morris is always on the hunt for new items. He keeps a scrapbook of ideas, which come as frequently as a couple of times a day or once a month during slow times.
Most do not pan out, but all have potential, and he revisits the notebook all the time. New products include 4D Metapuzzles based on fourth-dimensional designs and a palette of plastic shapes that create colorful designs rather than solve problems.
While solving puzzles can be a frustrating experience for some, they can be great stress relievers for others, Janice said. The blocks, too, relieve stress but sometimes in an unintended fashion. "You can throw them and they won't hurt (anyone)," Morris said.
