Forbes 30 Under 30 game creator Yuting Su and her team wanted to revolutionize playtime for kids. Thinker-Tinker seamlessly integrates physical toys with technology. Their first product, Octobo is a plush octopus that transforms into an interactive play platform.
We sat down with Yuting to learn more about how Thinker-Tinker came to be, the team’s business model, exit opportunities, and more-
For those who don’t know, what is the genesis story of thinker-tinker?
I love working with people, and my works have always been dedicated to making changes that can uniquely benefit people’s lives in a nonintrusive way. I hold a dual Masters in Medical Informatics and Interactive Media and Games. Before starting Thinker-Tinker, I was an educational game designer and researcher. I soon realized that even we as a developer, have all the great intentions of creating contents for kids — the screen media itself are so limited in the type of interaction we can provide for kids. So I started to experiment on the combination of digital and physical gameplay. So kids can still take advantage of all the interactions digital media can provide while having the opportunity to use their body and receive the tactile physical stimulation that is crucial for their development.
Thinker-Tinker provides interactive plush learning companions for kids. Our original toy, Octobo, is the world’s first interactive smart plush with expandable content that teaches ABC’s, spelling, rhythm, and the foundations for STEAM (science, technology, engineering, arts, and math) education and most uniquely, social-emotional learning. The kids love it, but so does the industry. Octobo is a finalist for SXSW Innovation Awards and CES’s Last Gadget Standing. We are backed by Techstars and Comcast and are now working with Universal Brand Development to create a new interactive experience!
How do you plan on allocating funds raised in this round to scale the business?
There are two key drivers for us to scale our business:
- Product expansion (product and content development speed)
- Channel reach (marketing and distribution strategy)
The investment will enable us to make key hires for development and marketing, accelerate growth. We already established a very promising conversion rate from our digital ads, and we will be able to push more budget for sales after this round.
As for the content side, currently, we develop all content internally with our small team. That gives us the advantage of producing high-quality content, but at the same time, it does take a little longer then we like to push out new releases. With additional funds, we will be able to not only speed up the production for content but also have resources for business development on content collaboration with third parties. This way Octobo can provide even more value to our customers!
We just recently launched an equity crowdfunding campaign with Netcapital.
What is the difference between unstructured and structured play?
One of the biggest challenges in the children’s software space is appealing to those who prefer unstructured play (LEGO, Minecraft, dollhouses), and those who are looking for clear objectives and guidance (most videogames). By creating a seamless blend between exploratory play and storybook adventures, the style of play can change from minute to minute with Octobo, and every child can find their way to play with him.
Our products provide free form exploration (unstructured play) that you can put Octobo in front of a kid and he/she can naturally start playing with the product. And instructed play through the storybook (structured play) when parents and caregivers want to be involved in the social play.
This design allows a more natural integration into families’ lives and makes our product suitable for all occasions, across multiple ages.
Do you have any direct competition, if so, how do you differentiate?
There are a few other products like Osmo, LEGO Boost, Cubetto, Woobo are in the phy-gital product space. However, most of the products are designed for kids 6-12 and focus on hard topics like coding skills, science and math. We are targeting the younger market for 0-7, and introduce learning topics beyond STEM lessons. Our flagship product Octobo fosters creativity, storytelling, social-emotional learning and companionship on top of all the learning topics.
Our product also seamlessly integrates the screen inside the plush toy and brings the plush, and the screen together as one interface. With an expandable app library, and having the mindset of building our product like a “platform” – we will be able to push out more content at a faster speed and continue growing compared to other products.
Our technology is also built to be able to easily port to other characters, opens up a great opportunity to work with other IPs.
Can you speak to your b2b medical institute pilot and any other plans for future expansion?
Our B2B pilot is a 24 months SDK licensing pilot. The research institute is using our SDK to re-map Octobo sensors to their app content that is designed for dementia and diabetic patients. Doll therapy and companion robots have long been discussed in the field, but yet have a solution that is affordable for mass use and flexible enough for quick customization. Octobo and our SDK system provide a unique solution to treat the needs.
In the near future, Thinker-Tinker will focus on the software side of the product. On our road map, we have a subscription service for learning insights, more educational interactive storybooks in the Octobo universe and mini-games that we are developing for Octobo. We will also take advantage of our special collaboration with Universal Dreamworks to build our brand.
What are the biggest risks associated with your business?
We already de-risked the biggest challenge for the business – hardware R&D and manufacturing. We spent the last two years working on the solution, a lot of product companies failed at that point. But we overcame all the hurdles that came with productions and now have a full technical solution for our platform for future growth. The next step for us is to gain enough funding for pushing additional content and marketing reach to build awareness for our products.
How is your team uniquely positioned to win out in this market?
There are two key stakeholders necessary for a product like Octobo to take off: 1. Creative talent and content producers and 2. manufacturing management. We are blessed to have a phenomenal team that can fulfill our vision on both of these fronts.
Our strong content development team includes members and consultants from USC’s Cinematic Arts network, Disney Interactive, and Sesame Workshop. Coming out from the Comcast Techstars accelerator program, we are also uniquely connected to the media and startup ecosystem. Our deal with Universal Dreamworks came out from our internal connection through Comcast.
On the manufacturing side, my personal connections lead me to the development network in Taiwan and China. I communicate in my native Mandarin to DFM companies and also to the factories in China.
What does your business model look like?
We are expecting 2.5x of LTV from our initial product sales. Our business model is similar to the razor and blades business model. Our primary physical smart plush toy acts as a simple “controller” for the play platform that families can then purchase additional add-ons (both physical and digital) to expand the play. 72% of our customers purchased an additional add-on pack that is $40 more than the primary product. We are expecting another $100 add-on purchase on the digital product we will release.
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like?
Our vision is to create natural and emotional learning companions that educate children through all of their senses. I believe that learning should be done through play, and the contents should be adaptable and personalized as possible. Moreover, it’s a trend that our kids will have access to, and surrounded by technology and digital contents early on in their lives – therefore we want to be better prepared for this future. We want to create a brand that people come to us for quality, organic digital experiences that do not let go of physical, social stimulation that is so important to us as humans. 10 years from now, we envision ourselves to be the next sesame workshop, with a line of innovative smart products and a world of attractive characters that are active among all different media platforms (including the new ones that are coming out in the future!).
In the past two years, there are a few acquisitions happened for:
- Bigger toy/product company acquire specialty companies in the space (Sphero bought littleBits and specdrums, Jazware bought Wicked Cool Toys)
- Product company acquired content/ IP creator startup (Spin Master bought Sago Mini and Toca Boca, Hasbro bought Entertainment One).
- Production/ content company acquired another content channel (Moonbug bought Little Baby Bum)
As Thinker-Tinker produced both our original IPs, patented tech and have the ability to keep advancing our product lines. We can potentially pursue all the above models as our exit plan.
We at KingsCrowd are excited to see where Yuting and her team take the company. Thinker-Tinker is currently raising funds on the Netcapital portal.
About: Olivia Strobl
Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.