Magmatic (Trunki): Rob Law MBE

Watching Theo Paphitis literally ripping your product to shreds, and listening to Peter Jones call your company worthless, must be a pretty chastening experience. But for Rob Law, creator of the children’s suitcase Trunki, a verbal barrage on Dragons’ Den has provided the launchpad for meteoric business success.

Five years on from Law’s visit to the Den, which brought rejection from all five Dragons and a torrent of condemnation, it is estimated that 10% of Britain’s three to six-year-olds own a Trunki, and more than one million units have now been sold. Trunki’s parent company, Magmatic, is turning over £6m a year, and Law has earned an MBE for his efforts. It’s no wonder the Dragons have since dubbed Law as “the one that got away”.

Early turbulence

Law has been proving people wrong ever since he conceived the Trunki, while studying product design at Northumbria University in 1997. After conjuring the idea of a ride-on children’s suitcase while standing in the toy section of a local department store, Law was rebuffed by everyone he pitched to. Toy companies told him it was luggage; luggage manufacturers told him it was a toy. Disheartened but undeterred, Law went travelling after university, putting his entrepreneurial dreams on the backburner.

Upon arriving back in the UK in 2002, Law’s plan was simple: get some money together, then find a licensee for the Trunki. Initially, everything went to plan. After securing a £4,000 loan from the Prince’s Trust, Law went to a London toy fair where he met what he thought was the perfect company, a toy specialist with knowledge, contacts, and burning enthusiasm for the product.

The two parties quickly drew up a licensing agreement: the licensee would take care of every stage of Trunki’s development – sourcing, production, sales and distribution – leaving Law free to concentrate on forging his own full-time career as a design consultant, and watch as someone else turned his vision into lucrative reality for the both of them.

Well that was the theory, anyway. In fact the licensee made a complete hash of the job, selling just 19,000 units in three years. In October 2005, the company went bankrupt, leaving Law and the Trunki in limbo. “It was a dark week,” he recalls. “I took a call from my girlfriend of seven years saying she didn’t want to carry on, and then I heard the company selling our product had gone bust.”

After painstakingly crunching the numbers, and working out how much it would cost to warehouse the product and ship the units over from China, Law decided to go it alone, taking out a £10,000 loan to start producing the Trunki himself. But this was no easy task; the problems just kept on coming.

In the spring of 2006, just before Magmatic was about to begin trading independently, a key factory in China went bust, forcing Law to find a new manufacturer at extremely short notice. Then, when the first batch of Trunkis hit the stores, Law was inundated with complaints because the catches didn’t work.

Finally, in September 2006, Law’s appearance on Dragons’ Den aired to the nation. Millions watched as the assembled Dragons took turns to savage the Trunki’s prospects – when Paphitis pulled the strap off with little apparent effort, it was hard to see how the Trunki could ever become viable.

Recovery

But Law took it on the chin, salvaging positives from the wreckage of his appearance. Even today, he insists Dragons’ Den “was a great bit of marketing. It certainly brought more coverage to our website”. Using Paphitis’ criticism as a lesson, Rob got the faulty strap fixed, and began an ambitious campaign of pitching to the major department stores.

This campaign has brought huge success. Just a few weeks after Dragons’ Den aired, Law concluded an agreement with John Lewis; further agreements have since followed with the likes of Next, Toys R Us, John Lewis and Halfords.

Surprisingly, Law has never sought a patent for his product, believing that “they are very expensive for what they provide, and they can make people become too secretive about their ideas”. He says the absence of patent protection necessitated a vigorous expansion strategy – “because there’s little intellectual property around our product, we needed to get the Trunkis out, and transcend international boundaries”.

Today the Trunki is sold in 1,564 stores in 62 countries, including Canada, North America, Spain, Italy, Holland, Australia and New Zealand. Law has expanded overseas by attending trade shows and building up word of mouth, and created a network of 16 overseas distributors.

Magmatic currently has only one oversees licensee, American firm Melissa and Doug. Law says he decided to secure a US licensee for several reasons: “With the litigious nature of the US, I wanted a firewall between Magmatic Ltd and the US product. The insurance for product liability in North America was also very expensive, and I heard horror stories from peers in our industry who almost went bust by pouring all their energies into feeding overseas growth – draining cashflow and diverting attention from the core UK market.” The arrangement has been extremely successful, and Law hints he may seek out further licensees in the future.

Diversification

To complement the Trunki, Law has introduced several new products. These include a travel toy box; a booster pack, which can function as either a rucksack or car booster seat; and a messenger bag which doubles as a saddle for the suitcase.

As the product range has developed, Law has been forced to spend thousands of pounds on marketing and safety testing. This has necessitated additional investment; during the development of the booster pack in 2008-9, Law went back to the market to look for an investor, creating a new business plan based on debt and equity finance. Yet again, Law was faced with an immediate obstacle. “The business plan landed on my bank manager’s desk the day after Lehmann Brothers went under, and they weren’t able to help us after that.” Once more, however, Law bounced back. He went after private investment, and eventually managed to convince an angel investor to pay £200,000 for 10% of the business.

Promotion

Product development may have been expensive, but promotion has been extremely cost-effective. Magmatic refuses to do any front-end advertising. Instead, it relies on careful PR, meeting journalists and wowing them with the product. Law says: “We’ve spent around £200,000 on PR so far, and the coverage has been worth several million. Journalists have loved our product, and we’ve been able to do loads of cool things. For example, to promote our new dinosaur Trunki, we did a Night at the Museum-style viral video to coincide with it, which has really taken off on YouTube.”

Law has also injected light-hearted creativity into his promotional literature, an approach which stems from dealing with angry customers after the first batch of Trunkis hit the shelves back in 2006. “I tried to diffuse the parents by saying ‘sounds like you had a poorly trunki, but we’ve got a remedy’. We started putting in an instruction sheet on how to fix your trunki – I even wore a doctor’s outfit! It turned the situation into a positive one, and showed the power of a more conversational, fun approach.”

Today Law’s business card bears the moniker ‘Trunki daddy’, and his office even has its own slide. “Everyone who comes in the office is encouraged to go down it, from new starters to potential customers,” Law says proudly. “It’s not just a gimmick. If you put yourself in the mind of someone who goes down the slide – they’re going to go home and tell their friends about us, and our sense of fun.”

The present

Law now presides over 21 full-time staff, divided into eight departments – each with its own manager and Trunki-based job title. He proudly states that “my greatest achievement is my team”, and regularly rewards his staff with lavish trips. In 2011, for Magmatic’s fifth birthday, Law took the whole company on holiday to Ibiza. “It was an expense, but it was a great bit of PR for us. The papers picked it up, and it really solidified our team, for not much investment really.”

Law’s success has yielded a string of consumer awards, most recently ‘Product Business of the Year’ at the 2011 Fast Growth Business Awards (organised by Startups’ sister title, Growing Business), as well as design accolades.

Further recognition has been provided by the producers of The Apprentice, who challenged this year’s contestants to sell a booster pack to French retailer La Redoute. “The editor of The Apprentice has kids, who have Trunkis, and she contacted us to ask if we have any new products that would be suitable for the show. Dragons’ Den, in hindsight, couldn’t have worked any better, so I thought ‘why not take the risk? It’s really paid off with loads more enquiries.'”

Buoyed by the publicity provided, Law wants Magmatic to be hitting £10m turnover within two years. Having overcome so many obstacles over recent years, you wouldn’t bet against this passionate entrepreneur achieving anything he puts his mind to.