Video Case

Toying with Success: The McFarlane Companies

Todd McFarlane, president and CEO of the McFarlane Companies, is an entrepreneur who understands the importance of product development. Comics, sports, toys, and rock-and-roll have all benefited from his creativity. When McFarlane's dream to play major league baseball didn't happen, he fell back on another interest he developed as a teenager-drawing superheroes. He faced the same question faced by all other entrepreneurs: Could he make money pursuing his dreams? He sent his sketches to prospective employers, and after 300 rejection letters McFarlane got a job freelancing for Marvel Comics. Working many hours for low pay, he made a name for himself and by 1990 was the highest-paid comic book artist in the industry.

Frustrated over creative differences and his desire to own the rights to his characters, McFarlane quit, took six other artists with him, and started his own company. He went from artist to entrepreneur overnight. While industry experts predicted he would last less than a year, McFarlane didn't even think about the future. Spawn, his first comic, sold 1.7 million copies.

Entrepreneurship rewards individuals willing to take risks. In Todd McFarlane's case, the need to control his destiny drove his aspirations. His path is similar to that taken by many others: receiving training at a large company, then leaving when he decided he could provide a better product on his own.

Today's dynamic business environment has a tremendous effect on the success or failure of entrepreneurs like Todd McFarlane. Economics plays a key role at the McFarlane Companies. The firm must protect the many intellectual properties it creates and licenses. The business uses technology to support and spark creativity in developing new products. The competitive environment drives quality at McFarlane, which produces high-quality products even if they cost more, and thus McFarlane gains an edge over competitors. The CEO uses the Web to interact with his key demographic, or as he puts it, the freaks with long hair and cool tattoos. Spawn.com provides a place where fans can interact with each other and with the company. Finally, the global influence on business has an impact on all the other environments. Knowing he can't control the global environment, McFarlane focuses on managing what he can control.
Todd McFarlane's purchase of Mark McGwire's 70th home run ball for $3 million illustrates his willingness to take a risk and focus on what he controls. While many thought he was crazy, McFarlane saw an opportunity. He combined the ball with several others hit by McGwire and Sammy Sosa to create the McFarlane Collection, which was displayed in every major league stadium and garnered enormous publicity. A portion of the proceeds was donated to the Lou Gehrig Foundation. Most significant, McFarlane began a relationship with professional sports that led to his obtaining the exclusive rights to nearly every professional sports team toy license.

Questions for Discussion-

1. What personality traits do leaders like Todd McFarlane possess that distinguish them from other individuals?

2. How have global competition and technology advances changed business conditions and leadership challenges?