How LEGO Rose From The Ashes To Become a Billion Dollar Empire

LEGO, the beloved toy company known for its iconic bricks, has an origin story filled with fiery disasters and family feuds, yet it still managed to rise like a phoenix to become the massive global brand it is today.

Humble Beginnings For A Tenacious Carpenter

It all started with Ole Kirk Christiansen, born in 1891 to a large but impoverished family in Denmark. Despite the poverty, Ole was determined and worked hard to get a basic high school education. He then apprenticed as a carpenter with his older brother, finding joy in the craft of working with wood to build things.

After saving up money for a few years, Ole opened his own carpentry shop in the town of Billund, selling handmade furniture like tables and chairs. He married his sweetheart Kirstine and they started a family with four rambunctious young sons. Though they lived modestly, Ole was living his dream running his own business.

Tragedy Strikes: Fire And The Great Depression

But Ole’s happy life was struck by immense tragedy. First, in 1924, his young sons accidentally started a fire that burnt down Ole’s Billund carpentry shop to ashes. Then the Great Depression hit Denmark in 1930, leaving Ole struggling to scrape by. Worst of all, his beloved wife Kirstine passed away in 1932, leaving Ole a grieving single father of four.

To cheer up his sons during these hard times, Ole began whittling small wooden toys for them to play with. Seeing their joy playing with the toys sparked an idea in Ole. Though his siblings begged him to get a “real job”, Ole stubbornly decided to pivot his carpentry business into making and selling wooden toys, naming the venture “LEGO” after the Danish phrase meaning “play well”.

Nazi Invasion Threatens The Fledgling Company

However, the pivot came at an awful time economically in Denmark and LEGO struggled badly. Then in April 1940, Nazi Germany invaded Denmark, making life even harder under occupation. In one final cruel stroke of bad luck, the LEGO workshop burned down again during Nazi control, destroying all the wooden toys inside.

When Denmark was finally liberated in 1945, Ole turned to plastic as a cheaper material to produce toys with. He purchased one of the first plastic injection molding machines in Denmark to make toys like plastic tractors. While wooden toys remained part of the business, making plastic toys marked a turning point toward LEGO’s future success.

Interlocking Building Bricks Become LEGO’s Breakout Product

In the mid-1950s, Ole learned of the “Kiddicraft Self-Locking Building Brick”, an interlocking plastic brick children could assemble. LEGO released their own similar brick product called “Automatic Binding Bricks”, though there was heated controversy about whether LEGO had permission or if they outright stole the brick idea. LEGO leaders maintained they legally pursued the opportunity.

In any case, Ole’s son Godtfred began extensively developing and perfecting the brick design, allowing models to hold together securely. The improved bricks debuted in the late 1950s as part of the LEGO Systems building set line, becoming a huge hit. By the early 1960s, the LEGO brick emerged as the company’s top seller, finally bringing real success after decades of struggle.

Bitter Family Feud After Third Fire

However, tragedy wasn’t done plaguing LEGO. In 1960, lightning struck and burned down the workshop for the third time! After this, Godtfred controversially decided LEGO would stop producing wooden toys altogether, despite protests from his siblings. The siblings quit LEGO entirely, starting their own wooden toy company BILOfix, while LEGO would focus only on its plastic bricks.

Massive Global Expansion Across Decades

Spurred by the brick’s success, Godtfred’s ambition grew exponentially in the 60s and 70s. He constructed an airport to boost international sales and opened the first Legoland theme park, which saw over 600k visitors in its opening year against all expectations. The company grew into publishing books, video games, clothing lines and more. By the mid-90s, LEGO was a thriving global empire just before Godtfred passed away in 1995.

Financial Tailspin Threatens The Empire

After Godtfred’s death, his son took over as CEO but struggled to manage the vast company. Poor financial decisions and overexpansion caused LEGO’s first major losses in 1998. Lawsuits from competitors making similar bricks exacerbated money problems.

By 2004, LEGO lost hundreds of millions of dollars, forcing them to lay off 1,000 employees. The next CEO, Jorgen Vig Knudstorp, immediately sold off underperforming business units to stop the financial freefall and refocus LEGO on its core products. By doubling down on merchandising and video game licensing deals with major entertainment brands, Jorgen was able to rapidly return LEGO to profitability.

The company further capitalized on its popularity by expanding into movies, releasing The LEGO Movie in 2014 which grossed nearly $500 million. Today, through surviving disasters and never giving up its ambition, the ex-carpenter’s toy business that rose literally from the ashes has grown into a beloved $7 billion dollar empire spanning toys, games, movies and more.