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As a nearly 60-year-old brand, Hot Wheels has been a playroom staple for generations of children. But while the tiny cars and buildable track sets have managed to find their way into the playrooms of millions of children, the looping, curving track pieces have always been a bit of a challenge to actually put together. Mattel, which created the Hot Wheels brand in 1968, knows this is a pain point, especially at the younger end of their target market. Recent research found that less than a third of kids aged 3 to 6 are able to assemble Hot Wheels track sets without help. “That to us was a really big call to say that we need to approach this in a different manner,” says Roberto Stanichi, executive vice president of Hot Wheels. [Photo: courtesy Mattel] So, in 2022, Hot Wheels launched an unusually detailed research and development effort to improve the assembly of its playsets. The outcome is the new Hot Wheels Speed Snap Track System, which makes every section of track easier to connect together. Instead of the somewhat complicated existing system that requires a small connector piece to slide into the end of each section of track, the new system’s track pieces come together with a simple snap that’s manageable for kids as young as 3. Products will start hitting stores in early summer, and will come with adapters to connect to the existing track system. [Photo: courtesy Mattel] “It’s the first time we’ve done this big of an innovation in the track system in over 50 years,” says Katie Buford, vice president of product at Mattel. Building a new track For Hot Wheels, the typical pipeline to bring a new product to market takes about 18 months. When it came to the tracks, the brand spent almost three years to get this essential piece of the playsets right. Buford says consumer research helped inform the need for a different approach, and Hot Wheels designers and engineers worked their way through six prototypes, and variations of those six, before landing on the approach that was the most intuitive and the most accessible. Prototype iterations [Photo: courtesy Mattel] “It comes back to the testing. Like, lots and lots of rounds of making sure that the snap is the right tolerance, and that it is the right amount of pressure for kids to be able to put together, but also the right amount for it not to come apart,” Buford says. “It’s a fine balance to strike.” A late prototype of the new design. [Photo: courtesy Mattel] Hot Wheels playsets, which come in a range from conventional racetrack loops to extravagantly looped and motorized contortions, can be a make or break for consumers, according to Stanichi. Some consumers will buy a track product and call it a day, while the more engaged Hot Wheels fan might buy many track sets over time, connecting them together in wild and YouTube-ready arrays. [Photo: courtesy Mattel] All Hot Wheels playsets sold over the past decade or so have included at least one connection point that allows them to link up with other sets for more creative and expansive play. But for those kids who have been unable to build the playsets on their own, the drive to get more tracks just wasn’t there. “Kids are already engaged in our brand. They are already our fans. But because of some of these usability challenges, we were not getting them to go deeper into our track system,” Stanichi says. “When the Hot Wheels track system really comes to life is when you’re expanding it.” [Photo: courtesy Mattel] Endlessly expandable The new system was intentionally designed to be modular, so that it could be endlessly expanded. Redesigning the tracks became a way to nudge more kids away from thinking of the playsets as a contained activity and toward thinking of them more as what Stanichi calls “a sandbox for creativity.” According to user testing, Hot Wheels’s Speed Snap Track System addresses the main problem with the existing track system, making assembly easier for a majority of the Hot Wheels 3-to-6-year-old target audience. Track setup time was also reduced by 10%. Stanichi says the product will be a success if it gets more Hot Wheels customers to go from just buying toy cars to buying playsets, and for more of those who already have playsets to double or even triple the number of sets they own. Whether a few stretches of plastic race-car track will convince kidsor, really, parentsto buy more Hot Wheels stuff remains to be seen. But according to Stanichi, the brand doesn’t actually need that much help. It’s seen seven years of revenue growth, and shows no sign of slowing down. “The last seven years have been the best performing years in the history of the brand,” Stanichi says. That makes redesigning one of the key components of the brand a possibly confusing decision. But Stanichi says the user data on the existing track’s assembly challenges was impossible to ignore. “There’s been a lot of excitement and support within Mattel overall to innovate and to break something that is not broken so we can make it better,” Stanichi says.
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Hello and welcome to Modern CEO! Im Stephanie Mehta, CEO and chief content officer of Mansueto Ventures. Each week this newsletter explores inclusive approaches to leadership drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to get it yourself every Monday morning. Long before the Trump administration tapped Elon Musk to cut federal costs and headcount via the Department of Government Efficiency (DOGE), business leaders and politicians have been trying to find ways to make government leaner, less bureaucratic, and more like a well-run corporation. In 1982, Ronald Reagan asked J. Peter Grace, CEO of W.R. Grace & Co., to lead a private sector committee to root our government waste. While campaigning for the presidency in 1992, Bill Clinton promised to radically change the way government operatesto shift from top-down bureaucracy to entrepreneurial government. The notion that federal agencies and programs can be run more like businesses has animated the Oval Office aspirations of executives such as Michael Bloomberg, Howard Schultz, and Doug Burgum. Public-sector playbooks for CEOs But are there lessons that executives in the private sector can learn from their public counterparts? Businesses certainly have benefitted from government; tech companies owe a debt to DARPA, the U.S. Defense Advanced Research Projects Agency, for funding the predecessor to the internet, for example. Local governments can be particularly good at empowering employees at all levels to innovate, something that can confound large corporations. Rick Wartzman and Lawrence Greenspun, when they were with the Drucker Institute, shared the story of how a single front-line employee and two-middle managers in South Bend, Indiana, streamlined the citys application for tax-abatement to four pages from 22 and moved the process online. The mayor who challenged them to innovate? Pete Buttigieg, who went on to become U.S. Secretary of Transportation during the Biden administration. Government has produced and shaped other notable leaders, including Christina Romer, the former chair of the Council of Economic Advisers in the Obama administration; and Maura Healey, the current governor of Massachusetts, whom I happened to interview last week at Think 2025, IBMs annual event for senior business and technology leaders (Fast Company was a strategic media partner at Think). At a time when many forces are pushing government entities to be more like businesses, I asked both of them to reflect on what business can learn from government. Heres what they had to say: Maura Healey, governor, Massachusetts: Nobody has ever asked me that question. In many ways, government can do better by operating like a business, but in other cases that just doesnt hold. Government is the place where things have to get done that the market isnt going to do. As governor, I have to be attentive to the needs of seven million residents, some of whom voted for me and some of whom didnt, many of whom have competing interests. In government you have to find a way to account for all of that. It gets messy; it gets noisy; but at the end, it helps in terms of productive policy formulation when you have that kind of stakeholder incorporation. “For purposes of creating a better worldI think in big termsa world where there is an abundance of energy, of housing, of healthcare, of transportation, of economic opportunity and prosperity for every child, it has to come from a broader lens than sometimes might be incentivized by the bottom line. Christina Romer, professor emerita, Graduate Division, University of California at Berkeley, former chair of the Council of Economic Advisers: Government policymaking is often chided for being slow, and it can indeed be frustratingly bureaucratic and incremental. But moving fast and breaking things is not what Social Security recipients want when they are waiting for their checks or what the public expects when the FAA is reconfiguring flight patterns and deciding control-tower staffing. At their best, government actions are carefully researched, broadly vetted, and deliberately implemented. This approach wouldnt work in every business setting, but it could certainly help prevent many bad decisions and unintended consequences. Something else that impressed me during my time in government was the high quality of government workers. Far from being the lazy, overpaid bureaucrats they are often caricatured to be, I found government workers to be knowledgeable, hard-working, and committed to serving the public. Businesses would certainly benefit if they could generate that kind of loyalty and passion in their workers. Good enough for government work Are you a business leader who has worked in government? What did you learn from your experiences in the public sector? Send your stories to me at stephaniemehta@mansueto.com. I may include insights in a future newsletter. Read and listen to more: good government The first 100 days at the SBA Gen Z really wants to work for the federal government Reclaiming the phrase good enough for government work The Computer Freaks podcast tells the untold story of how the internet almost didnt happen
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A group backed by tech billionaires spent years and $800 million secretly buying up over 60,000 acres of land in Solano County, California, 60 miles northeast of San Francisco. The groupwhich calls itself California Forever and is funded by Marc Andreessen, LinkedIn cofounder Reid Hoffman, and Laurene Powell Jobs, among othersplanned from the start to build a brand-new city for as many as 400,000 residents. But to do that they needed voter approval to change the countys development rules. Just before heading to the ballot this past November, California Forever yanked its initiative despite spending over $9 million on its campaign. Now it seems California Forever may have found a way to develop the property it owns without needing to win an election. The pulled ballot measure caught the attention of Bret Prebula, the city manager of Suisun City, a small city in the area. It was the trigger, he tells Fast Company, for coming up with the idea to expand the citys borders and annex nearby land as a way to address the citys finances and budget deficit. There is only a small bit of undevelopable marshland to the citys west; to the east are the vast tracts of land owned by the tech titans. Prebula brought his idea to the Suisun City council last year, and in January it voted four to one to explore the possibility of annexing land. It was a heated meeting, with critics bringing up California Forevers likely involvement, but the mayor of Suisun City chastised attendees multiple times that California Forever was not on the agenda. And yet, when Suisun City later sent letters out to property owners surrounding the city, California Forever was the main group that responded to indicate its interest. The map Suisun City produced of what land its looking at annexing is exactly where California Forevers proposed city would be, says Sadie Wilson, director of planning and research at The Greenbelt Alliance, which has been leading the opposition to California Forevers development plans. A few weeks later, Rio Vista, another small city in the area, announced it, too, would explore annexation in response to Suisun Citys announcement. The city voted to join the effort to ensure that, as City Manager Kristina Miller said at the meeting, it will have a seat at the table so that, for lack of a better word, we are not on the menu. Many of the councilmembers took the same stance, voicing their opposition to California Forevers plans while saying, in the words of Councilmember Rick Dolk, the city needs to take a defensive position. Indeed, Rio Vistas hand may have been forced: the land Suisun City is looking at annexing thats owned by California Forever goes right up to the citys west border. If it didnt join in, the city could feel the impacts and get none of the benefits, Wilson says. At a meeting in mid-April, the two cities signed a memorandum of understanding to avoid being pitted against each other. Suisun City is also pursuing an agreement with California Forever that would require the group to cover all of the costs of consultants and other needs the cities will have as it explores the idea of annexation so it doesnt have to spend its own money. That could also include an agreement that California Forever wont put another measure on Solano Countys ballot next year as the group vowed to do after it pulled last years initiative. For California Forever, it seems that annexation is the focus right now, says Nate Huntington, resilience manager at the Greenbelt Alliance. Representatives from the group have attended meetings in both cities in which these plans were discussed. In response to a request for comment, a California Forever spokesperson says: We look forward to working with Suisun City, Rio Vista, and Solano County to bring new industries, amazing neighborhoods, and new sources of tax revenue to the region. The annexation process is typically lengthy, often unfolding over several years. Before either city can expand its sphere of influence to include additional territory, the city councils must first vote in favor of the proposal. They must then reach an agreement with the county on how to share property tax revenue. After that, detailed plans and analyses must be developed to outline what the expansion would involve and how the cities would provide municipal services to the new areas. The plan must then be approved by the Solano Local Agency Formation Commission, which oversees jurisdictional boundaries. The process also requires a municipal service review, an environmental review, and multiple city council votes. But opponents of California Forevers development plan point out that the group has a track record of trying to do things differently than what is typical. There are roadblocks, but also I think theyve shown theyre really willing to go around the normal process, Wilson says. California Forever is very powerful and they have a lot of resources. Prebula, for his part, sees it similarly, saying that it could make sense, if annexation moves forward, to see if the state legislature will pass legislation shortening the process as it did for the construction of a new NBA stadium. But the deal could be a raw one for the cities if they move forward. Although they would get upfront development fees from California Forever, a fiscal study of the groups ballot initiative commissioned by the county last year found that, had it won and developed the city, the county would over time actually lose $103.1 million, and that was under an arrangement where all tax revenue would have flowed to the county. If the cities go forward with annexation, theyll have to share tax revenue with each other and the county, earning even less. Prebula rebuts those findings, arguing the analysis happened way too quickly and was based on archaic ways of delivering services. Opponents of California Forevers efforts say the annexation plan reflects the groups belief that it cant win at the ballot box, especially when they got off on such a bad start and theres so much distrust, Huntington says. The group kept its plans secret until the New York Times revealed who was behind the land acquisition in 2023. California Forever also sued local ranchers and farmersmost of whom had refused to sell their landalleging they violated antitrust law when they collude[d] by holding out for higher offers and seeking $510 million in damages. Many of those landowners were ultimately forced to settle and give up their property. Jan Sramek, former Goldman Sachs trader and CEO of California Forever, told Fast Company last August that the group would refuse to drop the case. They also say it represents an end-run around the public. If you go the annexation route, there is no vote, noted Duane Kromm, a former member of the Solano County Board of Supervisors who was involved in opposing California Forevers ballot initiative. Prebula argued that county residents voice can be heard without a public vote and that his approach brings more people into the conversation when you have a select group of people who can foster a process and a project. That, he argued, is what democracy is, its just not about a vote. But Wilson argued that its a way to go around the process California Forever should have followed. Its saying you dont care about the publics vote, dont care about the county process, she says. Time and again they seem to just be doing whatever they want and not respecting the people or laws or processes or communities.
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