LEGO Group

Ole Kirk Christiansen was a carpenter in Billund, Denmark who began making wooden toys in 1932 during the Great Depression after his construction business collapsed. He named the company LEGO — a contraction of the Danish "leg godt," meaning "play well." He had no idea that the Latin word "lego" also means "I put together." He later said it was a happy coincidence. The company nearly went bankrupt twice in its first decade, once when a warehouse fire destroyed the entire inventory.

LEGO began producing plastic interlocking bricks in 1949, based on a British toy called Kiddicraft Self-Locking Bricks. Danish toy retailers refused to stock them, telling Christiansen that parents wanted traditional wooden toys and would never trust plastic. LEGO's own salespeople reportedly refused to demonstrate the product. The bricks sat in warehouses. Christiansen kept producing them anyway.

LEGO filed a patent for the modern LEGO brick design on January 28, 1958 — the stud-and-tube coupling system that makes LEGO bricks compatible across all sets made since that date. A LEGO brick from 1958 is still compatible with a LEGO brick made today. No other toy company has maintained backward compatibility for 65+ years. The patent expired in 1978, but LEGO's manufacturing precision became its own barrier to competition.

By 2003, LEGO was losing approximately $1 million per day. The company had over-diversified into clothing, theme parks, video games, and television — straying from its core product. Debt was spiralling. A turnaround consultant named Jørgen Vig Knudstorp was brought in and appointed CEO in 2004 at age 36. He sold the theme parks, eliminated most non-brick products, and refocused entirely on construction sets. Within three years, LEGO was profitable again.

The LEGO Movie was released in February 2014 and was both a critical and commercial success, grossing $469 million worldwide. It was essentially a 100-minute advertisement for LEGO that people paid to watch. By 2015, LEGO had overtaken Mattel and Hasbro to become the world's largest toy company by revenue. A carpenter's toy company from a Danish village of 6,000 people had become the most valuable toy brand in the world.