B-School Startups: The Birth of Morphologyby
Editor's Note: This story is part of Bloomberg Businessweek's occasional series on the world of startups. The series focuses on MBAs and undergraduate business students who developed their ideas or launched their businesses while still in school and the many ways their schools helped them get their new ventures off the ground. For a look at some business students trying to build their own businesses, check out our slide show.
Kate Ryan Reiling's big idea came on a freezing Minnesota night in 2002. It was too cold to venture out, so Reiling and her friends decided to stay in and play board games. They didn't like their choices—Jenga or Pente—so they opted to invent their own game.
What they came up with was something similar to a 3D version of Pictionary. A member of a team picks a word, and using an assortment of objects, such as string, glass beads, colored cubes, and wooden sticks, she builds the word for her teammates to guess before time runs out.
After an evening of combining blocks, beads, and words from a Spanish-English dictionary, the night ended for everyone but Reiling. "I was amazed at how much fun we had," she says. "I asked [them] if I could take the idea and run with it."
The next day Reiling raided her local craft supply store, buying objects she could use for the game. She brainstormed words that could be "built"—such as "butterfly," "pizza," and "lightbulb"—and wrote them on the back of old business cards. Then, for the next few months, she lured friends over with promises of chili dinners and coaxed them into playing different versions of what would eventually become Morphology. In an early version of the game, she tested a random selection of objects, but after watching people play, she realized the simplest pieces were the ones most often used. After that, she focused on incorporating simple shapes and ordinary objects, like string and blocks.
Then she hit a wall. "I had the product, but I didn't have the skill set yet to take the product and turn it into a company," she says. So she decided to go to business school.
In 2007, Reiling enrolled in the Tuck School of Business at Dartmouth, specifically to develop a business plan for Morphology. She had a good feeling about Tuck. "There was a really exciting energy around the entrepreneurship program," she says, "a real sense that this was something the school was focused on nurturing."
In a course called First-Year Project, taught by adjunct professor Gregg Fairbrothers, she learned about scheduling and organization and how to work with investors, suppliers, and distributors. Fairbrothers calls the course a toolkit for students. "There are a bunch of things a businessperson needs to learn somewhere, and we're providing an accelerated, comprehensive way of picking up those tools," he says.
For three-months, Reiling and a few of her classmates worked on her business idea—and by the end of the course had refined her prototype and put together a convincing business proposal. So convincing, in fact, that the venture capitalists evaluating her assignment were interested in investing. "The whole final presentation was validation for me that I was onto something," Reiling says. "I realized I had the idea; now I needed the company."
Despite everything she'd learned in her first year at Tuck, Reiling wanted more time before she started accepting funding. She did, however, sell her first prototype to Fairbrothers for $50.
Reiling continued to refine the Morphology Games business plan throughout her second year at Tuck and raised $150,000 of initial funding from family and friends at both Dartmouth and her undergraduate alma mater Macalester College in St. Paul, Minn.
Her alumni networks proved to be valuable resources, not only for financial backing but also as learning aids. A co-founder of the popular game Cranium is a Tuck graduate, as are several Hasbro employees. Reiling reached out to both, and through their conversations she got advice on the legal details of starting a company. The Hasbro connections helped her think about acquisition and building a brand. The Cranium co-founder was instrumental in thinking through the details of how to play Morphology and improve the rules. "Business school is less about sitting in class and the assignments, and more about being able to pick up a phone, call someone, and know they'll return your call in 24 hours because you're in the same community," Reiling says.
After graduating in the spring of 2009, she took her first batch of games to the campus Barnes & Noble and asked if they would be interested in carrying Morphology. The meeting went exactly as she had expected, and she credits Tuck with teaching her how to negotiate successfully. The business was officially launched in November with the sale of the first product that she'd made in her basement.
Reiling, president of Morphology Games, is the company's sole employee. She hires contractors based on company needs to minimize overhead. In the first year of production, Morphology Games manufactured 500 sets and sold out almost immediately. Reiling does not share revenue numbers but does say the company is selling thousands of units a year in specialty retail stores and through online sales.
After Reiling exhibited her game at the New York Toy Fair, Morphology was named one of the event's top picks, according to Toy Directly Monthly. The game was voted No. 2 in Time Magazine's "Top 10 Toys of 2010" and the Chicago Tribune's "Top 10 Games to Start a Party."
Currently, Reiling is working on extending the game's basic idea to other platforms: Morphology for kids and a travel version, as well as Morphology for the iPhone and iPad.