In October 1929 the Wall Street stock market in New York crashes – with dramatic consequences for large parts of the wider Western world. Companies collapse, and industry has its back to the wall. Agriculture is hit even harder. The USA and UK place restrictions on imports, and this brings the crisis directly to Danish farming communities in 1930. Butter and bacon prices fall sharply, and as these products represent a huge section of Danish exports, life becomes very difficult for Danish farmers. Many farmers are forced from their farms.
The economic crisis also has serious consequences for Ole Kirk Kristiansen. Farmers and smallholders, his most important customers, can no longer afford to have carpentry work done, and in 1931 he has no option but to let his last journeyman go.
National Association for Danish Enterprise
The National Association for Danish Enterprise (Landsforeningen Dansk Arbejde), which supports Ole Kirk Kristiansen’s business efforts during the economic crisis, was established in 1908 with the purpose of promoting Danish manufacturing and the sale of Danish goods both in Denmark and abroad.
Ole Kirk Kristiansen is a member of the association, and in a members’ magazine he reads in an advice column the good sense in manufacturing readily marketable products, such as stepladders, ironing boards and other utility items, and something that will radically change his future – toys.
In his memoirs Ole Kirk Kristiansen writes of the year 1932:
I looked to
“... I looked to the future with hope. But within two months my world was tumbling. There was a crisis in farming but as we owed our living to the smallholders and farmers, we were also affected. We were in a difficult time – but it was as well that we could not see what lay ahead. During the summer we were asked to make toys for Jens W. Olesen, Fredericia, and as we had no other work, we looked on it as a gift from God.”
The family doesnt
The family doesn’t always agree with Ole Kirk Kristiansen and his ideas. When he asks his brothers and sisters to act as guarantors for a loan of DKK 3,000 for the company, one of them asks: “Can’t you find something more useful to do?” The episode demonstrates that Ole Kirk Kristiansen is ahead of his time. It is not yet accepted practice to take child’s play seriously and give them toys.
Ole Kirk Kristiansen repays the loan at compound interest in 1939. It is a big day in his life, his son Godtfred Kirk Christiansen later recalls.
Until 1934, Ole Kirk Kristiansen manufactures buildings, furniture and toys, but that year he decides to concentrate on toy production.
OKK writes later
Ole Kirk Kristiansen writes later about the decision to devote his life to the manufacture of toys: “It wasn’t until the day I told myself ‘you’ll either have to drop your old craft or put toys out of your head’ that I began to see the long‑term consequences. And the decision turned out to be the right one.” Within a few years Ole Kirk Kristiansen has laid the foundations of what is to become one of the world’s leading toymaking companies.
When Ole Kirk Kristiansen decides to concentrate on toy production, he realises that the company should probably have a more catchy name than “Billund Maskinsnedkeri” (Billund woodworking factory).
He organises a competition among his employees, looking for suggestions for a good name for the young company.
The competition winner (who can claim the prize of a bottle of Ole Kirk Kristiansen’s homemade wine) is ... Ole Kirk Kristiansen himself, who has played with the two Danish words LEG GODT (meaning Play Well) to produce the LEGO® name. In choosing the name, he places the emphasis firmly on developing child’s play – at the same time focusing on quality in preference to mass production. As an alternative, Ole Kirk Kristiansen almost decides on LEGIO (= legions) but opts finally for the name that emphasizes good play.
It is not until much later that someone realizes that the name LEGO in Latin means “I put together”.