From LEGO to Web3: The Symbiotic Path of Companies and Communities

Everyone in the Web3 world is familiar with Lego. We often compare DeFi to financial Lego, and DAO to organizational Lego, and in the future, there will be more fields with Lego metaphors. People enjoy these comparisons because various Web3 products often combine with each other, much like creative combinations of Lego blocks.

But composability is not the only insight that Lego gives us. We often overlook a fact: composability alone is not enough; innovation does not emerge out of thin air; an open and inclusive community is crucial for stimulating innovation.

With mutual support from the company and the community, LEGO has grown from the brink of bankruptcy to becoming the world's number one toy company over the past 20 years. This story demonstrates the importance of active community engagement and provides a reference for how to achieve this goal. The LEGO case is not only worth learning from for traditional enterprises, but it can also inspire the Web3 world.

Half Push Half Accept - The First Intimate Contact with the Community

Founded in 1932, LEGO has long dominated the toy market, but in the 1990s, with the rise of technology products, children gradually lost interest in building block toys. As sales declined, LEGO reported its first loss in the 1998 fiscal year.

To regain children's interest, LEGO developed several new products in the late 1990s, including a set called Mindstorms. It includes a robot controller, motors, sensors, building blocks, and programming software. Although originally designed for middle to high age children, LEGO found that 70% of sales came from adults using it for themselves.

The situation quickly spiraled out of control when a Stanford student successfully reverse-engineered the brainstorming software. Subsequently, hackers around the world cracked the toolkit, creating programs that were more complex than the original, allowing enthusiasts to unleash their creativity.

The traditionally closed and arrogant legal department of LEGO reacted strongly to the community's cracking and planned to take legal action. However, after a long discussion, LEGO ultimately abandoned the lawsuit.

So LEGO chose to collaborate. To foster the community, LEGO established an official forum and added a "right to hack" clause in the brainstorming user agreement.

The results are encouraging. The official forum and self-built community websites are very popular, with fans around the world creating hundreds of web pages to showcase new inventions and provide tutorials. Publishers have started releasing programming books, startups are producing and selling compatible hardware, and community members are organizing robotics competitions. An ecosystem is rapidly taking shape. The community support has attracted a large number of new users, leading to products selling out. LEGO has experienced the power of community involvement for the first time.

Embrace Fully - Community Becomes Core Strategy

Most of the products hastily developed in the 1990s ended in failure, nearly dragging LEGO down, with multiple product lines being shut down. Although the brainstorming received community support, the old management lacked enthusiasm for it, and in 2001, the brainstorming team was disbanded, and product updates ceased.

In 2004, the endangered LEGO appointed Jørgen Vig Knudstorp as CEO, providing the company with an opportunity to reflect on its strategy, particularly the value of its relationship with the community. The new CEO quickly concluded - embrace the community.

Despite the halt of brainstorming, the community's enthusiasm remains undiminished. The number of participants in the competition grew from thousands in the early stages to 50,000 in May 2004. The new CEO decided to relaunch the series and invited the most active supporters to co-create.

At that time, there was no deep emotional connection within LEGO to the community, and most members did not understand or support the invitation for the community to participate. The new CEO ultimately convinced everyone with a few practical reasons:

1. Insights from community enthusiasts can improve product success rates.
2. Inviting the community to participate can build better consumer trust.
3. Community participation in design is newsworthy and may gain media coverage to save promotional costs.
4. The community will promote it voluntarily.

In short, it can both increase sales and save money.

The challenges are not small. How to choose the right community members? How to ensure that the direction does not go off track? How to maintain confidentiality? How to eliminate internal biases? However, Lego ultimately overcame these difficulties, selecting four of the most passionate elite users from the community to participate in co-creation. The new version of Brainstorming was released in 2006 and achieved great success. This is the classic Brainstorming NXT series.

Increased sales are not the only benefit; LEGO subsequently firmly believed in the power of the community, leading to a major strategic shift for the company. Starting from the initial four-person elite team involved in design, LEGO established a pyramid system to classify community enthusiasts based on their contribution to products. Community involvement also expanded from brainstorming to more products, such as the modifications of the classic train series.

In 2006, architect Tak was noticed by the community for building the Chicago landmark Sears Tower with LEGO. After LEGO took notice, they reached an experimental collaboration with Tak, providing bricks and brand licensing. Tak created and sold 1,250 sets of the Sears Tower. The Tak couple completed production in their garage and delivered them to a Chicago souvenir shop, selling half within 10 days.

After the preliminary success of the experiment, LEGO scaled up, forming a temporary team internally to complete packaging design and organize production during their spare time, producing 4,000 sets of trial products to send to more souvenir shops, which quickly sold out again. Ultimately, this set became an official LEGO product and soon developed into the LEGO Architecture series.

Starting from the Sears Tower, the LEGO Architecture series has expanded into dozens of globally bestselling products, achieving not only substantial sales but also attracting a large number of users who previously did not consume LEGO toys. Due to the high tone of the series, which resembles art pieces rather than children's toys, LEGO products have successfully entered high-end retail channels.

As the relationship with the community deepens, LEGO establishes a more comprehensive community support system:

LEGO Ambassador Network: Each certified LEGO community has a slot for an ambassador, who gains direct communication channels with the company and connects with other ambassadors worldwide to promote interaction between the community and LEGO.

LEGO Certified Expert: The most professional LEGO player entrepreneurs will turn their passion for LEGO into business, collaborating with LEGO to promote the brand ecosystem.

LEGO Creative: An original design community that encourages users to communicate and collaborate, sharing and evaluating each other's designs. Highly supported designs may become official LEGO products. Designers receive community honors and can also earn 1% of sales as royalties.

LEGO World Building: An online creative platform that allows fans, creators, and storytelling enthusiasts to collaborate in building a new LEGO world. Users can create original worlds, design characters, plots, and environments, participate in worlds created by others, and discuss modifications together. Outstanding works may be included in the official product line and even developed into animated films, movies, TV series, and other content.

BrickLink: A marketplace for LEGO products, providing a community for tips and design sharing. The free software "Studio" is used for designing digital LEGO models. Acquired by LEGO in 2019, it is now an important hub for innovative collaboration.

Trust the community and share power with the community

The story of LEGO and the community is colorful and rich, making it difficult to fully express in a single article. However, the current narrative is enough to inspire.

We are all familiar with the term "community." Various companies often mention community in different contexts. However, in reality, most companies have never had a true community; what they refer to as "community" often means the consumers who purchase their products. A community is a group of people who share common interests, goals, or values, and connect, interact, and communicate with each other in a specific space. From this definition, a group composed solely of users or consumers does not constitute a community.

The ways and goals of building consumer groups and communities are different; the former seeks to expand in scale to increase sales. However, scale is not the primary goal of a community; the community aims to create closer connections and more meaningful interactions among its members. Without these, even the largest community is unlikely to generate real value.

Key points for the success of the Lego community include:

1. LEGO products and brand culture are widely loved by players around the world.
2. The excellent interoperability of LEGO bricks provides better support for creative combinations.
3. LEGO fosters a culture of respect, support, and sharing power with the community, and executes this well through a series of projects.

When the community is effectively activated, there is an opportunity for community-driven innovation and adoption, blurring the lines between producers and consumers. Consumers are no longer just consumers; they become producers, engaging in imaginative non-traditional production work, creating a win-win situation.

Consumers also become owners. Although LEGO does not provide consumers with true ownership, it at least makes the community feel psychologically that they own the LEGO brand. Psychological ownership and actual ownership are equally important. In the Web3 world, most projects fail to build an effective community because they have not successfully attracted members with a sense of identity and established psychological ownership. In this case, all participants are investors or speculators; regardless of price fluctuations, they will leave. If they make a profit, they take their gains and look for the next opportunity; if they incur a loss, they stop out and form a rights protection group.

With community support, the entire business ecosystem of LEGO has been fundamentally transformed. Since 2004, LEGO has gradually emerged from difficulties and maintained rapid growth, becoming the world's largest toy company. 2022 marked LEGO's 90th anniversary, with sales reaching a new high, nearly 11 times that of 2004.

Of course, there are also problems; the interests of the community and the company do not always align. Most community members are interested in participating in creation but have little enthusiasm for helping companies sell. In highly active and interconnected communities, corporate control gradually diminishes, and when the company's philosophy conflicts with that of the community, it can sometimes challenge the authority of corporate management. But that is precisely the meaning of a symbiotic system: mutual input and support. A self-sustaining and active community is the true community, the other party that is equal to the company. If everything obeys the company, the community is no different from a department.

However, in today's business world, most brands feel alienated from their communities. They have millions of consumers but do not know how to build a community, let alone how to share power with the community and truly involve it in creation. Nevertheless, we also see a positive trend, as many brands are bravely taking the first step through new scenarios supported by Web3 technology.

Web3 Technology Assists Enterprises and Communities in Forming Symbiosis

The story of the LEGO community may be unfamiliar to most friends in the Web3 world. However, to some extent, we are incredibly familiar with such stories.

LEGO successfully brings communities together through open culture and people's love for the brand. It encourages and nurtures communities, creating better connections and interactions. LEGO develops various mechanisms to encourage creativity and reward creators. The high standardization and interoperability of LEGO toys provide a foundation for convenient community innovation. In-depth research into the LEGO community also reveals traces of DAO, including discussions, collaborations, co-creation, proposals, and voting, as well as creator royalties.

However, in the LEGO community, members do not truly have control over the LEGO brand. The various works they submit do not grant them ownership of the data either. To some extent, LEGO's support and power-sharing with the community is a form of reward that can be withdrawn at any time. The vast majority of community members have not received any other compensation aside from enjoyment, despite the value they contribute. This includes the four original community members who helped brainstorm the reboot; when they first went to the LEGO headquarters for project discussions, they still paid for their own plane tickets.

This is not a criticism of LEGO. LEGO has already surpassed absolutely.