Legos get in on the 'sharing economy'

May 16, 2014: 7:00 AM ET
pley lego
Elina Furman and her son Julian, 6, with several of the Pley sets.
NEW YORK (CNNMoney)

When Elina Furman was 7, she came to the United States from Russia with her family and was allowed to bring three toys.

"I appreciated them so much. Each one was a treasure," she said.

That was 1980. Now, parents are overwhelmed with choices, not to mention the cost of buying every flavor of the month. Furman cited a British study that said the average Western kid has 238 toys, but plays with only 12 on a daily basis.

For Furman and her business partner Ranan Lachman, that dilemma sparked an idea. Just as consumers have taken to short-term rentals for everything from autos (Zipcar) to apartments (Airbnb), why not try something similar for toys?

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So last May, they launched Pley, which works something like Netflix (NFLX), only with Lego building-block sets. Pley's 15,000 subscribers can choose one or more sets from the company's online "pleylist." Pley ships the toys, and when kids tire of them (usually within two weeks) parents ship them back and get a new set in return. (Pley sanitizes each set before mailing it out.)

The company started with just 34 Lego sets, purchased with some of the $500,000 Langan put up as seed capital. Pley now has 23 employees and its San Jose warehouse stocks about 50,000 sets.

Pley charges $15, $25, or $39 a month, depending on which sets parents want to rent. It's much cheaper than buying Lego sets, which can cost between $40 and $400. Although subscriptions for multiple months are available at a discount, most of Pley's customers sign up for just one month at a time.

Star Wars sets are the hottest, as are Pley's own Creativity Crates, made up of combinations that are "designed to encourage creativity," Furman said.

I get paid to play with LEGO

So far, Pley has shipped about 80,000 sets, and investors evidently expect that number to grow fast. In March, the company, which turned profitable last fall, raised $6.75 million in venture capital.

To keep track of the many tiny blocks, they developed a high-tech weighing system that can tell within one-one-hundredth of a gram whether a set of blocks is complete or is missing a piece or two. (But no worries if there are a few lost pieces. There's no penalty for 10 to 15 missing blocks, which Pley counts as normal wear and tear.)

If all that sounds hard to imitate, it is: Furman and Lachman figured that by starting with a complicated toy that requires complex handling, they'd discourage potential competitors.

Pley has no current plans to expand beyond Legos, but Furman said she'd eventually like to rent out other playthings that also encourage kids to use their imaginations. She's particularly drawn to toys like Goldie Blox, which teaches engineering to girls, and robot-making kits from Little Bits.

"Parents are worried about their kids spending too much time in front of video screens," she said. "But [many of the educational toys] are expensive to buy, so they make sense to rent. It may take us some time to get there, but we always want to rent toys that encourage learning."

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