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Cranium

It's Not All In Their Heads

It's a humdinger: Your task is to whistle "Stayin' Alive" with enough skill for your teammate to identify the 1970s disco hit.
On your next turn, your partner draws a clue -- with his eyes closed -- and you have to figure out what it is. Some players
even find themselves spelling words backward in order to win a round. These odd challenges, along with 11 others, make up
the hottest new board game since Trivial Pursuit. It is a "whole brain" game appropriately labeled Cranium.

It took nine months for two former Microsoft employees to create a unique game and take it to a market that's been craving
something different. Company founders Richard Tait and Whit Alexander are trying to satisfy the world's intellectual hunger
with a game designed to include something for everyone.

So how's this game playing out? Cranium is currently one of the best-selling board games on Amazon.com and is also selling
like hotcakes at Barnes & Noble, Toys R Us and Target, among others. And while the dynamic duo prefers not to reveal the
exact number of games they have sold to date, Tait reports Cranium went platinum in 2002, selling its millionth game and
"bringing outrageous fun to millions of people on every continent."

Tait and Alexander are enjoying incredible success in the board game industry -- but they haven't let it go to their heads.
After living in the safe and warm world of Microsoft for a combined 15 years, the entrepreneurs are grounded by the big
challenges of running a small business.

Racking Their Brains

By November 1997, personal experience would lead Tait to consider a new breed of board games that incorporated a variety
of talents, unlike the popular uni-skill products currently crowding toy store shelves.

On vacation in the Hamptons with his wife and another couple, Tait's entourage found themselves stuck indoors one rainy
afternoon and decided to pass the time away with a board game. They first played Pictionary. Tait, a huge fan of the game,
and his wife, proceeded to "demolish" the other team. But his competitors sought revenge and quickly challenged Tait and his
wife to a game of Scrabble. Tait admits his good friends were the overwhelming victors in the popular word game.

"I felt terrible and wondered why there wasn't a game where everyone that plays can have a chance to shine -- still a
competitive fun board game, but one where everyone can show what they are good at," explains Tait.

Using Their Heads

Tait says he and Alexander, who was a good friend, vowed to leap at future opportunities to work together when they left
Microsoft. So, upon germinating what he viewed as a hot concept, Tait approached Alexander to help him examine the
possibilities of producing an offbeat, new board game.

"I must admit, we looked more at online opportunities than thinking about a board game," recalls Tait. That is, until they
recognized the cash cow a blockbuster board game can represent. After all, there have been five billion-dollar board games
created in the industry's history, but there has never been a billion-dollar PC game.

"We saw there was an opportunity to create something with a life span and a strong revenue potential," says Tait. "All of the
intellectual capital was going into online and PC or [Sony] Play Station-type games, and we didn't feel there was a lot of
horsepower being applied to the board-game market."

Further, Tait explains that board games go back centuries and have endured many different competitive threats, from radio
and TV to the PC-based gaming environment. This gave the braniacs confidence that board games are here to stay. Finally,
Tait says the level of capital required to launch a board game was significantly less than the investment required to get into
the high-tech video-game industry.

Left Brains, Right Brains and Board Games

Once the duo decided to take the proverbial plunge, they began conducting research to flesh out the concept of their "whole
brain" game.

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"The next objective was to get to a really robust prototype and get a lot of customer feedback, but before we could get there,
we had to undertake a good bit of research," explains Alexander. He reveals that if you go back to the pre-television era, or
even as far back as the turn of the century, you can find antecedents to most modern games, including Pictionary. The two
soaked up as much knowledge as they could about the history of social games, comparing their findings against the criteria
for Cranium.

Their conclusion was to develop a left brain/right brain game, but neither knew much about the hypothesis, so they began
researching the field of intellectual psychology. Tait and Alexander would soon discover a Harvard researcher named Howard
Gardner whose "Theory of Multiple Intelligences" postulates that there are eight core competencies where people demonstrate
intelligence, such as linguistics, mathematical, spatial, and so on.

"We thought it was a really rich framework to try to base the game design on, so we built up from Gardner's work," explains
Alexander.

The inventors identified a number of occupations that people might pursue if they are gifted in one of Gardner's intelligences.
They then broke down the findings into subject matters or areas of interest that those same people would be exceptionally
strong in, ensuring each player their moment to shine.

After about three months of research during early 1998, Alexander and Tait realized the novelty of their approach to the
board-game market. In total, they had come up with 14 different activities, each one innovative in its own right.

"We had some great new ideas that hadn't been popularized in a board game," says Tait. One such example is their Cranium
Clay used to play "sculpterades." As the name suggests, this activity requires players to sculpt clues while their teammates
guess what they are sculpting, bringing out the child in the most mature adults. The duo's commitment to research and
design took them through 10 different clay recipes and multiple scents before settling on purple, citrus-smelling clay that
boasts a long shelf life. Tait says customers e-mail them often looking for more of the putty because they like it so much.

Next, they settled on four unique groups of question cards, including "Creative Cat," which features sculpting and drawing
activities; "Data Head," which focuses on trivia; "Word Worm," which includes vocabulary-based questions; and "Star
Performer" featuring performance-based activities.

"It's the team with the best combination of skills that wins," explains Tait. "Unlike in Trivial Pursuit, where all the 'data heads'
would prevail, or Pictionary, where the artists prevail, or Scrabble, where the 'word worms' prevail."

Creative Challenges

Tait and Alexander say many of the early challenges with Cranium were creative in nature. Ironically, the two depended
greatly upon their high-tech skills to invent this low-tech board game.

Understanding the value of a diverse knowledge base, Tait and Alexander assembled a "virtual team," which acted as their
editorial board. Though they never met during production, together this cyber crew of about seven specialists would overcome
one of Cranium's greatest obstacles: creating the content that would make or break the game.

The founders attracted contributing experts in areas like the theater, visual arts, word games and pop culture, and also
worked with an experienced editor who reviewed the questions for qualities like appropriateness, level of difficulty, age
specificity, and so on. Alexander says the group developed 100 percent of the content via e-mail using special software he
had worked on during his time at Microsoft.

"Another challenge was really putting it in front of consumers and watching them play," recalls Tait. "We watched things like
duration of play and determined what people are looking for is really a 60- to 90-minute fun experience that they can have
after dinner with some friends."

Alexander would rely on his computer technology skills once again to tackle another major challenge for any popular board
game: engineering the most effective play duration and play dynamics. He simulated virtually thousands of different board
lengths to determine actual game duration, including the number of cells on the board, the number of questions and how
many sides were on the die.

Cranium avoids play dynamics that allow one group to "demolish" another by limiting each team to one task before passing
the turn to the next player. Tait says this is just one example of hundreds of game dynamics they fine-tuned throughout the
play tests. But, he adds, there was one constant throughout the testing period: People were having a good time.

Tait and Alexander describe funding as one of the challenges of coming up with an early business model, digging deep into
their own pockets to finance an invention they believed in with their hearts and their heads.

"The reality check for us was that, traditionally, it takes about $4 to $6 million to do a great computer game, and the
investment we've made to date in Cranium is only a fraction of that," reveals Tait.

An Intelligent Choice of Distribution Partners

By mid-1998, Tait and Alexander had begun to identify their distribution partners. By that November, they had secured four
major deals, giving Cranium both domestic and international exposure. The theme behind their distribution deals was
consistent: playing is believing.

Tait and Alexander identified distribution partners that were focused on the same demographic they were targeting with
Cranium. Cranium's target audience, affectionately called "dating yupsters" by the inventors, is made up of individuals
between the ages of 25 and 35, with an attractive disposable income. Tait says this demographic seems to have a natural
social tendency to play games like Cranium and Pictionary.

Their first major deal came from Starbucks Coffee.

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"We felt the social dynamic of the game fit with their coffee-house culture," explains Tait. "We knew they were looking for
distinctive products, and we discovered upon meeting with them that they had been looking for a game for two years. And we
were the game they chose."

Their next stop was popular bookseller Barnes & Noble, whose gift buyers had only five words for a zealous Tait: "We don't do
board games." But Tait convinced the group to hear him out, and during the meeting, he began to play a spirited round of
Cranium with the buyers.

"By the time I left the meeting, they told us we were going to be the first game to be stocked in 150 Barnes & Noble stores
nationally since Trivial Pursuit," he recalls.

From there, the impressive duo would use their contacts to get a foot in the door of one of the hottest shopping outlets on the
Web, Amazon.com. An eclectic group of Amazon representatives gathered to conduct play tests of Cranium, and Tait says the
outcome was a place on the virtual shelves of the leading online bookseller.

Finally, after identifying a second, slightly younger demographic (18-21) during their focus groups, the inventors decided to
pursue an entertainment partner to help target this lucrative audience. They focused their energies on Virgin Megastores
because Tait had read the biography of Richard Branson, Virgin's founder and CEO, and felt he would be most receptive to
Cranium.

"I knew if I could get this game into the hands of his kids and they liked it, we would have a chance of getting stocked by
Virgin. So, at Branson's book signing in Seattle, I approached him with a game under my arm," explains Tait.

When Branson asked what Tait was carrying, Tait presented him with Cranium. As it turns out, Branson had missed an
opportunity to invest in Trivial Pursuit and was eager to reclaim lost ground in the board-game arena. Within four days of this
nonchalant encounter, Cranium had an international distribution deal with Virgin.

Cranium is also sold via the company's e-commerce Web site and through their toll free number. Alexander says these efforts
account for a growing percentage of Cranium's overall sales.

Healthy Growth

In retrospect, Tait and Alexander say they're quite pleased with Cranium's initial distribution methods, although the former
says they have started to look to the specialty-game-store market as one avenue for growth and have found shelf space in
stores like GameKeeper and Seattle-based Turn Off The TV. The duo also plans to build on their own direct-sales efforts.

"The future of how to develop a board game is pretty well documented by some of the other big, hit games, where you
develop new card packs," explains Tait. And he says Cranium will offer new and unique card sets in the near future.

Tait reports that the company has spent very little on marketing efforts and indicates the most effective selling tool is sitting
down and playing the game. Targeting additional demographics was another strategy for the continued growth of Cranium.
Tait says it has become apparent from playing in family settings that younger children also appreciate the "whole brain"
game. As a result, the inventors developed younger versions of the game.

"We originally started with a much broader vision than just a board game," explains Tait. He says they looked at the 1980s
and how the heart was so heavily emphasized in conjunction with good health. "We think it's going to be the brain that's
going to be the organ for the new millennium, and we would like to be the company that's at the forefront of providing fun
things to do with your brain to keep it happy and healthy."

This strategy has made Cranium a standout among its competitors in the board-game industry, as there simply is no other
game that offers such a variety of activities. Even while still on the shelf, Cranium stands out amongst other board games.
This is thanks, in part, to their choice of illustrators and the inventors' talent for consumer-focused iterative product design,
another skill they refined during their Microsoft days.

Line Expansion

To respond to the unprecedented - and unexpected - enthusiasm for Cranium, the company launched Cranium Booster Box 1
with 800 new questions, just one year after the Cranium board game. To continue to satisfy the appetite of Craniacs in the
U.S., the company released Cranium Booster Box 2 and Cranium Primo Edition, a deluxe version of the smash-hit party game,
with all-new content and a new twist on Cranium's incredibly popular sculpting activity.

Determined to bring Cranium's distinctive kind of infectious fun to international markets, in October 2000 Cranium launched a
U.K. edition of the game, with content geared specifically toward British brains. On its heels, editions of Cranium for Australia,
Germany, and France and two editions for Canada, celebrating both English and French Canadian culture, began to lighten
and enlighten people's lives in those countries.

To build the brand for the brain and extend Cranium's outrageous fun to more moments and more people, Tait and Alexander
began exploring how kids play. First came the award-winning Cranium Cadoo. With a variety of hilarious activities, Cranium
Cadoo gets kids ages seven and up thinking, creating, giggling, and grinning as they go for four in a row to win.

Cranium Cariboo, which launched in 2002, takes three- to six-year-olds on an exciting exploration of the magical island of
Cariboo, where they'll find castles, boats, balloons, and more. Eyes light up as each turn gives kids the chance to match fun
drawings, unlock secret doors, and even discover hidden treasure.

Tait and Alexander also started to dig deeper into the moments in adults' lives, first targeting how people spend their time at
work. The result was Cranium Cosmo, an outrageously fun office toy that is perfect for a quick break at your desk or bringing
a few laughs to your next meeting.

The pair's efforts have caught the attention of more than just its wildly large fan base. The company won "Game of the Year"
at the annual Toy of the Year ceremony and brought home the prestigious Parents' Choice Gold Award for Cranium Cadoo for

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Kids in 2001. Created with a strong commitment to do good as a company, Cranium makes contributions through the
Cranium Fund and has awarded more than $600,000 to organizations that offer after-school programs in the visual, literary,
or performing arts to kids in challenging circumstances.

Minding Their Own Business

Tait's and Alexander's roles in the company are almost interchangeable. However, Tait handles a lot of the marketing and
business development, while Alexander deals more with operations and fulfillment. Each works on product design, customer
requests and public relations.

"That's one of the challenges. We can both do a lot of different tasks, but we each have special skills. What makes us a good
team is that we know which one is better at which thing, and we are happy to delegate that between the two of us," explains
Tait. But he admits, as busy entrepreneurs, they do end up overlapping on a lot of tasks just to complete them.

Today, the pair's main challenge is building the Cranium brand name, and Tait alludes to a potential TV show as well as new
Cranium products in the distant future.

Tait and Alexander are highly motivated by the potential of Cranium and indicate they have no interest in selling their
brainchild to larger industry players like Parker Brothers. "We are committed to seeing this thing through into the next
millennium," insists Tait. "It's too much fun to give up."

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