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👋 Good Morning. Before we jump into the hottest toy of the year, I want to share a special message that Rob Reiner sent to my dad, the real Max Belfort. Here it is. And here’s Rob as Max.

Read time: 3 minutes | 717 words

STORY 

📦 Nex: From Near-Bankruptcy to Black Friday Phenomenon

David Lee had a problem. His Silicon Valley startup was so close to running out of cash that he personally backed the company against his own assets (WSJ).

The Journey: Three Pivots to Survival

• 2018: Nex launches with NBA backing—an iPhone app tracking basketball shots. Decent product. Limited market.

• 2020: Pandemic hits. They pivot to AR fitness games. Downloads explode—more in two months than four years of the original app.

• 2022: Data reveals the truth: bigger screens = better retention. Time to build hardware. With zero manufacturing experience.

Lee faced a nightmare: sourcing chips, finding factories, mastering supply chains. All while learning how to compete with Sony and Nintendo.

The Payoff: Black Friday 2025

They ordered what they could afford without risking the company. It wasn't enough.

The $249 Nex Playground gaming console—a pastel-colored block that tracks motion instead of using controllers—topped Amazon's charts. Sold out at Walmart, Target, Best Buy.

Projected sales: 200,000 units. Actual: 300,000+

Revenue jumped from $3M to $150M. The company is finally breaking even. Industry analysts had the same reaction: "I didn't know this thing existed a month ago."

7 Legendary Toy Crazes That Changed Retail

• 1. Cabbage Patch Kids (1983): Riots broke out in stores. Near-stampedes became national news.

• 2. Tickle Me Elmo (1996): $30 retail, $1,500 resale. One Walmart employee hospitalized with broken ribs from the mob.

• 3. Nintendo 64 (1996): Revolutionary 64-bit graphics. Parents camped outside stores.

• 4. Tamagotchi (1997): Digital pets created playground currency. Schools banned them.

• 5. Furby (1998): 1.8 million sold. Pentagon banned them from secure facilities (seriously).

• 6. Pokémon Cards (1999): First edition sets now worth thousands. Created playground economies.

• 7. Hatchimals (2016): Stores sold out by early November. Parents lined up around blocks.

The lesson? The best pivots come from listening to your data—even when it tells you to bet everything on hardware.

Get your Nex Playground here.

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INSIGHT

Follow the Data, Not Your Assumptions

Let market signals guide your pivots — even when they tell you to bet everything on a completely different product. This lesson comes from Nex CEO David Lee:

• "We were building something great, for the wrong platform." The data showed bigger screens = better retention. So they abandoned their successful app for untested hardware.

• The engagement told the story: Two months of AR games got more downloads than four years of the basketball app. Users stayed longer on iPads than iPhones. Connected to TVs? Retention peaked.

• Industry analyst Mat Piscatella: "I didn't know this thing existed a month ago." Yet it outsold Xbox on Black Friday. Perfect targeting beats mass awareness.

• Investor Chip Austin called it "the mother of all pivots." From software to hardware. From NBA shot-tracking to family gaming. From $3M to $150M revenue.

In other words: Your customers are telling you what to build through their behavior. Watch engagement metrics religiously. When the data screams "pivot," don't waste time perfecting yesterday's product.

ACTION

📊 The Engagement Audit: Find Your Next Pivot in 7 Days

You can't pivot successfully if you don't know what's actually working. Here's how to identify the signals your customers are screaming at you:

Day 1-3: Track ALL user behavior. Where do users spend the most time? Which features have highest engagement? What devices do they prefer? Log everything—even surprising patterns.

Day 4: Find your "bigger screen moment." Nex discovered users engaged MORE on larger screens. Look for:

• Usage spikes in unexpected places

• Retention drops where you expected success

• Platform preferences that contradict assumptions

Day 5-6: Ask the brutal question. Are you building something great for the WRONG platform? Where is your data pointing—even if it terrifies you?

Day 7: Calculate the pivot cost. Nex went from $3M to nearly zero cash. Lee backed it personally. Then hit $150M.

The rule: If engagement metrics consistently point away from your current product, you're discovering what customers actually want. Stop perfecting the wrong thing. Build what the data demands.

MEME