Sphero is a surprising company. Last Christmas, when the small toymaker offered each of its then-70 employees a holiday gift choice of either a rafting trip, spa package, or a single bitcoin (worth $226 at the current price), they almost all chose the bitcoin.
The story of how Sphero caught the eye of the Walt Disney Co. (DIS) and ended up with the big business of making an official Star Wars toy is also surprising. The Boulder, Colo.-based company, which makes Internet-connected toys, has raised just over $90 million in venture capital and says it had sold half a million toys before it met Disney. But you can expect its sales to see a substantial spike in the next month, thanks to its $149 BB-8 toy.
BB-8, as Star Wars fans already know, is a droid—robot, that is—in the upcoming film Star Wars: The Force Awakens. (The character got a considerable amount of screen time in the first theatrical trailer.) Last summer, Sphero executives were invited to participate in a Disney accelerator program. Bob Iger, Disney’s chief executive, met them on day one already armed with BB-8 sketches and asked them to help bring the character to life.
Now BB-8 the toy, in miniature form compared to the film version, hits shelves on Friday along with all the other licensed Star Wars toys. And the small-but-powerful robot is likely to attract the dollars of kids and adults alike.
Fortune had a chance to play with the rolling celebrity a week early, and there’s a lot it can do: roll slow or fast (bumping into walls isn’t a problem); patrol the room and build a map of the surroundings; and respond to commands. Even the packaging is carefully detailed and designed to be faithful to the films; the act of unboxing Sphero brings to mind the opening of a new Apple device.
Fortune sat down with Sphero CEO Paul Berberian to hear the full creation story and get the skinny on the science behind BB-8. What follows is an edited transcript.
Fortune: How did the Disney program come about?
Paul Berberian: The company was pretty far along in June of last year. We had already raised $35 million in venture financing. We were approaching $20 million in sales. And there was this opportunity to do an accelerator with Disney. Accelerators are typically two guys in a garage learning how to build a startup, and we were already well beyond that. But the Disney program was really special and had incredible access to the top leaders at the company. And if we’re going to push the boundaries of robots and if we think that they’re going to be entertainment objects and be in every house, we probably want to meet these people.
Now, obviously it wasn’t random or a coincidence that Disney invited you—the company had looked into you and must have already planned to partner with you.
Well, we knew Disney had an interest in working with small companies. But we had no clue that there was this character in the works. We knew that Disney had a major impact on global toy sales. And we really kind of live between three different industries: toys, robots, and mobile technology. There were nine other companies: A talking toy company, somebody doing interesting things with Snapchat, guys doing in-line comment management for sports—so obviously that interested ESPN—and a personalized storybooks company. Each one of them had some sort of entertainment angle.
When we joined the program our team was busy launching Ollie, so I took myself and the two founders [Ian Bernstein and Adam Wilson] to California for four months, which was a real commitment. And the very first meeting was with Bob Iger. He pulls out his iPhone and starts swiping through the dailies from the set of The Force Awakens. And he points to something and says, “See that? That’s the successor to R2-D2 and C-3PO.”
How far along was it? That is, it wasn’t yet really a robot, right?
Oh, no, it was just a prop on set. It was puppeteered. But you could tell what it looked like. And we looked at it for eight seconds and said, “Yeah, we could make that. We already have something pretty close to that.” [The company already made and sold different versions of two robots: Sphero and Ollie.] And he said, “I know!” And we could see that the body was all based around a ball, which made a lot of sense to us. Balls are really special in robotics. And we’ve been in the robot-ball business for four years, we understood it. But it needed the head that would swivel on its own. And the funny thing was that a couple months earlier, we had already been prototyping how to put accessories on top of the ball. So we went and made a working prototype within 24 hours.
Geez, that was fast. And then you really moved fast to finish.
We went from the concept to having a finished product in 10 months. It’s been a very compressed timeline for us. It was their robot, they imagined it, they created it, but they didn’t believe they could create a really compelling toy experience—R2-D2 you can kind of get your arms around easier, it’s got wheels and a big cylinder. But with BB-8, it’s more complicated. So we got the image assets and we went to town. It’s a very complicated mechanism to get the authentic movement, where the head stays at the top while it’s moving, and it can turn and look at you. And we wanted a price point that was affordable for kids and families—sure, we could build a super tricked-out unit that’s $10,000, but we wanted it to be affordable for everyone. So it retails for $149. And people that worked on the film that saw it said, “Wow, that’s like 80% of what it can do in the movie. That’s really, really close.”
What are the things the character can do in the movie that the toy can’t?
Well, I don’t really know. We probably know more than the general public, but we never got access to the movie. I know just one or two things that I can’t share. But once the movie comes out, we can send updates to the product. We can change the firmware, let’s say we figure out a better algorithm for driving. Or maybe in the movie there’s a part where he spins his head around 20 times. I don’t know. But we can add that. This is just the beginning.
So the release of the movie will actually have an impact on the product.
Of course. Which never has happened. Like, you already bought the product, then you wake up, the movie comes out, and your product gets new features based on the story.
Did you ever have a concern that you’d now always be associated with Disney and Star Wars? Is there any drawback to that?
I never got very concerned about that. And the fact that it’s a droid who has a role in your life—that really naturally fits in with our existing vision. The beauty of what Star Wars did is they made BB-8 so approachable and cute. So it’s natural for a toy.
And is this the only BB-8 toy or do you expect imitation ones?
Oh, this is the premium version, the one that has the authentic functionality of the movie, but Hasbro has the license and made a toy for every character. So there are other, cheaper versions of BB-8 that will be on the market. But they’re not like this. A small company like ours, versus a Mattel or Hasbro, we can get really deep into one product and sweat bullets over tiny details, as opposed to, “it’s just one of 500 products we make.” That’s our advantage. We want to make entertainment robots affordable and special.
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