Denis Okhrimenko, who was pushed out of million-dollar company Ugears, has bounced back with another innovative startup called PAGL that sells environmentally-friendly large-scale building kits for children.
The Ukrainian, who co-founded Ugears and designed its first mechanical wooden models, sold his 25-percent share for only $360,000 just before Ugears signed a distribution deal with the Walt Disney Company in 2017. But Okhrimenko has moved on.
After launching a startup similar to Ugears, which produces mechanical models made of metal, Okhrimenko has now implemented what may be his most simple and yet innovative idea: a construction kit with blocks made of cardboard, with which kids can build structures the size of a person.
“The child builds around themselves — it’s a whole different feeling than modeling something on a table,” Okhrimenko says when asked how PAGL is different from LEGO, the ubiquitous plastic brick constructor toy.
What sets PAGL apart is that it’s plastic-free — the blocks are made of pulp cellulose and are colored with natural dies, making them light and safe even to eat. And what’s more important globally: PAGL is 100-percent environment-friendly.
Finding investors
Nature has provided children with basic building materials: sand and snow. But these are available seasonally and only outdoors. Finding a universal year-round building alternative for kids was the problem Okhrimenko wanted to solve with PAGL.
But pushed out from Ugears by a co-founder with whom he partnered for investment, Okhrimenko says he had to start everything from scratch. He was demotivated and wary of sharing his ideas with Ukrainian investors, who usually, he says, want a half share of the project.
But while helping to manage another startup, Okhrimenko met Sergey Rudkovsky, the deputy director of a Cardboard Factory in Zhytomyr, a city 150 kilometers west of Kyiv. He told Rudkovsky about his idea of a cardboard construction kit. The two started working together and involved another investor, Igor Liski.
However distrustful one can be of investors, there are projects that need immediate funding, Okhrimenko says.
“My projects in entertainment and the toy industry can’t be under development for 10 years — they have to deliver in two or three years, because everything can be copied fast, and ideas have a shelf life.”
Children play with PAGL Family Store Kit that has 111 building blocks and decorative elements. (PAGL)
Prototyping
Currently, PAGL is available in four kits, each containing 111 basic building blocks. They are manufactured using 70 percent recycled materials at the Zhytomyr Cardboard Factory. The same factory also produces cardboard boxes and egg cartons.
PAGL blocks indeed closely resemble egg cartons, and the company has been mocked for seemingly inventing just another type of egg carton that can be used to build large models.
Okhrimenko dismisses the criticism, saying that PAGL blocks were carefully researched to have perfect dimensions, weight, density and design elements that allow children as small as three to build tall towers that will stand and won’t lose their form even if weight is placed on them or they get wet.
The founders prototyped the blocks for months at home, in their offices and at the factory amid its workers, who wondered what the fuss was over the strange colored boxes.
“I made the first block at home from paper. I was sitting there, gluing it and giving it to my three-year old son to see how it fits into his hand. Thanks to the small notches and buttons it worked,” Okhrimenko says.
During market research, PAGL found that many people are put off by the idea of a large-scale building kit, which they think will take up too much room in their apartments. The dissembled blocks, however, are designed to be neatly packed away in a box the size of a suitcase.
Sales
Another complaint that comes mainly from Ukrainian customers is about the price of the kits. They average at Hr 1,590 ($57), which amounts to about Hr 14 ($0.5) per block. The average salary in Ukraine is Hr 9,218 ($332).
For international sales, the price of PAGL kits is higher due to logistics and shipment costs. The kits average at $111, which amounts to a dollar per cardboard block. Okhrimenko says that the prices are justified due to the cost of the factory equipment used to produce the unique shapes of the blocks.
“We are looking into buying new equipment that will work faster and will produce more, thus cutting the production costs,” Okhrimenko says. “But for that, we need larger volumes of sales.”
PAGL started selling their products in Ukraine in October last year through Facebook and some retail stores. About the same time the company launched their second crowdfunding campaign at Kickstarter.
PAGL reached their goal of raising $15,000 and are now finishing delivering the kits to people who backed the project around the world. The company is starting international sales through its website and is making deals with international retailers.
Okhrimenko has plenty of ideas on how to improve PAGL. First of all, he wants to design up to 10 new types of blocks that will allow more sophisticated structures to be built. The next step could be blocks for assembling paper balls, discs, swords and other items for outdoor activities.
“We even thought about adding augmented reality features to our blocks,” Okhrimenko says. “But for now it contradicts our main message: ‘Take a break from the phone and make something!’”
In Ukraine, PAGL kits are sold for Hr 1,290–1,690 at www.pagl-corp.com and Antoshka toy stores.
Internationally, PAGL sells kits for $102–114 through www.paglcorp.com.
