Q&A: Fun Factory Co-founder Dirk Bauer Discusses 20-Year Milestone

Ariana Rodriguez

Twenty years ago, Dirk Bauer and Michael Pahl ventured into the pleasure products industry inspired to create the first gender-neutral sex toys made from body-friendly materials. Fun Factory’s founders — two recent university grads at the time — started the company out of a garage in Bremen, Germany making dildo prototypes out of Play-Doh that would eventually become part of an award-winning arsenal of innovative designs. Two decades later Fun Factory is credited with revolutionizing the industry with pioneering technology such as magnetic rechargeability and the company’s patented Stronic pulsating technology.

In 2003, Fun Factory expanded into the U.S., inciting the company’s international growth. Serving as the mediator between the company’s German headquarters and its vast U.S. customer base, Fun Factory USA has played a vital role in the company’s success by providing knowledgeable support to retailers and promoting the benefits of German manufacturing. Today, Fun Factory employs 140 people in more than 20 countries and Bauer says the company is poised for continued growth with new innovations in the works. Bauer reflects on Fun Factory’s evolution and growth over the past two decades in this exclusive Q&A.

Our main motivation is still engineering and innovation. Even with a lot of new products in the works, we still have more ideas than we can realize.

XBIZ: How has Fun Factory evolved in its 20 years?

Dirk Bauer: When we started, we had no money and were running Fun Factory out of a garage. Now, we are a 140-person company with international distribution and a wide range of successful products.

XBIZ: What was your vision and goals for Fun Factory when you established the company? Has the company achieved your expectations?

Bauer: We were at a sex-positive store in Bremen when we overheard a customer talking to the staff: a couple was looking for a non-penis-shaped dildo made of body-friendly material, to fit in their harness. Since there were no products like that, Michael and I decided to make one. We had no idea about the industry, the market, the players, or the rules. But we did notice that, at that time, products were designed and marketed in a way that wasn't very friendly to women: naked women on the packaging, poor materials, poor quality, all dildos were shaped like penises, etc.

We thought that there might be a market for better products at a higher price point, so we started designing toys based on four principles: fun, innovation, performance, and passion. We didn't expect much, and we certainly didn't expect to quit our day jobs. Fun Factory was a passion project that quickly surpassed our wildest expectations!

XBIZ: What’s your favorite product in Fun Factory’s range? Which design are you the most proud of?

Bauer: My favorite product is the Delight, a perfectly shaped vibrator inspired by the motions of female masturbation. Plus, it looks so elegant! It was also the first sex toy to win a mainstream design award — the reddot design award, in 2008. I am most proud of the Layaspot, our first external vibrator, which we designed to fit easily in the user's hand for a more intuitive experience. It's turned out to be our most successful vibrator ever.

XBIZ: Discuss Fun Factory’s international success. Did you anticipate the brand’s wide-reaching popularity?

Bauer: Not at all. We didn’t expect that Fun Factory would evolve like this. We showed our first dildos to Good Vibrations in 1995, and they placed a small order, but we didn’t expect more than a few small orders here and there.

XBIZ: What are some of the challenges you’ve faced and overcome while establishing Fun Factory?

Bauer: The first problem was money. At that time, we had no investors and no bank was prepared to finance a sex toy company. Neither Michael nor I had any money. We needed to finance new designs out of the cash flow, which is what we've always done and still do.

Since the company grew very quickly, we've never had money to spare. It's meant that we've sometimes had to move more slowly than we'd like, but that's the way it is. Our next problem was how to scale up the production. At first, we could only make one vibrator per day, but then we received our first large order of 480 units. We were sure that the client didn’t expect to wait 18 months! We had to scale up immediately without knowing how, but we managed successfully.

XBIZ: Discuss Fun Factory USA . When was it established? How has it contributed to the brand’s success?

Bauer: Fun Factory USA was founded in 2003. We already had some business in Canada and one distributor in the USA (Miko Exotic), but that wasn't enough to supply such a huge market. Today, the U.S. is our most important market outside Europe. Since we have such a brilliant team and amazing retail partners in the U.S., we get excellent feedback about how our products are received, which helps us to develop better products and fulfill needs specific to the U.S. market. Communication between the two companies is important in pinpointing users' expectations and needs in each specific market and trimming down what is less relevant to each, to guarantee global success and products that perform well in all markets.

The fact that Fun Factory USA has performed so well and increased brand awareness in a significant way in the last four or five years has helped to confirm our position as one of the top brands for quality products worldwide. Meanwhile, our German headquarters also implements strategies that have been successful in the U.S. Because of this, the entire company is now much more international. We use three languages (German, French and English), but all internal communication is now in English.

In turn, U.S. customers have been very responsive to the fact that products made in Germany are more heavily regulated than those made overseas, guaranteeing that German-made products are made of body-safe materials like our medical-grade silicone. That, combined with Fun Factory's commitment to eco-friendly manufacturing and fair labor practices, has made our brand very attractive to American customers looking to shop ethically.

XBIZ: How many employees does Fun Factory have? Discuss the Fun Factory team’s synergy.

Bauer: Fun Factory has 140 employees. We employ people from more than 20 countries, and that variety of perspectives helps us better reach a greater number of international markets. The collaboration between the German headquarters and Fun Factory USA has also allowed us to share what has worked for each team and make more informed decisions about marketing and what kinds of products our customers are looking for.

XBIZ: What can we expect from Fun Factory in the future?

Bauer: Our main motivation is still engineering and innovation. Even with a lot of new products in the works, we still have more ideas than we can realize. We were the first to bring vibrators with medical grade silicone into the industry, we established the first luxury brand, we brought rechargeable vibrators into the market with our early Sinnflut products, and we brought magnetic chargers into the industry with our Click 'n' Charge system.

In the U.S., Fun Factory has been a pioneer with our very strict MAP to support our customers and maintain the integrity and value of our brand. We won’t stop inventing new products or improving on existing designs, and we'll stay ahead of the curve with our marketing schematics and innovative business strategies. Above all, we're going to continue to have fun and bring better and better sex toys to the people.