It would be too bad if Donald Kingsborough isn't a leading candidate for "hottest entrepreneur in America," because we're pretty sure he could handle the heat. Three years ago, as executive vice-president of sales and marketing for Atari Inc., Kingsborough helped preside over the dismantling of Nolan Bushnell's dream baby; passions ran so high during the final rounds of layoffs and liquidations that at one point his car was raked by gunfire. In 1980, in Las Vegas, he and his wife had to be airlifted to safety by helicopter during the tragic MGM Grand Hotel fire that claimed 84 lives.

These adventures may prove a mere warm-up to Kingsborough's latest barn burner, however: Worlds of Wonder Inc. (WOW), a high-tech toy company based in Fremont, Calif. WOW's product list includes Teddy Ruxpin, America's favorite micro-loquacious teddy bear, and Lazer Tag, one of the first of the red-hot infrared pistols. Demand for these items helped WOW post sales of $93 million and $327 million in its first two operating years. In the midst of a year when it would post nearly $19 million in earnings, WOW pulled a sizzling $101 million out of its initial public offering in June 1986. With current revenues projected as high as $520 million, Kingsborough's wunderkind, now 500 employees strong, could eclipse Compaq Computer Corp. as the fastest-growing start-up in U.S. history.

Even so, industry wisdom holds that the toy business, like the fashion industry, is prone to vertiginous cycles. The rise and fall of Atari is one example. Coleco Industries Inc., which soared with the Cabbage Patch Kids but plunged with the Adam Home Computer, is another. Could WOW be another flash in the pan?

"I doubt it," avers Kingsborough. "We're positioning ourselves as a kids' company, not a toy company. Our commitment to R&D is unique: we have 140 engineers working for us, compared to about 100 for the rest of the [toy makers] combined. We're more interested in creating new product categories than simply turning out hot products. Hot products normally have a 2- to 3-year life cycle. A product category, such as animated talking toys, can go for 10 years or longer."

"The key to [WOW] is they're such strong marketers," adds Robert L. Rebitz, a toy-industry analyst for Davis, Skaggs, a division of Shearson Lehman Brothers, in San Francisco. "I'm confident they can achieve whatever they want."

While WOW attempts to capitalize on such technology-based toys as talking dolls and interactive videos, it is also striving to bring an updated, twenty-first-century look to such mundane products as backpacks and school supplies. As for industry giants like Hasbro and Mattell, the 40-year-old Kingsborough says he's convinced that many old-line toy companies are now ripe for the overtaking.

"Innovation in this industry tends to come from the outside," he notes. "And nobody has come along any hotter than we have."