Editor's note: This tour of small businesses across the country highlights the imagination, diversity, and resilience of American enterprise.

Edwin is kind and yellow and lives on Main Street. Stroll through the French doors of the neat red brick building on the west side of Carmel, Indiana, and you're in his world. There is a grass-green floor and sky-blue walls laminated with larger-than-life images of Edwin reading a book and Edwin standing, one wing extended in a gesture of welcome. On summer days when the neighborhood hosts art shows, hundreds of children crowd the small space to sing, dance, and learn along with Edwin.

Edwin is a duck. Edwin looks like he just may be a hit.

Since Edwin debuted in Apple Stores and Best Buy last November, his creator, Pi Lab, has sold more than 14,000 of the $100 toy. Amazon, Target, Toys "R" Us, and the independent chain Marbles will soon come onboard. Designed for ages 1 through 5, Edwin contains a Bluetooth speaker to play music, and can be manipulated through twists and taps to control an animated version of himself on screens. Children play games, sing songs, and read stories with Edwin via an ever-expanding selection of apps. At night, his head glows while lullabies, a heartbeat, or rain sounds issue soothingly from his sleek, rounded body.

Named for Pi Lab co-founder Matthew Edwin MacBeth ("The name means 'faithful friend' in Old English," MacBeth says), Edwin is the first product from a business launched in 2013 to create charging cables and power bricks. MacBeth and his business partner, Don Inmon, are tickled by the pivot that instead made them shepherds of a beloved toy.

"Edwin is about the Golden Rule," says Inmon. "He is very kind. He is very loyal to his group of friends. He lives as a human being, even though he is a rubber duck."

Edwin's home is Carmel, anointed the best place to live in America by Money magazine in 2012. There, he is becoming a familiar sight. Periodically, a Prius-sized inflatable Edwin commands attention outside Pi Lab's storefront, where duck-emblazoned T-shirts, bibs, and onesies are also for sale. An Edwin booth pops up at events, and the duck rides in his own float in the Fourth of July parade. "The community has adopted Edwin," says Carmel mayor Jim Brainard. "He's developing into a mascot for the city." (The duck is also fond of the state capital, a half hour away. Pi Lab's website features "Edwin's Favorite Places in Indy.")

For families, Edwin is an all-purpose fowl. Carmel resident Dan O'Brien bought one for his newborn daughter, Grace, who used the duck's suckably round head at first for teething. When Grace started having trouble sleeping at about 9 months, O'Brien and his wife switched on Edwin's internal nightlight and set him to play the lullaby "Twinkle" from Pi Lab's "Sleepy Time" app on a continuous loop.

"Since we started putting Edwin in the crib with her, she wakes up maybe once a night, and we've been having a good string of consecutive not-waking-up-at-all nights," says O'Brien. Edwin also entertains O'Brien's older nieces and nephews when they visit: "They always say, 'Can we play the ducky game?'" And when O'Brien and his wife snag a few moments of quiet, he says, "we will put it on Spotify and throw it in the hot tub."

Striving for "infinite creativity"

Of Pi Lab's two founders, Inmon is the Indiana native. He grew up with electronic toys, playing with an early version of the archetypical video game Pong, for which his father soldered motherboards at a local factory. During high school, Inmon worked at Best Buy as a cashier; a few years after college he was launching new stores for the chain. In 1997, he switched to the manufacturing side of consumer electronics, helping develop and market products for Klipsch, a maker of high-end audio systems, in Indianapolis.

Inmon's relationship with Apple--a corporate friend to Edwin--dates back to the 2002 Consumer Electronics Show in Las Vegas. Inmon was manning the Klipsch booth, when in walked a team from Apple's retail division. They loved the products, says Inmon; and for the next few years he sold Klipsch devices--including iPod docks, computer speakers, and headphones--for resale in Apple stores. From there, he accepted a job from Apple, working in procurement.

In 2008, family reasons brought Inmon back to Indiana and Klipsch. There, he met his future co-founder. MacBeth had grown up in western Pennsylvania, the child of an entrepreneurial family that founded and runs an outdoor recreational facility. After studying electrical engineering at Penn State, he worked at several audio companies before fetching up on the headphone team at Klipsch.

If Inmon was the guy who knew how a product should look, sound, and feel, MacBeth was the guy who could turn that vision into reality. "We would put up concepts on the board and he would come back with a functioning prototype in a couple of days," says Inmon. "Matt, to me, was the original 3-D printer."

MacBeth left Klipsch and, in 2010, joined a business called Stem Innovation that made a camera for monitoring babies, pets, and homes via an app. Inmon soon followed. After about a year, "we looked at each other," says Inmon, "and realized we had to start our own thing." They named their startup Pi Lab "because pi means infinite and lab means creativity," says Inmon. "So it is infinite creativity."

Between them, the co-founders had worked on or developed around 100 products for other companies. Now they would generate their own product ideas and hire the best engineers, designers, salespeople, and marketers to bring those ideas to life. Working from offices above and behind a retail space they rented on Main Street in Carmel, they sketched concepts for 13 products, such as charging cables and power bricks.

Then in 2014, wanting to do some research, Inmon traveled to a trade show in China.

Enter Edwin.

Ducky love

Hong Kong went mad for a rubber duck. When Dutch artist Florentijn Hofman inflated a six-story-tall version of the iconic bath toy in Victoria Harbor in 2013, hundreds of thousands of people from across Asia swarmed to view and photograph it. Local hotels and restaurants created duck-related promotions. After someone inserted the oversized fowl in an iconic image from Tiananmen Square, government officials banned online searches for the term "big yellow duck."

In Hong Kong a year later, Inmon took a break from the trade show floor and wandered down to the harbor. He knew nothing about Hofman's duck, which by that time was long gone. But he stumbled upon a line of roughly 300 people stretching back from a tiny booth, which, upon investigation, turned out to be selling miniature replicas of the yellow sensation. "I talked to a couple of people who spoke English, and they were just like, 'Oh! The duck was here!'" says Inmon. "I called Matt and said, 'I've got an idea.'"

Back in Carmel, Inmon and MacBeth added to their portfolio of product ideas one for a toy duck with a speaker inside that interacts with educational and entertainment content via an app. They created a pitch deck for all their proposals and set up meetings with buyers at Apple, Best Buy, and other retailers. As Inmon recalls, "The buyers said, 'We really love these products, but tell us more about the duck.'"

With $600,000--a combination of their own money and an angel investment--the partners got down to the duck. MacBeth began working out the technical issues: creating plastic parts on a 3-D printer and coating each prototype with silicone using a turkey baster. Because Edwin is a toy, "you need to be able to drop him, bang him around, and soak him in Cheerios, and he doesn't quit working," says MacBeth. "There are all kinds of situations that kids will run into with a toy that don't exist in the world of mainstream consumer electronics."

The technology was especially challenging. Edwin's compact, buoyant body is packed with lights, a Bluetooth speaker, a thermometer (to take water temperature during bath time), and a device that tracks his movement. Sound quality had to be high despite the speaker's nontraditional exterior. "We also had to make sure he wasn't too loud," says MacBeth. "We had to make sure a child could fall asleep on Edwin without damaging their hearing."

Aesthetics were equally important. Inmon and Macbeth paid close attention to everything from how far apart Edwin's eyes are spaced to how his body is angled so the water rolls off. "At first glance, you go, 'Oh yeah, that's a rubber duck,'" says Inmon. "But when you look at it a second time, you see he's got a heart on his chest. He's kind of adorable. Curious and intelligent."

Onscreen and live

No duck is an island.

The Edwin sold in stores is a toy to be floated in bathtubs and snuggled at bedtime. But it also acts as a portal, via an app, to a world inhabited by digital Edwin and his friends. By moving the toy, children can navigate Edwin through games and stories designed to educate as well as entertain. The company currently does not charge for digital content; it will offer both free and paid apps in the future.

At first, the partners, working with third-party developers, devised simple content that kept Edwin close to home. Then Apple advised them "don't limit yourself with how you set the structure for the story," says Inmon. "Edwin should be able to stand on the moon, go back in time, go to the bottom of the ocean. That opens up the door to all kinds of creativity."

Pi Lab is also getting more ambitious about music. The company brought together an Indianapolis keyboardist and guitarist to write songs for Edwin, with titles like "Yeah Yeah Yum Yum Good" and "Yellow Mellow Fellow." The two also perform as The Wingmen, whose easy, jokey style Inmon compares to Flight of the Conchords. So far, their gigs have been limited to trade shows. But "if you think of properties like The Wiggles and Yo Gabba Gabba!," says Inmon, "we believe Edwin and the Wingmen have an opportunity to create an interactive live concert experience."

Inmon and MacBeth are building out the Edwin product line and may develop other toys in the future. But they also haven't given up on the more utilitarian products with which they started. Ultimately, they say, Pi Lab will be a multi-product business offering the kinds of devices that plug into cell phones and sit on desks. But, like Edwin, those products will be designed to have a personality: rendered in surprising colors; fabricated from distinctive, soft materials; and given names meant to evoke a laugh. "One of our rules," says Inmon, "is that we won't make a product that doesn't makes people smile."