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Tom Murdough shares business wisdom at Hudson library

Murdough founded Little Tikes, Step2 and Simplay3

By LAURA FREEMAN Reporter Published: January 29, 2017 12:15 AM
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Tom Murdough, founder of Little Tikes in Hudson, Step2 in Streetsboro and his newest company, Simplay3 in Streetsboro, shared his business experience Jan. 23 at the Hudson Library and Historical Society as part of the 2017 Winter/Spring Burton D. Morgan Entrepreneurship Series. More than 200 people attended the event.

Reporter Kabir Bhatia interviewed Murdough about his long and successful career.

Murdough said he has been in the rotational molding plastic business for more than 50 years and turned seasonal products into a year-round business.

Rotational molding allowed you to do things a different way, he said. The drawback was, it was labor intensive.

In 1969 Murdough joined Rotadyne, founded by Jack Hill, to develop children's products. A year later he became head of Little Tikes, a plastics toy company using rotational molding for large items such as the Cozy Coupe, sandboxes, playhouses and more.

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"Rotational molding represents only 1 percent of plastic processing," Murdough said. "Most of the plastic industry is involved in injection molding which is not labor intensive."

The company moved from Aurora to Macedonia where a rail siding allowed him to cut costs on shipping. Another cost saving change was pulverizing plastic instead of using powder.

Murdough began sharing his business experience in the 1970s when Hudson High School business teacher Bob Mottice asked him to talk to his students.

"I would talk to them about our approach to business," he said. "Don't take the path most traveled. Do it your way."

Murdough told a story about gangster Danny Green meeting with him in the parking lot and wanting to organize Murdough's 15 employees at the time. Organizing them would have closed down the business, he said.

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Afterwards, Murdough met with his employees and instituted monthly meetings so they could communicate about any problems.

"When we make money, when we're profitable, you're going to share in it," Murdough told his employees.

Murdough emphasized taking care of employees and many in the audience were former employees.

"Whatever we achieved was achieved as a team," he said. "Twenty to 25 percent of the profits went back to the employees. Caring for your people is critical in any business."

His philosophy consisted of six P's: Purpose to be number one; people finding best possible; products of quality, value and service; patience; perseverance; and profits to take care of employees, shareholders and invest in new equipment and support growth.

"Do it right!" Murdough told the crowd.

One of the tough lessons he learned was in 1977 when the banks wouldn't loan money to toy companies and pulled their loan.

"It was devastating," Murdough said. "We fought our way through it. We were profitable. There was no reason to do it, but it was a wake-up call to me."

In 1984 the Murdoughs moved to Hudson.

"We located Little Tikes in Hudson because we [Hudson] had lost Terex and there was a rail siding there," Murdough said.

"The belief in the industry was, you don't sell toys in the spring and the summer," he said.

A buyer from Sears asked if I had ever thought about a covered sandbox.

"I thought about it pretty quick, Murdough said. "We came up with a turtle sandbox."

That sold well and proved there was a market in the spring and summer, he said. A picnic table followed with pools, slides, climbing gyms, playhouses and more.

"We became a 12-month a year business," Murdough said. "Profitability got to a point we didn't need the banks anymore!"

Rubbermaid had acquired the company in 1984 when interest rates were 22 percent, which was one of the reason he sold it.

"Rubbermaid sent people to help us," Murdough said. They "replaced people who had built the company and showed us what to do. I wasn't happy."

When Murdough left in 1989 Little Tikes had grown to 1,700 employees with five plants and $300 million in sales, he said.

"That was pretty exciting," he said.

In 1991 he started Step2, which made home and garden products and eventually toys. Nearly everyone nationwide has one of its mailboxes.

Last year he added Simplay3 which sells plastic products online.

Simplay3 came about as a result of Murdough being bored in retirement.

"It was fine for awhile," he said. "It got boring, and I thought it was affecting my brain. We're getting it sharper now."

Simplay3 products are sold online but not in stores, he said. People want cheaper and faster.

"Regulatory issues are so different today," Murdough said. "The [Simplay3] mailboxes went to postal services in Washington in July and still are not approved. It's impacted our ability to get off the ground."

A member from the audience thanked Tom and his wife, Joy, for their philanthropic work in Hudson.

Another person asked for advice for starting a business.

"Don't follow conventional wisdom," Murdough said. "Take your own direction and look at ways to be better and differentiated from competition out there. Be unique. Come up with ways to do it better."


Email: lfreeman@recordpub.com

Phone: 330-541-9434

Twitter: @LauraFreeman_RP

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