Robert “Bob” Mouch, president and CEO of Dallas-based Mag-Lok Tools, Inc., talks with the Opportunist’s Managing Editor Leslie Stone about his company’s innovative system of interchangeable tools and how it is revolutionizing the $8 billion long-handle tool industry.
To be successful, entrepreneurs must identify an unmet need in the marketplace and create a product or service that satisfies that need. Mag-Lok Tools’ founder, the late Ray Miller, a lifelong inventor, discovered an unmet need in the long-handle tools industry: quality tools that can be stored easily and securely. Miller, along with CEO Bob Mouch and a team of product designers, developed a single-handle tool concept that pairs industrial grade handles with interchangeable heads. “Power tools have accessories but nobody had ever successfully done a long-handle tool that gives users the ability to switch out tool heads quickly and easily with one handle like our Mag-Lok Grip Connector,” says Mouch. “I believe it’s going to be one tremendous business.”
Opportunist: We noticed you have your very own Mag-Lok “pinup girl.” Is she helping to put you on the map?
Mouch: Tool companies have traditionally featured pinup girls since the forties and fifties, but when we first started marketing the company it never occurred to me to produce a calendar like that. Someone suggested we give it a try, and I had hired a young woman to work the booth at one of our Las Vegas shows. She was such a big hit that I thought maybe sex does sell [Laughs] and I hired her for the next show. Turns out she was involved with a group that produced a calendar every year, so she asked if we’d like to participate. They were trying to get their printing numbers up so they could get a cheaper price, and I talked to some people and decided to do it. I figured out I could use the inside of the calendar and do my own cover. I did not have to hire the girls or do the production for the inside. We ordered 2,500 calendars and they went like hotcakes! In fact, at the very next show we had people wrapped around the corner, standing in line to get a calendar. My advertising agency advised me to have plenty of Sharpies on hand because guys were going to want our girl’s autograph. Sure enough, they were standing in line for it. Today, I bring her to every show with me because, first of all, she’s much better looking than the rest of us and, second, she’s sharp and intelligent. She can sell. Last October, thanks in part to her, we had our best show ever. We got almost 700 leads and gave away about 750 calendars. Other vendors brought their customers over to our booth to get a calendar. It has been such a huge hit that by April or May of this year people were already asking about our next calendar.
Opportunist: When did you join forces with Mag-Lok’s founder, Ray Miller?
Mouch: In 2007. He had been an innovator in the telecommunication industry since the late-‘70s—he started the first major competitor in the long-distance telephone business in the United States—but he was retired and he was bored. So he started playing around with garden tools and discovered that nobody ever came up with a successful single-handle tool concept. These tools have the biggest handles, so 60 percent of the cost of the tool is in the handle part. He thought if he could fix it to where there was one handle with interchangeable heads it could save a lot of money and be a pretty nifty tool. He returned to Dallas to work on that and asked me if I wanted to join him. I thought it would be a lot of fun to build something from the ground up because I was usually taking over from somebody. I had the business and financial experience and he was the inventor. That was a very good combination.
Opportunist: Had anyone ever attempted to produce a tool like this before?
Mouch: Other people had tried it and patents had been started but nobody had been successful. You’ve got shovels, hoes, brooms, cultivators and a variety of other tools—there is just a huge number of tools that use a long handle—but no one had successfully invented a one-handle, multiple tool head combination for the long-handle tool business. When we started out, there was one on the market and we went to different distributors to find it but nobody carried it. When we asked why they weren’t carrying it, they said it didn’t work and nobody would buy it.
Opportunist: What obstacles, if any, did you encounter in trying to get your idea made into a real product?
Mouch: We started working on it during 2008, and it wasn’t easy. We worked out of Ray’s apartment a lot, and then we would take our ideas down to the machine shop. We built a business plan and started talking to users of the tools to try and determine what would get made. The problem that we had—and everybody before us had—was that the connection between the handle and the tool head wiggled on earlier attempts. We knew as long as that moved nobody would buy it. That’s why it had never been successfully done before. We had a connector that goes on the handle end and a connector on the tool end, and we ran into the same problem. Nobody had been able to make a connection that was just as good and solid as a fixed handle tool. When you’re using a shovel, you’re putting a lot of torque on it to dig up the ground. And rakes require a push-pull motion that could pull the rake and the handle apart if it isn’t sturdy. You’ve got to have a way to connect each piece that won’t cause the tool to fail. That’s what everybody had problems with over the years. It took us about two years to figure out how to make it go together smoothly and stay tightly attached without wiggling. We started selling our finished product at the beginning of 2012.
Mouch: We received notification from the patent office in July that we had been approved and that a utility patent would be issued in 60 to 90 days.
Opportunist: So no one can copy your product?
Mouch: We were very fortunate to have received a utility patent, which basically means it will be very hard for someone to invent a connection for a tool head to connect to a long handle without violating our patent.
There are design patents and utility patents, but a utility patent is a lot stronger. For example, if we only had a design patent someone else could copy our idea by simply making a connector that is shaped differently from ours.
Opportunist: Where are your products made?
Mouch: Our tools are made in China and our handles are made in the United States. Ninety percent of all long handle tools are made in China, India and Mexico.
Opportunist: Tell us about your experience in China.
Mouch: It took several trips to China— mainly in the northeastern part of China outside of Beijing, where a lot of manufacturing is done—and shipping packages back and forth to get this made. I got a pretty good education about how you can work in China. Everyone had warned us to be careful because they knew somebody who got screwed out of money or never got their product made. We also heard about slave labor and children working in poor conditions, but we didn’t find that to be the case. The factories I was in could rival ones I’ve seen in the United States. We have had nothing but good work in China.
Opportunist: How long does it take to manufacture your tools?
Mouch: It takes about 60 days for them to produce an order for us and about 30 days to get here.
We have a product for which most of the components are already made. Here’s a perfect example: They make a basic shovel in China so they know what it is and do not have to make a mold for it. All they have to do is take our connector and figure out a way to attach it in the most effective way that will hold up to the stress. They don’t have to reinvent the wheel. They just take a tool they have already made and they affix our connector onto it.
Opportunist: What are your competitive advantages?
Mouch: Our tools take up less space and less tool weight, which makes it much more convenient to store and transport tools. If you have six long-handle tools and you can reduce it to one handle and six tool heads, those are going to take up less space and less weight. Plus, our warranty guarantee is better than anything out there on the market—and we are cheaper.
Opportunist: Tells us about your warranty.
Mouch: When I was in China, I saw two different piles of rakes getting ready to be packaged. I asked why there were two piles and it was explained that one pile was going to Eastern Europe and Russia and the other pile was going to the United States. So I asked, ‘What’s the difference?’ and they said, ‘The rakes in this pile are going to Eastern Europe and Russia and will never break. The rakes in the other pile are going to the United States and will break.’ That’s when it occurred to me that we have planned obsolescence here in the states. I thought, why don’t we build a quality product that won’t break? So we decided to build a product that would have a lifetime warranty.
Opportunist: Is that possible?
Mouch: Well, all the skeptics warned that a lifetime warranty and having product that doesn’t break would put us out of business but I had to laugh because this is an $8 billion a year market. If you have ever read the fine print for tools that have lifetime warranties, you will see that if they are used commercially it voids the warranty and you have to package up the damaged product and pay to ship it in for replacement. That’s why most people decide it is easier to go buy another one. We tell people to take a picture of what broke and we will send them a new one the next day—at no cost. That’s how confident we are that we are building a product that doesn’t break. There will be some breakage and some manufacturing issues, of course, but those we can deal with.
Opportunist: What is your target market?
Mouch: We are marketing to the commercial user; it’s not really a consumer product because it’s a little bit heavy compared to tools you will find at hardware stores. The utility industry is where we are focusing our efforts right now, and we are also trying to break into the railroad business.
Opportunist: How much do your tools cost?
Mouch: In round numbers they run about $25 a tool or handle. If you bought just one of our handles and one of our tool heads it’d cost roughly $50. If you want to add a rake to it, you can buy a rake head for $25. So your average cost for two tools is $37.50. We’ve done studies and made up charts. We are price competitive with all the high-end commercial tools that are also built to last, but there aren’t that many. You have to go to a specialty distributor to find one and, still, those tools are not of the quality that we make.
Opportunist: Are there any plans to go public?
Mouch: There is always that possibility. It is one of the things that Ray wanted to do. We were two months away from going public when Ray died. After he died I stopped the proceedings because I believe you need to build your sales up and get a market before you go public. We will probably reconsider in two or three years. My guess, though, is that somebody will come in and buy us because of the patent. That gives us pretty good leverage. Or we may just hold on to it and keep it private.
Opportunist: What are your goals for the company in the coming years?
Mouch: I would say we are going to grow exponentially. We have done a very modest and respectable business so far. Once we get these first distributors on line with reorders we will get more and more sales. Utility companies and gas companies will start converting all their trucks to our tools, especially as theirs break. There are more than a million utility trucks in the United States when you count railroads and all the different maintenance companies.
Opportunist: What have you enjoyed most about creating this company?
Mouch: Building a sales force and actually going out and seeing the look on people’s faces and hearing people ask why somebody didn’t think of this before. I always say that I don’t know but I’m glad they didn’t. [Laughs] Working with Ray because of all the things he had done in his life. He was older than I was, and he had started so many different companies and had taken a lot of them public. He would do that and just move on to something else. Going to China and being pleasantly surprised to find that they do things very differently from what I was told to expect.
It’s been a fun time. I expect that it will be an interesting business case study someday. I have gotten to do a lot of things I never did before. I’ve been involved in 10 or 12 other businesses, but I truly built this one from scratch. This may be my last business, and I want to go out with a bang.
Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in the Orlando area.
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