Fads And Frisbees The firm's founders got started by lobbing meatballs at falcons.
By Paul Lukas

(FORTUNE Small Business) – The film Dickie Roberts: Former Child Star wasn't a huge box-office hit, but someone from Wham-O apparently saw it. Shortly after the film's September debut, Wham-O sued its producers and distributor, claiming that a scene in which actor David Spade lubricates a Wham-O Slip 'N Slide with vegetable oil and then goes flying into a fence constituted an "unauthorized" and "inappropriate" use. That litigious approach may seem uncharacteristically grown-up for a firm based on child's play, but Wham-O's protective stance is understandable, for the company hasn't always reaped the rewards of its playthings' popularity

Wham-O began almost by accident in 1948, when Richard Knerr and Arthur Melin, both students at the University of Southern California, started a fledgling enterprise training falcons. To teach the birds to dive at prey, the duo lobbed meatballs at them with a homemade slingshot. "I don't want a bird," one prospective customer said, "but I'd sure like a slingshot like that," recalled Knerr, now 78, in a recent interview with FSB. They promptly jettisoned bird training, bought a Sears bandsaw on credit, and began producing slingshots in Knerr's garage. "We called them Wham-O slingshots," Knerr said, "because, well, that's the sensation you felt when you hit something." The product did moderately well, and they followed up with other novelty hunting tools such as boomerangs and crossbows.

Their big break came in 1955, when they met Walter Morrison, who in 1948 had co-invented a plastic flying disc called the Flyin' Saucer. Morrison and his partner later split, and Morrison redesigned the disc, calling it the Pluto Platter. By any name it sold poorly, but Wham-O saw potential. It inked a licensing deal with Morrison and rechristened his disc the Frisbee (which may have been a reference to the Frisbie Pie Co., whose tins were tossed about by Ivy Leaguers). Immediately popular at Eastern universities, the Frisbee soon went national. By 1957 several million had been sold, and Wham-O had entered the fad field.

But fads can be fickle, as Wham-O discovered with the Hula Hoop, which debuted in 1958. Melin demonstrated it on California playgrounds, and it spread like the measles, becoming the biggest American fad of all time. Within four months, 25 million hoops had been sold--about $30 million worth--but not all by Wham-O; copycats were rampant. By year-end the craze had flamed out (one headline declared HOOPS HAVE HAD IT), leaving Wham-O with millions of surplus hoops and a $10,000 loss.

With similar boom-bust cycles and knockoff competitors plaguing subsequent Wham-O products such as the SuperBall and Silly String--along with occasional duds, like instant-grow fish eggs--the firm's finances seesawed wildly: According to the Wall Street Journal, a 1962 profit of $370,000 was followed by a $425,000 loss in 1963 and a $387,000 profit in 1964. Black ink finally outweighed red, thanks to the enduring Frisbee, which Wham-O promoted as a sport, Ultimate Frisbee.

Knerr and Melin (who passed away in 2002) sold Wham-O to the Kransco Group Cos. for $12 million in 1982. Mattel owned Wham-O for a spell, and now private investors do, but it still turns out iconic toys, including the Hacky Sack footbag and, yes, Slip 'N Slide. As for the lawsuit (the defendants had no comment), Knerr hadn't heard of it. Or of the movie either: "Must have been a flop."