These days, babies are the new black. Popular culture is obsessed with them: from Angelina's exotic adoptions and Britney's bizarre custody battles to Hollywood blockbusters Knocked Up and Juno. Birth rates are rising along with the mercury, spawning a multibillion-dollar industry selling high-end baby goods to googlie-eyed parents at an unprecedented rate.
Since starting Liandrea Productions - a Toronto-based business that produces educational DVDs for new and expectant parents - Lianne Castelino and Andrea Howick have struggled to tap the parent pipeline. Their first foray - Bringing Baby Home - sprang from Ms. Castelino's frustration at watching the cheesy '80s-era instructional video in her Montreal prenatal class, when she was pregnant with her first child in 1996. "To me it was just inexcusable," recalls Ms. Castelino of the grainy VHS tape, replete with mullets and American accents. "A lot of the information wasn't even pertinent any more, but those were the only videos they had at their disposal."
The experience convinced Ms. Castelino, a television reporter at the time, that she could do better. In 2003 she teamed up with Ms. Howick - a fellow broadcaster and mother - and the pair made their first video, for $100,000. Their venture gained a valuable ally when Dr. Denis Leduc, former president of the Canadian Pediatric Society, agreed to star in the video.
Armed with those references, they landed in more than 300 Wal-Marts nationwide. "People always say 'You're in Wal-Mart, you must be rich!' " exclaims Ms. Castelino, instead acknowledging that it's a daily struggle just to make sure the product is properly displayed so customers can see it.
Undaunted, the erstwhile moms released another DVD in 2006 on newborn nutrition, entitled Yummy in My Tummy. This time they enlisted the help of a public relations consultant to overhaul their website, Liandrea.com, and promote the release.
Last year they were given their own radio show in Montreal, Parent Talk Radio, as a cross-promotional tool for their DVDs and website.
Despite these successes, the DVDs are still not flying off the shelves.
"We just don't have enough hours in the day," Ms. Castelino says. "It's so hard to get the attention of potential sponsors these days; you're one among a sea of voices."
What the experts say
As a mother herself, Mat Wilcox empathizes with these mompreneurs, but takes a tough stance when it comes to their business.
"It's a nice-to have, not a have-to have," says the CEO of Wilcox Group, a national Canadian public relations and crisis management consulting firm. "There are tons of people with really sweet ideas, and you go 'Oh, that's so adorable,' but they're not going to make money. So what's the business model to make money?"
Ms. Wilcox suggests the women start selling themselves instead of their DVDs. To do that, she says they have to use their radio show to comment on hot-button or more mainstream issues, such as celebrity parents and trans-fat-free diets for kids.
"It's mom stuff, and there's a real limited readership for mom stuff, unless it's parenting magazines. What do people really care about? They care about celebrities. Celebrities and babies right now are the No. 1 thing"
To bang the drum, she advises doing a media tour of Los Angeles or New York, as it would generate more website hits than all of Canada combined. In addition, Ms. Wilcox says they should stream their radio show live on their website, and flip the business model to offer free clips from the DVDs, bringing in money through advertising and sponsors. "They should look at a different business model of advertising and become the free baby resource."
Stewart Thornhill wonders if Ms. Castelino and Ms. Howick did enough market research to determine whether their perception of a need for parenting videos actually meshed with reality. "You see a lot of these, where somebody says 'Well, gee, there should be a Greek restaurant in this town,' without ever going around and asking, 'Does anybody here like Greek food?' " says Prof. Thornhill, associate professor of entrepreneurship at the University of Western Ontario's Ivey School of Business.
Prof. Thornhill says they need to target their customer with a laser-like focus, and then sell in those stores where they are more likely to shop. "They just really need to define who benefits most from their product, and then how to educate that person that they'd be better off with your product in their hand than they would the $10 in their wallet." He suggests Wal-Mart and Costco offer too much of a scatter-gun approach to selling, and that they may have more luck in stores such as Shopper's Drug Mart or prenatal clinics. "If you can get the product to where the expectant mothers are, well, now maybe you at least have a shot of selling to them."
Despite the cachet of being in Wal-Mart, Mark Wardell agrees it's likely not helping the bottom line. As the president of Wardell Professional Development, Mr. Wardell suggests the Liandrea owners become more specialized, restricting their areas of expertise to organic baby food or more green applications, such as reusable diapers.
"When they're headed down a path like that, then we can start to look for other opportunities for growing this thing, like looking for alliances, which will be much easier to find once they're clear on what kind of company they want to build." Mr. Wardell believes they could partner with baby food firms. A good example would be "buy a bottle of Heinz baby food and get $5 off a baby video."
By positioning themselves as experts, through their radio show, DVDs and website, they become the product, and that can springboard them into more lucrative relationships with companies already in the baby industry. For Mr. Wardell, selling DVDs is not the best business model, as people watch them once or twice and put them aside; there are no repeat sales. "What's really cool about the target market is that there will forever be mothers, but the way it's structured, there's nothing to do with repeat sales or expansion. They're going to be building some kind of credibility here among these new mothers. So while they've put the video to one side, it doesn't mean they've put Liandrea to one side. They still occupy some mind-share with these new mothers, and that's where there's opportunity."
In a nutshell
Research your idea: Find out if your perceived need of the product really exists.
Don't be afraid to change: If your product isn't selling, modify the revenue model.
Brand awareness: Just because you have an awesome product, people won't necessarily care about it.
Wal-Mart is not
always the answer: Major retailers can actually hurt a small business, as your product can get lost and your profit margins reduced.