 At
the recent NY Times Small Business Summit David Schnurman
sat down with Julie Aigner-Clark, founder of Baby Einstein and
The Safe Side. Anyone who has had a baby in the past
10 years is certainly no stranger to the company's line of baby
videos. Julie sold her company to Disney 5 years ago
which is now worth an estimated one billion dollars. During
our interview, Julie discussed starting her company, she explains
how it grew to over $20 million in sales, and what her
reasons were for selling it. In addition, she discusses her
most recent venture, The Safe Side, where she has partnered
with John Walsh to create videos on stranger safety for
pre-teens.
Below is a summary of their interview
1. How did you start Baby Einstein?
Before Baby Einstein, I was an English major in college and
after that I was a teacher in high school and left when I had
my first baby. At that time, there was nothing that existed
that was fun educational videos for babies. That is when I realized
that there was a need in the market place and best of all I
was my own customer. I had no production experience and I shot
my first video in my basement. My initial investment in it was
$15,000.
2. Tell me about the name of the company?
It was something that I just came up with on my own. However,
I believe the name of our company was incredibly important to
our success. When I first created it, I didn't think I was creating
a company just the name of a video. However, the name Baby Einstein
caught on very fast and became the generic name for baby videos.
3. How did you get your first distribution deal? 
After we made the first video one of my friends recommended
we attend a trade show to try and acquire a distribution deal.
For the first two days of the show I walked around and memorized
everyone's name tags. At one point I saw a buyer and chased
her down, and pretty much scared her to buy the video. Seriously
though, I think it was clear to her that I had a great passion
for my product. She agreed to try the video in 10 stores with
5 videos each store. I was ecstatic that I sold 50 videos. In
3 days they were sold out!
4. How many different videos did you produce?
In the 5 years that I owned Baby Einstein, we made 10 videos.
I also signed a publishing deal with Disney. I felt we were
exposing babies to poetry.
5. What was your growth from year 1 to when you sold your
company to Disney in year 5?
# In Gross Sales:
Year 1 -- $100,000
Year 2 -- $1,000,000
Year 3 -- $4,000,000
Year 4 -- $10,000,000
Year 5 -- $23,000,000
I sold it in year 5, which was 5 years ago. It is now reported
that The Baby Einstein is worth one billion dollars.
6. Why did you sell your company? Any regrets?
When the company was doing $23 million in sales, it was beginning
to consume all my time. In order to take the company to the
next level, it would have required much more of my time and
commitment. It was more important for me to spend more time
with my family and be with my children. So my husband and I
sat down and came up with a number that we would be happy selling
the company. The first company we approached was Disney because
we already had a publishing deal with them and it just made
sense. Disney normally does not buy companies, they make their
own. However, they agreed to our number without any negotiations
what so ever.
In terms of regrets, I do not really have any. We sold the company
the year of 9/11. In addition, I have been able to be with my
family much more than I ever could have for the past 5 years.
While the company is worth one billion today, I do not think
we could have brought it to that level alone. We sold the company
for a lot of money and I am happy with that.
7. What are you working on now?
 I
have partnered with John Walsh from American's Most Wanted to
create a video series called, The Safe Side, it focuses on children's
safety with strangers. It is targeted to children ages 9 to
13. We are donating our proceeds to charitable organizations.
8. How is the venture going?
Much tougher then I originally anticipated. While we have sold
a large number of videos, we are no where near where I expected
to be. However, in October we are releasing a much wider distribution
all over the country.
You would have thought if you combined my credibility in video
production for children and John Walsh's credibility for safety
it would have been a winning combination. However, I am already
personally almost $2 million into this projection and we have
donated $200,000 of proceeds to charity.
Looking back it would probably have been a wiser decision to
reinvest the proceeds to make it easier on allowing the company
to grow. In addition, after we started The Safe Side, I went
through a lot of personal hardship when I was diagnosed with
breast cancer. If the company hadn't been started yet, I do
not know if it ever would have happened. When ever you go through
something like that, you looking at your priorities in an entirely
different light.
I started this company because my children are at the age when
you start to worry that they know about stranger safety, especially
when they are on the Internet. I wanted a video that would be
fun for them to watch as well as teach them. I am passionate
about this and I am optimistic in its success.
8. Going back to Baby Einstein how did you market your company
to lead to such growth?
At that time we didn't have any budget for PR. So what I did
was send out the videos to all publications to review it. There
was a reporter from People Magazine who loved it and wrote a
piece on it. Then there was a producer on Oprah that also loved
it and they fit it into a segment. At the end of the day word
of mouth is your most important means to get the word out and
we had a great group. Mothers!
9. How did you expand your distribution to earn $23 million
in sales the year you sold it?
Initially we signed an exclusive deal with The Right Stuff to
be distributed in 34 of their stores. Our first market was college
educated moms. In addition, we went with The Right Stuff because
their sales people educate the mothers on the product. If it
was in Wal-Mart from day one, the sales people wouldn't have
been as helpful to our customers. I think it is important to
focus on the specialty shops before trying to get large distribution
deals because if your product fails in the beginning, you will
never be allowed back in larger stores. However, the problem
today is a lot of these specialty shops have been run over by
Wal-Mart. It wasn't until year three that we went into Wal-Mart.
In order to do that we had to go with a large distributor. For
Baby Einstein we went with Artist Entertainment and most recently
with The Safe Side we are using Sony Wonder.
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