Baby Business: Black entrepreneurs develop products for parents too!
Babies are big business. Baby care alone is a $5 billion industry, according to Packaged Facts, a leading consumer goods and market research firm. New parents rank among the top consumer groups in the country, and minority entrepreneurs want a piece of their action.
My Lil Star
Steven Marcano, a father of four, recalls his first run-in with the high cost of diapers. “When I had my first child, I couldn’t afford diapers,” he says. At the time he wondered how struggling families in his Jamaica, N.Y., community handled the cost, especially since diapers could not be paid for with public assistance funds. “When my second son was born nine years later, I was shopping for diapers and remembered how hard it was when my first child was born, so I decided to start my own line,” says Marcano, who is of African-American and Puerto Rican heritage.
With credit lines, Marcano’s personal savings of about $300,000 and roughly the same amount kicked in by joint-venture partner Scundi International, a fashion, hair accessories and beauty products manufacturer whose principals heard about Marcano’s idea and wanted in, My Lil Star was born in 2002. The first product, My Lil Star Diapers, hit stores two years later. The company is now headquartered in New York City, with offices and warehouse space on Long Island and in Connecticut.
Marcano owns 51 percent of My Lil Star, which recently inked a deal with Quality King Distributors, one of the country’s largest independent distribution companies with reported annual sales of $3.2 billion, to distribute the diapers through its network of chain supermarkets and drugstores. The diapers are available in such grocery stores as C Town. “My Lil Star wants to become the household name that moms trust when purchasing baby and infant products,” says Marcano.
He plans to introduce a full line of affordable baby products, he says. “There are many families that are not able to afford the giant economy packs of diapers, which the major corporations in the diaper industry promote. In turn, these families of infants are then left with no choice but to purchase off brands that are not of the best quality for their precious bundles of joy,” he says. To reach out to those families, Marcano launched My Lil Star’s Diaper Day.
“The Diaper Day came about when Hartford City Hall asked me to donate diapers to moms in need,” Marcano says. On Diaper Day, My Lil Star teams up with organizations such as the National Urban League and WIC to distribute free samples of My Lil Star diapers to families with infants and babies.
A former show promoter, Marcano’s entertainment connections proved handy. The My Lil Star Web site, www.mylilstar.com, rings with one celebrity endorsement after another, including ones from actors Salli Richardson, Dondre Whitfield, Carl Payne and Lisa Raye and sitcom star Flex Alexander and his wife, singer Shanice Wilson. Celebrities Tichina Arnold and Brian Hooks have publicly endorsed My Lil Star. Marcano says he is ready for “different” baby products. My Lil Star infantwear and educational DVD/videos are already on the drawing boards, and even items for parents of babies are envisioned.
In July 2004, in Jersey City, N.J., Wilma Ann Anderson launched MahoganyBaby.com, an online publication geared to Black mothers. “A colleague from graduate school brought the initial idea to me based on her difficulty finding parenting magazines that focused on the issues faced by parents of African-American children,” says Anderson, the magazine’s publisher. “I then crafted the idea to fit an online magazine model, keeping many of the features one might find in a print publication but without the print costs.”
MahoganyBaby.com has become a popular e-zine. “The most difficult part of the venture was deciding what the face of MahoganyBaby.com would look like, its design. After that was cemented, it was a matter of executing that vision online,” says Anderson. “Months of nonstop research on the baby industry, our target audience, as well as the growth of the Internet, preceded our launch,” she says.
Start-up costs were low—under $1,000. “Quite frankly, it was the cost to set up a domain name and obtain an electronic-mailing-list-facilitating company, less than $500.
“All other services and goods were donated,” explains Anderson. Freelance writers provide copy in exchange for bylines. “Thankfully, the Internet is still a medium that allows one to operate with little capital. MahoganyBaby is profitable and makes money through advertisers, affiliates and donations from supporters,” Anderson says.
In October 2003, in Chapel Hill, N.C., Jennifer James launched Mommy Too! Magazine (www.mommytoo.com) “because I could find relatively little about mothering and motherhood for mothers of color in article format.” She wanted to provide an online portal with uplifting, positive content about such subjects as babies, pregnancy, parenting, home and living, “where mothers of color could come and really enjoy themselves as moms,” James says.
Like Anderson’s, James’s start-up costs were relatively low. “I started literally with $20 and the determination to make it the best online site for mothers of color,” says James. “Since then, the costs of the site have truly grown because of the increased costs of bandwidth, e-newsletter costs, Web hosting and the costs of professional photos.” James still funds the site with money “right out of my pocket,” although advertising income offsets some of the cost.
Mommy Too! has yet to show a profit. “It is difficult to corner the market of online mothers of color. Mommytoo.com has mainly grown via word of mouth. Our main obstacle is gaining more subscribers and online readers,” James says. The magazine currently has 12,000 readers. James plans to spin off a print version “eventually.”
Global Profiles Inc.
Necessity truly was the mother of invention in the case of Global Profiles Inc., a Decatur, Ga., company founded in 1998 by husband-and-wife team Antonio Anderson and Raquel Lett-Anderson (no relation to Willa Ann Anderson). “I was feeding my youngest son and trying to use the remote control for the television to watch the Falcons football game,” recalls Antonio. “I wanted to be able to feed my son and caress him while I watched the game. Then I began thinking about all the things my wife has to do [while she feeds] the baby. She was seriously lacking a free hand. So the idea was born out of a need.”
That idea was Gabriel Feeding Pad, a cloth garment you drape over one shoulder that holds the baby’s bottle while the baby feeds. Start-up costs of $75,000, followed by a $100,000 line of credit, put Global Profiles’s first product on the market.
“It took nine months before it was commercially manufactured, packaged and brought to the consumer in November 2001. We did an advertisement and sold the product online‚” says Antonio. With stores skeptical about carrying innovative products, the Andersons literally took to the road. “It was a major challenge, traveling to and testing our products through consumer trade shows,” Antonio says.
Steady sales at these shows helped build their confidence, as well as the product brand. The product eventually was accepted by one store. “Once it was accepted, stores wanted more.” In May 2004 Global Profiles landed its first contract to supply the Gabriel Feeding Pad Break-Away to more than 200 Babies“R”Us stores and Babiesrus.com, Target.com, 100 Burlington Coat Factory (stores), Baby Depot stores and Babydepot.com. The company’s projected revenues for 2005 are $1,073,474. New products include the Gabriel Discovery Pad, an interactive learning pad, and the Gabriel Feeding Pad Break-Away, a three-in-one product for nursing, bottle-feeding and burping. A line of educational toys for infants and toddlers is being developed.
The couple, who have appeared on The Oprah Winfrey Show, have also created a seminar series entitled Take It to the Market! where “we help make the invention process easy from our own experiences,” Antonio says. Already available in book form, the seminar is expected to be on DVD by the end of the year.