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| First Person |
Lessons Learned
Larry Balaban
03/01/2008
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Larry Balaban, a creator of Baby Genius and the president of
Pacific Entertainment—one of the largest providers of children’s programming on
CD and DVD—believed he had a new approach to teaching and entertaining
youngsters when he helped launch the company in 1998. Balaban applied lessons
that he had learned starting—and closing—a variety of businesses, in which he
marketed everything from diets to specialty phone cards. The knowledge he
garnered in such seemingly unrelated fields proved invaluable in building the
new venture.
October 16, 2001, was possibly
the best day of my life. It was the day I became both a father and a songwriter. As I rocked my daughter, Frankie, to sleep for the first time, I was inspired
to write the song "1, 2, I Love You," scrawling on the back of an envelope
with my left hand—even though I’m right-handed.
 | LARRY BALABAN struck gold with Baby Genius, a company inspired by his daughter, Frankie. |
In that moment, new fatherhood, creativity and even entrepreneurship mixed together; Frankie’s song would eventually become a
hallmark melody in my work as cocreator of the early-childhood education company
Baby Genius and as the president of Pacific Entertainment. Today, more than 7
million Baby Genius CDs and DVDs have sold worldwide.
Three years before Frankie’s birth, I started Baby Genius with
my brother, Howard, and Klaus Moeller and Michael Meader. We began modestly,
using a small office above a gas station in San Diego. In 1998, Klaus had
brought Mike, Howard and me into his business, International Trading &
Manufacturing, which was selling jewelry on the Home Shopping Network. The sales
were slipping in the costume-jewelry business, and Klaus was searching for a new
venture. We wanted to start a business creating and marketing products for
children, though none of us had worked in children’s programming before. And
while it might seem like a stretch to switch from selling necklaces to creating
musical and educational DVDs and CDs for children, we loved kids and believed in
our idea. We also thought we could contribute different talents. I had
extensive experience in negotiating licensing and promotional deals, and
Howard was skilled at developing business opportunities. Mike had a strong
musical and operational background, and Klaus was a great CEO. We thought that
together we could create something new and meaningful in early-childhood
education.
The first few years were tough, because we were building the
company from the ground up without a lot of start-up capital. Minnesota Public
Radio provided our first financial backing, with an initial $600,000 investment.
Lacking a large marketing budget, we planned to build the Baby Genius brand by
piggybacking on mature, well-regarded brands. We produced the first two DVDs on
a shoestring budget. Then we partnered with Gerber to create a co-branded
"bath-time" CD, and Kellogg’s placed 400,000 CDs in its cereal boxes. We also
contributed 250,000 CDs to a Parents magazine subscription drive in
schools.
Although I was new to children’s programming, I applied the
lessons I had learned from my earlier businesses. I can thank my dad for helping
me to become the entrepreneur I am today. I started in grade school as a Cub
Scout, selling chocolate to raise funds. I was a natural; I sold all of my
candy, as well as my brother’s, in one afternoon on the boardwalk in Atlantic
City.
When I was 17, I helped my father start a company called the
Diet System, which we sold within two years to Educom, a firm based in
Philadelphia, for $1 million in Educom stock. Entrepreneurship was innate for
me; I grew up in a family that encouraged it.
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