From the December 1998 issue of Startups

When Julia Linden Frazier was working as a New York City graphic designer in 1986, she was surrounded by pregnant women. All her friends and co-workers were having children--and that got her to thinking about having a baby of her own.

But this "baby" would be different: not a child at all, but an educational tool for pregnant women. After hearing her friends talk about the size of the fetus in this week of pregnancy and its stage of development in that week, Frazier was struck with her great idea: Why not feature gestation information in a special calendar for pregnant women, so they could track their babies' development and know what to expect along the way?

"The women I knew were always asking each other things like when they should expect morning sickness and if they could eat such-and-such," says Frazier, now 39. "By putting the answers into the form of a calendar, they'd have all the answers when they needed them."

The concept had potential, but Frazier wanted to raise this baby with more than one parent. So she called on her freshman-year roommate at the University of Colorado in Denver, Marion Finholm Jones, who was in nursing school. Frazier envisioned herself designing the calendar and Jones writing it, providing medical information with the text.

"At the time, all the [reference materials] for pregnant women read like textbooks," says Jones, 39. "What I liked about Julia's idea was that it put the things a woman needed to know at different times right in front of her--no flipping through big books. You could look at the calendar and say `Okay, I'm at 24 weeks. Here's how big the baby is; here's what feelings are normal.' "

Sensing their success was about to hatch, the pair then recruited Jones' sister, Beth Finholm Rumbach. She worked for a property management firm at the time, and brought sales and financial expertise to the budding business. She and her sister also had already had their first babies, giving them firsthand pregnancy experience.

Together, the trio of moms (12 years later, they have a total of eight children) dubbed their company Linholm Corp. They launched the Denver company in 1987 with $11,000--the sum of Frazier's inheritance, Jones' savings and a loan from Jones' in-laws--and a goodwill deal: The Colorado hospital where Jones worked ordered 1,000 calendars and agreed to pay
50 percent upfront to cover printing.

Since that time, the pregnancy calendar has sold more than 1.26 million copies; spawned (in 1990) a "baby's first year" calendar that has sold 498,000 copies to date; and most important of all, been a resource for new mothers nationwide. Since start-up, Linholm Corp. has earned $6.4 million--not bad for a business that remains a part-time endeavor. (Frazier is still a graphic artist, Jones is a nurse and Rumbach works for American Airlines.)

Baby Steps

"There's a dual purpose that makes moms love using the calendar: It's a place where the expectant mom can keep up with how her baby is developing, but it also becomes a precious keepsake of the pregnancy," says Emily Gentry, a nurse who runs the Family Resource Center at Baylor University Medical Center in Dallas. Since 1988, Baylor has licensed its own version of the calendar, using the trio's text and basic concept but adding its own artwork.

The partners retain all rights to the concept and are responsible for updating the artwork and text--for example, incorporating new information on pregnant women's need for folic acid--and, thanks to licensing, they've established a two-pronged business. One version of the calendar is designed for sale in retail stores; all contracts and distribution on that side are handled by licensee Russ Berrie & Co. Inc., a nationally known gift company in Oakland, New Jersey. On the other side are assorted versions of the calendar designed as free handouts and distributed in obstetricians' offices. These contracts are handled by Nashville calendar printer Falco Manufacturing. But the partners' successful strategy didn't start out that way.

Initially, the women sold the calendars to hospitals and retailers themselves. Only after a feature article caught the attention of Russ Berrie in 1989 did they think of licensing their product. They also learned that retail stores and hospitals had slightly different needs: "Hospitals want something that looks more clinical than the cutesy artwork we use for retail stores," Frazier explains.

Thus educated, the partners had inadvertently been prepped for Russ Berrie's approach. "Russ Berrie always bought all rights [to a product] and expected to do that with us," Jones says. But Linholm's founders knew that by selling all rights, they'd be withdrawing their product from a sizeable market. So they negotiated to keep hospital and premium rights, and were able to mine their concept twice.

Now the hospital side of the business appears to be eclipsing the retail side in sales, Jones says. The lesson: "Don't sell the farm just because [the offer] sounds good at first," Jones advises. "Do the research and find out what you may be giving up."

What Linholm stood to lose wasn't just an income stream, but an entirely different way of getting important information to pregnant women. That focus on end-users' needs is what makes the product so successful, says Lauren Law, director of creative services for Baylor Healthcare System. "The Linholm calendar really meets the needs of pregnant women," Law says. "Women can tell--and so can the physicians giving it to them--that the information comes from people who feel it's worth sharing."

Buddy System

For the three partners--who still have no employees--it's not just about distributing information, but also about sharing the ups and downs of business. "Staying motivated can be a problem for any business," says Rumbach, 41. "The partnership gets us through those times."

"This has always been part-time for all of us, but we've managed to juggle it with everything else," says Jones, who speculates the business might not have survived if one person had tried to do it all. "Lots of times, one of us would get too busy with other things, like work or kids, and eventually the other two would say `Hey, remember this company we own?' We keep each other involved because we all like it so much."

Not to mention their obvious affection for one another: "The first decision I made was the best one--choosing my partners," Frazier says. "We fit so well together."

That's despite the fact that they mostly keep in contact by phone and fax. "It was definitely more fun working face-to-face, and we got a lot more done," says Frazier, who left Denver last year to move to Connecticut. "But we're all willing to make the extra effort it takes to work together, even though we live so far apart."

The Postpartum Years

These days, the pregnancy years are mostly behind the three entrepreneurs. Rumbach gave birth again this year, but overall, "the pregnancy calendar gals have moved on to later stages of life," says Jones. And they're looking to those stages for material.

Frazier says she's considering the possibility of a women's health-related product, although it might not be a week-by-week calendar. "It would probably be more of a monthly planner, with thoughts on how your body and outlook might be changing," she says. Alternately, a long-postponed calendar for the toddler years might finally make its appearance.

But the partners also have a different expansion route in mind. To date, distribution of their products has largely been limited to the United States. But since they've translated the calendar into Spanish for markets in the Southwest, the Linholm team now wonders how that product might give birth to a whole new market--in Mexico. After all, Frazier notes, "Pregnancy doesn't change much from one country to another."

Expect The Unexpected

Linholm Corp.'s founders have discovered some parallels between giving birth and starting a company--and it's not just that both make you sweat and groan. Whether you're birthing a baby or a business, these four key insights can ease the pain:

1. "It's a 24-hour deal," says Rumbach. "Just like that baby who won't go to sleep in the middle of the night, a new business never sleeps. There are faxes coming in late at night, things that have to get done. But like that baby, it can be trained. You just tell yourself you won't go into your office on a Saturday or you won't look at that 2 a.m. fax until the next day."

2. "When you're pregnant, you're dying to know what's normal. `Is it normal to feel sick now? How much weight gain is normal?' " Jones observes. During a pregnancy--especially the first one--most women need a lot of reassurance that it will all work out in the end. "Starting a new business feels the same way," Jones says. The solution? "Do your research." (Unfortunately, there's not yet a week-by-week calendar for business start-ups.)

3. "You don't get the rewards right away," Rumbach says. A baby might not smile until he or she is six months old; a new business might not offer many rewards for three times that long. But that's no reason to give up on either one.

4. Strong partnerships carry the day, says Frazier. Whether it's a marriage or a business partnership, "it helps if you trust each other, if you can put things in front of each other and know you can talk about them."

Dennis Rodkin (dnsrh@aol.com), the father of a 4-year-old, is the first to admit that while pregnancy may keep to a regular schedule, a growing child does not.

Contact Source

Linholm Corp., (888) 339-BABY, linholm@aol.com