Million-Dollar Ideas

3. Tot Tech

OK, even we're jealous of high school and college students with outrageously successful tech companies, but given the proliferation of baby and tot software and the burgeoning online audience of pre-readers, the next e-prodigies will be in grade school, not their teens.

"Five years ago, there was almost no software for kids under age 4," says Ann Stephens, president of market research firm PC Data. But after companies like Jumpstart introduced baby and toddler software, sales soared, rising 18 percent in '98 and reaching $20 million by mid-1999.

In 1998, former Netscape senior manager Tony Fernandes' then-infant son enjoyed playing with Tony's PC. To create something that rewarded their child's curiosity, Tony, 35, and his wife, Kathy, 35 (pictured below), began BowWow House Inc., which develops software for young children. BabyWOW!, their flagship program, reacts to slight stimuli like mouse movement or a pressed key with photos and sounds.

Though BowWow House competes with behemoths like Mattel, Tony says small size allows them to innovate without millions of dollars in overhead. "We're constantly learning [from parents and researchers]," says Tony, who expected a 400 percent increase in units shipped for 1999.

Pre-readers are also the newest audience online. Yaron Ben-Shaul, 28, watched his nephew unsuccessfully search the Web for info on dinosaurs because he misspelled the word. That led Ben-Shaul and partners Victor Vidal, 34, and Joel Vidal, 27, to create Alfy Inc., a Web portal for kids ages 3 to 7. "We have a 100 percent graphical interface, so [children] can explore thousands of sites and unique content by clicking on images and hearing sounds," says Ben-Shaul.

Currently, Alfy's sales come from banner ad merchandise sales and sponsorship, but the tot tech company plans to incorporate a subscription section with original content and games, and to begin merchandising Alfy, the site's skateboarding canine host.

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This article was originally published in the January 2000 print edition of Entrepreneur with the headline: Million-Dollar Ideas.

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