Garry - I'm Garry Nash and Welcome to CeoCast! Joining me today is Dr. V. B. Goodman; Dr. Goodman is the chief executive officer of a private closely- held company, which is a limited liability company, KinderStart.Com. Dr. Goodman, welcome to CeoCast.
Dr. Goodman - Thanks for Inviting Me.
Garry - We are glad to have you! A very interesting model that you have, basically your web site is geared towards children, a certain age children, and we will talk about that as we continue on with our talk. But, Dr. Goodman, for those who might not be familiar with Kinderstart.com give us a brief overview, tells us about the company.
Dr. Goodman - The initial design and the focus of KinderStart is to be the largest indexed directory for parents and caregivers on the ' net. Of course, there are many people who take care of children and, KinderStart attempts to aggregate and make available that information and those services which are specifically focused on children zero to seven
Garry - How are you marketing KinderStart.Com? It's a very crowded; the Internet is just crowded with dozen and dozen of sites. How are you marketing KinderStart to the target audience? How are you getting the message out about the company?
Dr. Goodman - Essentially, the way we have gotten the message out is the hard way, the old fashioned way which is communicating with people directly, with vendors, with organizations on a guerrilla marketing basis.We find, and I have found that is just the best thing, the thing that works. We don't use massive advertising campaigns, nevertheless, there are over 600 sites that are running our logo and there are over 17,000 references to us in Goggle. So, it's just a matter of communicating with sites, getting sites to find us useful and letting them spread the word and let it propagate over the Internet.
Garry - Dr. Goodman, there are others that are doing this similar type of model and targeting the same audience, one can argue that Disney is doing the same thing on their web sites. What makes KinderStart different? What are some of the valued propositions of KinderStart?
Dr. Goodman - That's a great question. Because, we differ very much from content sites like Disney, we are an aggregator site! We are more like Yahoo, yet with a vertical focus, sort of a "vortal," six months ago that was a popular term, the word goes in and out! Disney and normal content sites pay a fortune to create their content while we don't pay anything to create content; we merely promote the content of others, so is a very economically and efficient model.
Garry - Let me ask you this, what is your revenue model? How do you make your money?
Dr. Goodman-KinderStart.Com has a large vision and a very low burn rate! We knew it was going to take us sometime to built critical users mass, which we are starting to do now, (a quarter million unique visitors a month, and over 4 million pages and growing over 20% to 25% a month with no advertising budget.). The direct answer to your question that would be that we have a large vision for KinderStart. We are building a "Brand" for KinderStart! KinderStart is going to provide to people every kind of product and service that people would need for young children, which is a lot, whether it will be toys, products, services or education. People are even building sites for us at no charge because they want part of our audience. We essentially see the KinderStart brand as our prime directive, there is a real need for a specific "brand" and for products and services related to that zero to seven crowd and we really don't feel that nobody owns that space right now, and we intend to.
Garry - So, are you saying that your revenue model will be one of licensing, for example, if Stein Rowe Investors Fund, because that fund caters to children, if they into strategic partnership with KinderStart and then someone signs up for an investment fund under the KinderStart name, you would get a licensing or royalty fee?
Dr. Goodman - Gary, I'm not a business school graduate, I am more of the creative visionary for KinderStart.Com, but when talking to the marketing people they have mentioned that term in numerous discussions.To me, it is a form of licensing but I think that the KinderStart products will be products and the services that we identify as quality products and services that follow through with our notions that you can find on KinderStart.Com. They will be things that we find that we want to attach the KinderStart Brand to, thereby so notifying the consumers that when they purchased or buy KinderStart items they are buying the best for young children! Years ago, there was what I might call the "Romper Room" Model, I don't know if you remember, but they did licensing and branding which spread to an array of products for young children. I don't think the products were that good, but that is the model we have in mind. Frankly, at the moment, there is a lot of momentum at KinderStart, lots of people calling us, lot of synergy around KinderStart, and to be honest with you I think there is going to be charges in terms of adding new people and new ideas, some thing will be evolving from that.
Garry - Now, one of the things that I think is interesting because, when we are speaking of the Internet, many Parents are very... they fear for their children as far of the content that they are able to reach. KinderStart just recently launched a filtered email system, tell us about that!
Dr. Goodman - Right, I think that understanding the needs of parents, where things are going, that vision, that understanding is what is going to drive products. You have to have the knowledge of what people need prior to creating or delivering. This is how the filtered email evolved.Essentially, we saw that there wasn't a product like this readily available on the Internet. Email promotes writing, it's very important that children know how to write, teachers want children to know how to write but, there is a tremendous fear about getting out in the internet and the fear is "real", because whether you have an AOL account or whatever kind of account you have, the chances of you getting Mature Material sent to kids is almost guaranteed. So what we have done is develop a filtered email product that is kid friendly, nice to look at, easy to use and that literately filters incoming and outgoing mail and prevents receiving profanity and inappropriate pictures or documents. We feel that this particular offering is one of those things that KinderStart will be providing, that it is of tremendous use for parents and it's introduction is receiving a tremendous response- even with the little marketing that we have done thus far.
Garry - So, therefore if my child had an email account and then someone, one of these email marketers sends my child something with a dirty word like, like what we adult say when we stump our toe, the system will automatically just stop that email from been received?
Dr. Goodman - Right, it would delete and replace it. The way we have it set right now is if it there are three of those " dirty words," the dirty words are deleted and replaced by [this has been edited by KinderStart] on outgoing mail
On incoming mail, if there are three of those words, they will be replaced with the message [edited by KinderStart.Com,] if there were more than three words on an incoming mail the mail would be bounced back to the users.
We can set that at a higher threshold as far as incoming mail. Back to outgoing mail, if the children send mail that has profanity in it to another user, that mail is not send and the child is given a little warning- A Little " Bee "Pops Up on it screen, in effect saying "Don't do this you- violated the agreement." Each time the child send profanity, a Bee is added; if they do it nine times, they get a "24 hour "time out," no email." So, yes it prevents any profanity for getting to the child or being send by the child, unless somebody thinks of a new word, but if so we just add it to our filter.
Garry Let's talk about Kinderstart.com the company itself. Are you a private company? How have you funded yourself? How are you funding yourself?
Dr. Goodman - We have been funded by a group of; small group of investor, and then an equity partnership by the Ayzenberg Group, the Group does our graphics- they are a well known graphics designed firm. In addition to KinderStart.Com, other clients include, Disney and Microsoft They have partnered with us and are handling some marketing needs. Our private investor group has invested in a number of projects I directed including another Internet project, that which was recently acquired.
Garry - Do you foresee a need to approach, and this is in the short term, the investment community rather the capital market in order to perform a capital raise in order to grow out the company?
Dr. Goodman - KinderStart is now breaking even and growing. I think that it depends on the direction we take. I think KinderStart as an entity is guaranteed to succeed, but it depends how it wants to grow, how aggressive it wants to be, in terms of whether we want new and additional capital. Obviously, if you are going to take more and more market share you are going to have to have more capital. So, I think that definitely is something we are considering now, that we are talking about.We run KinderStart.Com very much like a traditional business as opposed to a Dot Com that's not our approach! But, I think that in moving forward and getting into the grander vision of KinderStart, now that we have accomplished round one, so to speak, may well require some additional capital.
Garry - That is my next question, How do you get around that dot come, dot come "kiss and death," so to speak.
Dr. Goodman - Dot Com, Dot Bomb!
Garry - Right, Exactly! What is the message did you put out to you investors that they got?
Dr. Goodman - My dad used to go to the racetrack all the time, one time he told me "bet the jockey." I was around when the 'net was "hot," etoys and everybody! I went to VC's on my other projects and these people to be honest with you just didn't get it! They totally don't understand the Internet; they don't know how to run a company. I have been around sometime, I have run traditional companies that have been successfully; I had to make payroll and had to make a profit.So, as far as the way these people ran companies - they were guaranteed to fail. So, part of building confidence for new investors is to have them talk to us and see the background of our current investors, understand that we approach things more like a traditional business. I think that essentially people will understand that KinderStart is creating something useful for parents something that will be around for 100 years. KinderStart will evolve, we already own that section of the Internet and we are going to earn it keep and keep earning it from parents, through our integrity and helpful infomediary qualities. I think that it is just that we are creating a " brand," we are creating something that is real and we're just going to keep banging at that, and not wasting money and things should be just fine.
Garry - What do you define as the short term challenges for the company?
Dr. Goodman - I think that short-term challenges are that we have gone pretty far with very little capital. Okay and I think, that we have to decide are we are going to have a slow growth strategy or we are going to hit it a little harder.We are also right now at the point in our development that permits us to begin incorporating all of our business models and business partners. So, I think that this is a very challenging time because we are moving out the creation stage, which we control, into a market stage where we will be dealing with all kinds of people. You know, there are Sharks in the ocean! We have to apply our best business judgment, all our partners are experienced successful business people and we will call upon their wisdom and the wisdom of others as we move this brand forward- and I think that, that's the challenge.
Garry - Dr. Goodman, I want to thank you for joining me today on CeoCast. Best of Luck to Kinderstart.com is a very compelling; especially the email is a very compelling technology.
Dr. Goodman - Well, thank you very much.
Garry - I have been speaking with Dr. Victor B. Goodman . Dr. Goodman is the chief executive officer of a privately held company KinderStart.Com. Until next time, this is been Garry Nash for CeoCast.
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