Analysis of a for-profit association designed to give young mothers information, services, and purchasing power.
Jonathan Silver wants to create a for-profit association of young mothers that gives them information, services, purchasing power, and political clout. But will his one-stop-shopping concept stand out in a competitive field?
On a fair summer Saturday in New York City, a battered gray Lincoln slows to a halt at the corner of Park and 65th. The engine is running. And so too is the driver, who, having spotted a stroller, has abandoned the car and dashed down the block after an unsuspecting mother and child. "He does this all the time," says a seasoned passenger, sighing. It is, after all, New York. For the fast-talking young man waving brochures at the half-startled mother, however, chasing a stroller is no urban sport. In fact, it's strictly business. He considers the episode a cold call, made in the tireless service of his infant company, Mothers' Network. When gangly, 31-year-old Jonathan Silver returns to the car -- "Caught her," he pants -- he's convinced that a new customer has just been won. So what if he has to stop traffic now and then to give chase? You don't build a business idling in traffic. Launching this business -- a national, for-profit association for mothers -- Silver can't afford to let too many strollers slip by.
Not that this Wharton-educated entrepreneur ever expected to be pursuing women pushing babies up Park or any other avenue. He's not the most likely candidate for founding an outfit called Mothers' Network. "I'm not a mother. I don't have kids. I don't even have a wife," he confesses. "I just happen to have this idea and a one-and-a-half-year-old company to match."
Silver's brainchild? Mothers' Network, a membership organization for mothers that hopes to turn a profit by imitating nonprofits. The game plan: provide members with benefits and services ordinarily found among nonprofits, knit a web of local chapters across the country, build membership to several hundred thousand, and then sell it. Sell what, you may ask? "The channel," says Silver, who believes that a captive audience of half a million parents will command a handsome price from toy makers, diaper sellers, and other marketers. The mommy channel: if he builds it, will they come?
The Market
Silver, who had worked at blue-chip consulting firm Mc-Kinsey & Co. for two years and attended Harvard Business School (for 10 days) before launching this business, got into the market in 1987 through Itemz, the small marketing firm he was running at the time. He discovered a product called the Bubble Potty. Inflatable, with disposable liners, it was the ideal emergency potty. He sold nearly 20,000, and by mid-1988 parents across the country were calling. "They told me they were using it in the park, at the playground, and that it was a great way to meet other mothers." One message became clear: "People were looking to make contact with other parents."
A little research revealed there was no national membership organization for mothers. There were parenting publications -- national, regional, and local -- but Silver thought them "impersonal." There were childbirth centers that offered prenatal and postnatal training for mothers, but they focused for the most part on health issues and served only a tiny fraction of the market. There were local support groups run through Y's and churches and community centers. They offered opportunities for companionship but few hard economic benefits. There was no one-stop-shopping service organization that catered to parents' social, information, and financial needs.
Yet with census figures showing 17 million households with children under age 6 and the birthrate climbing up in recent years -- it went from 3.7 million in 1985 to an estimated 4.1 million in 1991 -- surely there was a market for a national association, Silver thought. He had another reason for optimism: steady growth in the market for juvenile products. Spending on children's products had been increasing by roughly 5% a year. (It reached $52 billion in 1992.) In the first year of a child's life, parents spent an average of $3,238 on paraphernalia. If Silver could combine merchandise sales with membership, he figured, he'd have a gold mine. He decided his primary market would be first-time mothers within six months after the birth of their children, when anxiety and expenditures reach their peak. He targeted mothers and mothers-to-be with household incomes exceeding $25,000 a year.
Silver envisioned an association as powerful and as lucrative as the American Association for Retired Persons (AARP), the advocate for the elderly based in Washington, D.C. His Mothers' Network would offer discounts, publications, insurance, and other products (including, eventually, a commanding lobby group in Washington) at modest cost. But Silver's start-up would differ in one crucial detail: while the AARP was legally a nonprofit, Silver's association would be a business.
In the first phase, he would concentrate on parents of children up to age 5. Beginning in 1989 he started identifying areas where his association would offer benefits: health issues, child rearing, and product information, which he would provide on a local basis to small groups of parents. He introduced the network at a trade show that summer.
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The Idea
"There's no real training to be a parent, and it can be very isolating at first," Silver says. "People today are separated from their extended families, juggling work pressures and family responsibilities. The roles of fathers and mothers are less clearly defined. There are more choices to make about brands to buy, child-care options, parenting philosophies. Things are more complex."
