And retailers seem to be lapping up Glow Dog's products. The company has 100 wholesale customers, most notably Petsmart Direct, a $160-million catalog subsidiary of Petsmart, the largest pet superstore in the country. "We don't need another toy or treat on our pages," says Tony Leonardi, president of Petsmart Direct. "We look for something that gives us a competitive edge, and we got that edge with some of the products we saw from Beth." Early sales of items such as dog collars and rain slickers have been unusually strong.
Glow Dog is sniffing around foreign markets as well. "There's an explosion of pet ownership in developing countries," Schoolman says. "Latin America and Asia have limited pet-product manufacturing infrastructures, so they look overseas. U.S. pet products have top-of-the-line status." Indeed, Marcus already has orders from Europe, Japan, and Australia.
Finally, there's the pedigree of the founder herself. "Beth's the kind of person I like to invest in," says Don Spero, an angel investor based in Bethesda, Md. "She gets a dollar's worth out of 30¢. She's creative, aggressive, and an awfully quick study, and she's jumped into this market up to her eyeballs."
FLIES IN THE OINTMENT: Glow Dog has a leg up on competitors, thanks to its exclusive rights to IllumiNite within the pet-supply category. But that can't stop imitators from poaching with products devised from cheaply made reflective fabric. "These guys watch each other," says Leonardi. "They'll see inventory of Beth's products in Petsmart and mimic the success."
THE "IF IT'S GOOD ENOUGH FOR BILL GATES" FACTOR: Marcus isn't likely to roll over and play dead at the first crisis; she's been down the chaotic company-building road before. The Rolex on her wrist is inscribed with the date April 12, 1996--the day she sold her first business, joystick designer Exos Inc. The reported price tag: more than $5 million. The buyer: Microsoft. --Mike Hofman
5. Circular logic
COMPANY: The Net's Best, Irvine, Calif.
YEAR FOUNDED: 1998
CONCEPT: Create a Sunday-newspaper insert for Web sites wishing to advertise economically off-line
PRINCIPALS: Bill Weimer, 36, president; Lisa Espinoza Weimer, 31, vice-president of operations; Shannon Reagan, 28, director of operations
PROJECTIONS: Sales of $5 million this year; profitability in the fourth quarter
FUNDING: $1 million plus from Stone Investments
BIRTH LEGEND: Bill Weimer, a former vice-president of sales and affiliate relations at Fox Sports, had gone to a party at the home of his college chum Keith Clougherty. Clougherty, chairman of the board for Web-based digital-consumer-electronics vendor Roxy.com, described to Weimer his difficulty in getting the company's name out there. On-line advertising wasn't enough. Newspaper, radio, and TV ads were too expensive. What Clougherty wanted was a way to advertise in traditional media without breaking the bank. Three months later Weimer completed his business plan for an eight-page circular that would reach 1.5 million wired households by focusing on major cities and suburbs that are bristling with Internet connections.
WHAT'S TO LOVE: For all the hoopla about Internet advertising, portals and banner ads don't make a sound if there's no one on-line to hear them. The Net's Best not only drives customers to specific sites but entices them to log on in the first place. That's the beauty of aggregation: if one advertiser's special offer doesn't compel someone to sit down at the computer, offers from three or four sites might.
The Net's Best should also appeal to media buyers, many of whom remain unconverted when it comes to on-line advertising. "Internet companies are continuing to move more advertising money off-line," says Weimer. "Our initial focus groups showed us that Internet users visited the URLs they saw in print or traditional media much more than ones they saw in banner ads."
Finally, the Net's Best exemplifies the cost efficiency of target marketing. Since the Net's Best knows exactly where its audience lives, it doesn't waste money spreading its net too wide and can pass the savings on to advertisers. (As of April the company had signed 14 advertisers for each issue, and Weimer expects that number to rise to 24 by the fourth quarter.) And the targeting continues. "We have another product in development targeted just to college newspapers," says Weimer.
FLIES IN THE OINTMENT: The Net's Best's model wouldn't be hard to replicate, especially for print-insert giants like Valassis and News America. Hoping to fend off imitators, Weimer is exploring exclusivity arrangements with such newspapers as the Los Angeles Times, the Chicago Tribune, and the Boston Globe. And some experts think the idea just plain won't work.
THE "YOU MAY ALREADY BE A WINNER!" FACTOR: The Net's Best's ability to propel readers on-line is heightened by its advertisers' effective use of special offers and sweepstakes. Last winter Roxy.com lured 40,000 visitors to its site with a contest--advertised only in the Net's Best--for a JBL Home Theater System. --I. M.
6. Reads Like Teen Spirit
COMPANY: SchoolSports Communications Network LLC, Boston
YEAR FOUNDED: 1997
CONCEPT: Build an advertising-supported media company with print and Web products devoted to local coverage of high school sports
PRINCIPALS: Jon Segal, 30, publisher and founder; Grant Son, 36, president and chief operating officer; Eli Segal, 56, chairman
PROJECTIONS: Revenues of $500,000 in 1999 and $2 million in 2000
FUNDING: $850,000 in private equity. The principals hope to raise at least $2 million this year
