Many companies have been bought for a song, but few have been started with one. That hasn't discouraged Dr. Donald Altfeld from launching a company based on "The Little Old Lady From Pasadena," the popular ditty he wrote 21 years ago that celebrates a grandmother's reckless driving. Altfeld, a physician, is convinced that the spunky senior citizen can still make him a fortune by endorsing products, thereby proving that a well-worn idea can be repositioned to create a new business.

Altfeld was a medical student at the UCLA School of Medicine when he scrawled the lyrics in his notebook during a boring bacteriology class. He gave the lyrics to fellow medical student Jan Berry, half of the singing duo Jan & Dean. Their recording reached number three on the charts in 1964, and Granny has been tailgating Altfeld ever since. The persistent accolades of disc jockeys finally convinced him, he says, that "Granny had become part of Americana" and, therefore, was more bankable than ever in an endorsement market that reached $26.7 billion in retail sales last year. So Altfeld started a new enterprise, Little Old Lady From Pasadena Enterprises Inc.

Atfield gave the little old lady a facelift, and shrewdly rewrote the song to help him win certain sponsorships. The "shiny red superstock Dodge" in Granny's garage is gone, replaced by "an Apple computer and a Ford Mustang." Altfeld hopes to sell Apple Computer Inc. on the idea of Granny as the ultimate symbol of user-friendliness: If she can learn to operate an Apple, anyone can.

If Altfeld has his way, Granny's face will adorn everything from toy cars to vitamins, until "the song itself almost becomes incidental." Legions of familiar characters are already scurrying for endorsements, but Altfeld claims that "Granny is not a me-too thing, because of the diversity of potential product lines," which include a movie, a TV series, and a cartoon. Altfeld clearly intends to get maximum mileage out of an old and gray idea.