Brian Pass, Passport New Media

My interview today is with Brian Pass, co-founder of Los Angeles-based Passport New Media. Passport recently rolled out Your Own World, an interesting service which provides a safe way for kids to experience the Internet.

BK: Tell me a little bit about Your Own World...

BP: To give you a little background, my brother and I founded Passport a little over a year ago to address the significant issues surrounding kids and the Internet. At the time, research showed that fewer than 1 out of 3 kids living in homes with Internet access were actually online. The reasons were plain from my own experiences with my two girls: for kids, the Internet is too dangerous, too slow and too unfocused. Instead of trying to protect kids online, our basic premise was to bring the Internet to them. By bringing the children's Internet experience offline, we provide an experience that is safe (kids never actually go online while using the product) fast (because the content is stored locally, it performs faster than multimedia CD-ROMs) and tightly focused (kids receive content suited to their reading ability and content channels are always one click away). We use the Internet to regularly update all of the content at a time the parent selects. In keeping with our view of the best Internet business models, we offer the service and software for free.

The start-up process has been a remarkable one -- we've taken the company in less than a year, from no employees and a business plan through two rounds of funding and the official launch of YOW this past Monday. We are currently 29 employees and growing.

BK: Where do you see your company going with your product?

BP: With YOW, we intend to become the leading aggregator and distributor of digital interactive content. YOW enables children to experience premium content from trusted brands (like the Muppets; Reader Rabbit; Kidpix; Carmen San Diego; TIME For Kids Magazine; Hiyah.com; and most recently Sports Illustrated for Kids); leading independents (Knowble.com; BrainPop.com; LearningPlanet.com; ezone.com); and of course our own content, featuring YOP ("Your Own Penguin") and his friends. With the base we are building now, we will be able to extend YOW into new platforms, new demographic markets, new products and different media.

BK: Who are your typical customers? Families with children, schools & libraries?

BP: Our typical customers are families. YOW is targeted squarely at t home market. The interface is designed so that up to five children in the home can each have their own unique interface and the parents have their own interface too. That said, we have been contacted by many teachers and librarians who believe YOW would be a good solution for them in these other settings as they struggle to find safe ways for kids to benefit from the Internet.

BK: What's the main way which people have heard about your service? Have you had to invest lots in advertising?

BP: We officially launched the product on February 14 -- Valentine's day -- so we are just now getting the word out. A test marketing campaign is under way in Minneapolis, which will combine radio, television and live event promotion. Nationwide, we have received favorable press coverage, including in Knight-Ridder syndicated papers and that has helped to spread the word too. About 1/3 of our current operating budget is allocated to getting the word out.

BK: From what you've seen of your advertising efforts so far, do you think fighting for attention among all the dot-com advertising is a problem, or is your service unique enough that your customers are responding well?

BP: I don't think we are fighting for attention in the "dot.com" world in part because our product is so unique and in part because of the nature of our market. The unusual nature of our product -- we aren't a Web site and we are not a multimedia CD-ROM -- means that our real marketing challenge is explaining what YOW is. And because there is no clear market leader in the children's Internet space, we don't have to rise above many other competing messages -- e.g., we are not one of ten online pet supply stores trying to distinquish ourselves from the others.

BK: How is it starting a company with a sibling?

BK: Starting a company with a sibling has been great. My brother and I always felt we would eventually be working together on something. Originally, we thought it would be movies (David attended USC Film School and I had an extensive theater background through college). But I went to law school and started to get involved in technology, while David pursued his life-long passion for video gaming and began developing games for Activision. So we naturally veered toward a tech start-up.

Working together (we even share an office) is a pleasure. We are almost always on the same wavelength and when we are not, we don't hesitate to communicate that to each other and then quickly come to resolution (no blows necessary to date!). I think David and I always shared a special relationship, though, so I can't say I would recommend it for everyone. In general, as with any partnership, both siblings have to share the same vision. We do.

BK: Who is your financial backing, and how did you get hooked up with them?

BP: Our lead investor is a fund based in Boston called the Megunticook Fund. Megunticook was founded by an old friend of mine from college, Tom Matlack. It is kind of a long story, but Tom was the CFO for the Providence Journal Company. Although we had always remained in touch, we became closer again when I joined Americast (the Disney-Baby Bell joint venture to develop digital interactive cable systems) because we shared some common business interests. After Tom led Providence Journal through a series of transactions including its ultimate sale, he led a successful investment in Art Technology Group (Nasdaq: ARTG) which propelled him to launch the fund. He invited me to serve on the board of the fund, but I had just completed the plan for Passport New Media and asked him to take a look at it. He loved it and the rest was history. Our other partners were introduced to us from a variety of sources. THCG is a public New York fund that was introduced to us through my former boss (himself an early investor). Trekk Opportunity Partners, based in L.A., was introduced to us through our director of marketing when her business school classmate -- a principal at Trekk -- expressed interest in what she was doing. Rolling Oaks Enterprises, also in L.A., was introduced to us by our former outside counsel (since departed for drugstore.com). I guess you could say we've utilized just about every form of network connection to finance the company.

BK: Finally, what do you think is the one thing you would have done differently if you had a chance to start the startup process again?

BP: Although we have executed our plan almost to the letter and recruited a first-class team of professionals (knocking on wood as I type!), there are probably many things I would have done differently. One that comes to mind concerns space: I had a chance to lease a lot of space early, but didn't which I regret. (I've heard from many entrepreneurs that space issues are a common source of regret). We've just moved into new space, so it is moot now, but it would have saved us many headaches. Another thing I might have done differently is to raise more money at an earlier stage -- instead, we raised exactly what we targeted according to our plan. It did not give us much room for error!

BK: Thanks!