Paw Island

Boarding the plane with only seven minutes to spare, Mike Maxwell took the last seat on a crowded flight bound for Henderson, Texas early last year. He was headed on a business trip to review the construction of his company’s new Mobile Web Adventure project.
Donned with the company’s colorful, cartoonish apparel, he quickly took a seat next to a quiet woman dressed in black. The plane took off, and after a long silence, the woman slowly turned to him and, with an inquisitive gaze, said, “OK, I’ll bite; who is Buford and where is Paw Island?”
Maxwell, 60, chairman and COO of Paw Island Entertainment (www.pawisland.com) in Lake Geneva, promptly began a lively description of the characters comprising the cast of the children’s entertainment company.
“So I told her the story of Buford being the fisher-dog extraordinaire, and that he’s one of the dogs and cats that live on this magical world of dogs and cats named Paw Island,” Maxwell recalled. “And she looked at me and said, ‘Do you believe in providential meetings?’ And I said, ‘Well, as a matter of fact, I do.’ And she said, ‘Well, this is one of them.'”
The woman Maxwell was sitting next to happened to be Martha Datema-Lipscomb, producer of a wide array of entertainment productions for the popular children’s television and video icon “Barney and Friends.” She was also formerly in charge of creative development for international productions for Barney.
“And she said, ‘We just did Radio Music Hall with Barney. … Should we talk?’
Within three weeks, Paw Island Entertainment retained the services of Datema-Lipscomb, who has been working with the company ever since.
Corey Maxwell, Mike Maxwell’s 30-year-old son and creator and CEO of the fictitious island, recalls the serendipitous event. “And when she visited here for the first time she said, ‘You have wonderful products. You have some of the best books I’ve ever seen. You have an amazing array of talent. But no one’s ever going to buy it, because nobody knows what Paw Island is.'”
Inspiration from Jurassic Park
Paw Island surfaced out of the creative imagination of Corey Maxwell. Fresh out of college in 1993, Corey and his father decided to start a business together and began a newsletter for dog and cat owners. It was based in Elgin, Ill.
Looking for an original approach, Corey decided to write the newsletter from the pet’s perspective, and eventually decided to give the characters that he had developed a home of their own, which he called Paw Island.
“I had just read the book Jurassic Park and I thought it was cool that there was an island full of dinosaurs somewhere,” Corey Maxwell recalls. “I always wondered whether the real name of the island really existed; I thought it was really a clever way to do it. And when we got into this newsletter and decided we were going to write it from the pet’s perspective, I thought, ‘Why don’t we have a similar place where all of our dogs and cats live?'”
The readers of the newsletter became more intrigued by the characters Corey created than the informational content found in the newsletter itself. “And what started to happen was people that got the newsletter said, ‘Listen, we get all of this information already from our pet store owner or whomever, but we really love your characters,'” he recalls. “‘Do you have more stuff with just your characters?'”
That’s when, Corey says, the dream began. “And immediately I pictured the back of the cereal box and the theme park, my mind went all the way down that road,” he recalls. “But I knew the first step was to create the world and the characters that lived there.”
From there, eight main characters were developed to serve as different perspectives within the world of Paw Island. “So we created characters that served the pet’s needs and products for pets, such as Ria Taylor who runs the general store on Paw Island,” Corey adds. “And then we wanted a colorful character to tell the stories of human behavior from a pet’s perspective and we named Buford that character.”
Other characters names on the island include Butch, Mel, Kee Kat, Allie, FiFi, and Graham Paw — the patriarch and founder of Paw Island. The story is situated upon a paw-shaped island located in the middle of a “distant sea.” Graham Paw discovered it many years ago after escaping from an evil pet orphanage in the “Land of People.”
Lucent Technologies bought into the idea
As the world of Paw Island caught on, Corey began to dream of marketing the idea by producing t-shirts, books and music. When in 1996 he met Mark Hladish, a music studio owner from Walworth, he had found the talent he needed to move ahead with creating a musical cassette and accompanying songbook.
One of the biggest breaks came when one of the cassettes he produced ended up on the desk of an executive at Lucent Technologies in Denver. “He took it home and gave it to his daughter — and she loved it,” Corey Maxwell recalled.
The next day, Corey received a telephone call.
“And he said, ‘I really like your characters, tell me about your company,” Corey recalls of the conversation. “Would you be willing to move out here to Denver and do the creative side of this program using your characters?”
The program the Lucent executive spoke of was an idea to make a Web-based program to teach the Internet to children, using the Paw Island characters. Although the idea would be short-lived due to managerial changes at Lucent, the move would prove to be an opportunity to both build support for Corey’s idea, as well as eventually gain the company’s first round of venture funding in 1998.
But just prior to that procurement of funding, Corey says he was beginning to lose some steam with the project. He approached his father, who had been a business owner himself of a successful advertising and marketing company, for advice. “And I said to him, ‘I’ve been doing this for five years and still just getting by month after month,” he recalls of the conversation. “What do I need?'”
Mike Maxwell told his son that he needed somebody who could help him raise the money, someone that was a dealmaker, and someone that could handle the business side so that Corey could concentrate on the creative side.
“And I said to him, the only person I would trust is you — and I can’t afford you,” says Corey. “And he said, ‘Well, you’ve never asked.'”
So Corey did ask, and Mike Maxwell joined the company, called Pet Care, Inc., at the time, in late 1998. The Maxwells moved the company to Lake Geneva and renamed it Paw Island Entertainment, Inc., in 1999. The company now has 13 employees, with two based in Atlanta.
“We raised some finances and were able to then really focus in on what we wanted to do with the characters and the company, which is to create an entertainment company that produces high-quality, exciting entertainment for kids. But it does it in a wholesome way,” Corey notes.
New dog, new tricks
The Paw Island motto is coined as: “Entertainment that kids love and parents feel good about.” Corey says that theme of a “wholesome approach” to children’s entertainment is one that is greatly needed in upgrading the quality of today’s entertainment for children.
“[As a child] I was never allowed to see or experience anything violent or sinister — it was pretty much filtered at the front door,” Corey recalls. “And yet I don’t feel like I really missed out on a whole lot. And so our belief from the very beginning has been that we can create something that’ll excite the kids as much, but they won’t have that dark side to them. And it is a challenge.”
Datema-Lipscomb agrees. “This project, I think, is a perfect kind of project that the marketplace really needs,” she says. “There are lots of people who live by moral code and who want their children to have it and to behave by it, that aren’t necessarily religious. And I think what’s wonderful about this is what it offers to kids about respecting adults, about having fun, about learning, about tolerance. … It’s perfect. You never talk about color on this island, you talk about ‘cats and dogs.'”
In her experience with helping children’s entertainment ideas grow into fruition, Datema-Lipscomb says there are three primary things she looks for: originality of the idea, commitment to the idea, and potential acceptance of the idea worldwide. “The first thing I look for is that it doesn’t exist already,” she says. “For me, right now the market is so crowded that things that are distinctive are very important. And obviously the Island got flying colors on this, because there’s nothing out there like it.”
Corey says he believes the real strength of the concept is the “island” approach — enabling them to create a whole new world for children. “It allows us to do so many different things,” he notes. “But primarily, we’re able to look at what experiences in our world can apply onto this one, and put more of a positive twist on it.”
One example of real-world lessons can be found in the Paw Island book, “The Mixed-Up Pup,” where Butch, the newest member to the island is immediately judgmental of the others who don’t look like him, and doesn’t understand “gray cats gettin’ along with striped cats.”
“The genesis of the ‘Mixed-up Pup’ idea came from the Rodney King incident, for example,” says Corey. “We use issues like that. And it talks about how dogs and cats of different colors, shapes and sizes can be friends. Kids don’t care about that, they like the story and the songs and the music. But in the end when that point is made, they get it, because the entertainment has drawn them to that.”
Sniffing out success
When Paw Island Entertainment, Inc., was officially formed in April 1999 during the high-tech market hoopla, many people encouraged the Maxwell’s to take a dot-com approach to the Paw Island idea. After all, it was the Lucent Technologies Web project that got the company off the ground.
“Out of the gate everybody wanted us to put a dot-com on the end of our name,” Corey recalls. “And, at the time, we probably would’ve had an easier time getting financing. But our focus would’ve been only on that idea — not to mention that we may also not be here right now.”
Since that time the company has produced four musical storybooks, coloring books, a line of toys, t-shirts and conducted an extensive 50-city mobile Web adventure tour.
The idea for the tour came from the Lucent project to educate children about the Internet. But the idea was hindered by public schools’ inaccessibility to the proper equipment. So they decided to bring the technology to students. Purchasing a semi-truck loaded with personal computers and decorated with Paw Island characters, the company set out to teach and familiarize children with the characters of the island.
The idea has turned into an online education of the industry for children. “So the new curriculum on the truck is more of a music and art education,” says Corey. “It teaches children how an entertainment company such as ours, does what it does.”
The project has given the company a test market and some additional exposure across the US. “In hindsight, we wouldn’t be here if it weren’t for doing that [Lucent] program,” says Corey. “It was almost a blessing and a curse. The curse side of it was people grouped us and characterized us as just an Internet company.”
By trying to change that image, the company went into a product-making frenzy to market the characters themselves — not just the Web site.
That’s why when Datema-Lipscomb first stepped foot onto Paw Island last year, she told them that although it was a wonderful concept, nobody would buy their merchandise — because nobody knows what Paw Island is.
Video is the key
“She said, ‘You’ve built a wonderful foundation, but the first thing you should’ve started with is video,'” recalls Corey. “We’ve even had a buyer say to us, ‘As soon as you have video I’ll buy all of your products.'”
So it was then that the company’s focus immediately shifted. According to Corey, the company is hoping to release its first video this fall.
“So I think that, by all rights, this should be a hugely successful property,” says Datema-Lipscomb. “The question I have is, again, daily exposure. Regular exposure is important in this process, and we’re working with people who are really good with children’s properties to ensure that it will be seen — and I think that’s the major issue.”
Now with a more finely tuned focus, Corey believes Paw Island is poised to enjoy a successful future. “In the last few months, I think since October, we’ve managed to step back and examine all of the different irons we have in the fire and taking out the ones that aren’t making sense,” he says. “And we’re really starting to formulate something more focused.”
The company recently secured a contract with a 128-store retail chain with stores in Ohio and Michigan, shipping the first products out this past March. Most channels, however, have been small, independent distributors, the Internet and catalogues, according to Corey.
Paw Island is now seeking a new round of financing to help it capture the opportunities Datema-Lipscomb says exist. The firm was one of four area companies that presented proposals at a recent venture capital fair hosted by the Wisconsin Venture Network in Milwaukee.
The company is currently seeking $8 million in funding, of which $1 million appears to be in the pipeline, according to company officials. Revenues for 2001 are projected to be $10.8 million, with about $2.6 million of that being operating income. If financing comes through and the business plan pans out, Paw Island is projecting that by 2004 its revenues would be more than $95 million, with more than $44 million of that being operating income. The significant increase in profit margin would be the result of licensing agreements and other factors, the company says.
Mergers and acquisitions could be part of the firm’s future growth strategy. And a public offering of stock is also envisioned, the firm told participants in the venture fair.
But while they see a lucrative business venture, the Maxwells also see a mission in their work.
“What I’d like to see is to have it said that we impacted children and that we had a successful business,” says Mike Maxwell of the future of Paw Island Entertainment.
One of their biggest supporters, Datema-Lipscomb has a lot of faith in that same vision. “They should be [successful], the idea is terrific,” she says. “They’re fun, they’re interesting and any parent could be pleased at what is being modeled in the characters. And I think the kids will laugh hysterically, because it’s funny.”
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Company facts:
Paw Island Entertainment, Inc.
709 West Main Street
Lake Geneva 53147
262-248-7747
www.pawisland.com
Founded in 1999 by Corey Maxwell
A “Maturing Early Development/Early Growth Stage” children’s entertainment company that has developed its intellectual property, is producing video content and is launching sales.
April 13, 2001 Small Business Times, Milwaukee