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Expanding to a New Niche: Karen Adams' Key Move

Karen Adams enjoyed starting up and running software firms and other information-technology enterprises. But after she became a mom, this hard-charging entrepreneur decided that what she really wanted to do was to sell $50,000 Cinderella pumpkin-coach beds for little girls over the Internet.

So PoshTots.com was born. And now Karen’s company is bringing Posh living to all members of the family!

Karen graduated from the University of Virginia at age 19, with a human-resources degree, and confesses that she was “always in a hurry to go on to the next thing.” For her, the “next” next thing was recognizing her talent for developing high-tech firms. She built one company into a $10-million outfit in two years and another from a $30-million enterprise to a $160-million player.

Then two things happened. “I got pregnant and decided that life on the road was no way to live as a mom,” Karen recalls. “And then I met Andrea.”

Andrea Edmunds was a parole officer who was looking for a switch into high-tech recruiting. Karen thought she was only meeting Andrea for a lunch interview. But instead, the two women noshed for three hours, “and at the end I said, ‘I think we should start a business together about children. That’s my passion.’”

When they launched in 2000, the new partners decided two things right away: They would use the internet as their retailing platform, and PoshTots.com would only sell top-notch goods.

So, as the web site puts it, the company peddles “the most extraordinary children’s furnishings in the world.” Their chi-chi wares range from a $120 diaper bag to the obnoxiously expensive Cinderella bed that is made in the United Kingdom .

“We just installed one of them in an NBA player’s house in New Jersey ,” Karen notes. “People flew in from Texas to upholster it and from Utah and England to assemble it.”

Karen still dabbles in technology, but with revenues approaching $10 million a year, PoshTots.com is demanding most of her attention these days. And now, she and Andrea are expanding the “Posh” brand to a new site called PoshLiving.com

Karen’s Key Move: Expanding to a New Niche.

Karen and Andrea saw early on the potential for stretching their “Posh” philosophy from kids’ furnishings to the rest of the house. But they didn’t do it until they were ready, and Karen is convinced that was the right approach.

“Customers have been asking for something like PoshLiving.com for years,” Karen says. “They felt we had such extraordinary things for children’s rooms that they wanted the stuff for the rest of the house.”

But before expanding Posh to any new niche, Karen wanted to make sure the company had some things nailed down first. “We had a lot to learn,” she says. “We’d never been in the furniture business until PoshTots, so we had to find the right shippers and processes and learn how to do catalogs.”

With an eye toward further extensions of the brand, Karen also took advantage of her technology expertise to make certain that Posh was building a sufficient e-tailing infrastructure to support rapid growth in business.

“We built an infrastructure under this small house that would support a skyscraper,” she says. “We took a very long time and a long road to build the PoshTots engine. It took 22 people and eight months to build a $1-million site. We didn’t go cheap. But we wanted an engine that was scalable and robust and didn’t require a huge technical staff to keep it going.

“I thought we’d have multiple sites eventually. And I knew if we were going to do that, it would be a lot easier to do it right upfront than to get into it a couple of years and then go back and have to try to re-do it.”

And Karen knew that customers of PoshLiving.com would have the same high expectations that had been created by the quality of the merchandise on PostTots.com. “We really focused on getting well-made product lines with rich fabrics and great textures and unique designs and styles,” Karen says. “But they’re also furnishings where you don’t have to worry about letting your kids hop onto them.”

For PoshLiving.com to satisfy the most discerning and moneyed customers, Karen also knew that they would have to offer goods that consumers can’t get anywhere else. So Karen and Andrea have worked hard to develop “account-specific” relationships with vendors.

As a result, PoshLiving.com now can brag about selling a pet bed that looks like a miniature Airstream camper. Try finding that anywhere else!

Karen’s Bonus Insight:

Nothing succeeds in boosting a new company like public relations.

PoshTots.com benefited from serendipity when someone on the staff of Friends found the site -- and the next thing you know, Karen and Andrea were outfitting the nursery for TV Rachel’s high-profile baby. People magazine ran a story about it.

Then Andrea, with a talent for PR, quickly began working the celebrity angle to draw more attention to PoshTots. And when Britney Spears got pregnant recently, the likes of Access Hollywood was calling PoshTots.com to ask how she should deck out her baby’s room!