Mary Wallace Jaensch and Rachel Braun Scherl were marketing consultants specializing in women's health and beauty issues when someone handed them a business plan for Zestra, a topical, over-the-counter product for enhancing women's sexual pleasure.

The business plan indicated that 30 million women have sexual concerns and difficulties, and that Zestra -- which is said to increase a woman's sensitivity to touch -- was the only product on the market available to help them. What's more, Zestra -- a blend of botanical oils and extracts -- is regulated as a cosmetic, not a drug.

"This is the perfect storm," Scherl declared. They kept an eye on Zestra Laboratories and, when it declared bankruptcy in June 2008, the pair teamed up with Quaker BioVentures, a health sciences venture fund, to purchase the assets.

"We had never raised venture capital before. We'd never bought assets out of bankruptcy before," Scherl says. So they did what smart businesswomen do: "Whatever it is you need, find the smartest person you can afford who knows how to do that," Scherl says.

They found a bankruptcy attorney, put in their bid -- and then continued working on their consulting business while waiting to see what would happen. "There's an auction process," Scherl explains, "and you have no way of knowing if anyone else has bid or what they've bid." Because of that process, Scherl and Jaensch had to find a venture capital partner quickly, so they'd have funds to purchase the assets if their bid was accepted.

"The way to get smart venture capital money is through personal introduction," Scherl says. They reached out to people they knew who could introduce them to venture capitalists. "Then it becomes like speed-dating," Scherl says. "Do they like you, do they understand your business, are they comfortable saying the word 'vagina'?" Their partnership with Quaker Bio Ventures was the result.

An Insight Into Women
At first glance, Scherl and Jaensch didn't seem like the ideal candidates for venture capital. "What they like is someone who's raised money before, made money before and run a like business before," Scherl says.

But what Scherl and Jaensch didn't have was less important than what they did: an incredible partnership, and experience and insight into how to communicate with women. As consultants, she says, "We'd built business that required understanding women to make them grow."

That isn't the approach pharmaceutical companies have taken. "The pharmaceutical approach to female sexuality is dysfunction as opposed to enjoyment. That's the model that worked with Viagra and [similar] products."

But that isn't the right approach for women, Scherl says. "What's unique about female sexuality is how complex it is. There are multiple inputs on whether a woman's going to have a positive experience."

Scherl compares sex to a bus ride for women. "Some get on the bus and don't enjoy the ride that much. That's lack of arousal. And some women never get to their ultimate destination, and that's lack of orgasm. And as most women know, if those pieces aren't working together, you're not running to get back on the bus.

"What we find with Zestra is that women get on the bus, stay on the bus, get to their destination -- and want to come back for another ride."

That observation is backed by a double-blind study of 200 women at 13 sexual health centers. Sixty-two percent of the women who were using Zestra reported that their husbands or partners wanted them to keep using what they were using. Among those using the placebo, the result was 12 percent.

Infinite Details
Once the bankruptcy auction was over, Jaensch and Scherl got to work. "From September through May, we got office space, we hired people, we built two websites (one was transactional), we hired a team, we added discipline to our manufacturing process." They also moved the office infrastructure from South Carolina to New Jersey.

They ran 19 focus groups and conducted an 800-person online study about Zestra. Among other things, they learned what was unique about the product and how women liked to talk about it.

They also transformed their business model, shifting from a primarily retail model to a direct marketing model. "We do a huge business online," Scherl says. They renegotiated terms with a smaller list of retailers -- focusing on those that weren't owed money by the bankrupt firm and didn't owe the bankrupt company any money. They also changed their positioning and messaging, created new packaging and changed the flavor and the fragrance, which some customers had complained about.

"This is the hardest work we have ever done," Scherl says. "Bankruptcy is really trial by fire. It's like a chess game, and you can't predict how anyone else is going to move."

Scherl and Jaensch were also very careful about whom they hired to help them. "One of our mottos is, if we hire you to do something at this company, it has to be something you've done before."

Advice for Entrepreneurs

Not everyone is cut out to be an entrepreneur, Scherl says.

"You have to be willing to accept risk. You have to make the best decision you can with limited information. You never have a complete picture in time to make a decision."

"Not everybody is cut out for a startup. It requires a level of scrappiness and endurance and creativity. In a small company, if you don't find solutions, being out of business could be a reality."

What's more, she points out, "You have your own money, and your family's money and investors' money -- people who believe in you. There's a sense of ownership and responsibility."

That's how they handled repackaging Zestra. A long-time colleague and friend who had been a senior marketing official at Schiff came to a brainstorming session. The next day, she called and offered her help. "With her huge amount of experience, a vendor she had worked with before, a lot of analysis -- and input from me and Mary -- Karen really led the charge to redesign the packaging," Scherl says. The focus groups and online study also gave them the information they needed to provide the packaging company with direction. They wanted to tout their all-natural ingredients. And more than that, they felt the packaging should convey "a sense of light and life and happiness."

Scherl and Jaensch formed a medical advisory board, and they found themselves a high-level mentor: Mike Hagan, former CEO of Nutrisystem. "He was incredibly generous as a mentor to us," Scherl says.

One lesson arising from that association: Scherl learned that she could call "anybody for anything." After all, she notes, once you've stood up in front of strangers and asked them to give you millions of dollars, it's pretty anticlimactic to call a high-level player and say, "Listen, I was wondering if I could get 10 minutes of your time."

Advertising Roadblocks
The big question mark was how to get the word out about Zestra. They started by contacting the TV networks for advertising -- and were turned down flat in most cases. So they switched to advertising on cable. In the process, they also got the mainstream media to cover the roadblocks they were facing in their efforts to advertise the product -- producing arguably more buzz about the product than paid advertising would have generated.

Their advertising budget remains relatively modest. They buy remnants -- advertising space that is sold at a reduced rate when national advertisers don't purchase the spots. Zestra has been featured in The New York Times, and the product was recommended by Dr. Oz. Scherl and Jaensch did a spot on Oprah radio in June and appeared this fall on a series of weekly segments on Lifetime Television's The Balancing Act. "More and more consumers are learning about and trying the product every month," Scherl says. They are also repurchasing the product once they've tried it. "It works for seven out of 10 women," she says.

"The idea of talking about female sexual satisfaction in an appropriate way that isn't prurient or pornographic or too scientific is very unusual," Scherl says. "We're saying, you can have better sex." After all, says Scherl, "She's doing it anyway; she should enjoy it. And this makes it better."

The product is primarily sold online, but it's also available at Walmart, Kmart, Rite Aid and Meijer. "For some women, that's how they shop. They're going in to buy what they need, and we want to be able to have that for them," Scherl says. Zestra is also sold to smaller stores through distributors, and in Canada. Authorized online distributors include Walmart.com, Target.com and Drugstore.com

In addition, a lot of health professionals are recommending the product to their patients, Scherl says.

Semprae Laboratories isn't profitable as yet, but it's growing and currently has 11 employees. "Are we where we want to be? No," Scherl says. "But we are absolutely on the path to getting there."