She shot the first Baby Einstein video in her own basement with a borrowed camcorder, a few puppets, and an $18,000 budget. Five years later, she sold the company to Disney for a reported $25 million.

Taking on Baby Einstein’s DVD empire is a formidable task. But Juno, a precocious puppet with big googly eyes, pigtails and a red dress, is up for the job. Her strategy: Create original ...