Conversations With a Teen Entrepreneur

Now 19 and a student at the Boston University School of Management, Cathers is launching his third venture, a software company that recently raised a round of venture capital. He's also written Conversations with Teen Entrepreneurs (iUniverse Inc.), a book of discussions about business topics—from marketing to funding—with experienced teenaged businesspeople.

Because marketing in particular is such a crucial part of business success, we decided to speak with Cathers about it, focusing on some of the common mistakes teen entrepreneurs make in order to learn the essentials of successful marketing.

Entrepreneur.com: Is there one main marketing mistake you see teen entrepreneurs making over and over?

Ben Cathers: The main thing I see is, [entrepreneurs] just not knowing who their customers are, not knowing who they're marketing to, not knowing what they want. Sometimes entrepreneurs take the cheapest route possible thinking, "Marketing is marketing," but I've seen a lot of people who have skimped on their marketing budgets and have had just absolutely no results [compared to] the people who put a little extra out. You can buy ads online, just a general ad that will appear on any site that's not that expensive, and think, "I'm marketing, I'm advertising. Obviously, I'm doing well." But if you do that, you don't know who your customers are—you're just doing blind ads.

If you don't know who your customers are, if you don't know how you're going to market to them or what they want, then there's absolutely no way to reach them. I had somebody on my radio show advertise once. He was representing an eye care company, and he bought the ad because we offered him a good package, but he didn't get any sales, and he complained to us and I said, "Look, you knew that all the people listening to the show were teenagers. You marketed a product toward 45-year-olds—there's obviously not going to be a connection." Mistakes like that are what really hurt people in marketing.

Entrepreneur.com: How can teen entrepreneurs figure out who their marketing should target?

Cathers: They should first develop a marketing plan—they should really research who their customers are and see what they're doing. If they're targeting teenagers, they have an advantage because they know how they get their information: They know that teenagers don't really click on online ads, that they look more at magazines, that they like getting fliers handed out to them.

If they're marketing to adults, they need to do some research. For example, if they're marketing to 25- to 30-year-olds, [they need to determine how] they'd rather get their messages: Would they rather get them through a magazine, through TV, through radio? They need to research that target market first to understand what influences them—is it word of mouth, should you start a guerilla marketing campaign where you have people telling them what to do, should you do a push campaign or a pull campaign. If you don't research your target market and you don't know how you [should be] marketing, the probability of it working is low.

Entrepreneur.com: Do you think it's easier for teen entrepreneurs to go after customers their own age?

Cathers: That was one of my advantages when I ran my Internet company because I targeted teenagers. It was very easy, because all I ever thought about was, "This is how I get my information." When you start a business, there are hundreds of people begging you to buy ads from them, and I knew that I would never get a response from some of the [companies] who contacted me—I knew those weren't going to work for my customers because it wouldn't work for me.

Entrepreneur.com: Sometimes, though, experts warn against basing your strategies too much on yourself. Do you think that may be a problem, if entrepreneurs take for granted that, "I do everything this way, so all 16-year-olds must be like me"?

Cathers: You can't just rely on one source. If you market to teenagers and you're marketing based on yourself, your research is based on just one person and that won't work because the teenage demographic is very big and very different and very diverse. You have to base your research on a larger target group. If you base your marketing research on just one person, no matter who that is, that's a bad strategy.

Entrepreneur.com: Most teenage entrepreneurs don't have a lot of start-up funds, so what would you suggest as free or inexpensive ways to do market research?

Cathers: Most of the research is available online for free. If you do a Google search for market research, you'll find that most of these sites have basic demographic information available for free, and that demographic information alone is helpful. If you have an idea—for example, that you want to target people in their early 20s—you find a magazine that you know is read by 20-somethings, then go to their rate card or media kit. Those companies have already done all the research you need, and you can use their research to help you plan your strategies as well. Most of what you need is available for free or at a very, very low cost, and if you put the effort into it and you search around, you'll definitely be able to find it.

Entrepreneur.com: If somebody did have the funds available, would you suggest they use a third party or consultants to help with their market research and campaign?

Cathers: It really depends. If it's going to be a large-scale marketing campaign and you've dedicated a large portion of your funds to marketing, [using an outside source] is going to give you the most accurate results. If you get someone who really knows statistics and really knows marketing well and they can do some kind of market analysis for you, that would be fantastic.

But if you could also get it cheaper and put those funds into something else, that's also very efficient. I just actually raised a large amount of financing [recently] for a company I've started, and I can tell you we've dedicated almost nothing to marketing because we know we can do most of the marketing at very low costs. We're developing a software company, so if we do that, we can divert more funds into the software itself and help the main business.

If you're targeting a very different or very hard-to-reach group and there's not a lot of information available, like if you get very specific and you're looking strictly for teenagers aged 16 to 18 who don't drink and don't smoke and live on the East Coast, then obviously that's when you might have to look at paying for [market research].

Entrepreneur.com: How do you determine how much money and time you should put into your marketing?

Cathers: When you write your business plan or your plan of action or your strategy, that's one of the things you're going to have to look into—you're going to have to do some research on the costs. If you contact a market research company, they can give you an estimate or you can ask around to find out what the average prices are. It really depends on what kind of business you have—some marketing is 1 percent of the budget because marketing isn't that important. But if you're a consumer company that's just released a new product, you're probably going to have to dedicate 40 or 50 percent of your budget to marketing.

I can't just say you should be 10 percent in because 10 percent for one business might not be enough for another business. If you know you have to reach massive amounts of people to be able to make a profit, then obviously put more into marketing.

Entrepreneur.com: In your book, you focused quite a bit on Internet marketing. Do you think that's the most effective way for teenager entrepreneurs to market their businesses?

Cathers: For teenagers, absolutely, because the reason why Internet marketing works so well is that you don't have to spend much money and you pay only for results. Focusing on search engine marketing, which is basically paying for positions in a search engine, is probably one of the best ways you can go because when people use a search engine, they're specifically looking for your product. If somebody types in "video games," they're obviously looking for video games, and then if you have a video game sponsor, you can broadcast your message on video games only to the people who are looking for video games. From there, you only pay when somebody actually comes to your site and does business with you. It really minimizes your risk because if you buy an ad in a magazine, there are no guarantees; if you buy an ad on TV, there are no guarantees. But if you buy an ad on a search engine, you're getting a guarantee that someone's going to visit your site. Then it's up to you to make the sale or not. If you find you have a lot of people coming to your site and you can't make a sale, there's something wrong on your end and you'll have to do research to find out why aren't people buying.

Entrepreneur.com: For teen entrepreneurs with a Web site for their brick-and-mortar business, is Internet marketing effective for them as well?

Cathers: This is where research is really important, because you can find out how many people search for that product online. Let's say you're selling baseballs and you only sell those baseballs in your store. If you find out people are searching for information about baseballs and that [keyword is] searched 20,000 times a month, then Internet marketing is still going to work for you because there are 20,000 people searching for information on baseballs.

It still works because it's still very cheap: You can start Internet marketing for as low as $50—most entrepreneurs have an advertising budget of $50. It's also effective, and at least then you're exposing your product to people who have an interest in your product. If you go and buy an ad in ESPN magazine, readers might not be interested in your baseball products. At least with the Internet, you're guaranteed you're going to have somewhat of a match. This is the cheapest way to get somewhat of a guarantee of results.