From the August 2000 issue of Startups

Hey! Did ya just hear that kaboom? That was, like, the explosion of the fashion and beauty market for teens. All these geezer designers--they're, like, 25 or 30!--are coming out with these way-cool products just for us: hair stuff, makeup, handbags, accessories, clothes . . . and, hey, we've got mucho dinero from our part-time jobs-and, like, maybe a little help from the parental plastic. Let's go shopping!

Thankfully, you don't have to talk like teens to sell to them. Nevertheless, a growing number of Gen X entrepreneurs are getting in touch with their inner teen and communicating with the junior market using the sweet language of commerce. And there are a whole lot of kids listening: By 2010, the number of teens in the United States alone will swell to 35 million, more than at any other time in history, according to Teen.com, a Web site catering to the interests of 42,000 young surfers each day. A Rand Youth poll estimated that teen girls spend $21.8 billion a year on clothes and beauty accessories. The children of the boomers are growing up, and they have been well-schooled in the joys of consumerism.

"The teen market is growing immensely; they're surpassing the baby boomers as the prime target for companies because they have so much disposable income," says Keri Singer, Teen.com's fashion and beauty editor. Kids between 13 and 19, especially girls trying to define themselves, have an endless appetite for new fashion and beauty products--and testing out new looks helps them satisfy it.

Enter entrepreneurial opportunity. Designers with vivid memories of adolescence-albeit with limited bank accounts--have jumped into the teen market, sneakers-first. Among them:

  • Greg Herman, 27-year-old president of Greg Herman Los Angeles Inc., designer of funky, retro-looking handbags. Although he has a bachelor's degree in anthropology from the University of California, Los Angeles, Herman was virtually homeless, carting around two suitcases filled with his worldly goods and crashing on friends' sofas, when he started the company in 1997. He maxed out his credit cards and got $4,000 from an angel investor to make samples, which he then took to New York.

"I put 40 handbags in a rolling suitcase and literally walked up and down the streets, stopping at showrooms," recalls Herman, who expects sales of $3 million this year and has recently added shoe, shirt and scented-soap lines to his collection. Despite the company's unconventional beginnings, Herman, a benefactor of homeless causes, sells his bags to catalogers and major retail stores like Barney's and Anthropologie. Celebrities such as Jennifer Love Hewitt, Courtney Cox, Calista Flockhart and Christina Applegate buy his bags, which retail for up to $50.

  • Matt Diamond, 31-year-old president of New York City-based Alloy Online, a site that sells the beauty products of other companies as well as its own line of clothing products under the Station Wagon brand name. He and two partners, Jim Johnson. 33, and Sam Gradess, 34, maxed out their credit cards and emptied their savings accounts to scrape together the $250,000 in capital for their 1996 launch. They lived out of a basement apartment, using the kitchen as a warehouse, and personally delivered customers' orders to the post office each evening.

They also created a small, inexpensive catalog and sent it to kids who visited the site. Today, more than 4 million people receive the catalog, and 3 million receive Alloy's weekly e-zine. In May 1999, the company, which employs 150 people, raised about $50 million on its IPO.

  • Desiree Langager, 34-year-old president of Girls Rule Inc. in Los Angeles, designer of apparel items promoting "girl power." The former designer of private-label items launched the business as a result of her commitment to the achievements and development of young women.

Langager started the business with $10,000 in personal savings in 1995, distributing samples of her T-shirts to stylists, wardrobe professionals and fashion magazine editors. Pamela Anderson even wore one of her shirts on Bay Watch. But a trademark dispute with a partner put Langager out of business for three years, setting her back $200,000 in court fees. Eventually, she re-emerged victorious and relaunched her label this past spring, essentially starting all over again, sending out product samples and going back to all the surf, skate and snow shops that had previously sold Girls Rule products.

Now working with up to 10 freelance designers and pattern-makers, Langager predicts between $1.3 million and $2.5 million in sales this year. Asked where she found the emotional fortitude to begin again from scratch, she replies, "I want to make a difference."

Challenges Of The Teen Market

It's tough enough to make it in the fashion and beauty industry, insiders say, but selling to an audience as fickle as teens gives a whole new meaning to the word "challenge." "It's easy to get into this business and grow the first year," says Shawn Haynes, the 29-year-old president of Girl Cosmetics Inc. in Los Angeles and a former cosmetic company sales representative. Launched in 1997 with $10,000 in personal savings, the company earned $1 million last year and expects to double that this year. "But there's pressure, a constant cycle of bringing out new products," says Haynes.

That explains the myriad of options available to entrepreneurs looking to get into this industry, from cosmetics lines and teen-focused fashion to fashion and beauty Web sites. There's a piece of wisdom that will well serve anyone venturing into this market, say the somewhat battle-scarred veterans: Know your customers. Not just intellectually by reading trend reports, although that is important. You need to put yourself inside the head of a teenage girl and live there. Watch Dawson's Creek and MTV, read teen magazines, hit the most popular teen Web sites.

Are you running and still not able to keep up with the trends? Youthquake will show you how to get up to speed.

The three principals and owners of Mighty Fine Inc., a Los Angeles company with a line of clothes featuring silly slogans and characters, have resolutely resisted growing up and declare that they would want to wear the products themselves, although their ages range from 26 to 31. "This is a company created by kids for kids," says 31-year-old Guy Brand, who started the company at home in 1994 for less than $200, selling T-shirts with logos with the help of Stacy Kitchin, 29, and Pearl Shiung, 26. He initially marketed the products at raves, nightclubs and stores frequented by teens. Today, the products are sold worldwide, and the company expects to bring in $9 million this year-triple last year's sales.

Entrepreneurs cannot be successful in the teen market without constantly soliciting feedback from their customers, insiders say. Many entrepreneurs have Web sites featuring questionnaires that ask teens what they want; others get the word from teens on the street with informal focus groups. Says Diamond, "Teens determine what is popular and cool, not us."

What Makes Them Different

Teens are looking for higher-quality products than their predecessors, and they've got the dollars to pay for them. Philippe Tordjman, the 32-year-old owner of Philou, a San Francisco hair salon that he launched in 1997 with his tools and one assistant, has developed a line of hair-care products by the same name. They're designed to attract teens with their fun scents and packaging. "Nowadays, teens go crazy with their hair," says the French native.

Remember that teens want options, Singer adds. Most of the successful designers have several lines for buyers to choose from. "On our site, we give girls alternatives," Singer says. "We don't say 'If you don't buy this product, you won't be beautiful.' "

Girls are just there to sit pretty, huh? Try reading Where Are The Riot Grrls and see how females are tearing up the business world.

Although most of the fashion and beauty companies are located on the coasts, technology today allows you to reach other markets, Haynes points out. "I've been selling online to people in towns with populations of 100,000 or less," he says. "They don't have a Bloomingdale's or a hip shop where they can buy these kinds of products, so they seek us out on the Web. We also look to sell our products in small neighborhood stores, places where girls shop on their way home from school."

Entrepreneurs who are reluctant to enter the teen market because of its supposed age limitations aren't seeing the big picture, according to Singer. "All the high-end designers are showing an influence from the juniors market," she says. "Older women are trying out fun clothing decorated with rhinestones and embroideries, especially if they have teenage daughters." Adds Haynes: "There's a girl in every woman."

Past adolescence yourself? Check out these sites to find out what teens today are thinking and buying.

  • www.wgsn.com: Worth Global Style Network, a site filled with research on the fashion and beauty market


Pamela Rohland, a writer from Bernville, Pennsylvania, and the owner of four felines, finds cat hair an indispensable wardrobe accessory.