How To Build Your First (Crazy Profitable) Business As A Teenager
18 Radical Ideas For 18-Year-Old Entrepreneurs And Younger.
ARRRRRRRR!!!!! Pirates, lately we have started to see more and more of you choose to let your pirate flags fly high—and we SWASHBUCKLING LOVE IT. Special shout-out to Pirate Bart Fish (if that’s not the name of a Pirate, we don’t know what is) letting the world know he’s a Category Pirate and not afraid to create a DIFFERENT future.
So, if you see someone with that signature pirate flag emoji 🏴☠️ in their bio, just know you have a fellow pirate as a friend (and if you want other pirates to know you’re ready to sail the open seas, let that pirate flag fly 🏴☠️🏴☠️🏴☠️).
Dear Friend, Subscriber, and Category Pirate,
Most business books today are written for adults.
More specifically, they are written for Native Analogs—people who see the “real world” as their primary reality, and the digital world as a secondary addition to their real life. But this severely limits the scope of what new and valuable products, services, and solutions can (and should) be created. (If you think the earth is round, you’re going to build products for a round earth. And if you think the earth is a cybermatrix floating in the metaverse, you’re going to build products for a cybermatrix floating in the metaverse.)
Something the three of us pirates have been thinking about quite a bit recently is how entrepreneurs, creators, writers, and artists are finding their way in the world at younger and younger ages. Even 10 years ago, the thought of starting your own business as a teenager was incomprehensible for the vast majority of the population. Today? If you’re a teenager with a few thousand followers on Instagram or TikTok and you aren’t already monetizing (or actively thinking about monetizing), your peers think you’re stupid. Many teenagers today care less about getting into college, and more about how to become an influencer, start a YouTube channel, or launch a Shopify store. And considering we're still three generations away from Native Analog educators creating curriculums teaching digital skills to Native Digital students (which we’re calling The Digital Education Crisis), we think it’s a good thing teenagers start taking matters into their own hands.
Why spend 4 years and rack up a metric ton of student debt going to college to learn skills for a Native Analog world that no longer exists when you can build a Native Digital business as a teenager—and take full accountability and have total agency over your future?
So that’s what this mini-book is about:
How to create your first (crazy profitable) business as a teenager.
If you are a Native Analog parent with a teenager (or multiple) exhibiting entrepreneurial tendencies (such as: talking back, disregarding authority, and forgoing sleep in pursuit of a sudden special interest), this mini-book is for them. So, we encourage you to give them a (digital) copy, nudge them to read it (tell them it’s our idea, not yours, that way they’ll listen), and ask what new ideas for businesses they have afterwards. In addition, we also encourage you to give this mini-book a read, and sit with some of the uncomfortable feelings or responses that may arise as you consider maybe you and your teenager are living in two separate realities—aka: two different worlds—and what might seem like an insanely obvious and totally actionable digital business to them might seem like the most audacious and unlikely “digital” business to you.
That said, from this point forward (and for the next 11,000 words), we are going to speak directly to teenage entrepreneurs.
So, let’s get to it.
Dear Teenage Pirates,
Don’t listen to most people (especially your Native Analog parents).
Minimum wage jobs suck.
Most parents, at some point or another, all say the same thing: “You have to get a real job.”
A real job, it turns out, is just something that involves manual labor for low pay—which is likely what they had to go through when they were your age. (“When I was your age…I had to deliver 10,000 newspapers, in the morning, through the snow, with no boots!”) This is exactly what Pirate Cole’s parents said to him when he was a teenager, getting paid $25 per hour to write World of Warcraft walkthrough guides for a gaming website. When he told his parents how he was starting to make money (thinking they’d be proud), instead they said, “No, you have to get a real job, Cole. Something that will teach you work ethic, and how to put in a little elbow grease.” They made him take a job as an ice cream scooper at the local Coldstone Creamery—which paid him 50% less than what he was making writing articles about his favorite video game online, and required him to wear an apron, scrub melted ice cream trays, and mop the back office and bathroom floors.
Were his parents right? Did working an elbow grease Native Analog job teach him anything valuable?
Not really. It just confirmed what he already knew (scooping ice cream for minimum wage sucks), and postponed what he ultimately wanted to do (which is write online).
Today, Pirate Cole is one of the most-read and highest paid digital writers on the planet.
Part of being an entrepreneur of any kind means going against the grain. (Pirate Christopher started his first businesses while a teenager, back when most people thought entrepreneur was a French word for “unemployed.”) But being a teenage entrepreneur today means acknowledging (and having compassion for the fact) that your Native Analog parents are probably not going to understand your Native Digital pursuits. Your dad has no idea what an NFT is. Your mom can barely assemble a Spotify playlist, let alone make sense of why you think creating video thumbnails in photoshop for YouTubers is a replacement for college and can be turned into a highly profitable digital business. (Huge category here, by the way.) And how could they understand? They didn’t grow up in a time where you could start a 95% margin digital goods business with nothing except an Internet connection and a laptop or smartphone.
So, Step 1: when your parents say, “That will never work” or “You need to get a real job,” it’s important that you look them in the eye, tell them you love them, and then go right on building what you know makes complete sense in your Native Digital world.
Prove them wrong, in the best way.
Now, that said, we don’t want any angry letters from parents shouting, “YOU TOLD OUR KID TO JUST DO WHATEVER THE HELL SHE WANTS.” If you love playing Fortnite or are absolutely obsessed with TikTok, don’t just be a consumer. Turn your passion into a crazy profitable business—and don’t worry, we’re going to explain to you exactly how.
Start Native Digital. Don’t even think about doing anything in the Analog world.
The only thing that sucks as much as a minimum wage job these days is most Analog jobs.
Obviously, the world still needs plumbers. And construction workers. And warehouse managers. And piano teachers. And burger flippers. And highway patrollers. And bank tellers. And cashiers.
But more and more of these jobs are either being automated and digitized away, or becoming Native Analog-Digital hybrids (these jobs are what Elon Musk is designing the Tesla bot to do). Why only teach piano lessons to the students in your town when you can teach students from all over the country remotely? Why only draw up construction plans for new projects in your city when you can draw up construction plans for buildings anywhere in the world? That’s point A.
Point B is: Analog businesses are hard. They require you to put on pants. They involve lifting stuff, moving stuff, managing physical “stuff.” But most importantly, they are far less profitable. The average profit margin for a small business in North America is around 7%. Restaurants are even lower, with an average profit margin of 3-6%. Meanwhile, digital businesses can be started (and scaled to six, seven, even eight figures in revenue) with almost no overhead: no rent, no employees, and no fixed costs (like needing to buy lawn mowers for your landscaping business, or t-shirts for your clothing business). Aside from a computer and/or smartphone, few low-cost SaaS tools like a website builder and email marketing platform, and fees from a credit card processing tool like Stripe, your business can operate at an 80% or even 90%+ profit margin.
Which means you can easily be profitable Day 1.
Besides, as a Native Digital, the vast majority of your skills are probably “digital” anyway, which means you’re better off trying to monetize what you know and know well—opposed to teaching yourself how to use a socket wrench.
If you can build a (crazy profitable) digital business for yourself as a teenager, you’ll be set for life.
Pirate Eddie ran the numbers…
If you invest $30,000 in the Vanguard S&P 500 Index Fund by age 18, assuming modest 7% returns then you’ll have a little over $700,000 by the time you retire at age 65.
If you invest $30,000 in more forward-leaning companies and produce returns closer to a Venture Capitalist (15+%), you’ll have $32 million dollars by the time you retire.
And if you invest in Category Queens like say Microsoft or Apple who go on to capture the lion’s share of category economics and average an annual return of 25%, you’ll have $2 billion dollars by the time you retire. (We know that’s not enough to live on, but it’s certainly a start.)
This is one of the greatest areas of high school education malpractice. (Translation: they should teach this in school!) Social Security and other government safety nets will not be available for Native Digitals like you. The government is not coming to the rescue. You’re on your own. The good news is: if you make money and invest aggressively when you’re young and let the time value of money do its job, retirement shouldn’t be a problem.
Unfortunately, the very notion of focusing on your education and delaying the opportunity to make money now so you can make more money later (and losing a teenager’s time value of money advantage) is the very reason why there is a retirement crisis today. It is one of the greatest lies society tells young people. But if you work hard now as a teenager, you will be set in your golden years—allowing you to actually pursue your passion during the bulk of your adult life.
Now, $30,000 might sound like a lot of money, especially as a 14, 15, or 16 year old, but if you break it down, it’s not. That’s 10 clients each paying you $3,000 per year (or a measly $250 per month). Or that’s 100 people buying a $300 product. Or 300 people buying a $100 product. And that’s if you want to try to make $30,000 in a single year. Can you find 75 people to buy a $100 product per year for 4 years? That’s like six people per month.
We think you can.
More importantly, if you can figure out how to produce this very actionable sort of financial outcome for yourself as a teenager, not only will you guarantee yourself a comfortable retirement (which opens up a massive amount of personal freedom for you to enjoy all throughout your life), but you’ll also build a skill most people never learn—which is how to engineer financial outcomes and build businesses out of thin air.
And once you learn how to do that, you’re set for life.
(Because you can always build another business.)
You can either work to make someone else’s dream come true, or you can work to make your dream come true.
One last thing: Thinking about thinking is the most important kind of thinking.
What you’re not going to find in this mini-book is a Betty Crocker recipe for “3 easy steps to make your first $30,000.”
That’s not how business works (and anyone who says so is teasing you with a carrot long enough to steal that $20 out of your pocket).
Instead, we are going to give you some laws to live by, guardrails for your thinking, and 18 radical ideas to get you started. If one (or several) of these ideas *sticks* then by all means, run with it. But if none resonate with you, don’t sit there and go, “You didn’t give me an easy answer” and then give up. Use these ideas as a starting point. They are examples. Let your mind wander a bit. See what else they make you think about—and go give it a try.
Ready Player One?
If you are a teenager working an Analog minimum wage job you hate (or can sense, any day now, your parents are going to start nudging you in that direction), this is the path to quitting and paying yourself instead.
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