How To Make A Million Before You Turn 20

How To Make A Million Before You Turn 20


Melanie Lindner /  Forbes
02.13.08, 1:40 PM ET

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While four of the five were making a mint on the Internet,
Fraser Doherty was doing things the old-fashioned way. In 2002, at the
age of 14, Doherty started making jams from his grandmother’s recipes
in his parents’ kitchen in Edinburgh, Scotland. Neighbors and church
friends loved them. As word spread, Doherty started receiving orders
faster than he could produce them at home, so he rented time at a
200-person food-processing factory several days a month.

Go With The Flow

By
age 16, Doherty left school (with his parents’ blessing) to work on his
jams full time. In early 2007, Waitrose, a high-end supermarket in the
U.K., approached Doherty, hoping to sell his Superjam products in their
stores. Within months there were Superjam jars on the shelves of 184
Waitrose stores, hoisting Doherty and his business to new heights.

Doherty
borrowed 5,000 pounds (about $9,000) from a bank to cover general
expenses and more factory time to produce three flavors: Blueberry
& Blackcurrant, Rhubarb & Ginger and Cranberry & Raspberry.
Tesco
(other-otc:
TSCDY

news


people
) followed, adding Doherty’s products to 300 stores across the U.K. In March, Superjam will launch at Tesco in Ireland.

Last
year Superjam hit $750,000 in sales and is on track to double that in
2008 (about 50,000 jars a month). Based on a reasonable valuation
multiple of one times revenue–jelly-maker J.M. Smucker
(nyse:
SJM

news


people
) trades at 1.2 times sales–Doherty’s 100% stake is worth in the neighborhood of $1 million to $2 million.

Not
bad for a 19-year-old. Doherty’s recommendation to other young
entrepreneurs: "Have an attitude of adventure, and enjoy the journey."

Double Down

Cameron
Johnson truly took that perspective to heart, parlaying one hit into
the next. Back in 1994, when he was just 9, Johnson launched his first
business out of his home in Virginia, making invitations for his
parents’ holiday party. By the seasoned age of 11, Johnson had saved up
several thousand dollars selling greeting cards. He called his company
Cheers and Tears.

But the little guy didn’t stop there. At age
12, Johnson offered his younger sister $100 for her collection of 30 Ty
Beanie Babies, all the rage at that time. The young entrepreneur
quickly earned 10 times that amount by selling the dolls on eBay
(nasdaq:
EBAY

news


people
).
Smelling potential, he contacted Ty and began purchasing the dolls at
wholesale with the aim of selling them on eBay and on his Cheers and
Tears Web site.

In less than a year, Johnson banked $50,000–seed
money for his next venture, My EZ Mail, a service that forwarded
e-mails to a particular account without revealing the recipient’s
personal information. He hired a programmer to flesh out his idea, and
within two years My EZ Mail was generating up to $3,000 per month in
advertising revenue.

Be Fearless

Johnson still wasn’t
done. In 1997, he joined forces with two other teen entrepreneurs,
Aaron Greenspan and Tom Kho, to create an online advertising company
called Surfingprizes.com, which provided scrolling advertisements
across the top of users’ Web browsers. Those who downloaded the
software received 20 cents per hour (a tiny fraction of the value to
the advertiser) for the inconvenience of having ads splay across their
computer screens.

The boys employed a classic pyramid strategy to
spread the service. Users who managed to refer Surfingprizes.com to a
new customer would nab 10% of that new person’s hourly revenue.

But
Johnson and company didn’t just sell software–they wanted a piece of
that juicy ad revenue too. Their solution: partnering with companies
such as DoubleClick, L90 and Advertising.com that could sell the ads
for them. Under the agreements, the middlemen would collect 30% of any
ad revenue sold, while the three boys split the remaining 70%, out of
which they paid those referral fees.

"I was 15 years old and
receiving checks between $300,000 and $400,000 per month," says
Johnson. At 19, he sold the company name and software (but not the
customer database) to an undisclosed buyer. Says Johnson, "Before my
high school graduation, my combined assets were worth more than $1
million."

Now just 23, and with other ventures under his belt,
Johnson spends his time giving speeches and promoting a new book. "Put
yourself out there," he advises. "Don’t be afraid of rejection. Don’t
be afraid to ask anything."

Stick To A Vision

At 15,
Catherine Cook and her brother Dave, 17, were flipping through their
high school yearbook and came up with the idea to develop a free
interactive version online. In 2005, the two convinced their older
brother Geoff, a budding Web entrepreneur himself, to invest $250,000
and his time to help them launch MyYearbook.com, a social-networking
site based in Skillman, N.J.

Soon after, the Cooks merged with
Zenhex.com, an ad-supported site where users post a variety of homemade
quizzes, more than doubling the number of eyeballs taking in their
site. But when they tried to expand even further, they hit some snags.
Potential investors wanted to move the company’s headquarters to New
York (the Cooks wanted to stay put). They also wanted to have ads
appear on users’ personal profile pages (the Cooks didn’t).

Good
thing the Cooks stuck to their vision. By 2006, MyYearbook had raised
$4.1 million from the likes of U.S. Venture Partners and First Round
Capital. Since then, the site has attracted such advertisers as
Neutrogena, Disney
(nyse:
DIS

news


people
) and ABC; has grown to 3 million members worldwide; and rakes in annual sales in the "seven figures," says Catherine.

How
to compete in an industry dominated by MySpace and Facebook? Mine a
niche. "[Our site is] specifically for high school students, and we
really listen to the suggestions of our members," says Catherine.

While
the Cooks decline to discuss the value of their stake in the business,
one MyYearbook investor (who agreed to speak only if unidentified)
claims the Cooks’ chunk is worth "well over $1 million."

Seven
figures is real money to anyone, let alone a teenager. Yet despite
their heady success, all of these young world-beaters seem to
remain–refreshingly–kids at heart. "I’m not driving around in fancy
cars," says Doherty. "I’m in it totally for the adventure."

Profits and perspective: Sounds like a recipe for even greater success in the decades to come.

 

ALT

Certificateswap.com

Another Cameron Johnson brainchild, Certificateswap.com allowed
people to buy and sell unwanted gift certificates online. While gift
certificates routinely changed hands on eBay, the auctioneer charged a
healthy fee–"up to 13% of the cards’ value," says Johnson. "We took
only 7.5%." Johnson sold CertificateSwap.com in 2004, when Johnson was
just 19, for an undisclosed "six-figure" amount.

 

ALT

MyYearbook.com

In 2005, Catherine Cook, 15, and her brother Dave, 17, were flipping
through their high school yearbook and came up with the idea to develop
a free interactive version online. Soon after, the Cooks merged their
social-networking site with Zenhex.com, an ad-supported site where
users post a variety of homemade quizzes, more than doubling traffic to
their site. By 2006, MyYearbook had raised $4.1 million from the likes
of U.S. Venture Partners and First Round Capital. The business has
since attracted advertisers such as Neutrogena, Disney and ABC; has
grown to 3 million members worldwide; and rakes in annual sales in the
"seven figures," says Catherine. How to compete in an industry
dominated by MySpace and Facebook? Mine a niche. "[Our site is]
specifically for high school students, and we really listen to the
suggestions of our members," says Catherine.

 

ALT

Whateverlife.com

Conceived by 14-year-old Detroit native Ashley Qualls as a personal
portfolio with pictures and graphics, the ad-supported site evolved to
offer free MySpace layouts and tutorials for teens who want to learn
how to do their own graphic designs and coding. Whateverlife.com, which
Qualls owns outright, claims to nab 7 million individual visitors a
month and counts Verizon Communications as an advertiser. In March 2006
Qualls reportedly received an offer (from an undisclosed buyer) for
$1.5 million, but turned it down.

 

ALT

Dubit Limited

In 1999 Adam Hildreth of West Yorkshire, England, entered the
business world at the age of 14 by starting this social-networking
outfit. Companies like Coca-Cola used the site’s members for focus
groups to help market their products to young people. Hildreth served
as managing director of the agency for almost four years, leading Dubit
to become the most visited teen Web site in the U.K. Five years later,
the British Broadcasting Corp. named Hildreth, then 19, one of the
U.K.’s 20 richest teens, with an estimated net worth of 2 million
pounds, or approximately $3.7 million.

 

 

 

ALT

Crisp Thinking

In 2005, Hildreth founded another business, which developed software
to protect children from "online groomers"–pedophiles trolling the
Internet. According to a recent Cambridge University study, Crisp’s
software is 98.4% effective in detecting potentially dangerous
conversations online.

 

 

ALT

Superjam

In 2002, at the age of 14, Fraser Doherty started making jams from
his grandmother’s recipes in his parents’ kitchen in Edinburgh,
Scotland. As word spread, Doherty eventually rented time at a
200-person food-processing factory several days a month. In early 2007,
Waitrose, a high-end supermarket in the U.K., approached Doherty hoping
to sell his Superjam products in their stores. Within months there were
Superjam jars on the shelves of 184 Waitrose stores. Last year Superjam
hit $750,000 in sales and is on track to double that in 2008. Doherty’s
100% stake is now worth in the neighborhood of $1 million to $2 million.

 

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