Teens earn $40,000 salary from podcast hosting site

TECHNOLOGY
Teens earn $40,000 salary from podcast hosting site - High school entrepreneurs named CEOs of Web site they created and sold to a speech technology firm for stock worth $200,000
By Bridget Carey
Copyright © 2006, Chicago Tribune and McClatchy Newspapers
Published October 2, 2006

MIAMI -- Weina Scott answers about 100 tech support e-mails a day. The Web site must be perfect--one glitch, and 6,000 irate customers will bombard her inbox.

But first, she has to study her physics.

At age 17, Weina is the chief executive of her own Web-based podcast hosting company and makes an annual salary of $40,000 for working 20 hours a week. Her office is her laptop in her parent's townhouse near North Miami Beach, Fla. She balances her work duties with doing homework for seven advanced placement classes at Krop Senior High School and applying to colleges.

"This is the American dream," Weina says. "Start the company with zero dollars and end up with a $40,000 salary. I think I'll take that."

Experts say there is a growing number of teenage entrepreneurs like Weina, and most dive into the online business world. But because of their inexperience with promoting themselves, their stories are rarely heard.

"There's a lot of very successful young people that don't get spoken about very much," says David Hauser, who is involved with the Global Student Entrepreneur Awards and Students for the Advancement of Global Entrepreneurship. He says the bulk of young entrepreneurs head to the Internet, where capital required for a company is lower and criticism of an executive's young age is unlikely.

Hauser, 24, was once a teenage entrepreneur with a Web-based business. He sees that young entrepreneurs are sometimes more successful because everything is on the line when there is a mistake.

"People making that leap and going forward have a tremendous amount of passion, and that's what's most important," Hauser says.

And passion is something Weina has plenty of. She is the creator of Switchpod.com, which gives users space to upload audio and video programs as podcasts. She started it last year with the help of friend Jake Fischer, a 16-year-old living in Minnesota.

The two met while posting on a message board on the topic of Web site hosting. She was looking to start a company; he was looking for a programmer. They agreed to team up to create Switchpod. Within a few months, they had 300,000 monthly visitors.

Switchpod's success caught the attention of Wizzard Software Corp., which deals with speech recognition and text-to-speech technologies. Wizzard's chief executive, Chris Spencer, 36, was getting requests for software that can turn text in a blog to audio, such as in a podcast.

After doing some research, he found Weina's Web site. By July the high school entrepreneurs were signing a contract to sell Switchpod to Wizzard for stock worth $200,000. Weina and Jake were each named CEOs with annual salaries of $40,000.

"I assumed they were a year or two out of college or something, the average age of people doing start-ups in the Internet world," Spencer says. "Once I found out how old they were, I was like, `Are you kidding me?'"

Spencer was wary of hiring teens so young but pleased to see Weina and Jake go into overdrive.

"She's just working her tail off constantly," says Spencer, who jokes that he sounds like a gushing parent when he talks about Weina. "I would love to have a ton more workers just like them."

To pay for their bandwidth, Weina and Jake charge podcasters a fee of $5, $10 or $30 to put their programs online. A free option is available, but podcasters must allow a commercial to be placed at the beginning of the program.

A year ago they were making a profit of about $400 a month, which they split. Since then, the downloads have doubled, and the monthly profit is more than $1,000, Weina says.

"I really think now with their free model they have the opportunity to be one of the top three podcasting companies within the next year or so," Spencer says.

Weina says Switchpod has about 10 advertisers, but they are not focused on luring more just yet. A top priority is to improve the Web site to increase downloads; they are now at about 800,000. Then they'll draw in serious advertisers.

"I think what Switchpod needed in order to grow and in order to bring more business is credibility," Weina says. "Now it's not two teenagers running Switchpod or not two people you don't know. It's a public company."

They have roughly 6,000 customers now, mostly free. They get a new paid customer every two days and about 20 new free members a week, Weina says. Their annual budget from Wizzard is about $24,000.

When Weina's parents, Jude and Louisa Scott, first heard that a company worth millions wanted to buy Switchpod, it came as quite a surprise. But it also came as a relief: They said they would much rather see her keep up her straight A's than get in deep running a business.

"It wasn't the money for us, you know, because she can make money after college," Jude Scott says.

Since Weina is a minor, her parents signed the contract, stipulating that their daughter would only work part-time during the school year.

The young entrepreneurs say they have learned some business lessons.

"I learned how to be more of a manager type," Jake says.

They have also learned to overcome technical hurdles. After more than 200 complaints that the server was slow, Weina moved it to a larger one in London.

She says sometimes the pressure is overwhelming. But even though she makes a significant salary, her friends haven't changed.

"They're surprised, I guess. Maybe a bit jealous. Maybe they want my job," Weina says. "My friends, they don't do podcasting. They do MySpace, but not podcasting. I guess I'm different."