Phase One Collect Underpants Phase Three Profit

Underpants Gnome Capitalism

Phase 1: Collect Underpants. Phase 3: Profit. Who says you can’t learn any good financial lessons from South Park?

I am sure you are thinking: “Eric, that is the most ridiculous thing I have ever read! How is that a good financial lesson?”

Small Business vs. Large Business

The whole episode revolves around South Park locals trying to keep a “Harbucks” coffee shop from opening across from the local guy. The kids agree at first, but are eventually taught about corporations by the Underpants Gnomes and decide otherwise.

The gnomes teach us everything we really need to do well in business. You need a good idea and you need an end goal. Figuring out how to make money from it is the challenge you will face. Identity a need and go fill it. Eventually you will figure out a way to make profit. People will always pay you if you can make their lives better or easier. Just make sure it is really something people would pay for in the long run. You don’t want to work for free.

In The Real World

A good example of this type of logic is Twitter. Phase one: Open a silly website that lets you type 140 character messages. Phase three: Profit. It took years to work out phase two. Phase two was sponsored tweets.

I am always on the lookout for a business opportunity. One of these days I will strike it rich. Many of you already have your own businesses. When I’m not working at my “real job” or on this blog, I spend quite a bit of time running flash mobs. I had no idea how they should make money in the beginning, but I’ve found a model that works.

At the end of the day, almost all business ideas come back to the simple economic concept of supply and demand.

If you are interested, you can see the whole episode for free here.

Your Business Stories?

How have you started businesses that make money? Share your success stories on the comments below.

Originally posted March 24, 2009. Updated July 29, 2013.