How to call the first boss

The Spider Crab only bites on one bait, the Empty Beer Can, which you get from the lighthouse keeper.

Raise $57: clams thrown at the keeper pay $1 each, and Ham or Hot Dog catches on the $3 Crab-Fishing Rod pay more.
Buy the Knife ($45) and a Beer ($12) at the stand next to the keeper.
Hold the Beer, face the keeper and hold Q; he drinks it and gives back the Empty Beer Can.
Switch the Crab-Fishing Rod bait to the can with B and cast from the rocks near him.
When "Spider Crab" and a red health bar appear, reel it in and drag it onto dry rock.

How to beat the Spider Crab

The whole fight is one pattern: a straight charge followed by a dizzy pause.

Stand on dry rock away from the waterline; in the water it jumps much higher.
Wait for the charge and step to the side at the last moment.
While yellow sparks circle it, run behind it and land three or four Knife hits.
Back off with Shift before it recovers and wait for the next charge.
Watch the white bar under its health: when it empties the crab escapes, so take riskier hits if it is running out.

Solo, the stun window is all you need; eat a dead catch from your inventory whenever three or four hits have landed on you.

With friends, each extra player in the lobby adds boss health, but several knives on the stun still end the fight much sooner.

No guns are sold on Island 1, so this is a melee fight. The Knife ($45) is the reliable choice; Brass Knuckles ($24) are cheaper but weaker per hit.

Sharpening at the anvil adds damage step by step, but it is optional for this boss.

The Spider Crab has 750 health on Normal, 75% of that on Easy and 125% on Hard.

No patch has changed this fight.

It breaks into meat chunks (one per player plus two, $10 each) and one Spider Crab Shell.

Throw the shell, not a chunk, to the keeper with Q to get the boat keys, then buy the $10 Radar and sail for the green dot of Island 2.

Shells also feed the Reel of Fortune, and a stack of Empty Beer Cans lets you summon the crab again on any island.