The Four Kinds of Side Hustles

Ah, the side hustle.

I've become somewhat of a (self-proclaimed) expert at doing random side things over the course of my life.

In the last decade I've created Udemy courses, launched a self-published book (under a fake name – not proud of this one), done marketing consulting, launched an email course (with a paid back-end), Airbnb’ed my apartment, bought a condo and put it on Airbnb, wrote a book (an actual good one), bought a business (and now another one), put affiliate links on my site, given paid talks, written book summaries, and built an affiliate site for a basketball dribbling course (also not proud of this one).

Heck, even my current company began as a side project.

And those are just the ones that worked! I've tried tons of other things – buying motorcycles on Craigslist and flipping them across the bay, starting an affiliate site for people with eyebrow dander (like myself), building an email course for people interested in nootropics… the list goes on.

I've seen firsthand how freeing it is to make even $1-2k a month on your own.

It’s a complete game changer, waking up with more money than you had when you went to sleep. For too long, I'd start my day by refreshing Udemy’s instructor dashboard to see how much I'd make. Then the Traction Amazon page to see our sales, then Airbnb...

Making money via side businesses (or side hustles) gave me the confidence to quit Rackspace and go out on my own 4 years ago. Having a few thousand a month coming in on autopilot gave me the freedom to charge premium rates as a growth consultant, as I knew I'd be okay if they said no. 

Side hustles can grow and evolve, but to work they need to have a few traits. They need to:

• Solve a problem someone is already aware of
• NOT require a lot of maintenance or hand-holding
• Have a no-brainer path to profitability

In my experience, there are 4 ways to build a successful side hustle:

1. Buy an existing asset
2. Launch a product on a marketplace with existing demand
3. Launch a unique, one of a kind product in a new space where you can buy demand (Adwords, Facebook, etc.)
4. Arbitrage (Craigslist, Airbnb, trading, Uber)

Let’s cover them one at a time.

1. Buy an existing asset

This one is probably the easiest, and can require the most money to pull off. But not always - two of my businesses I’ve bought with $0 down. 

It’s also pretty self explanatory. Buying an apartment and renting it out to someone is one of the most common ways to generate income in the US. You buy an existing asset (a house) and rent it out on a monthly basis. After a few years, you’ll have made your initial money back and the rest is just profit. Easy!

Real estate is the easiest example, but you can apply this concept (pay a lump sum up front in exchange for regular payments later on) to all kinds of things.

My partner Ryan and I did exactly this when we bought Fomo. We loved the app, it was growing well and kicking off steady cashflow. So, we bought it.

It’s the way we structured it that’s key. We seller-financed the deal, meaning we bought it for an up-front price and made the payments over time. Amazing!

We’re now applying the same strategy to more apps: buy a Shopify app up front, enjoy the monthly profits into (hopefully) eternity.

Beyond real estate and Shopify apps, there are all kinds of existing assets you can buy. I know one guy who found a watercolor tutorial site with a ton of organic traffic. To monetize, the site was showing Google ads on the sidebar, and using Amazon affiliate links. All told, it was pulling in $500-1000 per month.

My friend then bought the site, developed a paid course around learning to paint watercolor, and was making 10k+ a month in just under 6 months.

I've had other acquaintances buy the rights to unpopular songs or jingles and collect on royalties, others who buy YouTube channels or Instagram accounts, and still others who buy Amazon businesses. The list of existing assets you can buy are practically endless, and if you have 1-2 ideas as to how you can improve an asset, you could have a winner on your hands.

Even better, with Shopify exchange you can now buy existing sites for next to nothing (some sites go for $250) and get some experience building a business.

2. Launch a product on a marketplace with existing demand

This is my favorite way to launch a side business: spend time on a marketplace where people are spending money, and figure out how to create a product that people are looking for.

Example – a few years ago, my roommate and I ran the 2nd ranked Airbnb in San Francisco. We were renting out our living room for $250, (or our whole apartment for $500+) and making a killing.

How?

Mainly, by paying close attention to what Airbnb wanted. We realized that – from Airbnb’s perspective – they want hosts who do a few things: