68. How to Start and Grow a Side Hustle in 2023

0:00Yeah, I mean, this is something that we're trying to cultivate in our kids. They're seven and almost five now and trying to praise not just success, but praise effort and praise trying new things and, you know, recognizing, hey, you didn't get it at your first try, but you tried again. You figured it out. I think that skill of figuring it out is probably the number one entrepreneurial skill. Like you're always going to bump up against the ceiling of your comfort level and capabilities. It's like, well, what happens next? I got to figure it out. I'm calling the shots here. Hello and welcome to another episode of the Upflip podcast.

0:31I'm your host, Alex Freeman. And on today's episode, I'm talking to Nick Loper, founder of Side Hustle Nation. In 2008, Nick did what many people dream about. He quit his job to turn his side hustle into his full-time job. Five years later, he started the Side Hustle Show, a podcast that shares strategies and tips for other people who want to add an extra income stream or break free from their nine to five. Now he's bringing his expertise to our listeners, sharing his advice on the best side hustles to start and some tips and strategies to help entrepreneurs start a successful side business. Nick, welcome to the show.

1:02Alex, thanks for having me. Yeah, absolutely. And to get things started, can you just kind of give us the overview of your background and what makes you an expert in side hustles? Well, you hit the high points there. You know, I spent all of three years in my one and only corporate job while I was building my original side hustle. It was a comparison shopping site for footwear back in the days, early days of the internet, you know, pulling the catalogs from Dappos, Amazon, all these other shoe stores and tell you where you could find the best price on your next pair of shoes. And so that was my thing.

1:30I kind of naively thought I could be the guy who sells shoes on the internet for a long time, but was really grateful to have started several other side hustles on the side from that after quitting my job. And some of them worked, a lot of them didn't. And then in 2013, as you mentioned, started the Side Hustle Show and the Side Hustle Nation website to really spread the gospel of this lower risk brand of entrepreneurship and now have interviewed over 500 other successful side hustlers because it's less about my story is what I found is more about like, well, other people, how did you build that?

1:59How'd you come up with that idea? How'd you get your customers for that? So that's really been the most rewarding work so far. I want to ask you a bit about the shoe comparison side hustle. Why did you start there? Why was that the first one? It was just, you know, being in the right place at the right time. I had an internship in college with a Seattle area brick and mortar shoe store, and they had the idea in the early days of the internet to what would happen if we put some of our inventory up online? Would anybody buy this stuff? And so by the time I came on board as their marketing intern, the online portion of their business had grown, of course, by leaps and bounds compared to the single location brick and mortar shop.

2:34So that was my first exposure to affiliate marketing and pay-per-click advertising and SEO and e-com. So it was a really cool experience. And so after that internship ended, I said, okay, you know, as a part of my role was, you know, looking after the affiliate program. And I'm like, well, some of these affiliates are doing pretty well. Maybe I could do something similar. Like, you know, trying at that time, you know, you had sites like Price Grabber and Next Tag and Shopping.com, like big comparison shopping engines. Like, well, what if I could just snipe off a little segment of their business?

3:01Like, I don't want to compare everything. I'll just, you know, try and focus on shoes. I think that nichification or that niching down was something that really helped the site. How deep was your affinity for shoes? Were you a sneakerhead or was that just kind of like an opportunity that presented itself to you? No, I get that question a lot. And it was like, no, I was probably my own worst customer, like maybe about three pairs over the course of 10 years. It was like, you know, my shoes have got holes in it. And people, don't you own a shoe business? Like, it was kind of funny. But in terms of physical product affiliate commissions, it's a pretty high margin product.

3:31And so you'd see, especially early on, like 10, 15, 17 % affiliate commissions, which is not unheard of. In fact, it's pretty low in the digital product space. But in the physical product space, where now you have Amazon paying two to 4%, like it is a pretty significant margin. So I guess with that in mind, would you recommend somebody looking at things that they're passionate about to find what their side hustles should be? Or is it look for opportunities that are maybe going to be potentially more profitable than whatever your particular hobby is? Yeah, passion can be a trap in a way. And it's kind of a stressful question.

4:04So you turn around, hey, Nick, what are you passionate about? Like, I don't know, like I'm interested in a bunch of different stuff. But to call any of those things my life's undying passion, Like it would put a lot of pressure on that. And you find, you know, from talking to a bunch of people now, it's like, well, I turned my passion into my side hustle and then it became work and I was no longer passionate about it. It was like, I don't want to kill that passion either. But what we found, and there's some research from Dan Pink and Cal Newport to kind of back this up, is that passion tends to follow doing the work, like getting really good at a skill.

4:35And I'll give podcasting as an example. I had no passion for podcasting in 2013 when I first started. Like I had no idea what I was doing. but over the course of now almost 10 years have become really passionate about podcasting. I've started to identify as a podcaster. And same thing like painting houses in college, like no passion really for this or the shoe business. But like over the course of doing it for several years, you can't help but walk past somebody's peeling eaves. It's, oh, I got to come back, give this guy an estimate, you know, this weekend, or you become passionate about the process of it in the case of the shoe business.

5:04On that note, if somebody has the idea, whether or not it is a passion yet, what kind of planning or soul searching should they do before they take the step into starting it as a side hustle? I think the magic happens. We're trying to find this intersection or overlap between a skill or interest that you already have, some inherent curiosity to learn more about that subject, and then where is there a pain or problem that you can solve? And I think that's something that has helped the side hustle show do well is kind of scratch those itches, right? If I can help other people make extra money, that's a broad need that never seems to go away.

5:43And it really scratches my own inherent curiosity of how do these businesses work? How'd you come up with that idea? How did you market that thing? How do you scale it? And then piggybacking on my own somewhat skills at Hicksburg, I did this myself. And so I have some level of credibility to go out and talk to other people about it. So if you can find the intersection of those things, I think you'll be off to a good start. What about revenue expectations? Because I I think that there is an undercurrent in the side hustle side of culture. The way people talk about it is that money's going to roll in and you can just start taking these elaborate vacations.

6:15Sounds like you've been spending some time on TikTok, right? Isn't that the year one expectation? Or is it? Yeah, exactly. Is that or what's a realistic expectation for year one? You know, for me, it was three years of nights and weekends before I felt comfortable quitting my full time job. I was able to cover my rent after the first, call it 12 to 18 months. And to me, that was a huge win. It was not replacing the day job salary, but it was like, this is covering a good chunk of my fixed expenses. I was very early 20s, living relatively cheaply at that time. But it was having this epiphany moment of my day job is gravy.

6:52I don't need this anymore. So you're one bad meeting away from calling it quits. That's a really empowering place to be. So instead of looking at replacing your salary, look for those mini wins along the way. Call it the side hustle snowball where you itemized out your expenses from smallest to largest and it allows you to celebrate, oh, I erased my gym membership or my cell phone bill or my car insurance. You know, you kind of work your way up, if that makes sense. Yeah, I mean, that makes a ton of sense. You know, you talk about three years to kind of building that way up. Do you have any advice for assessing whether or not it is worth your time as you kind of get into a side hustle?

7:25Are there markers of revenue that you would look at and be like, okay, well, it's been two years and I'm still not yet barely covering my cell phone bill. Like, how do you kind of make that assessment? Yeah, this is where the curiosity and interest elements hopefully come into play that if this is something that I care about deeply enough to keep doing and you have that driving internal motivation, like, why is this important to me? Because if you don't have that, you stop as soon as the going gets tough. And it's like, look, I'm not seeing the results that I wanted to see as quickly as I wanted to see them.

7:56And I could be spending my free time with the kids or traveling or watching Netflix or any number of other things. But here I am trying to get this thing off the ground and it's a super heavy liftoff. So you got to have that driving why behind it. I think that's really important. And then you have to also ask yourself, like, did the business model I choose, if this works, is that a win for me? And not to knock on the DoorDashes or Uber Eats of the world, like they market themselves. Like, hey, start your side hustle and you'll find them on Side hustle nation as well, because sure, there's a viable thing, very plug and play type of opportunity, easy to get started with, low barrier to entry, checks a lot of boxes, but there's limited upside to it where you're still trading time for money.

8:35It's hard to scale beyond hours for dollars in that case. So when you're evaluating different opportunities, it's trying to project two, three, five years into the future. Okay, if this thing works, is that a win for me? Or can I reverse engineer by looking at people who have followed that path and saying, well, they were reasonably successful. What is their day to day look like? Like, are they still working 80 hour weeks or do they have a little more freedom and flexibility in their days? What was the biggest challenge that you faced when you first got your side hustle started and how did you overcome it?

9:01For me in particular, it was like software development. It was like, you know, pre WordPress or at least pre my discovery of WordPress. So it was like the technical side of having to hire developers to get this thing done. And like every software project takes twice as long as they think it's going to. And thankfully they stuck to their fixed price bid. But, you know, that was a frustrating thing on the personal brand, like the content. business, the blog podcast business. It's just the shouting into a void. It's like the battle for attention and discovery that is ongoing. It's like, well, how do you create something that is compelling enough for people to listen to?

9:33And hopefully they share with their friends and to find a critical mass of those people in to justify the time that you're investing into it. It's really challenging to get that flywheel spinning in the early days. In those early days, how many hours a week should somebody be expecting to devote to the side hustle? Once you start getting up into the 20, 30 hours a week, is it a side hustle or is it a part-time job. Yeah. And this is the trade-off is like, shoot, you know, for those first few years, I probably would have been better off with a part-time job or better off like driving for Uber instead of like trying to build this thing.

10:01But I was like, this is something that can scale, you know, it takes the same effort to produce an episode that 10 people listen to or that 10 ,000 people listen to. So you're trying to aim for something that has some unique scale. I think the specific hours really vary by your other outside commitments. The real key there is consistency. And so if I can carve out 15 minutes, you know, here, half an hour there, you're gonna have most control over the bookends of your days, meaning first thing in the morning, last thing before bed, being proactive about it, building up that hustle habit of, okay, I'm going to make some proactive progress towards something that's important to me.

10:32And you kind of build that into your days and your weeks versus trying to do it in fits and starts where like, okay, if I just take a week off of work, I'm just trying to build this whole website and the momentum dies as soon as you go back to work, if that makes sense. Yeah. And have you uncovered any side hustles that can become or are in the beginning, completely passive income sources? I mean, this is like the debate, you know, is passive income a real thing or not? I mean, the most passive income is dividend investments. I just put the money into the market in these long-established companies and collect checks every quarter.

11:02And that's been fine. That's one way to turn money that you're in today into a smaller amount of money that you're in tomorrow, but like hopefully in perpetuity. I like these models where you can create something once and sell it over and over again, whether that's a book or a digital product or an online course or a print-on-demand type of product. I think those are the kinds of things that ultimately have some leverage, but it's those hours and sometimes weeks and months of toiling away for next to nothing early on that's like in the search of that passive income. So what's interesting is we found that most side hustle show guests actually started with a service-based business.

11:37It's like low overhead, don't have to create a product. You know, it's kind of sell my expertise or sell my service to somebody else and solve their problems. And then maybe that's not the business model that they end up with, but that kind of gets them in the game. Quick reminder for our listeners that if you're looking for more advice on how to run multiple businesses at the same time, you'll hear tons of helpful tips in episode 60 of our podcast, where we interview Search Forget, who runs five multi-million dollar companies simultaneously. Nick, in terms of mindset, what's the biggest difference between starting a side hustle and starting a full-time business?

12:10It probably has to do with your risk tolerance or risk adjustment. Like if you've probably heard the quote, I think it's Reid Hoffman. Like, oh, an entrepreneur is somebody who jumps off the cliff and figures out how to build the airplane on the way down. That sounds terrifying. And I get that some people kind of need that burn the ships mentality. You know, they're going all in. I think it's more realistic for people with families with other financial commitments, like, okay, start something low risk on the side, build it up and then lower the cliff a little bit, right? Like, let's just a tiny step off now versus something that's going to be death defying to make it happen.

12:39So that's probably the big thing. And then the other mindset thing is just this willingness to take step one, even if you don't know steps two through 10. Those aren't quite visible yet. There's a lot of people and I bucket myself into this category to kind of like the type A planners of the world. Like I want to see this roadmap laid out in front of me. It's like more often than not, it's the people who do the first thing, test something out and then adjust course. So we see that pretty consistently throughout the archives. How do you make sure that you have cultivated that right mindset to take step one, especially as you just so eloquently pointed out, one of the big differences between perhaps a side hustler and a entrepreneur in the truest sense is being a little bit more risk averse than the entrepreneur might be.

13:21Yeah. I mean, this is something that we're trying to cultivate in our kids. They're seven and almost five now and trying to praise not just success, but praise effort and praise trying new things and, you know, recognizing, hey, you didn't get it at your first try, but you tried again, you figured it out. I think that skill of figuring it out is probably the number one entrepreneurial skill. It's like, you're always going to bump up against the ceiling of your comfort level and capabilities. It's like, well, what happens next? I got to figure it out. I'm calling the shots here. When you did take that leap of the side hustle becoming the full-time hustle, what was that process like, first of all?

13:54And what was the kind of hardest part of that? Yeah. So there was the financial side of it, where it's like, I wanted to see a track record of revenue going back six or 12 months, probably wasn't fully replacing the day job salary at that time. I'd say I wasn't making a huge amount of money. So it was like a lower hurdle to even get to there, but it was covering our fixed expenses. We did have a savings cushion. So like, you know, if it blows up tomorrow, you're not going to have to dip into savings. We're not going to take on extra debt. So there was like that financial level of comfort, like, okay, we're going to be okay to, you know, lose this income stream from the day job.

14:27And then there's the personal fear side of things. Like I went to college, I got this job, I did what you're supposed to do. And now I kind of want to do this other thing, but am I allowed to cut my own paycheck? Am I allowed to go out on my own? Like, is this real? Like, is this allowed? And so there was a little bit of that, you know, even though there was that revenue coming in, it was kind of a scary leap to make despite that. Now, what if somebody wants to keep the side hustle as a part-time venture, how do you grow and scale in a way that keeps it without the maybe blue sky dreaming of scale?

14:58Yeah. So you're thinking in terms of leverage, am I leveraging an audience or a platform? Am I leveraging other people's time and expertise? If you're having a service business, like, okay, could somebody else go and provide that service? And I take a percentage for being the business owner or the matchmaker there, or, you know, in terms of a content-based business, like I have inherent leverage when this is discoverable on Google or YouTube, where the same piece of content could reach thousands and thousands of people. So trying to think of, how do I squeeze more juice out of like every lemon worth of effort, or that's probably a bad metaphor, but like, you know, squeeze more mileage out of every hour that I put in.

15:34When someone's getting started on a side hustle, what are some of the common mistakes that people make and how can they avoid making those mistakes? It pains me to see people stressing out over their logo and website and business cards. Go get a customer first. It pains me to see people just kind of sitting on the sidelines waiting for that inspiration of the perfect business idea that's never before seen, you know, to come along. I don't think there's some risk in that. Like if somebody else has done the thing that you're thinking of doing, like, okay, they've already proven the market in a way.

16:02And you can come and offer that to a slightly different audience or put your own unique spin on it, common mistakes, getting stuck on the sidelines, spending too much money up front before validating the idea. Those are probably the big ones that come to mind. How do you avoid burnout when you're getting started on your side hustle and you've still got a full-time job and theoretically some other commitments, whether or not you have a family and kids? Yeah, this is a huge issue. And there was a piece in the New York Times a couple of years ago, the con of the side hustle, which it was more on the geek economy type of stuff.

16:32It kind of ignored the entrepreneurial upside. It was like, why are we glamorizing the need for a second job? And it's like, that's true. If you are putting 40, 50 hours a week into the day job and trying to stack on another 20, 25, 30 into getting your side hustle off the ground, if you don't have that driving why, if you don't have a supportive network of family and friends and even online peers and colleagues to go and do this, super easy to get burned out. And especially if you're not seeing the results from it right away. So it's setting boundaries in your life, boundaries in your schedule, like, okay, I'm still going to have to shut this off at a reasonable time.

17:05And the exception or maybe the, you know, something I want to point out is like this idea of sprint and rest or, you know, periods that seem a little bit crazy versus like, okay, if I can, and I'll give the example, this was Rachel Peterson on the podcast, who was building a social media marketing agency. And she described this kind of like two or three month sprint where she knew it wasn't going to be sustainable, but that's what was required to get the income up to a certain level to quit that day job. And so I can't recommend this sprinting 80 hour week lifestyle for the long term. It's just not sustainable.

17:37But sometimes you almost have to do it to get to the other side. Do you have any software recommendations or organizational systems that you can recommend to kind of organize the workflow, especially in the beginning? Gosh, I remember my first virtual assistant hire for the shoe business. And, you know, I was having him create these Google ads. And this was a process that I'd been doing myself for years and years. And it's like, how is he not getting this? Like, what's so hard about this? I can crank these out. It's like, oh, you've been doing it for months and months and years on end. It forced me to create that process documentation and, you know, the checklist and the step-by-step instructions.

18:10Give them the recipe to follow. Set them up for success. And so today that process library just lives in Google Docs. And there's a handful of different team members that can pick and choose. And they're living documents, which is another thing that I learned from another virtual assistant of mine. She's like, well, have you ever thought about doing it this way? Like, no, but actually that's way better. So yeah, update the process file and we'll do it your way from now on. So that's kind of how I keep track of that stuff, that like checklist, you know, getting it out of my head into a format that can be delegated to somebody else.

18:38So I don't really lean on the software side. We can geek out on software tools all day long, but just from an organization standpoint, that's probably the big one. A lot of stuff lives in Google Drive and Google Docs. Now, I want to tap into your knowledge of the wide world of side hustles here. And I guess I want to start with what are some profitable side hustles that require little to no money up front? Full to know money up front. I mean, the online business example is one that probably checks that box. Yeah, you're going to have to register a domain name. You're going to have to buy hosting for it.

19:09But it's something that does have some unique scale and you're putting in your own time, likely early on to create those articles, create those podcast episodes, videos, etc. That's one that comes to mind. Any type of service based business where it's like I'm selling my expertise as a freelancer, as a consultant, absolutely a viable model, almost zero startup cost. Probably maybe you have to like register with your secretary of state at some point down the road, but like, you know, really easy to get started as a sole proprietor. And the model that I might pursue there, if I was starting over today, would be what I call like the software with a service model in that you kind of hit your cart to the rising tide of popularity of an existing software tool where the company is investing in growing their user base.

19:51And if you can be an early adopter of that tool and provide helpful content that says, you know, here's how to do XYZ using this tool. And you put that up on YouTube, introduce yourself as a consultant, you end up starting to get some views on those videos. Ultimately, you can monetize. But in the near term, which are really after these consulting calls, could you come in and train our team on this? Like, you know, we don't know what we're doing here, but we, you know, we invested in this tool and we want to figure it out. We've seen people do this with QuickBooks and Asana and Salesforce and ActiveCampaign and, you know, Ahrefs, like lots of different software tools where if you can be an expert in that, you kind of almost tap into some pre-existing demand.

20:26What about the highest paid side hustles, whether or not there is a large upfront investment? The highest paid. That's a good question. I mean, some of the most lucrative business owners that I've interviewed have been in the online business space where, okay, if I have blurred my SEO correctly, you know, now this website that, you know, two years ago didn't exist or two years ago didn't get any traffic is now breaking in$50 ,000 a month in affiliate commissions. Like, okay and because it's bringing$50 ,000 a month in affiliate commissions that's a million dollar asset if somebody were to buy it you're building up not just the one-off income but also like the equity in the business so that's really interesting and some of the other high value ones are the recurring revenue service provider type of things where especially if you build it from the mindset that you're not telling yourself as an expert but you're kind of like solving a problem you're doing in a unique way.

21:19The most recent one we did on the show was Ryan Golgoski runs a service called 180sites.com. We're selling like a web design service and selling it specifically to like people who have pressure washing businesses. Like you built this whole business. What a random niche. But he was doing it when we spoke. I think he just crashed a hundred thousand dollars a month and he was selling it as a recurring service. Like instead of a big, you know, one-off expensive web design investment for these companies, like, oh, look, I just charge him 200 bucks a month for the first couple of years. And then, you know, a lower retainer after that, hosting included, you know, website tweaks included, design included, like, dang, I thought that was a really innovative way to go about it, to set yourself up for recurring revenue.