Daniel: So we’re here today to talk about the side hustle, and people talk about the side hustle but if you’ve never done it, how specifically does it work? And Steve, I believe you have a story to start us off.
Steve: Yes. This is a story about a guy who went from working small jobs on the side by himself to pitching corporate clients as a team and having nearly $40,000 in the bank, all the while keeping his regular job. So let’s call him George, as in George Jetson. He had a regular full time job in the IT department of a well known large company. I met him while I was working on a project there, and the thing which connected us, why we were both on the same project, is we had experience in the employee time system that we were implementing there. And it turns out, we had both worked for that software company in the past at the same time, in the past, but we didn’t realize it. We didn’t know each other until we met on this project.
Well I had a problem while I was working on this particular job, and it was that I had a client on the side who needed a system administrator to implement this app. This is a smaller client than the full time project that I was on, and I knew that George had experience in this app. And the client really didn’t need somebody full time, they needed somebody part-time, and I didn’t have the system administrator skills that they needed to install the software. So one day over lunch, George starts telling me about some of his own side hustle gigs. I didn’t know he did that. He does some software development on the side, he does a little one on one training for up and coming programmers, and all of a sudden for me, bingo. George is really doing side hustles now, side hustle jobs, and he had the mindset for it.
So, I tell him about my client, and my pain, what am I’m gonna do? How am I gonna find a system administrator? And so I just hit him with the question. “Would you be willing to set up server environments for this client on the side?” Here’s the rub, it would probably take a day or two initially to get the environments up, which is kind of a big hit, but everything after that is pretty easy, not urgent, one to three hours at a time, pretty flexile. Man he didn’t hesitate. He was totally up for it.
Now the interesting thing is, he ended up working for this client for about three years. On and off, small requests, things like that. And he and I went on to pitch other clients doing the same thing, and I remember looking at what he had earned on the side after that three year period. I just happened to be looking one day. Turns out he had pulled in about $120,000 over a three year period, all while maintaining his day job.
Daniel: Well you know it’s interesting, I listen to that story Steve, there are a few things we can kind of extract from it in the way of sort of best practices for initiating a side hustle. And so, you might say that number one is, start your consulting practice on the side before you leave your job, obviously then you’ve got a source of revenue, you’re not jumping without a net. Number two might be to get comfortable with that feeling of working on the side over time. Number three might be looking for businesses who only need you part-time, obviously don’t need 40 hours a week. And fourth is get that first small engagement and get started. But I wanna ask you if, do you think that’s right, and also what does it take to really get comfortable with the feeling of working on the side, you know, what does that mean, since that’s kind of an open ended concept?
Steve: Those are all right, those steps. And to get comfortable, I think you have to have kind of a hunger. A hunger for more independence, “I’m gonna do what it takes to develop my own endeavors, my own professional freedom, and I’m talking about financially as well as professionally.” And George had that, he definitely had it going because he was already doing things on the side. So that was really key, but some of the missing parts was he didn’t have the opportunity until we serendipitously met, and then it kinda clicked together, so soon as the opportunity popped up, he was all over it.
But the other thing in terms of mindset that I think is really important and it shows in this story is, he was willing to take a couple of days of vacation on the initial setup for this other client, and not everybody thinks that way. I would encourage them to if you’re thinking about going down this road. But in his case, he right away, I didn’t have to tell him, he said, “Yeah, I can take a couple of days of vacation. I can take days off and go on sight to this other client, get them set up.” ‘Cause he understood, it’s his line of work, he understood after that it’s all smaller pieces. So yes, all of those factors start to come into play, but you gotta, the thing I wanted to convey, is putting it together. Thinking it through like we’re describing here.
Daniel: So I got a couple of questions about this process. Let’s go a little bit deeper. Because it all sounds good on the surface, but item one. What about this? Are we worried about spies or rats, you know when you say to somebody else, “Hey would you like to do some work on the side?” Or “I’m doing work on side,” do we worry that somebody will essentially tell and cause us a problem? I mean Steve, when I went, when I started to side hustle, I sort of protected myself. I put an entity in place. I put an LLC in place, and I told them when I came on board to my next company, that I have my own company and I doing work in the evening, and weekends and stuff, and it won’t distract from my business or the company. So that kind of gave me cover. But do you think that’s necessary, or how would you approach this?
Steve: It’s useful, and I think it’s really smart to do, although it’s a gamble during the interview process or early on in the job. You know some companies, where they technically can’t prevent it, some companies are going to shove you aside of look for an opportunity to get you out if you say you’re going to do that kind of thing. So, and in George’s case, he was already in the company. I don’t believe he was actually working jobs on the side, or maybe when he started this company, but along the way, he’s thinking, “Yeah I want to start doing this.” At least that’s what the impression was that I got from him. So one you’re in it, and you want to start doing it, you’re in your job, you can’t exactly then say, “Oh, you know now I’ve got this company on the side, I’m going to start doing this.” It sends the wrong signal in most cases.
The other thing that was a hesitation for me is, not everyone has this mindset, and I’m using this phrase, and maybe this will illustrate point, is even as a contractor, I don’t want to go walking up to people who are working in the client company in regular jobs who are interested in career survival. They wanna enhance the career, they don’t want to do anything that might cause them to be shoved aside. And so this, it works both ways. I wouldn’t want someone to be approached with this kind of question and feel threatened to even to have had the conversation, and I wouldn’t want them to go telling a project sponsor, “Oh Steve actually approached me about this, and I’m not so sure he’s a good fit for this particular project.” In most cases, this isn’t a big deal, but in some client situations it can be, and so I was definitely uncertain and that’s why I didn’t approach George right away, but then as soon as I found out he was already doing some things on the side, I like, “Okay great, this will work.”
Daniel: Well I think we kind of smell our own a little bit, so you can kind of tell the difference between a careerist and someone who probably has some game. You know I live in New York, and in New York, everybody’s got a game on the side, because you gotta pay your rent and if you don’t have something, you know a standard salary usually doesn’t do it, no matter how much they’re paying you. You’ve got goals, man. But full disclosure, you and I are partners in Free Agent Source, which is a company that allows independent consultants to work on the side, and have sort of a company entity umbrella over them, and provides some of that cover. But I wanna ask you another question about that.
So is it harder for employees, standard W2 employees, than for people who work on projects? Because you and I both did it Steve. We launched our side hustle while we were already doing project work, although I was a project employee, meaning I was actually W2, but it was understood that this wasn’t my career future. It was a 10 month project that like most projects, turn into two years, or you know double the time. But it was still a project. So what’s the answer to that? Is it harder for W2 employees than project workers?
Steve: Yes and no. So let me give the yes, it’s harder part first, and then the no it’s not harder part second. Yes, it’s harder in that if you’re a full time salaried employee, there’s an expectation that you’re basically giving it your all, and why would you be working anything else on the side. And so, whereas a project employee, or project based employee, or a contractor in both cases, it’s kind of on the table, that “Yeah this is a limited engagement,” and thinks we could end up parting ways at the end of the project. In the case of a contractor for sure. In the case of my work, it’s all above board and people understand that I’m looking out for the next engagement and sometimes there’s additional clients and all kinds of things like that.
So for full time salaried employee, there is still that sort of cultural expectation of giving it everything. Not only your mind but your emotional commitment and all of that. Now we’ve talked about in other conversations that, but that’s not actually an economic safety net, and everybody’s kind of starting to look out for themselves on the side, and I think that’s a wise way to go.
Now let’s talk about the no part, that it’s not harder. It’s not harder once you decide, “I am gonna do things for myself on the side. And there are multiple ways to go about it. We’ve already talked about it. Look for clients who need skills that you have, but not on a full time basis, and find ways that you can serve them. For example, one of the things that I’ve told people, it’s kind of useful if you find clients in a different time zone. So if we’re on the west coast and we have an east coast client, very easy to get on the phone with them in the morning before regular hours and vice versa, if you’re an east coast consultant and you happen to pick up some clients out west, then that’s awesome too, because at the end of your regular day, you can just schedule all your calls with your client in the evening. So there’s some practical things like that.
No we do have this issue of entity which you talked about. A lot of people spin up their own LLC on the side, and that’s a good experience. In George’s case, he didn’t have one but I did, so he just came in and used the entity that I was already using for this client, and that was easy, and of course he loved that too, ’cause now he’s getting into an enterprise client as a team member, you know we’re pitching together, working together, and he doesn’t have to think about incorporating. So that’s what I mean, the no part. There’s some very simple steps that are possible.
Daniel: That’s why I preferred contract work actually over W2. When people would ask me, “Well don’t you worry about benefits and permanency and all of that?” Because by choosing contract work when I had a choice between working contract and W2, it implied that I was sort of less than full on approach and that I would have other irons in the fire, and of course I intended to and so, that helped me achieve my goals. In the time we have remaining as we wind down Steve, I wanna ask you what happens if you get a bigger fish on the hook? You know you go fishing for guppies and you catch a shark? They want more hours than what you can do, so it’s not two or three hours a week, it’s they want 30 or 25 hours a week and it’s not possible. What do you do with those guys? Do you throw them back in the water?
Steve: The answer is always yes until it’s really no. We often filter out those opportunities when it might work out, and so now I don’t meant deception, I mean let’s explore this when that big fish opportunity comes up, because a few different things can happen. Number one, it might turn out to be such a good opportunity, you might end up be willing to leave your current job or your current situation or somehow wind down your current client. You always have a chance to also introduce a colleague or a peer, either to the new big fish, or to replace yourself on your current client engagement or your current job with someone else.
A lot of times a client, and this is sort of a third point, a client will come in and say, “I’ve got this really big need,” and you can sort of talk them down off the ledge if it actually isn’t that big a need, and once they hear your side of it, how this project might be executed, they might do a, “Oh, now I see, maybe it’s not such a big deal.” So there are many options that might come into play, and I would say, just keep talking until you figure out, “Oh I really can’t do this.” It’s yes, the answer’s always yes until it’s no.