Afford Anything - Start a Micro-Business & Build Multiple Income Streams, with Nick Loper

Episode Date: February 10, 2023

#427: Okay, maybe the phrase “side hustle” is overused. But it’s also misunderstood. “Side hustle” is a catch-all term that people use to describe everything from low-paid gig economy labor – Doordash, Uber Eats, Rover – to six-figure consulting for Fortune 500 companies.  On the remote-work side, it includes everything from freelance graphic design (services) to selling bundles of presentation deck templates (digital products).  On the physical goods side, it includes everything from wholesaling (real estate) to flipping antique grandfather clocks (personal goods).  On the e-commerce side, your side hustle might mean starting your own manufacturing, white-labeling and shipping services, in which you distribute toothpaste or trash can lids or desiccant packs. How do we make sense of such an umbrella concept? In this interview with Nick Loper, we learn how to wrap our minds around the huge world of hustles. We talk about how to understand the options available, choose a path, and start with minimal capital. This interview originally aired as Episode 85. Enjoy! Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything, but not everything. Every choice that you make is a trade-off against something else, and that doesn't just apply to your money. That applies to your time, your focus, your energy, your attention, any limited resource that you need to manage. And that opens up two questions. First, what matters most? And second, how do you make decisions that reflect your priorities?

Answering these two questions is a lifetime practice, and that's what this podcast is here to explore. I'm Paula Pant, the host of the Afford Anything podcast. Many of you have been writing to ask about side hustles. We've had a big influx of questions related to side hustles making more money. We're seeing more interest in that than ever before. And I think that's for a couple of reasons. Number one, there's a lot of transition right now. There was the great resignation that started during the pandemic. There's the overall labor shortage, which gives people a lot of flexibility in the type of work that they do, and often that leads to the idea that, hey, if I've got flexibility in the jobs that I get,

what kind of flexibility do I have in the projects that I start myself, the things that interest me that I want to monetize? So you've got the great resignation, you've got the labor shortage, now you've got big tech layoffs also happening, which remind people that it's dangerous, It's risky to rely on just one single source of income. If something happens to your job, your income goes from 100% to 0%. So multiple streams of income is a way of getting some income diversification in the same way that you want diversification in your portfolio and your investments. You want diversification in your income streams as well so that if you do lose a job,

heaven forbid, your income doesn't drop to nothing. Maybe you lose 70% of your income. That's still devastating, but at least you've got something. So I don't know if those are the reasons why we've been getting so many more questions lately around side hustles. There may be other reasons as well. Just anecdotally, I know that we've seen a big uptick in this. And so for today's episode, I want to play one of the gems from our archives. This is an interview that we did with Nick Loper.

He's the founder of Side Hustle Nation and a host of the Side Hustle Show. Like many people, Nick used to work at a full-time job that didn't excite him. But unlike most people, he decided to escape that. But he had a lot of missteps along the way. First, he launched a shoe comparison website. It became increasingly profitable over time, so much so that he thought he could run it full-time, so he quit his job, and then all hell broke loose.

Within days, his website lost 80% of its search traffic and 80% of its advertising revenue. And so he found himself both unemployed and without a viable business. He spent many months correcting course just trying to get his business to become solvent. But that was when he learned about the importance of creating multiple streams of income. So he launched multiple small side businesses in order to diversify his income, diversify his revenue stream. Some of them succeeded, others quietly fizzled out. But because he made enough small bets, he wound up with a handful of winners. And so his income now comes from a cacophony of different sources.

He is income diversified. And so in this upcoming interview that you're about to hear, he's going to talk about how to create small micro businesses, that's what a side hustle is, small micro businesses that provide a supplemental source of income. He's going to talk about how to make small bets. And he'll discuss the distinctions between many of the things that we tend to aggregate under too broad of an umbrella. So there's a distinction, for example, between the gig economy, Uber, Lyft, Instacart, TaskRabbit, right? That's the gig economy.

But then there's also freelancing or expertise-based businesses where you're monetizing your knowledge, not just your time. And then there are e-commerce businesses. In fact, there are a few models for that. There's retail arbitrage in which you find and flip items, and then there's private label in which you design, manufacture, package, and import your own product, often white labeling products. So there's a lot inside of this world of side hustles. And we're going to hear an overview of how to make small bets so that you can diversify your income stream. We're going to hear that from Nick right now. This episode originally aired as episode 85.

But we're pulling it from our archives today because it is. as relevant now as it was back in episode 85 when we first aired it. So I hope you enjoy. I will meet you at the end of the show. Nick, I'd like to ask you about ways that the people who are listening can develop outside hustles. But before we dive into that, very briefly, can you introduce yourself and give a little bit of your story? Sure. So I am the chief side hustler at side hustle nation.com. It was a project that started appropriately as a side project from the main business that I was running at the time, which was called Shusniper.com. It was a comparison shopping site for footwear, which started as a side hustle to my main job, which was slinging parts for Ford Motor Company to their different dealers throughout the south and northern California as well. It's been four years.

I've tried to spread the gospel of this lower risk brand of entrepreneurship and trying to figure out all the different ways. to make it happen. And I don't think I've even scratched the surface. There is, you know, every week, I'm constantly amazed by different people with different stories on how they're getting it done, you know, crazy businesses. And that's really my favorite part is just learning from all these amazing guests on the side hustle show. And you're like, I didn't even think of that. So I love it. So you had a full-time W-2 employed job and you started a side hustle in which, which was a shoe comparison website. Yes. And then after starting that side hustle, what happened? Like, how did that, that grew, I assume, and became reasonably lucrative-ish?

Lucrative-ish. So it had lots of ups and downs. So the first, actually the first day where I'd, you know, turned in the keys to my company car and kind of had naive visions of the four-hour work week in my head, Google came and slapped me down. They put me in my place and they said, your advertising account, which was kind of accounting for 80% of the traffic and revenue at that time, no longer meets our quality guidelines. And I was like, you've got to be kidding me. You know, you haven't had a problem for this with this for the last two years. Would you mind, do you think you could have told me before I, you know, just quit my job? Yeah. So back of the day you quit your job was the day that your business lost 80% of its revenue. Yeah, they conveniently

waited until after the two weeks notice was up. And it was like literally day one of self-employment. And I was like, this is going to be great, you know, crank up the laptop. And it was a nightmare. I was like, you know, you go through the seventh stage of, you don't denial and then anger. It was just, it was a really stressful summer. So we made a bunch of changes to the website to try and like get back into their good graces. And they wouldn't really tell you exactly what they were looking for. But they came back three months later and said, you know, we made an error. You're good to go. And it was just like, you know, the floodgates were open again. And it was fine. But it was kind of, you know, hit me as like, you know, I thought I was diversified. Because. You know, you know, I thought I was diversified. I had 30 or 40 different retailers or advertisers on the site, but if you peel it back one layer, really just had that one source of traffic. And it was pretty devastating. So immediately it was like, okay, diversify, diversify, diversify. So trying to figure out, you know, even during the time where I was running that business as a full-time thing, he was trying to start other things on the side to, you know, hedge or to

just because it was like, well, you know, this, there's only so many hours a day you can think about choose. We try and figure out what else to do. And so started a couple, actually started probably a dozen different projects during that time. Most of those have died a quiet death in the corner of the internet somewhere. But a couple of them have lived on. And one of those was the side hustle nation site. Interesting. So you became enthusiastic about side hustles because it was a way to create multiple streams of income and diversify your income sources, particularly as an entrepreneur. Right. So it started as just, you know, focus on this one thing, trying to get it up and running. And then once it is, okay, now how can I, you know, what's next?

Trying to figure out, okay, how can I expand my empire or something like that. Interesting. So a lot of the people listening are interested in developing some type of a side hustle or a side business, but they're not quite sure what to do. Could you outline for us if you want a side hustle, but you don't know what to do or how to do it, where do you begin? Well, let's dive into this stuff because this is where it gets fun. And the important point I want to make before we even get started is choosing what's next.

It doesn't mean choosing what's forever. So what I was doing, I mean, the work that I was doing five years ago would be unrecognizable to the work that I'm doing now. And the same goes for five years before that. So just getting started, I think is probably the most important skill set or the willingness to get started and test something out. I think we'll serve you well. And, you know, of course, there's a million pivots and stuff down the road.

And that's totally fine. But the three kind of overarching ways or maybe the fastest ways to get started, like to present are the peer-to-peer economy or the sharing economy or the gig economy, whatever you want to call it. And we'll talk about some ways to get into that beyond just driving for Uber or, you know, renting your spare bedroom on Airbnb, although that can be very lucrative. The second category would be freelancing or selling your skills or knowledge in some way. And we'll talk about how to do that for higher paying gigs and also how to do that in a time leveraged way. We can kind of package up that expertise and sell that in a one to many fashion instead of just, you know, one to one.

I'm going to deliver this work. And the third way is kind of the age-old business model of by low, sell high. And we've seen people build tremendous, I mean, this is Amazon's business. This is Walmart's business. We've seen people build gigantic businesses. And you can start with really as much, with as little as you're comfortable investing in inventory. A friend of mine, he calls himself the flea market flipper and spends every weekend. at the flea market looking for weird stuff to buy and sell. He says his wife got started in the business. She won't buy anything for more than $3. So it's like specializing in baby items. So you can get started for as little as $3 in that business or even free on the free section

of Craigslist. But those are kind of the three areas that I'd like to dive into or I'd like to share with the afford anything people. Excellent. All right. So number one, the sharing economy. Number two, the freelancing slash expertise based economy. And number three, e-commerce. We'll talk about all of those. Let's start with the sharing economy. Go ahead. Okay, so the best known in the sharing, or best known apps in the sharing economy are companies like Uber, like Airbnb, like Lyft, like TaskRabbit, where TaskRabbit, if you're not familiar, it's like a gopher service. Like I need somebody to come and be a handyman or I need somebody to, you know, fetch my dry clean, whatever like that. When I use it, found a handyman to come over and like fix our mice problem and knock on wood so far,

no more mice. So it was awesome. The, Where I think the opportunity lies in the sharing economy is like if you have a big underutilized asset to rent or to sell, right, like your spare bedroom or your mother-in-law unit that doesn't have to be used. Like obviously, and if you live in a desirable area, that's a fantastic asset that you're sitting on that might be able to be generating revenue for you. On the car side, like that's another expensive asset you might be sitting on as an underutilized piece of machinery.

I met a guy in Florida who was using the rental site, Turo.com. And he started out with just like his, he had a Ford Escape that he was renting on this site. And then, you know, when it had, you know, we kind of at capacity, he was like, I was traveling for work or, you know, we didn't need two cars. So we could use, we could rent the other one out. And then he ended up taking a lease out on a couple new SUVs. He's like, I was a little bit nervous because it was like $500 a month in new lease payments. but right away they were bringing in $1,500 a month in, you know, rental fees on this site. And so he's kind of, he's building out his own little mini fleet.

So that's one way to start. It's kind of like with the asset model. But the ones, sorry, go ahead. Well, so what's interesting about that, because when I hear you give these examples, with turo.com, you have a vehicle which you rent out. So it doesn't, you're literally just renting out the piece of equipment without dedicating your time to it. Whereas with, say, becoming a driver for Uber or for Lyft, the asset that you're really renting out, it's partially your car, but it's also largely your time. Right. And that's a great

example. With Uber, with Lyft, with driving for these services, and you've seen them constantly cut rates over the last three or four years because they're playing the supply and demand game. It's like, well, people are willing to do it for $30 an hour? Are they willing to do it for $25? Let's see. Are they willing to do it for 20? Let's see. And you can see Uber's test driving a fleet of driverless cars. It's pretty clear, you know, where they're going. And I think that's true with all of the sharing economy.

Because you can do grocery deliveries for Instacart or shipped, I think, is really big in the southeast. But if anybody can do it, anybody will do it. And it kind of puts a natural downward pressure on how much you can earn. So kind of where the, I think, the opportunity lies is maybe in the hybrid space between kind of these. sharing economy platforms and then something that utilizes a little bit of your own expertise. So an example would be like rover.com, which is dog sitting. It's like Uber, Airbnb, but for dogs. So it's like, okay, if you have some animal loving background, like you can do that. Somebody has sent me a note and was like, I'm going to make 20 grand this year on Rover.

I was like, that is nuts. How many dogs do you have at one time? Another example would be kind of like a meal sharing platform like eat with. So eatwith.com you can host dinner parties and you kind of kind of like can play amateur chef in your apartment. So I met a woman in D.C. who was doing this and she, I think she had some sort of culinary training, but was looking at, you know, kind of making a career change. And I was like, I do not have the capital to start up a restaurant, but I can fit 12 people around my table. and another handful of people at the bar, and now I can do these dinner parties. You know, 50, 60 bucks a night.

You get to design your own menu, kind of a fun thing. I met another guy who is a mechanical engineer. So he was doing CAD design, 3D printing and CAD design on a platform called Thumbtack.com, which is more known for, you know, local services, you know, painters and cleaners and home services. But he was doing most of this work virtually because people were putting up bids on there.

And so he was kind of using that as a way to connect with his clients. There's another platform called the Expert Institute, which I actually haven't used because I don't know if I'm an expert enough in anything, but it's basically used by attorneys to find expert witnesses for trials. You could pay like $100, $200 an hour if you're like the star expert witness on whatever topic this trial is about. So I thought that was kind of an interesting angle on the, on the, peer-to-peer platforms. So I think a couple of things that I'm hearing from you.

Number one is that if you're interested in the type of gig that doesn't require any particular expertise, then you are most likely going to get trapped in a race to the bottom in terms of prices. Because as you said, if anybody can do it, anybody will do it. But if you can find a sharing economy opportunity that harnesses some expertise that you already hold, then you are much more likely to be paid well for your time. I think you're better off in that. And that's probably the same true as like any kind of employment situation.

Right. So an interesting platform that I've been playing around with is clarity.fm. It's like kind of an on demand by the minute consulting platform. Yeah. And it's primarily, you know, tech and startup and marketing based, right? But people, and what's cool about it is like there's a price floor at 60 bucks an hour, so a dollar a minute. And so you don't have the tendency that you find on Upwork or other freelancing platforms where it's like, okay, I'm going to bid super, super cheap to, you know, try and build a portfolio and attract clients. And so you kind of, we can automatically go in there and, you know, it's another search engine, right?

Each one of these could be considered its own mini search engine for discovery. And that's what I think is cool about it. And Airbnb is a great example of that. Amazon is a great example of that. Even iTunes for podcasts, right? It's like a smaller search engine to play around in versus, well, I'm going to stick my, I'm going to do 3D CAD design and hopefully somebody finds me in Google. It's like, well, here's a platform where people are already looking for it and I can get in front of them that way. For the people who are listening who have some type of expertise, but they're not sure what website would allow them to sell that, how can they start that search? Like, for example, if somebody was good at CAD design but had, you know, didn't listen to this episode and didn't know about Thumbtack.com, how else would they be able to find that?

there's well I've got a resource for you if you don't mind linking it up in the show notes and it's got like 200 something of these different platforms so that might be one place to start is it took a while to compile that so perfect yeah we'll link to that in show notes yeah definitely let's move on to talking more about building out on expertise that you already have yeah we're moving we're moving up the spectrum and one way or one interesting platform is like a tutoring type of platform and you see a lot of freelance tutors and you know they'll post there are flyers at the coffee shops and they'll get in touch with the guidance counselors and stuff. And that's totally a viable way to do it. But what kind of cool way that I've found or that people have approached me about is, you know, online tutoring platforms. And probably the biggest and best known is one called Wise Ant, like W-Y-Z-A-N-T. You can start out there. Primarily people will want to book their first session in person. And then, you know, maybe once they build up that trust, you can kind of graduate to doing that online. But the cool thing is, so I was looking for, you know, math help near me.

And people were making decent wages, you know, $50, $60, $70 an hour for this, you know, for this specific expertise. And like all these platforms, they have like a rating system, right? So as you build up your reputation, you can increase your, you know, you can bump up your rate and be like, well, this guy's got 25 positive reviews. Like, I definitely want to see him versus the guy who's brand new. And so then that's one way to kind of scale that up. The other one, I actually met a dude in Boston who was an adjunct professor, which I guess you could do as a freelancer.

And he was doing this at like a dozen different schools. Huh. And so some of them required him to, you know, present the lecture live. But others of them, this is what really allowed him to do this, was pre-recorded. The record it once. He's like, I teach business law and ethics. at all these different schools, and it's like, you know, I got to read the essays when they come in, but, you know, all of the content delivery was automated. I was like, dude, this is crazy. And he's,

you know, getting paid whatever flat fee per semester or per quarter. So, you know, I think a master's degree was required. But for highly educated people, like a really cool kind of side business to do that. That is really cool. I've never heard of that before. Adjunct professorship. Yeah, on demand adjunct professorship. Yes, very cool. Automated. Automated. Now, so the traditional model is like, I'm going to be a graphic designer, I'm going to be a website designer, I'm going to be a freelance writer, and I'm going to go hustle for clients. And that's totally cool. Like, there's nothing wrong with that. My wife is a freelance wedding photographer as her side hustle. She's an engineer by day, because this is what she does nights and weekends a lot of

time, especially during the summer, during wedding season. And she actually ended up getting her first clients on Craigslist. There's an ad on Craigslist. I was like, who's looking for wedding photographers on Craigslist, you know, says the marketing major. And, and And within a week, they'd booked up like half a dozen gigs. And I was like, all right, all right, I was wrong about that. I'll give it to you. But it was like going, and that's probably the theme with all these, like going to where your customers already are,

going to where they're already searching or they're already doing business. And so where they found success later as they raised their rates was, you know, doing venue-specific wedding shows. And you can kind of look at this, you know, across any different, you know, freelancing platform. And, you know, whether you want to bid for gigs on Upwork or Freelancer.com, which would stay away from that site. I don't know. I like Upwork a little bit better. It seems like a little bit different clientele. But the reason people are on those sites, right, is because they don't have a guy. They don't have a person that they can go to for when I need

graphics. What I need, you know, so that's the reason they're looking for it. And so if you can find a way in with your network. And even if it's just raising your hand on Facebook and say, hey, guys, I do freelance web design. If you know anybody who needs, or better yet, I do freelance web design for realtors or like trying to niche it down. So it's like, oh, next time I'd come across a realtor, I'd be like, hey, I know this guy, you know, where it's easier to make that referral, kind of tapping to your network's network in that sense. So I like that kind of method of the, you know, of the freelance, kind of like selling your skills for, basically it's time for money, but it's kind of like on your own terms. You can set your own

schedule. Right. And I like what you said about raising your hand and tapping into your own network is particularly if it's a niche network because Nick, as you and I have both seen within the personal finance community, there are a handful of people who they freelance heavily within the personal finance community and develop a reputation within this community. And, you know, once you get into the niche of people who blog and podcast about a particular topic, and it doesn't matter what that topic is, whether it's personal finance or horses or, you know, upholstry. Yeah. Or chair upholstery.

Like, it doesn't matter what the topic is. Once you get into that niche topic, the people who are content creators around it, that's a small community. And so if you get into that community and you develop a good reputation there, it's very easy to get referrals. Totally. We give the example of Steve Stewart for podcast editing, podcast production, and Grayson Bell for like tech support, website support all the time. They've done this expertly.

You know, they've kind of embedded themselves in this community. And it's so easy. Hey, I'm struggling with question XYZ. How do I make this widget go on my WordPress site? And, you know, there he is, raising his hand. Here's how to do it time and time again. It's like, man, this guy really is the expert. Why don't I just pay him to take care of it?

And he's built his whole business that way. It's been awesome to watch. Yeah. One tactic that another guest of mine shared was going into Facebook groups made up of your target customer and using literally the search bar for words like help, struggle, challenge, trying to look for people asking questions. And hey, if this is related to my area of expertise, like chiming in on that thread and, you know, trying to be as helpful as you can, like not in a spammy way. But then, you know, there's kind of a fast track way to establish that reputation as. Is somebody helpful? Because people are asking because they don't know. And then if you can kind of guide them to the answer or maybe that's a product or service that you offer, all the better.

That's a very good point. It's a very good idea. All right. So what we're talking about now is still kind of like in this time for money phase. And so you might be, well, you know, I'm doing that in my day job. So how can I leverage this a little bit? And I've come across some pretty interesting examples. Actually just last week on the side hustle show was a gentleman who was an adjunct. He was a, he's the executive director for a homeless shelter in Illinois. And he got asked to do some presentation at a library group. So he does the speech. And the crowd, I don't know, it's like standing ovation, like a really rowdy library crowd, right? And you're like, can you come train our staff? And he's like, no, I'm doing this day job thing.

And, you know, so he's like, but tell you what I'll do. I'll record this YouTube video and you guys can use that as training. So he puts up this like half hour of video. and checks back a couple years later, the video has like 10,000 views, 12,000 views. And he's like, man, apparently there's quite a bit of demand for this. And so then he kind of like, the wheels get spinning. And he's like, of course, I've read the four-hour work week at this time. He's like, how can I, you know, leverage it?

So he puts together this whole online course about teaching librarians how to deal with homeless people in kind of a confident and compassionate way. And he's, you know, now the benefit of this is instead of saying, selling individuals, he has like a very targeted list of customers he can reach out to and say, this is, I built this explicitly for you. And he's even gone one step further and be like, you know, you can test the entire course for free, you know, for one person on your staff. And if you think it's valuable, you know, then you can buy a license for it. And it's like, man, this is like such a cool, such a cool business. Super, super niche. But a way to leverage his expertise in a pretty cool way. Hmm. And is that something.

that you see a lot of people get more success by niching down? I think it's so much easier to reach a target customer that way. So the, you know, if I wanted to teach a course on like general freelancing, that's doable, but it's a lot harder than saying I will teach you how to become a freelance writer in the personal finance space, right? It's like, you know, so much more well, well defined. Another example, I met a guy, also a former engineer, who now makes a full-time living, selling piano courses. Like, I'll teach you how to play piano. And his hook is like, I'll teach you how to play modern songs on the piano in 21 days or less.

And I think he made like 20 grand last month doing this. It's just nuts. And so he showed, if you search in YouTube for like how to learn piano fast or something, like he owns those keywords because he's created the content around. He's created the videos around that. And he's going, I think if you search in Google, you know, he's got ads that'll pop up for that. So he's doing really well with his business that's based around his expertise, whereas the one-to-one model would be like, oh, I could teach piano lessons in my living room. But the one-to-many model is like, okay, I can put this online and I can build it once and sell it over and over again.

And that's what's great about that one-to-many model. Or I like to think of it as one-on-one times one million. It's scalable. You know, you can reach so many more people and you can leverage your time so much better. Yes. Yeah. Another example was a weight loss coach who started out. She'd lost a ton of weight.

Her neighbors were asking, how did you do it? And so she'd give them the recipes and all this stuff, and they wouldn't take action. And so she eventually had to start charging people to have a little skin in the game. And that's when people started doing really well with it. But she's transitioned too from this one-on-one weight loss coaching to now doing group programs. It's still for a pretty high dollar amount. So she's kind of, you know, even though this is not an expertise, she has by, you know, college degree or certification. It's just, hey, look, these are the results

that I've seen. This is my system to get there. I've helped other people at this point. And I believe if you follow these instructions, follow my guidance and accountability, you can get there too. And, you know, to the right people, those 15, 20 pounds are worth quite a bit of money. Now, let's say that a person who's listening decides that they want to develop some type of a side hustle. and based around some sort of expertise or based around some idea of who their target customer is. And they pursue one of these roads. They pursue some example that sounds like it's in the vein of something that we've just discussed. But after a couple of months, they're still not meeting with any success.

At what point do you pivot? At what point do you decide that your model is wrong versus your approach is wrong, if that makes sense? I don't know if I'm asking that very well. Yeah, that one is tough. It's like it probably comes down to the number of conversations that you've had. Like if you've legitimately put out, you know, content into the world for six months and nobody is, nobody has responded to it. First, check your marketing.

Like, have you proactively gone out and tried to get this in front of people versus like, hey, I put it up and maybe Google will find it? You know, that's, you know, the hoping and praying model is, is a little bit tougher to judge. Is this working or not? But if you can talk to somebody one-on-one and say, would you pay me for this, you know, that's a much easier one. And if you get two people to say no, like, I don't think that's a valid sample size either. But if you get 10, 20, okay, maybe there's not a demand for this. Or maybe I can pivot.

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That's W-A-Y-F-A-I-R.com. Sale ends December 7th. So we've talked about the sharing economy. We've talked about freelancing slash expertise-based opportunities that a person can pursue. Let's move to the last piece of the puzzle, or the last kind of leg of the triangle. E-commerce. Sure. And this, I think, is very different because both the children.

sharing economy and freelancing slash expertise based are very much built around you, your time, your existing assets, your existing skills, e-commerce is completely different. It really is. It's a new skill to learn, but it's, I think it's doable. And I think the tools that we have in place today make it accessible, make it, I don't want to say easy, but make it, you know, maybe faster. They kind of have bridged the gap or kind of narrowed that learning curve in a way. And probably the best example of this is Amazon. So I was shocked to learn a couple of years ago that almost half of Amazon's inventory isn't owned by Amazon's owned by, you know, small business sellers like you and me. And it's a giant consignment store. And they said, we've built

this world-class logistics network and it was really expensive. But tell you what, you guys can take advantage of that. We'll list your product. It's going to be available for Amazon. And we're going to ship it out on your behalf. And it's called Fulfillment by Amazon FBA. And it's made, I don't know, it's made a ton of, you know, new entrepreneurs, new businesses probably over the last five years. And I think we're still in the early days, even though it's gotten more competitive. I think we're still in the early days of this e-commerce revolution in Amazon has become kind of the de facto first search for products really of all kinds. And it's kind of an exciting one. So the easiest way, sorry, go ahead.

I was just going to say that's the first time I've heard Amazon referred to not as a retailer, but as a logistics network. And I think that's a very accurate description of Amazon. It's kind of crazy what they've what they've built and you know they built the back end and the, you know, web services and, you know, now they're, you know, they're selling off kind of like stuff they were going to have to build anyways and it's a fascinating business within a business. But so the easiest way to get started, the fastest way to get started is kind of the retail arbitrage clearance arbitrage model. And this is the extent that I've played around with this is like the Amazon seller app on your phone while you're out shopping while you're out doing your.

regular errands is just like, hey, swing by the clearance section of the store, use this free app to scan a couple items that look like they're, you know, on a steep discount or they're really on sale and see what that might be worth online. And it's a little bit of a needle in the haystack to try and find, like probably scan, you know, 20 items for everything that's a hit. But when you do find a hit, and there's like 10 of them on the shelf or in the clearance bin, it's like, oh, crap, I just made 100 bucks by, you know, packaging all this stuff and sending it in. The general rule of thumb is if you can double your money based on what the app is telling you. And if the sales rank is like less than 100,000, so they'll give you an estimate of, you know,

how they rank every item in every category, you know, from one to however many items are in the category. Number one is like the best selling item in home and garden and kitchen or whatever. So if it's under 100,000, it just gives you an indicator that it's going to turn relatively fast. It's going to sell relatively quickly versus it's going to sit on the shelf and collect dust in the warehouse somewhere. So it's kind of a fun little thing, you know, while you're out running your errands. I don't know at this point, the time rewards have become a little bit harder to part with. You know, we got a one year old. So it's been a little bit, I though I did

quite a bit at Babies R Us while he was just born. So we're like, oh, let's go to Babies or us. Oh, are you going to nap in the car for a minute? Okay, let's go scan some stuff. But lots of fun doing that. And kind of the next level up or the next stage up would be kind of like the private label model and you've probably had other guests, you probably talked about, you know, people importing products or designing their own product, looking at what is already selling on Amazon and, you know, tweaking it to improve it or make it a little bit better, contacting manufacturers often in China and then bringing that product to market and saying, hey, you know, there's already a proven demand for something that, in our opinion, is not as good of a product. So we're confident

that this one will sell as well or you're trying to look at reviews of competing products and stuff. And there's people building million dollar businesses like just doing this. That's kind of an exciting way to do it. And then also, you know, once you have got that going, I mean, this is the Steve Chu model. You can build your own, you build your own e-commerce store and you can drive your own traffic and then you don't have to pay Amazon's, you know, processing and finders fees and all this stuff. It's just kind of a fun and a leveraged way to do it, especially if you're, you buying products in bulk and you've got a decent margin on that. We had Steve Chu on an earlier episode of this show. I'll link to that episode in the show

notes. But just to review everything that you've just said, so with e-commerce, there are two different models that a person can pursue. One is the retail arbitrage model. Yeah, basically playing the flipping game, except online. Yeah. So that is the retail arbitrage model. And then the other model of e-commerce is the private label model. That model is exemplified by Steve Chu, who we've interviewed on an earlier episode. So how long would, how much time would something like this take? I mean, when we're, if we're talking about the retail arbitrage model, for example, I mean, that's something that you could do whenever you happen to be in a store. You know, if you don't have any particular revenue goals and you just want to make a little bit of extra money on the side, then sure, that's something you could do whenever you happen to be in a store and the idea happens to strike you. Right. But to pursue something like the private label model or to pursue something like what we've talked about earlier in terms of eatwith.com or rover.com or the expert institute or clarity or wise ant, you know, any of those expertise based services. How much time are we talking about here?

We can set your own hours on most of those platforms. And so I, you know, I'm on clarity and I probably take, you know, less than five calls a month. So it's not a huge, not a huge time commitment. My brother does the tutoring thing on Wise Ant and similarly. You know, get half a dozen clients a month and then it's kind of a lead generation platform in a way. But just lots of, you know, that's the beauty of it is you can spend as much time or as little time as you want. And that's, you know, I guess for better or worse, I guess that's the gig economy that we're living in. What about the initial time that it takes to scale up? Like, you know, the earlier example that you gave about going to Facebook groups that are made up of your target

customer and then using the search bar to look for words like help or do you know how, that's the portion of side hustling in which you're initially laying that groundwork that will ultimately lead to having a handful of clients or customers. How much time in the beginning would a person be devoting to something like that? Yeah, this is kind of like the darkness before the light or like the, Yeah, exactly. The pre-revenue stage. And this can be tough.

And this can be really tough to kind of stay motivated during that, especially if you're just like building, I'm writing content, I'm trying to, you know, network and make connections. And probably the best advice that I've heard on it is just to block it on your calendar, to make it a habit. I'm going to do prospecting or I'm going to do marketing for half an hour every day. I'm going to do marketing, even just 15 minutes a day and just say, okay, I'm going to put in this time. It's going to fill my pipeline.

Eventually. It may not happen today. It may not happen tomorrow, but it's kind of like, it's like going to the gym, right? It's like I'm going to do, I'm going to go do my workout and I'm probably not going to have a six pack tomorrow. Probably not going to have a six pack the next day. But like if I keep going, if I keep at it, I think it starts to, you know, the results start to compound. And that's why, you know, folks like Steve and like Grayson have built the businesses that they have because they continually showed up for years now. So I guess what I'm hearing you say is that even if a person doesn't have a lot of time, doing something 15 or 20 minutes a day consistently will over time accumulate? It adds up, and I was guilty of this in the past until we had a kid. I was like 15 minutes. There's nothing I can get done in 15 minutes. Now, when there's a 15 minute window, I'm like, oh my gosh, that's a lot of time. I could, you know, outline this entire thing.

You know, I could do, you know, all these different things because it's like you learn to appreciate it so much more when your time has been taken away from you voluntarily. I might have, but just, you might be surprised with what, with what you can get done in these, in these blocks. And to kind of prove that point, it's like, well, you know, even if you just trying cleaning the house in two minutes, give yourself two minutes, you're like, oh, it looks a lot better in just two minutes. You know, it's kind of like, imagine what you could do in 15. You could do that online. It's just kind of getting over that shit. And I was totally the same way. I'll just go on Facebook. I'll just, you know, do nothing. And there's, oh, I could actually make some meaning full progress, especially if you do it day after day.

What are some of the biggest mistakes that you see people make when they try to develop side hustles for the first time? The hope and pray model, right? Like, I'm going to create content and hope somebody finds it, hope somebody discovers it. The, let's see, other mistake. Like, like not telling anybody about it. Like, oh, you know, just being really shy and saying, you know, nobody knows what it is that you do.

Or on the flip side of that going way too broad. like the example, well, I build websites. Well, I think you'd be better out. Well, I build websites for realtors. I build websites for home builders or, you know, picking some sort of niche to target two first. Not getting started. That's probably the biggest mistake of all. It's just like this constant paralysis of analysis and saying, well, you know, if I just had the perfect idea, you know, I would do this.

But it's like one of my favorite quotes all time on the side hustle show came from Ryan Finley, who runs re-cregslist.com makes a full-time living, just buying and selling, I think, appliances on Craigslist. It's kind of a crazy business. But he said, the best opportunities aren't visible until you're already in motion. And at the time, I was like, you know, that's kind of like a hippie-divy thing to say. But, you know, now with, you know, probably two and a half years removed from that recording, I was like, he is totally right. You know, once you get going in anything, it really doesn't matter what that first move is, you start to see all these different conversations, all these different opportunities that start to pop up. And that's the really exciting thing. That's the really

empowering thing. My friend Julie calls it like the game of chess. It's like, look, your first move, it doesn't matter. You're going to move upon. Your opponent's going to move upon. You know, you're not going to decide the game right there. You know, it doesn't matter. Just put it out in the world, see what kind of reaction it gets. And I love that. So probably mistake number three, just in action. Failure to launch. We'll come back to this episode in just a minute, but first. This Giving Tuesday, Cam H is counting on your support. Together, we can forge a better path for mental health by creating a future where Canadians can get the help they need

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Like leftovers at midnight, our Black Friday offers won't last. Shop now at IKEA.ca.ca.com slash Black Friday. IKEA, bring home to life. If you are already running a side hustle, how do you decide if it is a better use of your time to develop that particular side hustle out further and try to grow it versus diversify by starting something else? That's a good question. And for me, I guess the ADD has always kicked in and I've had to try and balance.

It's like the, well, double down on what's working and the, well, but there's a shiny thing over here. I want to try. You know, kind of what I fall back on is, well, what's going to be the most fun? If my needs are taking care of, especially if I'm kind of in this, you know, enviable position of having a day job that covers my bills or kind of being on the cusp of early retirement, it's like, well, which project is going to light me up? Which one is going to be the most fun for me? And then it's like, is that going to be a fun challenge to work on? I see myself enjoying that. So that's kind of the framework that I use. I don't know. What about you?

I've always been committed to afford anything, the brand. But within that, I definitely have some shiny object syndrome between like the blog and the podcast and the YouTube channel and the social media platforms. Now there's Instagram. So I've doubled down or I've kind of centralized my efforts by encompassing everything under the umbrella of afford anything. But inside of that, there's been a lot of. me just pursuing whatever I'm more interested in at the moment. Right. Because I suppose podcasting, blogging, YouTube, these are all just different mediums of communication. They are. And there's a million different things to, there's always going to be more to do, right? You said like, well, there's a new social media channel. There's a new thing.

And it's easy to kind of get down that rabbit hole. There's a good balance between testing it out and just like, you know, focusing on your one thing. And that's the cool thing about the afford anything and about the side hustle brand is, hey, there's a lot of, that's a big umbrella. You know, a lot of different stuff can fall under there. And we can kind of position, well, that was just an afford anything experiment. Yeah, yeah, exactly. And there's certainly a lot of experiments that I've started and then just gave up on like periscope. You know, I made a couple of periscope videos maybe a year, year and a half ago and then just decided, you know what, not excited about it, not worth my time and just not into it.

Yeah, me neither. Same story. There's a few broadcasts was like, this is not for me. Now, have you done any like Facebook live or anything like that? No, never. Never. I'm nervous. I'm nervous. That's why I like the podcast. You can polish it up afterwards. You can clean it up, make yourself sound smart. Exactly, exactly. I like that about YouTube as well. It can be polished and edited. I don't like to put raw material out there. I like things. I like to edit stuff before it goes out. Yeah. Sounds good. How do you determine how much to charge? How do you strike that balance? especially for people in the expertise economy, or people who are selling their time, or some hybrid of the two, how do you strike the right balance between not selling yourself short and yet not overpricing? So there's a couple different ways to go about it. And so I'll share the first one was kind of the path that my wife and a partner took in the photography business. And that was pricing extremely low at the beginning because it was like, look, this is your wedding. we haven't taken, we've never shot a wedding before. Like you're taking a risk on us and, you know, like, just like the market, that risk needs

to be priced accordingly. And so it's like, you know, starting out very low to build a portfolio. And as they've now done dozens of weddings, you know, they can price themselves more in line with what other photographers are charging. The opposite angle of that is what you could call like value-based pricing. And that's, this is like really annoying when you see this on. website. So it's like, well, call us for a quote. But I totally understand why people do that, because they want to figure out, well, how expensive of a problem is this for you? And it can be,

and it's not always to like try and milk the most money out of the client. A lot of times it can be, you might, and I've done the same thing when hiring freelancers is like eliminate the outliers high and low where it's like, okay, this guy bid $10,000. This guy bid a thousand or everybody else bid a thousand. He must clearly have not understood the problem. He must be, you know, out in left field. So it's kind of a weird way to go about it, but trying to figure out, well, what's this, what's this worth? And it's like, if there's, if there's too big of a gap, what I guess what I'm trying to get is, like, if there's too big of a gap between, well, this is a $10,000 a month problem and you say you can solve it for 50 bucks, like that doesn't seem in line. Like,

you must not fully understand our problem. So I guess that's kind of where you're trying to ask those probing questions of, well, you know, what are you doing to solve that today? Or what have you tried in the past? Or, well, really, what is, what's that costing you? What happens if that doesn't happen? You know, trying to figure out what's that. How much does it hurt? Right. What happens to people who are already successful at a side hustle, but then they just lose their passion for it? What next? That's not a good thing. I don't know. I'm sure it happens. I guess it's on to the next project or trying to figure out a way to, you know, reinvigorate yourself with, and maybe it's sellable. Like if you've done this to the extent you all like built out an agency and I'm no longer, you know, selling my time.

I'm selling, you know, X result and I could hire somebody else to come on and deliver that for me. Like you may have built a sellable business, which is a really cool asset to be sitting on. Yeah, that's tough. You've got to find a way to make it interesting. Make it, you know, make it fun to work on because, yeah, life's too short to be working on something that drags you down. The same thing. Like, you know, if you are an accountant by day and you hate it, the last thing you need is a side hustle that's doing accounting. Right.

Oh, and that's actually a great point, is should a person, particularly somebody who's interested in pursuing an expertise-based business, is it wise to go into the same thing that you do in your day job? is that typically in terms of what you've seen, is that a recipe for burnout? Not always because sometimes it's like the work environment that people find toxic or that they don't like or I don't like that I have to be in this cubicle from 8 to 5. It's like if I could do this on my own terms or if I could do this and not have some other, not have the company like eating up 70% of the margin. Like that would be fantastic. So sometimes there's a way to do that authority business or do that expertise business. in a way that isn't going to burn you out. And you can be more selective about your clients, too.

Make the work interesting for you. Interesting. All right. Well, thank you so much, Nick. Is there anything that I haven't asked about that you want to emphasize? I don't know. We covered a lot. And I guess the parting guidance that I try and leave people with is, you know,

to put on your scientist lab coat and think like a side hustle scientist. You know, all the stuff is just an experiment. And it's usually not life-threatening. And so one thing that separates the people that I see having success from the people that I see kind of sitting on the sidelines is that willingness to have an experiment, even if they don't know what the outcome is going to be and say, well, you know, that didn't work out as planned, but, you know, I learned from it. And I can kind of apply that to the next experiment.

Nice. Well, thank you so much, Nick. And I will link in the show notes to your website, your podcast, and also that resource guide that you mentioned that has all of those different websites that you've put together. Thank you for that. Thank you, Nick. What are some of the key takeaways that came out of this conversation? Here are three things that I got. Number one, I was struck by his comment. Choosing what's next. It doesn't mean choosing what's forever. Many people believe whatever they decide to do is the thing that they're going to be doing for a long, long time. And as a result,

I found that a lot of people have a bit of analysis paralysis. Oh, I could go into X side project and it has these pros and these cons. And people get so caught up in, you know, thinking about what to do that a lot of times people just don't start. And part of that comes from the idea that whatever they decide to do is the thing that they will get stuck doing. But as Nick said, your side project can and will evolve over time. After all, look at his own story. He began with a shoe comparison website. And now here he is, many years later, teaching people how to develop out their own side hustles. At the beginning of his journey, he didn't see where he would end up years down the road.

He just simply took the next step and then let it evolve over time. So that was key takeaway number one. Choosing what's next is not choosing what's forever. Takeaway number two came when Nick said... If anybody can do it, anybody will do it. And it kind of puts a natural downward pressure on how much you can earn. So kind of where I think the opportunity lies is maybe in the hybrid space between kind of these sharing economy platforms and then something that utilizes a little bit of your own expertise. Here, what Nick is talking about is that if you are engaged in some type of a side gig that has low barrier to entry, then you face a lot of competition.

If the only asset that you're selling is your time is unskilled time and unskilled labor, well, then you're probably not going to make. a whole lot of money. Whenever possible, it is better and more lucrative to choose something that will harness either your expertise or your existing assets. In other words, think about what makes you unique. Is it a certain skill that you have, a certain interest, certain assets that you hold? Whatever it is that makes you unique, whatever it is that creates some type of barrier to entry for the competition, that's where you're more likely to profit and more likely to succeed. And by the way, this too will evolve over time. I mean, when I was getting started, the thing that made me unique was that I was, in my own opinion, if I do say so myself, I was a pretty good writer. I used to work as a newspaper reporter. And so I knew that I had a particular developed skill in writing, more so than the average person. So I started a blog. And it was because of the blog that I later started a podcast. That wasn't something that I could have foreseen six years ago when I began the blog. I mean, how do you make the leap from newspaper reporter to podcaster, right?

Like, I was nowhere near the broadcasting medium. But I just found one thing that made me unique, started down that path, and then let it evolve over time. Finally, key takeaway number three that I got from this conversation is when Nick said, Going to where your customers already are, going to where they're already searching or they're already doing business. So what Nick means by that is that your customers are already gathering in, certain places. It could be certain places online like Facebook groups. It could be forums online,

various websites online, could be physical places like conferences. If you are niching down and targeting a certain community, a certain muse or a certain type of like avatar customer, well, those customers are already gathering in certain places. Go where they already are. be on the same forums that they're on, attend the same conferences that they go to, read the same websites and publications that they read. And this is applicable regardless of whether your target customers are real estate agents in Cincinnati or RV owners on the West Coast or dermatologists who need websites. Regardless of who that target customer is, there are places where they hang out, be there.

As the cliche says, the riches are in the niches. All right. So that was our interview with Nick Loper. We originally aired this interview as episode 85. And we are back again because that's how important this topic is, the topic of creating these small micro businesses that provide a diversified income stream. And now, today in 2023, with tech layoffs and high inflation, The notion of having multiple streams of income seems to be resonating with people, at least anecdotally, what we've been seeing is that this seems to be resonating with people more now than ever.

So I hope you enjoyed this episode. And if you want to learn more about side hustles, head to afford anything.com slash online business. That's affordanything.com slash online business where you can get a bunch of free information that will teach you more about how to grow your own digital remote business. You know, I was thinking about this the other day. A good friend of mine, Chris Gillibault, he's been on the show several times. He invited me to give a keynote at the World Domination Summit, which is a conference that he hosts. He wrote a book, it was a New York Times bestseller, called The $100 Startup.

And the idea behind that book is very much like the idea behind what we talk about in our email series, which is that you don't need a lot of money in order to start some type of a side project. In fact, it's better if you don't put a lot of money into it because you want to make these small bets. You want to test the waters to see if something is going to work before you go bigger. If for a hundred bucks or less, you can test the waters, get some proof of concept, and then build on that, that approach, that low capital approach, that is not a hindrance. That's not a bug. That's a feature, right? That's not, oh, woe is me. I don't have enough money to start something. It's, even if you did have all the money in the world, you would still want to start something cheap so that you could make small bets so that you could get proof of concept. That's the idea behind the $100 startup, New York Times bestselling book. That's the idea behind the book Launch by Jeff Walker or the book Will It Fly by Pat Flynn. I've read a lot of books on this topic and they all say, that you should start small, start scrappy, start cheap, even if you have the money. Don't overinvest in something without testing it first.

That's something I very much believe in, something I like to teach my students in this community. So again, if you want free info, afford anything.com slash online business. If you want to chat with other members of this community, many of whom also have side hustles, go to afford anything.com slash community to talk and get feedback. from like-minded people. That's afford-anything.com slash community. All of it's totally free. I hope you enjoyed today's episode.

We'll be back next week. We'll have, of course, we'll be getting back on our groove with the Ask Paula and Joe episodes in which we answer questions that come from you. We also have a couple of really cool interviews that I've recently recorded. One is an interview with an Oxford professor about big projects,

kind of the opposite of small bets. He talks about how to manage really big projects, expensive projects, like if you're remodeling your kitchen. How do you do that in a way that's on time and under budget? So that interview is coming up. We also have an interview with Barbara Sloan who talks about money management specifically for people who rely on tips. Tipped workers, service workers, how do you manage money? and the challenges that tipped workers face are very similar to the challenges the entrepreneurs face. Income volatility, lack of benefits.

So in that episode, we talk about how to budget when your income is uncertain and when you have to provide for your own retirement and health insurance. So all of that is coming up on the Afford Anything podcast in future weeks. Make sure that you are subscribed to this show so that you don't miss any of our amazing. upcoming episodes. Just open up whatever app you're using to listen to this show and hit the subscribe button. And while you're there, please leave us a review. Thank you again for tuning in. My name is Paula Pan. This is the Afford Anything podcast. And I will catch you in the next episode.