Why Your Side Hustle May Not Qualify as a Full-fledged Business
The only place where success comes before work is in the dictionary.
I like writing. I love producing videos. I thought I could turn that hobby into a side hustle that could generate revenue.
I have created a Medium account. I have created a YouTube channel. I started pushing articles and videos on those platforms.
I am still not monetized on YouTube. I just got monetized on Medium. With $2 this month, I am far from leaving my well-paid job as an aerospace engineer to being a full-time content creator.
Yes, what I have is just a hobby that cannot even qualify as a side hustle.
I am not really solving anybody’s problem. I am just writing to solve mine. Yes, there might be people who can resonate with my content. Yet it is far from reaching a critical mass so that it generates the magic “passive” income.
In this article, let’s explore how you can avoid the traps I am in. Here are 5 easy steps to create a thriving business beyond just a hobby.
1. Whatever you want to do, start now where you are.
There are many wanna-be entrepreneurs out there. They binge-watch videos on YouTube. They get their dopamine hit.
They think they have an amazing business idea just by watching others convince them.
They think that their shitty idea is unique. They see themselves as the next Unicorn. They go to bed after their shift, considering they will soon be rich.
Like all sweet dreams, they wake up, and nothing has changed since bed last night. They start a new shift, hoping for a better tomorrow.
In theory, everything is great. In practice is where reality meets the road. And there are frictions.
Planning is great. Yet, often, too much planning is just procrastination in disguise.
Start right now. Start where you are. Start small. Just start.
If you are unwilling to start implementing the four steps below, you can just stop reading.
The steps below are helpful if they are followed by execution, no matter where you are.
2. Identify a problem.
As I stated before, we are quick to jump into execution. Yes, I know. I just said before that you should start now. But there is a caveat. You should start AFTER getting familiar with the steps, not before.
You read an article. You may have a hobby. You start executing on that hobby. It provides you with some pleasure because it is solving YOUR problem.
That is the crucial element here: if it is only your problem you are solving, it is just a hobby.
You should identify problems other people have that you can solve. It can be a problem you have already solved or could solve.
It could be new information that you could turn into a product.
You can also focus on a business area where you work or not. Identify what does not work or works poorly or slowly. It can also be something that could be done better, faster, or cheaper.
The key here is identifying how many people or businesses have that problem.
You should ask yourself if the market is big enough and ready to pay a decent amount for your solution.
3. Solve the problem.
Often, we might identify a big problem with the right market. Yet you are not equipped with the means to solve it.
You try to guess how people would like that problem to be solved. You spend too much money, time, and energy building a product. But there is no market fit for your solution.
What you should do is first decide one way to solve the problem. Then, you build an MVP (Minimum Viable Product). Then, you put the MVP in front of a sample of your market. You listen and get their feedback.
You use that to improve your MVP.
Maybe an MVP can be a way to teach your customer base. It can also be a simple service that can solve their problem.
Just make an MVP that you can make and sell. It should be easy to do, not too expensive, and address the core pain points of the market.
4. Get paid.
You have identified the problem. You have built an MVP. From your perspective, it is the way to go. Before selling to your first customer, you go full gear.
You drop your well-paying 9 to 5 job. You put all your savings and become another victim of the sunk cost fallacy phenomenon.
In other words, no one is buying. But you have already invested too much. So, to feed your ego, you pour even more money into an already dying business.
You should estimate the costs of your product and service. You should do a benchmark with competitors selling a similar product. Identify how much they charge and see if you can charge less or the same.
You should charge, at minimum, the sum of your cost and markup combined.
Start with an initial price and test. As you are getting feedback, adjust your pricing to be more competitive.
5. Refine and Repeat.
You have just started shipping your product. Maybe you are lucky, and many people are buying your product. Shit, you cannot scale up because you never thought about it.
Selling a product should not be like blind fishing. You cannot “hope” that it will work the first time you do it. Maybe you are selling initially, but it takes too long to produce. Perhaps your production process is too complex.
You should use your MVP sales as an opportunity to learn from your customers and improve your product.
It is not viable if your business solely relies on you to do the heavy lifting. It should be scalable to be called a business. If not, you may just call it a side hustle and quit.
You should think about how to produce quickly, efficiently, and at scale.
Use that feedback loop to close the loop on your initial offer.
Refine your product and repeat the previous steps to make it viable, sellable, and scalable.
Final thoughts
Most of us are fooled by our hobbies or side hustles. They convince us they are viable, scalable, and durable business ideas.
We jump full gear on. Often, it is already too late when we discover the mirage. Don’t be like me.
By following the five steps above, you can build a business and not just a hobby or a side hustle:
1. Start Now
2. Identify a problem
3. Solve the problem
4. Get paid
5. Refine and Repeat.
If you cannot get your business idea through those five steps, it is a hobby at best. At worst, a side hustle distracts you from your 9 to 5.
In that case, you should definitely keep your current job. Don’t give up as a solution finder. Keep your mind open.
Get new ideas and pass them through the five steps above until one passes. 99% of your ideas will not get through if done properly.
The 1% passing the test will bring you money beyond your wildest imagination. Now you are rich with cash.
The new question you should ask is:
Are you rich in time and energy?
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