When I was getting my company off the ground in 2015 and 2016, I did a lot of SEO consulting to pay the bills. If I’m honest, at that time I was a solo SEO consultant with a side project that at the time was called HireGun, and has become Credo.
So how did I think about Credo as a side project then, and how do I think about side projects now that Credo is my full-time focus (given that I haven’t done any retained SEO consulting in 2 years)?
In this essay I’m going to try to unpack how I thought about it and what you can take away from it whether you’re an entrepreneur getting itchy for the next thing or if you’re full time salaried for another company and wanting to either start a side gig (and keep your day job) or go full time should the side gig be able to support that.
Here are the things I think about when deciding if I should put time into a side project:
- Can it provide meaningful revenue within a recent amount of time?
- Can it achieve some sort of leverage that doesn’t always require more time?
- Can I properly invest the resources (money, time, expertise) into it to have it achieve its goals in the time allotted?
Before working on a side project/business (different from a hobby, which is not what I’m talking about here) you need to ask yourself if the project could bring in meaningful revenue.
Notice I didn’t say substantial revenue, but rather meaningful revenue to you. If $1,000 a month is meaningful to you for the time and mental (and possibly monetary) investment you’ll put into it, then that’s enough and in my opinion reason enough.
Note that what meaningful means will be different to different people. For some it’s an extra $1,000 per month. For others it’s an additional $15,000 in business revenue.
At this point, it’s important to be clear on what you will be selling and what you can charge for that. If you want to reach $1,000 in a month and you’re selling a $14 item, you need to sell 71 of that item in one month. Is that doable?
It might be for you, though if it takes you 3 hours to produce each one that’s $4.69 you’re making. That’s not even minimum wage.
As you might be starting to see, meaningful isn’t enough, but it is part of the overall equation. There are a lot of easier ways to make an extra $1,000 a month than spending 3 hours on an item you can only sell for $14.
So now we need to
Once you’ve determined what meaningful means for you, you need to determine if your idea has leverage.
By leverage, I mean “is it something you can replicate for marginal cost”.
Software has leverage. Consulting does not unless you can charge a LOT as an expert in your field (and even then, much more is expected of you and you can never remove yourself from it completely).
This is part of why I have not invested deeply in one of my side projects. It makes about $1k/yr in passive revenue, and runs at ~80% profitability. So it’s not nothing and lets me buy a few new things which I enjoy, but it’s definitely not meaningful even though it’s leveraged and mostly automatic. I wouldn’t miss that revenue if it went away, but I’m also not spending much time on it.
I do often see people spending a lot of time on something that has no leverage, like the example above where someone spend 3 hours producing something that they can only sell for $14.
When I’m investigating a side project idea, if it does not have leverage I don’t do it as a business endeavor.
I may do it as a hobby if I really enjoy it, but it’s not a business idea for me.
Make an investment
Once you determine that the idea could generate meaningful revenue and it has leverage, it’s time to figure out what you need to and are able to invest into the idea to capitalize on the potential.
I learned 8-9 years ago that there are three things that you can invest, but usually don’t have all three:
If you do have all three, then you’re in a fortunate position and just found a cheat code. Up down up down A B A B and collect $200 and all that.
But if you’re normal and don’t have all three, you need to pick the two that you DO have and determine how much you can put towards this idea.
Most people have TIME and EXPERTISE that are underleveraged. This means that most people don’t have significant funds, beyond maybe money to pay monthly for a web host and a few tools, to put into a side project.
But most people have time and an unfair advantage of expertise (or even just experience) in a space.
Regarding time, look at your calendar and see where you have time that is currently underleveraged. Maybe it’s the two hours in the evening that you spend watching Netflix with your partner (guilty!) Maybe it’s an hour every morning before your child wakes up (I’m writing this before 7am).
Over the years I’ve heard people talk about two work shifts – their 5-9 and their 9-5. Other talk about their day shift and night shift – they work their regular 9-5 at their job (either as an entrepreneur or for someone else) and then they work 9-12 in the evenings on their side gig (or their main gig if an entrepreneur, I guess). Dharmesh Shah from HubSpot is known for having done this for years, especially in the earlier years of HubSpot, when he built many of their free tools that became large acquisition drivers for them.
Please note that there’s no “right” amount of time to spend on a side project/business, but you won’t build a successful anything without a reasonable investment.
Trust me – an hour a week isn’t going to get you there. As an example, when this blog was driving the most traffic and making the biggest impact on my life I was publishing twice (2x) a week and spending ~10h a week on those posts most weeks. So it was basically a part time job for a number of years.
Hope that helps! Leave questions in the comments below 👇