2023: The proliferation of side hustles
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2023: The proliferation of side hustles
Oodles and oodles of newsletters, courses, mini agencies, and podcasts.
It’s 2023 and everyone and their dog seems to be starting a side hustle.
Whether that’s a personal social audience, a newsletter, a podcast, an onlyfans, a startup, a course, consulting, communities, a second job, WHATEVER.
Everyone is clamoring to make more money and make themselves less exposed to losing a job or their company.
(Yes I’m aware, I’m a part of the problem with my social growth and newsletter.)
Let’s analyze why.
Bull and Bear
Bull
During a bull market (when asset prices go up), opportunity cost is super high. You can make a lot of money with very little effort.
When you combine a bull market with low-interest rates, you get the perfect storm.
People make lazy, bad investment decisions and they pan out.
They get raises at work and get offered new jobs with crazy comp packages.
You can raise a ton of money from angel investors and VCs with very little.
And they can get a 2% interest 30-year mortgage, 0% 6-year car loan, 1% line of credit. And a phat business loan.
When money is cheap, why put in 1,000s of hours of effort into developing skills and creating sustainable assets? The opportunity cost is just too high.
Or as I put it in a recent LinkedIn post:
Bull market behavior:
– YEEEEEEHHHAAAWWWW
– I’m making more than I ever have but it’s not enough!!
– Throw money at the problem
– Let’s raise at a 50x multiple
– We should buy a house, with zero conditions, and at $200,000 over asking
– We need to hire, hire, hire! WE NEED MORE PEOPLE TO TAKE OVER THE WORLD.
– This will last forever 🎉
Bear
On the flip side, when money is expensive, you’re worried about your job, and even sound investments go poorly (in the short term), you get scared, stop spending, and become a lot more willing to work hard to build up a long-term asset.
That’s what we call a bear market, or a recession.
In other words:
When money is expensive, and you’re scared for your livelihood and want to prevent this feeling in the future, you feel you need to put 1,000s of hours of effort into developing skills and creating sustainable assets.
So it makes sense. The hype of becoming your own boss, building a personal brand, starting a side hustle, is all a product of the current economic and social environment.
People like Justin Welsh were perfectly poised to pounce on that opportunity with his focus on teaching how to be a solopreneur like him.
Bear market behavior:
– Ohhhhhhh f**k
– I’ve lost everything, I need a side hustle
– Too many problems, no money
– Hmm, we can’t raise money
– Let’s live with your parents for a few months and save up
– We need to fire, fire, fire! WE NEED LESS BURN SO WE CAN SURVIVE
– This will last forever 😭
The never-ending cycle
This boom and bust cycle has been true for much of recorded history.
One of the first was the famous Dutch Tulip boom. People were buying and selling Dutch tulips for absurd amounts of money as a speculative asset.
Eventually, this bubble burst. And anyone who still had a tulip got to watch it wither away worthless.
And well, now you can get a bouquet of tulips for $20, or on the side of the road.
Much like we saw in 2021 and 2022 with basically every asset. Houses. Stocks. Crypto. NFTs. Art. Salaries. Everything shot up insanely.
And all felt that it was going to last way longer than it did.
I know people who had their staff get $600,000 USD job offers at FAANG companies. And it seemed every single one of my friends was crushing it and buying a house.
Then it came crashing down faster than we could have imagined.
And for the past year, we’ve all been miserably clinging to our purses in fear of our own lives coming crashing down due to not properly preparing in the bull market.
We’re hunkering in for it to be really bad for years and years to come.
And again, it’ll likely end much sooner and faster than we think.
The inherent problem
We’re social animals operating off of prehistoric hardware.
Our brains and bodies have barely evolved in many thousands of years. But our societies and lives have evolved and continue to evolve at breakneck speeds.
Our brains were not built to handle instant connection with billions of humans thousands of miles away.
For most of our history, we at most had contact with a few dozen people that we relied on for our daily needs. We only had to handle and process our immediate environment. One that changed infrequently and slowly, except when a jungle cat jumped in or a storm rolled in.
If we didn’t stay in sync with those around us, that jungle cat or storm could kill us.
Even people we thought were the smartest and best investors messed this up. All the smartest VCs poured insane amounts of money into unprofitable startups. Silicon Valley Bank dumped their cash into 10-year treasury deposits. Elon bought Twitter (an unprofitable business) for a record high amount.
We’re all victims of the mob mentality. Because it’s what kept us alive in the past.
The way out
It’s incredibly hard not to get sucked in. We’re wired to conform to the society we’re in.
And when information travels at light speed, it’s hard to escape.
It’s also hard to resist the social pressure from those around you. When everyone else is buying a house and making crazy cash, it’s hard to resist buying a house and dumping everything else into $TSLA.
The only way out is to train yourself to be immensely skeptical.
To learn how to bet against the mob.
Often, the signal of the top is when everyone is cheering the loudest and shouting, “This’ll never end!”
And the signal of the bottom is when everyone is crying, businesses we thought were invincible are failing, and people are shouting, “This’ll be worse than the Great Depression!”
Learn how to detach and you can focus on building long-term assets while everyone is busy chasing short-term wins.
Instead of being the 1,000,000,000th person starting a newsletter struggling to grow, be like Lenny Rachitsky who grinded away at his during the bull market and now makes 7 figures per year.
He invested in the long-term when everyone else was buying $DOGE.
I know it’s kinda shit advice
“Hey, you should have started earlier!”
I’m not saying don’t build the long-term asset now that everyone else is.
Absolutely do focus on the long term.
But the key now is to keep going. Do not stop.
When the markets get rosier, 99+% of people will move on to short-term wins again. Resist that urge. Continue to build for the long term.
When the next bull market ends, and they’re left with little to show for it, you’ll have something to show for yourself.
Thanks for reading!
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– Neal