One of the key levers of wealth creation, income expansion can take different forms – it could mean enhancing your professional skills and expertise to increase your salary, or investing over time in a portfolio of income earning assets, or maybe you are ready to create a side hustle business. While it’s one of the more difficult avenues to be successful with, a side hustle business can be the most lucrative way to expand your income. To be able to do this without having to quit your day job makes this option so appealing that it seems everyone is getting their side hustle on these days.
In today’s world where anyone can open an online store in hours and with only a credit card, your chances are much better than in the past when only the well funded could afford the necessary infrastructure and tools to be successful with a new venture.
What about taking it to the next level by automating most aspects of your side hustle so you can free up time for other pursuits? All the while watching the passive income stream into your account. Well, that’s the dream. And I found someone who was able to do just that, through ingenuity, hard work and persistence. This is his story.
Finding security in a full time job
When Samir Al-Battran immigrated to Canada in the late 1990s it was a high flying time to be a Computer Engineer with mastery over the “in demand” programming skills of the day - .NET, Web Services, C#, AJAX, SQL. While it may sound like alphabet soup, these are very valuable computer programming skills that made looking for employment during the dotcom boom similar to shooting fish in a barrel. Not truly appreciating the upside that the “free agent” nature of independent consulting offered such a talented professional, the younger version of Samir at the time placed more value on the safe road that full time employment offered.
But his job search at the time wasn’t without its temptations, not surprising as it was during the dotcom boom after all. At the time of his search, DirectX was a computer gaming programming language that was in high demand with a limited supply of DirectX developers in the market. It just so happened this was one of Samir’s specialities and led to a bidding war for his talents that would test his resolve to stay on the safe path of full time employment. In one hand Samir had the security of a full time $50,000 per year job offer from a large Canadian software company that specializes in graphics processing. At the same time as he was pondering the offer, he was being recruited by an aggressive contracting agency that was offering him a three month DirectX developer contract at $60 per hour. Each time Samir would decline the offer from the agency they would return with a more lucrative offer, driving their hourly rate offer from the original $60 to $90. What the agency thought was a negotiating ploy on Samir’s behalf was really Samir being cautious and opting for the perceived safety of full time employment offered him. Samir is not immune from reflecting on the opportunity cost of naïve decisions in our younger days. He estimates that if he had taken the three month DirectX programming contract at its peak offer he would have earned his one year full time position salary in a three month period, leaving him with time to pursue more entrepreneurial ventures.
Free agency
After one more crack at full time employment, Samir mustered up the courage to take a risk and go the free agent route of independent consulting and entrepreneurship. While filling his day with a steady string of developer contracting opportunities, reminiscent of the DirectX days, Samir found the idea for his first start up out of his own frustration of trying to find an apartment to rent in Toronto. Samir, along with his co-founder, started RentCompass (www.rentcompass.com) – today Canada’s most popular rental listing service on mobile devices. Working in their evenings for six months, Samir and his co-founder built a user centric rental web site that while it filled a niche in the market was quickly replicated by new competitors. As it became more and more difficult to differentiate and as the co-founders started to have families, RentCompass was shelved.
RentCompass reborn (and automated)
With the growth of mobile computing in the late 2000s, Samir and his partner saw an opportunity to resurrect RentCompass for a mobile first world and set out again to fill an important niche in the market. Another six month development cycle of late evening, caffeine fuelled, heads down coding, while paying the bills with a steady stream of free agent style consulting contracts during the day. This time RentCompass stuck and built a loyal base of customers.
As RentCompass grew in popularity, reaching 90% market share, so did the overhead for the two RentCompass founders who had their respective day jobs that paid the bills. More users brought more landlords which brought more content for the two founders to manage. What the two co-founders did next provides inspiration for the rest of us that are looking for strategies to grow our income in a more automatic way. Rather than build out an entire content management team to support the updates required to keep the listings on RentCompass fresh and timely so they could continue delighting their end users, they decided to automate their jobs.
The majority of the landlords using the RentCompass platform for advertising their listings had 10 or more buildings they were managing and therefore had their own company websites they were maintaining to ensure up-to-date listings. So, rather than update the 15 or so new listings or price changes for each builder every week, the founders of RentCompass built automatic robots (aka “bots”) that would scan the landlords website for any changes to their listings and capture this information to update the RentCompass listings. This meant each time they secured a new renter for RentCompass, Samir and his partner spent two hours to build a “bot” that would automatically grab content updates made to the renters’ own company website and update RentCompass. This upfront two hour investment, meant hundreds of content management hours in time savings over the course of their business relationship with the renter.
The two entrepreneurs found other areas of the business to automate, including leveraging a partner channel to resell their apartment classified listing service to renters across the country.
Samir and his partner had successfully built a predictable revenue run rate business that ran on auto-pilot practically with no major investment of time required from the two partners. Because their renters do need to have a human respond to their inquiries they haven’t been able to completely automate themselves out of the business, but they have managed to automate a big part of their work. Not bad for a business that is generating a secondary passive income that covers the pay of one part-time employee and enough income that they could both conceivably retire on if they so choose to. Rather than retire Samir has leveraged his passive RentCompass income to support him and his family while he builds his next start-up.
What’s your side hustle?
We all have unique skills, passions and hobbies that have the potential for parlay into generating a secondary income source through a side hustle. For Samir it was his deep computer programming skills with his ingenuity in recognizing a common problem that he had encountered himself that could be solved for others with his unique skills. For me, I’m hoping I can successfully turn my passion for personal finance and investing into a blogging income stream. Everyone has unique passions and skills, for some it’s their love of shoes, others it’s cooking. There is even a former political journalist who turned his unique knowledge of how to game frequent flyer miles into a seven figure per year travel advice business (Scottscheapflights.com).
While having unique skills and passion on its own is not enough for a successful side hustle, it is the engine of any new venture. You need to find a niche opportunity in the market and be willing to take action. Who knows, over time as you master your side hustle you may even be able to make it mostly automatic like Samir has done.
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