Preparing Your Side Hustle for Growth

Having been a tech entrepreneur for over two decades, I have collaborated with brilliant minds and built projects from scratch to address specific challenges. My latest endeavor, Teaching Startup, aims to distill the knowledge of seasoned entrepreneurs into a resource for aspiring business owners.

I set out to create a platform that is both accessible and affordable, eliminating the need for budding entrepreneurs to build extensive networks to seek advice. The foundations of my project were built organically, utilizing existing tools like eCommerce platforms, newsletters, and no-code solutions to demonstrate my concept's viability without significant financial investment.

To validate Teaching Startup, I leveraged platforms like Stripe, MailChimp, Zapier, and Bubble, starting with their free offerings. Within weeks, I developed a prototype and secured initial customers.

Yet, I recognized an important factor. I didn’t want Teaching Startup to merely function as a side gig. While I was content proving my hypothesis and addressing a pressing issue, I needed it to have the potential to grow into something larger, allowing customers the opportunity to learn from that journey.

Establishing Your Customer Base

It's crucial to understand the distinction between a customer and a mere transaction. If someone pays you to provide a service through an intermediary like Uber, they are not your customer—they belong to Uber. Similarly, just because someone engages with your content or purchases a product through your platform doesn’t mean they are your customers yet.

In more developed startups, I often establish referral or revenue-sharing partnerships with larger companies. This necessitates a clear definition of who "owns" the customer. A customer truly becomes yours when you have both the means and the consent to sell to them directly.

After gaining permission, establishing a process to gather customer information becomes essential. I prefer starting with email lists through platforms like MailChimp, eventually transitioning to comprehensive systems like HubSpot or Salesforce.

Creating Value Beyond the Initial Hustle

My decision to avoid simply launching Teaching Startup on Substack stemmed from my desire to offer more than just a newsletter. A newsletter serves as an efficient introduction, but my vision encompasses a broader range of features and functionalities.

The newsletter was a strategic choice: it allowed for quick engagement with customers, facilitated interaction, and provided a foundation for future development. It enabled me to validate my idea without extensive coding or complex business setups, while also capitalizing on the familiarity of paid newsletters in the market.

However, my ambitions extend well beyond a single newsletter. With my concept validated and the business launched, it's time to pivot from a "paid newsletter" model toward a startup that effectively addresses the challenges I aimed to solve.

Gaining Control of Revenue Streams

Even if you have established a customer base, lacking control over revenue means it isn't truly yours. For instance, with Uber, drivers receive payment from Uber, which retains most of that revenue.

In partnerships, it’s crucial for the customer to pay you directly, with you subsequently compensating your partner. This arrangement not only defines revenue ownership but also impacts the financial health of your business.

I hope you never encounter a partner who delays payments or disputes sales terms, but such issues can arise when control of revenue is shared. Many complications can be avoided if customers pay your business directly.

Investing in Your Business

Growth isn’t automatic; it requires active investment of both time and resources. While the allure of automation in side hustles is strong, relying solely on it can be a trap.

Once you are independent, dedicating all your time and profits to serving your customers isn’t feasible. You must reinvest in your business to ensure its growth.

Finding new customers, expanding your company’s infrastructure, and ensuring consistent payments all fall on your shoulders, underscoring the complexities of entrepreneurship.

Scaling Beyond Yourself

Your business's potential will always be constrained by your available time. To transition from a side hustle to a full-fledged startup, you must hire others to take on various roles—whether it's providing services, marketing, or managing finances.

This step is often the most challenging, as it necessitates transitioning from a solo operation to incorporating your first hire. You'll need to balance your workload while training new employees to contribute positively to your business.

Achieving this milestone means you have built a customer base, established a unique product, generated your own revenue streams, and created a team. You've successfully transformed your side hustle into a thriving company, paving the way for future entrepreneurs.

If you found this information helpful, consider subscribing to my newsletter at joeprocopio.com for more insights. For deeper startup strategies, explore Teaching Startup.