Searching for the side hustle: Market map + our early insights

As we explained in our first post, we view side hustles as opportunities for personal monetization — selling or leasing assets (ranging from physical goods to time to expertise) to generate additional income.

In further exploring the space, we’ve identified nuances that differentiate a side hustle from a broader marketplace. We believe that startups focused on the true side hustle represent some of the most compelling opportunities, as they ideally: (1) appeal to the supplier by allowing them to monetize underutilized assets; and (2) appeal to the buyer by opening up previously unavailable inventory that may be cheaper, higher quality, or closer to them.

In this post, we’ll outline what we believe defines a side hustle, what we’ve learned about the space through talking with 19 venture-backed companies, and what we’re still looking to learn.

We constructed this market map to cover what we see as the key categories within the side hustle space. Did we miss something? Let us know at and

What differentiates a side hustle from a broader marketplace?

  • Control of work schedule. Side hustlers are not employed by the platform they conduct business through, and have no requirements (beyond safety standards). They can work whenever and wherever they want, and start and stop at will. This usually means being an independent contractor.
  • Use of personal assets. Side hustlers are monetizing their personally owned or rented assets, not assets of a corporation (which is more of an agent/broker role). However, side hustlers may purchase new products or equipments to improve their operation — like buying a nicer car for Uber.
  • Opens up a new income channel, instead of amplifying an old one. There are many platforms for professionals to earn extra income by digitally connecting with a larger customer base. We don’t see this as a true side hustle — these platforms are providing greater distribution to existing companies, and usually have a high barrier to entry on the supply side.
  • Certifications and vetting processes are fine. A side hustle platform can require suppliers to have certifications or work experience, or even employ a selective application process. However, the hustler cannot be a current working professional in this industry — that’s a career, not a side hustle.
Above are some examples of platforms that we consider to be side hustles (or not side hustles) within categories like food, parking, lodging, and consulting.

What have we learned about the space?

  • Building supply should not require a large marketing spend. A side hustle should be a “no-brainer” for suppliers. They are able to get extra income through underutilized assets, and platforms should have safety features and insurance to make suppliers comfortable. If it takes significant marketing $ to convince suppliers to join, it will be hard to scale.
  • There’s a large market of people who want a side hustle, but don’t want to drive. We’ve seen many startups targeting the significant number of people interested in generating income without leaving home. Purple Squirrel allows people to monetize insights about their company for job candidates, while Yup enables people to tutor students through an app.
  • Side hustlers are less concerned about pay if they can generate income passively. Some side hustles allow people to earn income with little to no work — renting out hard drive space on Storj, opening up your garage via Stache, or driving with an ad through Wrapify, to name a few. Our conversations suggest these side hustlers are unconcerned with exact income generated and aren’t likely to complain about the platform’s cut.
  • Side hustlers need help setting rates. Because side hustlers are operating outside of their expertise, they don’t know how to price their offering. Some platforms use algorithms to generate suggestions, like eBay. Others provide general rules, such as SidelineSwap, which recommends 40% below MSRP. In cases where a company doesn’t give recommendations, other platforms often pop up to fill the gap (BeyondPricing).
Sneaker marketplace StockX publishes an upcoming release calendar of sneakers, as well as the current bid and ask prices of these shoes on StockX. This helps suppliers price their items.
  • Specialized marketplaces might struggle to take market share, but have unique benefits. Some side hustle platforms are competing with big players — TheRealReal users could also sell via eBay, and Hipcamp hosts could list via Airbnb. However, smaller platforms can benefit from creating a tight community and from offering trust-enhancing authentication— GOAT has specialists review every pair of sneakers, which eBay can’t do.
  • Power suppliers can be key, but commercial manipulation is a risk. For many side hustle startups, power users are crucial in creating liquidity — 10% of suppliers can often represent 20–50% of GMV. However, there is a risk that commercial players take over, manipulating prices and pushing out side hustlers. A 2017 McGill study concluded that Airbnb was “becoming more and more dominated by large commercial operators,” with an estimated 8% of listings (and 34% of revenue) from this channel.
  • Launch geographies are crucial. Not every side hustle will work in every large market, particularly when the hustle takes place mostly in the physical world. Key factors when selecting geographies include traffic patterns (especially if the hustle includes delivery), small local competitors (which sometimes can be extremely difficult to disrupt), and even preferred operating systems (Android vs. iPhone).

What are the attributes of venture opportunities?

We are still early in our thinking on what kind of side hustle platforms make the best venture investments. However, here are some of our initial thoughts:

  • Hustlers should be able to earn at least minimum wage. We’ve heard from many hustlers that a hustle provides more than money — they also get a sense of fulfillment. However, it’s still a drain on time and resources (including tax prep), and insurance, certifications, and depreciation of an asset all add to costs. Therefore, we’re particularly attracted to platforms where hustlers make at least minimum wage on an hourly basis.
A 2015 Stanford survey found that hourly wages in the on-demand economy can vary significantly by category of employment — ridesharing and “passive income” workers tend to earn much more than manual laborers.
  • For services platforms (e.g. Uber), the quality of the provider (within a reasonable range) shouldn’t really matter. A mega scale side hustle isn’t going to be able to precisely vet all suppliers before they come on the platform, so it’s important that the consumer’s experience isn’t too dependent on having a very high-skill service provider.*

*We have a theory that, for some high-skill services platforms, there are adverse selection effects — the highest skill providers may have enough customers to run an independent business. However, this clearly isn’t true in all cases.

  • For product platforms (e.g. Etsy), the quality of the provider should matter significantly. The process of purchasing most goods is already pretty convenient, especially with Amazon Prime. Therefore, side hustle platforms that involve buying items should be focused on high-quality suppliers who make goods that aren’t available elsewhere.
  • Big market — a “need to have”, not a “nice to have”. Ideally, a side hustle platform expands a market’s size. To do this, the offering needs to be: (1) equal or lower cost; (2) equal or higher quality; or (3) equal or better convenience compared to the best alternative (ideally, a platform meets several criteria!) This can be a tough ask for a new platform, so we’re looking for markets where small % saturation can yield big revenues.
  • CAC for suppliers is low. For many side hustles that are low-skill, suppliers have very little platform loyalty — they are generally looking for whoever will pay them the most, within any of their own standards for comfort or convenience. This makes turnover high on the supply side, which can be costly if suppliers need to be constantly recruited, vetted, and onboarded.
Blogger The Rideshare Guy recently published the results of his 2017 survey of 1,018 rideshare drivers — and found that two-thirds reported working for two or more platforms.

What are we still looking to learn?

As we continue to explore this space, there are many other questions we are hoping to answer, including:

  • Are suppliers more attracted to platforms focused on one specific task (e.g. Uber, DoorDash), or platforms that offer many different tasks (e.g. TaskRabbit, Upwork)?
  • How should a platform determine ideal pricing? Is it better to provide recommended pricing, or even standardize pricing, or let the market determine prices?
  • What is the ideal ratio of service providers to potential customers to ensure liquidity in the market without causing drop-off on either side?
  • How can platforms appeal to broader demographics, particularly non-millennials who don’t want to be a courier or ride-hailing driver?
  • Aside from the economic benefit, successful side hustles often provide a sense of personal fulfillment and satisfaction — how can platforms encourage or enable this?
  • In what situations do the benefits of a more rigorous vetting and application process outweigh the costs of being slower to scale?
  • Which side hustle markets will be “winner takes all (or most)”, and which will sustain multiple large platforms?

Thanks for reading! If you are working on a startup in the space, or otherwise have knowledge that you are willing to share, please let us know! We’d love to talk with you. We’re available at and

Justine and Olivia Moore

Written by

Venture investors at CRV. Stanford ’16. Subscribe to Accelerated for weekly tech news, jobs, and internships:

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