Over the past few years, we’ve noticed an interesting trend among many of our friends — instead of just working one full-time job, they’re using nights and weekends to supplement their income through a “side hustle.” We have friends who walk dogs, sell old clothes for cash on ThredUp, or even edit college applications for high school seniors.
A 2017 Bankrate survey found that 28% of millennials are working a side hustle, earning an extra $200 per month on average. 61% of millennial side hustlers work their second job at least once a week. Pew Research similarly found that 16% of millennials use digital work or task platforms like Upwork or Task Rabbit, compared to only 10% of Gen Xers and 4% of Baby Boomers.
Why are side hustles capturing the attention of millennials? We have a few ideas:
- Economic need. Millennials entered a tough job market in the aftermath of the 2008 financial crisis. The Atlantic declared millennials the “unluckiest generation” in 2013, and in 2016, the unemployment rate for U.S. millennials was 12.8% (compared to a 4.9% national average).
- Personal fulfillment. Not all side hustlers are economically motivated — Pew found that 42% of tech-enabled gig workers are in it for “fun” or “something to do with spare time.” A 2016 Quartz article noted that the side hustle is “a hedge against feeling stuck and dull and cheated by life.”
- Flexibility. Millennials have an oft-cited desire for flexible work arrangements, which a side hustle provides. Upwork’s 2016 survey of freelancers found that the top motivations were the ability to be your own boss, work from anywhere, and have schedule flexibility.
- Career aspirations. Some use a side hustle to test out full-time independent work. Glamour found that 11% of millennial women use a side hustle to prepare for the “next big thing” — one interviewee sold baby accessories on Etsy for five years before making it her full-time job.
- Rise of the sharing economy. The explosion of platforms that connect side hustlers with job opportunities has made the barrier to entry much lower. With the success of platforms like Uber, Airbnb, and DoorDash, it is now easier, faster, and safer to sign up for a second gig.
We see the side hustle as part of a bigger trend of “personal monetization” — renting or selling a personal asset, which could be time, expertise, or a physical/digital good, to make additional income. A couple of examples:
- Creative content. We’ve seen this play out successfully with Patreon (a CRV portfolio company) and Etsy, among others. We’re excited about the opportunities that these platforms provide to allow creators to distribute content without having to sign a record deal or set up a store.
- Stuff. This ranges from clothes to tech devices to sports equipment. With the rise of apps that better connect people to their own neighbors (e.g. Nextdoor, letgo), consumers shouldn’t have to buy full-price merchandise when they can borrow or buy at a discount from someone nearby.
- Time. Companies like Uber, Instacart, and DoorDash (a CRV portfolio company), which allow drivers to essentially sell their time (and access to a car), have dominated the “side hustle” market. We’ve seen a few more creative examples of this recently, like being a professional bridesmaid.
- Expertise. It doesn’t make sense for many small businesses to hire full-time employees to handle occasional tasks that require deep expertise, like negotiating contracts. We’ve seen expert platforms gain success in the consulting (Catalant), design (Behance, Fiverr), and coding (HackHands) markets, and are excited to see what industries are disrupted next.
- Influence. We’ve written about the rise of digital influencers before, and think that this new class of celebrity will be a big part of the future of media and ads, particularly for Gen Z. We expect to see more ways for everyday people to leverage their social influence to make money.
- Space (physical or digital): Airbnb has dominated the lodging market, but we see additional opportunity for consumers or even businesses to rent out their physical space for storage, workspaces, or even car parking. We’re also excited about sharing digital space — a number of companies like Storj now allow users to rent hard drive space in exchange for cryptocurrency.
We’re also interested in services that enable side hustlers by helping them better manage their gigs, income, taxes, and all of the other logistics involved in working independently. If you’re working on one of these problems (or anything else in the “side hustle” space that we didn’t mention), please reach out to us. We’d love to hear about it.
— Justine & Olivia Moore
