Did you know that 64% of Millenials have or have had a side hustle in the past 12 months? If you think this is just younger generations, that number is still 58% for Gen X and even 44% for Baby Boomers. The “Gig Economy” is defined by the Wall Street Journal as “a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.”
In this episode, Frank and Ian look at ways to profit from this shift to contract work. We look at side hustles that we’ve been paid for and how we use contractors to scale businesses much faster without hiring direct employees.
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How To Profit From The “Gig Economy”
“Happy birthday, Ian. You handsome son of a gun. Happy birthday, Ian.” That incredibly strange cold opening with some 40-year-old dude in India serenading me on my birthday was my first introduction to the gig economy. Frank, because he loves me so much, hired that guy for $5 on an app called Fiverr, which has become a much bigger app. He hired that guy to serenade, sing to me, and call me names. My mind was blown that some dude in India, halfway around the world for $5, would personalize, do a dance and sing for me.
This episode is all about gigs. Both Frank and I hire a lot of contractors for the various businesses that we use. Some of them work for companies, some of them are doing them as gigs. Frank and I are also part of the gig economy on the other side. We both do consulting gigs. We have hired out our hours. We have sold projects. This show is a gig.
This episode is all about how to start a gig, how to use people in the gig economy to build and scale companies and not do everything yourself, how to use gigs to grow a larger company to fill in and not hire direct employees. I hope you enjoy this. We had a blast making this one, and we hope you enjoy our gig.
Ian, you son of a gun. I changed up our intro because of the incredible audio that we have from 2013, which is the first evidence of Ian and I using the gig economy on the internet.
Frank and I were both going on a million different paths during the week. Wednesday is when we get together for 2 or 3 hours every week. Before we record anything, we chat for an hour and catch up on what the other is up to what they are doing. It was pretty interesting. Frank is chasing around a bunch of real estate deals. I’m trying to sell a bunch of car alarms for a tech company but all we were talking about from a labor perspective were contractors. We weren’t talking about direct employees. We were talking about social media marketing, advertisers, and content creators. It got us thinking of how easy it is to rent out services and talent versus many years ago.
It got us also thinking how easy it is to be the talent that does side gigs, and then it got us on the whole other path of talking about all of the side gigs that we have had over the last several years. It has led to a pretty fun conversation that we were like, “Why aren’t we recording this?” This is a fun topic and pretty topical given how many people are quitting major jobs now with the Great Resignation, the Big Quit.
When you bring this up to people in their 40s or 50s, managers, and companies, they say, “That’s because the government gave them money. No one is working.” You and I know better. People are working differently. They are taking gigs. They are working with 7 or 8 different things at a time, making money. People are still hustling. They are maybe not all doing 9:00 to 5:00 or applying to those kinds of jobs.
I will give you an awesome example. You go to a restaurant now, and there are a couple of things. Restaurants that used to be open 7 days a week are now 5. Every restaurant I go to has a slightly limited menu, if not a completely limited menu compared to before COVID. If you ask any of the restaurant owners, they say, “I can’t find cooks.” Cooks did collect checks from the government but what else has happened in Richmond since COVID happened? I live in Richmond, Virginia. There are more private chefs than I have ever seen.
There are people who will cook for you on demand. They charge a fair wage. I have one in my life. It’s fantastic. The point is it was hard to find this person a couple of years ago. If you look for a private personal chef now, there are hundreds of choices because those people didn’t go back to work on someone else’s schedule cooking in their kitchen or yours. They are making you a nice meal. They are making as much, if not, more money. They have taken their skillset and realize, “I can advertise this on the internet, and I don’t have to work from 6:00 until 2:00 AM cooking in a restaurant. I can do it on my schedule.”
There’s something you said there that’s incredibly important, which has to do with this gig economy and how much everything has changed. If you wanted to do that many years ago, you had to do it through word of mouth. Maybe you knew one wealthy person that wanted a cook to make their meals, and then if you did a good job, you would say, “Do you know any friends who might like this?” It wasn’t terribly easy to find new leads and new customers.
Now, people are putting up posts on Upwork for this stuff. You can go to Upwork now and say, “I’m a Chef in Virginia, and I’m going to search 20 miles around my house for people that are saying they are looking for a private chef.” You can find work like that in a snap of a finger. You couldn’t do that many years ago. The fact that she can advertise easily and make money that’s the new component of this. That’s a digital component.
I’m going to talk about it here. Tim Ferriss came out with the book, The 4-hour Work Week, somewhere in the last half of the 2000s, 2005 to 2010. I read it for the first time in 2009. What he talked about were all these virtual assistants, the term VAs. Most of us know this now. If you read The 4-hour Work Week now, it’s boring because it’s become popular in society. 2012 and 2013 were when I started to use them. Upwork wasn’t even called Upwork. It was called a different name. Fiverr was big, and there were all these other little things.If you’re a good kid, you show up, and you do things, it's not hard to stand out in the world. Click To Tweet
Things like Uber Eats, DoorDash, and Thumbtack didn’t exist. These are all things that came about in the last decade since this started but there’s a leverage point. I have three people who I work with every single week in my personal life, cook, personal trainer, and cleaning person, all of which I found on sites like Thumbtack, which is a gig economy site. Those things didn’t exist, and now they are so easy. These are people that are integral parts of my life and my weekly routine. How do you find those new old days? You would go to the gym and rip off like a little tag hanging up on a corkboard. Nowadays, you can find it on your phone.
I used Thumbtack because I needed an electrical outlet put in on a wall or hang in a TV in our gym, and I went and found it. Jenny was like, “Do you know anyone?” I’m like, “It doesn’t work that way. Let’s go online and find something quick.” I remember you bought me that book. I’ve got 30 pages into it, and I was like, “This is horseshit.” I was busy. I was an executive with a big publicly-traded company. I was making lots of money. I thought it was all garbage.
Maybe it was the title that turned me off because, at the time, I was working a lot of hours. It felt like a snake oil title where someone was trying to sell books to convince people you don’t have to work hard in life. When you read the book, it’s not that. It’s how to get a lot more done with the same number of hours, how to leverage yourself, and make more money.
The crux of the book, if you haven’t read it, it’s worth reading even all these years later. It’s a leverage point. What this whole entire episode is how you leverage your time. I would argue that the vast majority of Americans participate both ways in the gig economy. Smart people in 2022 participate both ways. You clearly use it to make your life easier.
I was at home with my parents a few months ago. We realized we were out of olive oil. In the old days, we had gotten in the car and drove to the store. I went on this thing called Gopuff, which my barber told me about. It’s for people who smoke weed and want to smoke. They will deliver you stuff from a convenience store in 30 minutes or less.
There are no munchies in the house?
There were tons of munchies too but for this particular instance, what I needed was olive oil. In the old days, I would have left and missed 30 to 45 minutes with my parents. I would’ve got in the car, drove to the store, got the olive oil, and drove home. For a $6 fee, I paid for the damn olive oil, and I missed nothing. I was in the house with my parents hanging out. My dad said to me, “Life is too easy,” because he’s an older guy. He doesn’t understand this but that’s how you use the gig economy.
What Ian and I are going to talk about is the other way. That’s how we make it easier for us. What we also do is take our skillsets and put them out there. We allow people to hire us. I get 1099 every year. Ian gets a 1099 and a K-1. These are things that you get when you are not an employee. You get them if you are a subcontractor.
This is going to be a fun episode because we are going to be able to talk about this as business owners who hire lots of people who work in the gig economy. You and I hire a lot of contractors to do various things for our businesses but we also have our own hustles. We have our own little side gigs where we either use our resources, knowledge or hours, and we charge people for our time. We know what it’s like to run a gig and to hire people looking for gigs. We use a lot of the same methods that other people use.
We have to go back and look this up about the first time I learned about the gig economy. Frank always schools me. Frank was in the private world way before me. He left NVR years ago before I left. I was still grinding away corporate jobs showing up every day in my Brooks Brothers shirt, and Frank was wearing hoodies and working from remote and doing gig stuff.
It was my birthday in 2013 when I’ve got this random email. Frank was nervous I was going to delete it. He’s like, “You’ve got to open that.” I go in and click this link, and it’s this garbled low-definition video of a chubby Indian guy with no shirt on, and it looks like a dress or a sarong. He’s dancing, and there’s bad Indian music playing in the background. I don’t know what I’m looking at. I’m like, “Frank is punking me.”
I’ve got to set this up a little bit. I looked for something that was ridiculous, embarrassing, and barely audible. I found this guy who did these crazy things. He has an unattractive dad bod. Everything about it screams cheap. That was it.
You nailed it. I almost turned it off because I didn’t get it. I was like, “There’s this chubby guy dancing,” but Frank was like, “You have to watch until the end.” At the very end, this was where my mind was blown. I’m watching. I’m like, “Anyone can forward a dumb-ass video of a fat guy dancing. I have seen that before.” In the end, he stops dancing and looks at the camera. He goes, “Ian, you handsome son of a gun. Happy birthday, Ian.” It is hilarious. He says Frank’s catchline to me, and he can’t pronounce my name. He’s clearly talking to me from India. Frank, which site did you use for that?
I use Fiverr for it. People barely even use it anymore. Nowadays, there are things that are more expensive than Fiverr. The other thing is it was too bucked and forced. He wouldn’t say bitch, and he emailed that to me. We had to change it from, “Son of a bitch to son of a gun.” He got your name completely wrong the first time. I had to spell it phonetically. I’ve got two drafts for my $5.
I have a code. Frank did get one edit, so he could go back and say, “Redo this because you didn’t say his name right.” The name Fiverr is very different nowadays but the name Fiverr started because it was like a dollar store for gigs.
“Whatever you want, we will do it for $5.” That’s how Fiverr started.
Put your contracts out there, and you scroll through and find things or you could search for it and find whatever. Frank found out about this from a mastermind group that he was a part of. Frank used gallows humor to use it for the first time instead of actual business-related. Now, you can hire a lawyer or anyone creative on Fiverr.
You can hire about anything you could think of for a business. You can pay tens of thousands of dollars for someone on Fiverr. Their big competitor is Upwork. Upwork is my favorite. I use Upwork all the time to fill a niche or some labor that I need that, either I don’t have the skillset or time to do something that one of my businesses has needs.
There are two things I want to say here. First is this. When I left Corporate America and moved into the world of being an entrepreneur, I joined a mastermind group. I knew all the corporate stuff. I knew how to hire people and do all that stuff. I knew how to overspend but I didn’t know how to do things inexpensively because I worked in a corporate world where you pay for the Brooks Brothers suits and the high-dollar stuff.
I found Fiverr through people who didn’t have the means NVR had. They had to start lower. We mentioned Upwork. Upwork started as a company called oDesk. They changed it to Upwork because it’s more relevant now but oDesk was also in existence back when Fiverr was but both of these companies have gone through a rebranding.
Fiverr still has the same name, but now, you can spend thousands of dollars per hour or per gig because they have expanded. The market at first was goofy shit like this, like how the internet started. The internet wasn’t full of all this incredible stuff when it first started. It was very niched. As more people start to use it and the market starts to expand, what happens is smart business people start looking, say, “I can expand services because there’s a need, want, and desire here.” Companies like Upwork and Fiverr are in the mainstream. These companies now have real advertisements like during NFL football games. These are real services, and they are multibillion-dollar businesses at this point.
The gig economy, as defined by Wall Street Journal, “It’s a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs typically enabled by the digital economy.” In essence, all that is saying is it’s easier to fill needs, find work, and add value to people for a sum of money. It’s easier to get the leads and find them.
There are interesting stats where 64% of Millennials say that they have had a side hustle or had one in the past several months compared to 50% of Gen X-ers and 34% of Baby Boomers, which Baby Boomer number is pretty high. It’s good. Nineteen percent of Millennials said that they had more than one side gig. In the dollar amounts, Millennials surveyed said that they made an average of $11,000 per year from their side hustle. That’s 20% more than Gen X-ers and 50% more than Baby Boomers. Gen X-ers made $8,800, and Baby Boomers made $6,000.
Those dollar amounts are pretty interesting because these are technically side gigs, meaning these are not their main source of income. I remember hearing some of these stats several years ago when I was at NVR, and I didn’t believe it. Someone told me half of Millennials have a side gig. I remember being like, “That’s bullshit. There’s no way they have time to be working side gigs.” In my mind, a side gig, even back then was, you worked at Starbucks on the weekend. Even though the gig economy was well and raging a few years ago, in my mind, I thought you work restaurants at night or on a weekend for somebody. My thinking of it was very primitive.
If you go back to the silent generation, which is the generation that was born into the Great Depression, the gig economy was, “Load up everything you own into a wagon and go to California, and hope there’s work there.” That’s the Great Depression era, the Tom Joad in The Grapes of Wrath. That’s the gig economy many years ago. Back then, you had to pack everything you knew into a wagon and drag it across the country. You had to hope that it was there.
The internet bridges that gap. Most of what we can do with technology, you don’t have to pick apples anymore. That’s what the gig economy is. If you look at the border between Mexico and the United States, it used to be open, and migrants would come and pick things during the summer, go home during the winter, and then we will come back every year. That’s part of a gig economy. That’s how things work.
The other side of it is this, and I realize this as an employer. You and I have come to this realization differently but we both arrived at a similar place. We used to start people in the mid to high 40s. I start knowing that low anymore because if you don’t make roughly $60,000 to $65,000 annually, you have a part-time job. I know this because I had many people several years ago who was making $45,000 to $50,000, and they were bartending and doing other things. They came on Monday and were exhausted when I was rested.
I started to realize these people need to make this money, so they can do it 1 of 2 ways. They can burn the midnight oil and be horseshit on Monday and Tuesday because they are exhausted. If you are a waitress or a bartender, you work Sunday and Thursday. Monday and Friday are compromised. What I started to realize as an employer is I need to pay a little bit more, so people don’t need a second job. I will tell them, “I’m going to pay a premium for this role but my expectation is this will be your only job, and I will get those hours and productivity.” That’s something that’s real, and you have to be very mindful of it.There are so many other things kids can do and create through their skillset. Click To Tweet
It’s easy for people to pick up a side gig. If you want to get the most out of them, you’ve got to talk about that with them, especially the younger crowd and say, “This is a conscious choice. The salary range for this is $35,000 to $45,000, I’m paying more but I’m doing it intentionally because I want the best of you. I want 5 good days, not 3 and a half.”
In my first gig, I was working for a friend’s landscaping company, and I considered that my real job because I would get up early at 6:00 AM and cut grass all day. I used to umpire, and the reason why I considered that a gig is my boss didn’t care whether I worked 1 or 15 games. He didn’t care if I worked none because there were enough umpires to go around. We all snatched them off the schedule.
I’ve got paid $20 a game. I could work a tournament on the weekend, do six games, make a ton of money, and be tired or skip the tournament altogether. That’s growing up in the ’90s when I was in high school. For me, that was a gig. I still had to go through an organization to get the leads. I wasn’t cold calling little leagues and saying, “I will take a game. I will do this.” I wasn’t calling travel coaches and saying, “Do you need an ump?” I was all there for me to pick. I still need an organization but I considered that my first gig.
I was an umpire, too. The reason that you become an empire when you are a kid is you are little and see kids who are slightly older than you umping. You start talking to them like, “How do you do this?” “I walk over there to that building, and I apply.” It’s pretty easy. If you are a good kid, you show up and do things. It’s not hard to stand out in the umpire world because it’s a bunch of gig people. It’s like, “I’m missing a shift. Can you pick something up?” Very quickly, you find yourself getting opportunities that come to you.
Speaking of opportunities that come to you, as a younger kid, in sixth grade, I started babysitting neighbors’ kids. I was slightly older than them, and I was across the street. My mom was like, “If something goes wrong, call us or walk across the street.” That was one of my first gigs babysitting, and for those same people, I mowed their lawns. This was just, “Frank has a lawnmower. He will mow your lawn for you.”
I grew up in Florida. It wasn’t a lot of leaf blowing or snow shoveling but there were lawnmowing 9 or 10 months of the year. I did those things, and it was shitty work. What Ian and I both talked about is he picked weeds, and I lawn mowed. We hated it. I remember thinking like, “I never want to do this again.” There are people who think lawnmowing is cathartic. It’s torture. I go back to being twelve and be pushing this lawnmower to eat.
The reason why it’s easy to find jobs like weeding and shoveling snow is that it sucks. Even in my broke-ass town of Michigan, people were willing to give me $10 to $15 not to have to grab a shovel and go to work on 12 inches of snow that fell over the night. They were happy to pay like you paid to get that olive oil. They were happy to give me some cash and say, “I’m not going out there and freezing my ass off. Can you do it?” Whenever it snowed, I could make $200 if I wanted. My back was sore for four days. It was brutal. It wasn’t scalable work.
There’s a side of this now, and it’s different. Kids are being forced not to do the menial labor or tasks that we did because, in all honesty, I can find a professional crew who will mow my lawn or pick weeds for a similar price to a high school kid. They are going to do it better and faster. They are going to be a hell of a lot more reliable.
What has happened is there’s a shift. These professionals who were hard to find in the old days, you go to the Yellow Pages but if someone was running an ad in Yellow Pages, they are expensive. You would use Ian to pull your weeds. Now, I can go to Thumbtack and find somebody and build a relationship with them. They pull my weeds four times a year. You have to think about it. What happens to a kid who wants to hustle and make some money? They go to the internet. They don’t want to pull weeds. There are so many other things they can do. They could be creative and use their skillset. That’s how this thing morphs.
When you say gig economy to the average person, they are going to say like, “I get it, Uber or DoorDash. I use those.” Those are gigs, and that’s fine if you need to make some loots. If you are working at DoorDash while you are going to high school or college and need to make some extra loot, I looked at that as an umpire job. I can work 2 to 3 hours a night if you are thinking of that like, “I could make a career of that. I will work when I want. It’s flexible.” No, you can’t make a career out of that. You are going to starve.
Uber has got this great thing now where they put the app like, “Do you want to talk or not?” That’s new. Most Uber drivers, I don’t feel like talking to. Before, that was a reality. My wife and I flew to Miami, got off the plane, we get into an Uber at the airport, and started driving. This woman, she’s not American but it’s relevant because she has a loyalty or feels something pulling her to Uber. She starts bitching to us about how Uber isn’t loyal to her and how she’s a loyal person like, “I’m a loyal person. I’m going to work for Uber.” I didn’t say anything. I nodded and was like, “Get me to the damn hotel and let’s end this conversation.” It stuck with me for years for this reason.
She’s loyal to a company that’s set up not to be loyal. You have the wrong alignments. The gig economy is great if you have the right alignments. Ian and I have gigs. We do all kinds of gigs. I have paid Ian a significant amount of money in the last couple of years to help me with something because Ian is better at it than me. I have leveraged my skillsets in ways where other people pay me. I have a full-time job and a staff. I look at it and like, “Where do I have a specialized skill that I can charge a premium for and make way more per hour than if I’m sitting at my desk?” That is how you can leverage the gig economy.
That’s well said. We should talk a little bit about some of the gigs we have done over the past few years. When I left NVR, I didn’t know what the hell I wanted to do. I was chilling for a while. I have talked a lot about on this show that I wanted to go out and buy a property. I didn’t know how to buy a property. I had to rely on a lot of people. That was my first gig. I didn’t consider it a business. I considered it an investment but it’s a lot different than buying a stock.
Going and acquiring commercial real estate is a responsibility. One of which I would have to work if I bought it, I had to go out, find deals, and cold call. I had to find a deal that was good, so I had to look at hundreds of them to figure it out. I had to find a team to do it and acquire it. That’s my first gig, and that’s the first way I’ve got paid. It took a lot of risk for me and learning new things. It wasn’t as simple as I left NVR and bought a real estate investment stock. I didn’t buy a REIT and sit on it and do nothing. It required my work and labor to get paid. I would consider that the first gig that I did. What was your first gig after leaving NVR?
Before we get into that, I want to pivot this a little bit. I consider your first gig core. You and I talked before you quit. When you are a senior-level executive, you come to the realization that, “I have people that like and follow me.” One of the things that I learned when I left NVR is they tell you they do but they have a full-time job and are loyal to their paycheck a lot more than they are loyal to you.
What Ian did was smart. Besides owning a real estate investment, which is a gig, it gives you an annuity and a payment. The way you research and how you put time into Quora to build an audience and leverage that was the thing that was the biggest leap and into a different foray. The way that I watched it is, first, you went out and researched, “Where should I write? What topics are popular?” You said, “This is what I’m good at and have the skillset for.” You then started to build an audience. As you built that audience, that became a source of multiple gigs for you. You researched it, thinking, “I’m going to capitalize on this gig economy.”
Quora is a website and a social media app where people ask questions and experts answer. The best answers get more circulation and views. You can build followers. I was a little bored. I wanted to write and enjoy writing. I wanted to get better at it. It was almost a hobby. I started by creating a website and going to blog but I had no idea how to even get it to people.
Quora was a safer place to go. I didn’t have to bother my friends. I could just go and write. The first 20 or 30, no one read. I’ve got smarter and smarter about what things were getting read and how to get more circulation. To the point where within a year in Quora, I had fifteen million views of my posts. I ended my first year as the number one most-read business writer. I remember that because I took that screenshot and used that to get a job with Forbes.
I went and cold-called Forbes. I found the guy who was the editor in chief of careers. I sent him a cold email and plopped that in there that I’m the number one most read writer. He wouldn’t have cared if I said, “I had this great career for corporations.” That would be one of everything. What he cared about was I knew how to start from scratch and get a lot of people to read my stuff.
I took Quora, went to Medium, and made money. Forbes paid me. From there, when I built that, now I have a blog, and that blog leads into my online. All of that gig led to consulting and other things that I’ve got paid on. That’s the first hustle that I went out and started from scratch and figured out how to make money online.
You are a good investor. I have talked to you about stocks and picks and things like that. You did a commercial because you wanted to replace your income, had money to invest, and needed something that was a paycheck. It took hustle. One of the things I told you when you left is you think you will leave with an audience but you’ve got to build your own. Ian built his own audience. He built it very quickly and successfully, and it’s turned into multiple things.
When he does consulting now, he’s got people from all over the world that found him on Quora. His wife and I will joke when Ian started a conference call with a button-down shirt and a pair of Lululemon shorts. He was on the phone with India because folks from India found him on Quora and hired him to do some consulting. That’s how the gig economy can go full circle.
For me, the gig economy started small after NVR. I left in 2009, and the first thing I did was clear short sales. I was an investor but I was a subcontractor. I was being paid to figure out how to negotiate with the bank. If your house was worth $200,000 and you $300,000, how to get the bank to come down to that $200,000? That was my real skill.
Will you split the difference of the savings with them? How would you get paid for that?
It’s illegal for them to get the proceeds. What I would do is I would convince the bank that it was worth $180,000 and not $200,000. I would get the short sale down $180,000 and sell it to somebody else for $200,000 or $205,000, and I would collect a fee in the middle. You were bringing me in to help you negotiate the short sale and what I did was I leveraged it into a second piece.
That business and buying things off the MLS led me to my most successful gig, which is where I became a consultant for a mastermind group. I was a member of that mastermind group for years. The owner of it watched me grow and look how I did with business. Now they pay me a significant amount of money to go to something I used to pay to be a part of.
You started by paying $25,000 a year to have the right to go there and listen to other smart real estate investors quarterly. It then became you no longer had to pay, and if you help to be one of the leaders there and do coaching for the people because you had grown past most of the members, you will get a fee of six figures, a nice solid income. Now, it took more of your time. You have to prepare. You have weekly calls. You have to be engaged with the executive team but it’s 100% a gig. You get a lot out of it but you are also getting paid now for your time for something you used to pay to be a part of, which is brilliant.
It edified me. I was some dipshit from Virginia before. Now I’m on a stage with one of the best in the breed of this particular type of group. I have credibility. What do I do? I do one-on-one consulting with people. I have a coaching program. I’ve got clients that pay me over $50,000 a year and some more than that to have me help them coach. I don’t get there if I don’t join the group first, have the opportunity to get on the stage, and then be able to do it under someone else’s umbrella.This digital component today allows you, in a snap of a finger, to easily advertise and make money. Click To Tweet
That’s what Ian and I are driving at. The cool thing about these umbrellas, the Upwork, and the other places is you don’t have to hope to God like you put an abandoned sign up and somebody calls you. If you are qualified and go to Thumbtack, you are going to get phone calls because Thumbtack does all the work. You post a good, compelling ad there, and you get jobs. This is how you can utilize this to your benefit.
There’s a piece that I want to make sure I say. If you don’t utilize the gig economy to your advantage the way you and I do, you are closing yourself off to education. I often get paid to work with clients who I, on balance, have a better business thing or I’m better at something than they are. Invariably, even somebody who’s behind you in the cycle, they do something better than you.
When you are working with other people, what you do is, if you are humble enough to listen, you find, “They have uncovered something that they are better at than me. How do they write this?” It’s a little tweak. It’s little levers and big doors that start to open if you do these things where you are with other clients.
You can do it online but with a lot of the money that we make, we leverage our relationships. We know people who have needs when you listen to them complain. You listen to them when they tell you what they are stressed out about. You think about where you could help. From a compensation perspective, I was working a gig and didn’t know it within weeks of leaving NVR. I had invested in CodeGuard several years before it was a tech startup.
As soon as I told my friend, David, who is the Founder, that I had invested in this company, “I left NVR, and I’m chilling.” I had nothing else involved other than just I told him that, and he was like, “We are in a weird place and that we could either flatline or pump this thing up. I need some help.” There are selfish reasons for helping. I have an investment. I put my own cash into this company. I don’t want it to flatline and go to nothing but I also know and trust him well enough that I knew that if I could help him do a good job, he was going to take care of me, and we had that discussion.
I worked my ass off. I went to Germany and Florida with them. I went to a bunch of different places. Every day, I was on the phone with them for an hour or two. I didn’t charge by the hour on purpose because that cheapens it a little bit. I wanted to price for value, “Let’s get a big exit on this,” and helped him negotiate along the way. We talked a lot.
When it closed, he negotiated with the board a payment of $100,000 to me in addition to the money that I made on us getting 25X or whatever we’ve got on our initial investment but he cut me a check. That was the first big consulting fee that I made. That was for a couple of hours a day for 4 or 5 months. That was leveraging a relationship I already had.
It’s very different than someone who’s driving for Uber or delivering for DoorDash. If you are doing those things, you are looking to make ends meet but if you are an executive or someone who has a fairly rich history in your career, you are going to have more opportunities than you want to pursue. What you have to be very mindful of is the asymmetric risk-reward like how much time versus and what it’s going to be.
What Ian and I are talking about is a luxurious spot that most people don’t get to, and we know that. If you are someone who puts a high-level job, someone is invariably going to call and say, “Can you help me?” You have to make sure it’s the amount of time you want to spend and has the reward you want. You have to be mindful. The gig economy will take your time, “Am I being paid for my time? Does it have upside?” In Ian’s example with CodeGuard and my example of the Collective Genius, it does. For both of us, it’s a decision of, “Should I do this or not? Is it going to take time away from other things? What’s the upside?”
How do we hire out from the gig economy? How many subcontractors do you cut checks to in a given month with all your businesses?
This is awesome. I have 50 employees. We have 400 subcontractors who we utilize. Most of those people have an average family of roughly three. If you do the math, there are more than 1,200 people that we support in our company. If you get it down to a bare tax, it’s roughly 400 registered 1099s that are subcontractors who we give gigs, and they do a certain service for us.
The 50 are you feel a little more responsible for. The subcontractors on gigs, it’s very simple, “Do a good job, I will pay you. Do a good job the next time.” If you cease to do a good job for Frank Cava and it impacts his employees or his customers, Frank will find someone else to fill that gig the next time.
This is what’s cool about the gig economy. That is true to a point but of those 400 subs, there are about 50 of them that are family. Ninety-plus percent of their businesses are us. We have taken them from 1 employee in 1 van to 15 employees in 5 vans. As an employer, it feels great because we have helped get there but I have a responsibility with them, too. I’m not Uber. I’m not enormous.
I’m small enough that I know my electrician by name. He knows my children’s names and the passcode to get into my house. I have relationships with these people. It’s a little bit more than a gig. My dad is an electrician, and even with that knowledge, I don’t know enough to run an electrical company. I hire someone who’s better at it than me to do that work.
What do all these 400 subs doing?
We do construction and real estate. At the construction level, I’ve got framers, plumbers, electricians, trim carpenters, cabinet contractors, and all of those. I’ve got people who do photographs of the house. I’ve got stagers. I have closers and permit runners. I have people who negotiate the city to help me work with zoning.
On the other end of the spectrum, I’m a licensed realtor. I make a conscious choice. I outsource all the sales of my properties to realtors who are full-time realtors. There are not enough hours in a day to do everything incredibly well. I pick the best in breed realtors in the market and have them list our stuff for us because I’m losing several percent but I’ve got a better person at doing that job.
It’s like returning your capital faster because they are better at it. You get your money back faster.
The subcontractor relationship can be a couple of things. It could be something that you don’t want to do or you are not good at, or if you hire someone who’s even better at it than you. I have a cell phone and a camera. I hire a photographer to take pictures of every one of our houses because he’s better at it than me. This is the way you can use the gig economy and hire out into it.
When we talked about this, I was trying to separate myself from businesses. I’m an owner that is into gigs. I could technically say that every single thing I do that makes money is a gig. 5on4 Group is my main holding company, which is leadership, consulting, and management training. It’s a gig. I can choose to do work. I can choose not to do work.
I have built all of 5on4 with contractors. It started with multiple management programs. I built the website, my logo, the LLC, the legal, and the course material. It took me about a year to build Leadership Essentials, which is a twelve-week management course. I knew PowerPoint. I knew how to research, get the stats, get the data, build the lessons, input all of my stories from being a manager, and teach and manage people.
I used a lot of material I have built over the last few years but I didn’t know how to make videos. I didn’t know how to house the videos on a website. I didn’t know how to automate it and set it up. I didn’t know how to set up an eCommerce site or take people’s credit cards. I had to hire out the social media advertising to build a marketing funnel when someone gave me their email address. I didn’t know any of that. I built all of that with contractors.
What I love about the gig economy now is if you would have come to me in 2018 and said, “I want you to train all of my managers. I have twelve new ones. I need them all to be great managers. I need you to put a training program together. I need you to do all the teaching at a price of $500,000.” You would have told me all that, and I would have been like, “That’s going to be four months to build it. I’m going to have to fly out there all the time and spend all this time with your managers.”
Now, if you ask me to do that same thing and you want my involvement, it’s $5,000 per manager. It’s so much cheaper because I have an entire video program that I spent a year building and put a lot of my time in but I needed contractors to do that. Now I can do it for much cheaper. You’ve got Zoom, Teams, and different things where I can be with you. You almost feel like I’m live with you but it’s so much cheaper. I can do this gig because I used other people in the gig economy to build the entire company up.
From the example I talked about from The Grapes of Wrath, the gig economy has been around forever. Go back further hundreds of years, there has always been a gig economy. What’s changed is the world’s appetite for it, and technology makes it, so you can do things that you used to have to get on an airplane to do. You can drive an Uber. If you have to guess, what’s the median amount of money an Uber driver makes working 40 hours a week over the course of a year?
This is someone who’s all in?
Their full-time job is driving Uber.
It’s $40,000 to $50,000.The gig economy is great if you have the right alignments. Click To Tweet
The median is $36,000. The very high end is between $60,000 and $80,000, depending on where you live and how many hours you put in. That boils down to the median of $17.40 an hour, and that’s before you pay for gas and wear and tear on your car and the other stuff. It’s like $9 or $10 an hour. There are a bunch of people who drive Uber. It’s incredibly rare.
You need to be in the middle of nowhere or at an excur hour not to be able to find any Uber. There is a shitload of people willing to work for $9 an hour net. That’s not good money. Think about your time and how do you leverage it. Ian and I have said this multiple times in this episode on how you use your time in the gig economy, leverage something, and get paid a premium, not do things at a discount.
If you want to work in the gig economy, Frank and I have a few rules that you should think about. One thing you have to remember is that the same rules apply to wealth, whether you work for a company, start a company or want to be a freelancer. You can only get so far in life, renting out your hours. If you are starting with no money and your goal is to become rich, renting out your hours, you will never get there. You will never feel wealthy.
If that’s your goal, you still have to figure out how to build equity, leverage yourself, and your experience. You always have to be asking, “How do I gain equity?” If you want to build true wealth, you won’t get there running your hours, whether you are delivering groceries, Uber driving someone around, or contracting your time as a contract accountant or a contract lawyer on Upwork. If you don’t have equity in something and can’t leverage yourself, you won’t become wealthy.
That’s it. What you need to be very mindful of is, “Are you filling all of your time?” One of the things that Ian and I talked about was when I quit my job. I realized all my best hours are spent in this company and working for NVR. A normal day starts around 8:00 AM or 7:00 AM and ends somewhere between 5:00 and 7:00 PM. Some days earlier than others but by large, you are working from 7:00 or 8:00 AM until 6:00 PM, and you are tired. It’s not like you are a weak human. You have put all 10 to 12 hours of your day in your thoughts and everything you think about into something else.
It’s hard to build something on the side while that’s going on if you are all in the business. If your goal was to build something, figure it out. This is what I did because I was in a different spot to me. I figured out what’s the least amount I could make or build, and then I could live and build. Specifically, in the gig economy, if you can work 40 hours a week in a gig economy, that’s okay but if you can do 20 to 25 hours picking the right gigs and have fifteen prime hours of your week back, what could you do with that? Could you build what you want or are you basically taking a job?
In the finance world, the knowledge difference of a typical loan officer versus a typical loan processor or even an underwriter is very little. They pretty much both understand the same things, how to qualify for a mortgage, how to get it approved, how to get it closed, and how interest rates payments work but a loan officer typically makes 3X to 5X what a loan processor makes. What is the one skill the loan officer has that the processor doesn’t?
It’s either sales or self-confidence, or both.
It’s a little bit of both. The loan officer is willing to work on variable pay. They eat what they kill. They are confident enough in themselves that they can go out and find their own customers, and they are good at selling. They are good at going and getting the business. The processor is willing to work for 20% to 30% of what the loan officer makes because they are not confident enough in their selling ability to go out and find new business.
The same applies to the gig economy. It’s one thing to say, “I’m going to go knock on some doors, and I’m going to cut grass,” but the person who makes money doing it is the one who hires other people to cut grass, goes out and finds the jobs. There are always people willing to cut grass, so long as it’s consistent money, and they don’t have to worry about finding the new yards to cut. They just have to, “Tell me where to show up and give me the schedule.” That’s 80% of the world. People are willing to show up and take orders.
The people that make money are the ones that figure it out. They go figure out how to get new leads, build a payroll, how to hire, and how to bring employees on. If you want to make money, start with a gig, learn it, then quickly hire people to do the lower level stuff, and you spend your time on building the business out, building a team, finding new customers, and building out infrastructure.
There’s a chapter in Freakonomics that’s called Why Do Drug Dealers Still Live With Their Mothers. The reason is that the drug dealers don’t make shit because they are the ones physically out there peddling. The people who make money are the ones that manage 20 to 50 drug dealers, collect it all a nice car and drive from neighborhood to neighborhood getting it. Even in the world of drugs which I know very little about drugs except from books, even in something I know incredibly well like Italian gangster movies, there’s always an arc. You go from the guy who is a bully to someone who’s an earner. An earner has a team under him.
You want to be a captain. If you want to be a made man, he is someone who knows how to earn and go out and find new ways to earn to make money for the family.
That’s hard-earned knowledge right there. I went and saw Goodfellas instead of going to the homecoming dance in 1990. I couldn’t find a date, so a bunch of us went and saw that movie but we are going to call that hard-earned.
At least you were honest that it wasn’t by choice that you didn’t go to that dance. This one is important, and I’ve got an example of this that I’m dealing with now. Start small but work your way up the value chain. This is incredibly important. It’s understanding your customers on what they are trying to get. A lot of people, when they think gig, they want to fill little tasks but behind those tasks are something much bigger.
At Keep, I’m the Chief Revenue Officer, so I’m responsible for marketing and sales, and I’m pushing pre-orders now. To do that, you have to build a little bit of social relevance on social media platforms. I’m trying to grow followers. I’m trying to get attention, views, and branding. There’s only so much of my time in a day and many ideas that I can come up with to make videos on Instagram, YouTube, and TikTok. I’m on all these platforms, and I’m running out of hours. I told David, “I’m going to find some people that can make content for me.”
I went to Upwork. I put out a post. The old way of doing things, “I’m going to hire a marketing manager. He’s going to be an employee and does social media for us,” but if I go hire a gal for that and she turns out to not be real good at it, I have wasted four months in a startup. We don’t have that time. The way I did it was I went to Upwork. I put a post out and said, “I need people to make videos.” That’s it. “I’m going to pay $100 a video. If your video sucks, I’m going to quit paying you, and we are not going to work anymore. We will clear up but if they are good, I will find ways to pay you more.”
I hired three kids, and they are doing a great job. They are building videos for me on TikTok, and one is clearly starting to stand out. I’m talking to him, and he’s putting more time into his videos. A couple of them have gone viral. We are approaching a million views on a couple. Before, we were getting 10,000 views on our stuff.
Cool story on the gig economy, he was a KPMG. He was there for two years, and COVID happened. His parents live in Hawaii. He had to live in Hawaii for a while because no one was in the office. He was working remotely and was like, “All day long, I’m on Zoom calls. I wanted to surf and still find ways to make money. I had people asking me if I could do little things for them because I was good on social media.” That’s his story.
I’m like, “You are always going to be surfing and living with your parents if all you can think about is making videos for $100 a pop. You give me seven a week, and we are paying you $700 a week. That’s great. You’ve got a few other clients.” What you need to be asking is not, “What is it worth to keep for you to make social media videos?” That’s $100. I can find lots of people that can do it. You should be asking me, “What’s it worth if I could triple your followers on Instagram? What’s it worth if I could get you to a million TikTok followers?” That is worth a hell of a lot more than $100. That’s worth $10,000, $20,000, $30,000.
He’s a smart kid. He’s like, “I get what you are saying.” He’s come back to me. He’s proposed 25 accounts to run an influencer campaign, “I’m going to reach out to them. I’m going to find out their ad schedule. I’m going to help you build the ads. We are going to use influencers to help grow it.” I said, “That is how you start making multiples of what you are making.”
When I say work your way up the value chain, “Ian, doesn’t want someone to make videos.” I want you to get me to an outcome and think about it as I do, which is, “I want a million followers on all those platforms,” so that when our product is ready and people go there. They are like, “This is a big company. They have a ton of pre-orders because they have a big following.”
I’m going to show everybody how Ian went from a drug dealer living in his mom’s house to drive in a pimped-out all-black Escalade, and he did it fast. First of all, he had a great job and made a lot of money. Second of all, he’s got some cool contacts, me among them but David is another one where there’s an opportunity for him. Ian paid to play. He wrote Gary Vaynerchuk a $20,000 check before COVID. We have done an episode on it.
He flew out to California with David, and Gary Vee told him, “Learn it first.” Ian is smart and hardworking. He put a quarter into it, one quarter of a year, three months. He realizes, “This is no longer for me to do but I have put enough time in it where what works and what doesn’t.” What he did is he went and leveraged his learning, skill, timeframe, and he took what takes most people, six months to many years. He microwaves the process by writing a check, attacking it with a purpose, and realizing, “I’ve gotten to a point where enough where now I can manage.”
That’s exactly what happened. He went through the gig economy himself. He was an all aspects of the gig economy. He wrote a check. He’s giving checks. Both of those two things are there but he already knows how to manage, so he leveraged it. It happened in what feels like a blink of an eye to most people under 100 days. He went from sitting in front of Gary Vee to having a team of people doing these things for him in a medium that he wasn’t even familiar with. That’s how you do it.
It’s a grind. To you, you say that feels like a blink of an eye. Like ten years of my life because I’m not good at TikTok and Instagram. I had to get knee-deep and make the videos myself. It was very frustrating at times. When I’ve got to a place where I knew it was time to leverage myself and start hiring people was when I stopped thinking I was learning. I’ve got to a place where I was like, “I get all of this. I understand how the platform works, how to make a video, which videos work. I’m not learning now. I’m going to go hire it out.” That’s a good question to ask yourself, “Am I learning anymore? Can someone else do it?”
The point of it is you know that and lived through that sensation before but that is that fulcrum in the gig economy, “Am I learning or getting better? Is it time for me to leverage?” Most people blow right past that. I have watched Pulp Fiction because I was sick. That burning sensation is pride fucking with you. That’s what’s fucking with you. You feel like you are too good for it but you lack self-confidence. You are not going to be an LO. You are going to be a processor because you keep ignoring that sensation where if you have leveraged the sensation, that’s when it becomes exponential.People are usually more loyal to their paycheck a lot more than they're loyal to you. Click To Tweet
We have five points if you want to get into the gig economy. Once you have done it for a while, figure out how to automate it. Frank is doing a good job of that. This show is a gig. It’s not a paying gig yet but we are a long-term on this, knowing it’s going to pay years down the road if we do it right. I talked about my management program and turned it into a video program, so it wasn’t me teaching all the time. It’s 1 hour a week for 12 weeks for me, and some groups pay me $60,000 for that for an hour a week when I have a big enough group. If I have twelve people in the group on a Teams call, that’s what it costs.
Frankie went from pretty much no Instagram presence at all. I flipped on it. I’m like, “He’s got a nice little presence there. It looks nicer than our show videos. It looks nicer than our Instagram site for the show.” I’m putting all this time in and not doing it well. I’m like, “Give me the people that are working for you.” His Instagram looks awesome. There’s a post almost every day coming out, and I asked him like, “Who’s doing all that?” His answer was great. He’s outsourcing it.
There are two great things. I told you, “Send me an email with these details of what you want.” I won’t even touch it. My assistant will send that on to the people who need to do it. We will do a 30-minute call where I’m there to make sure there’s continuity and that I’m doing what I need to do, and we move on. My wife and I went away for three days in New York. My parents flew up. It was awesome.
I’ve got two kids, and you need to get away when you have kids at that age. It was wonderful. We are at the 9/11 Museum. We are leaving. We are heading to the next thing we are going to do. Someone walked up to me and goes, “You are an influencer.” I looked the other way. I thought they were talking to somebody else, and she’s like, “You are on Instagram. I follow you.”
I was like, “Nice to meet you,” and I introduced myself. She said, “The contents are incredible. Please keep doing it.” She walked away. My wife goes, “I have silenced all your notifications. You too much shit out there,” which is awesome. The point is I don’t even know I have an Instagram account because I use someone better at it than me. We had a conversation a few years ago. I write him a check. He does the work but people like Ian and this person on the street are both saying, “It’s effective.” That’s pretty cool.
Frank, doesn’t want to admit this. I’m going to add the rest of the story he didn’t tell. She also asked for an autograph from his handsome co-host of this show. Frank got upset and walked away. Number five, you can take part in the gig economy and still build a gig team. Frank and I use a kid out of Bosnia that does all of our video editing. He’s great. We love him. He does a great job.
When he gets busy, he subcontracts out videos to another guy who does gigs. We pay him $100 to do our little videos for this show, and if he’s too busy to do it, he’s got a guy that will do it for $50, and he keeps $50. He keeps us as the customer and bills us. You can always be building out your team, so you are not doing all of the grunt work and hourly labor. That’s Frank’s approach to social media.
This show is a gig but we use a company, Podetize, that does all of our production. We use a video editing group. We are going to use Frank’s group to do our social media marketing. It doesn’t always have to be you and your hours. It’s the same with Frank’s real estate business for all the subcontractors.
You look for people that can save you time. If you are doing something that doesn’t 100% need your expertise, try to find ways to bring other gig workers in to do some of that work. You keep control of the customer relationship, invoice, and find people. The con is you give away a little margin. You lose control but the upside is there’s a lot more growth, and you can focus your time on building a team and growing sales.
As we wrap up, I will say a few things. First of all, make sure Milo doesn’t outsource this one. His subcontractor is going to ask for a raise. That’s number one. Number two, what’s prudent in all of this is to understand where you are in the cycle. If you are thinking about, “Do I like this? Do I want to do it? Is this the highest and best use of my time?” When you find yourself in your genius zone, which is that point where you are great at something, you love it, and you are doing that as much as humanly possible, you make the most money.
Ian and I have both worked for a brilliant CEO. He does exactly what he’s good at and hires everything else out. He’s a billionaire who doesn’t talk to Forbes. He’s a very successful businessman who does this. You can do this if you are a startup, and you can do it all the way up the chain to CEO of a publicly-traded Fortune 50 company but it comes down to you having the discipline.
If it doesn’t serve you, the internet has made it so easy to find someone who can help you deal with it. It’s hard when you start to not want to do it yourself. I meet so many people who tell me they are control freaks. I will show you who’s a control freak and broke. People who aren’t broke are people who are not control freaks. You need to have a high level and a high standard that you measure people up to. You need to know how to give direction, follow up, and stay with people.
You have to be okay with saying goodbye to people who don’t perform. If you do that through employees, through 1099s, through the subculture that we are talking about with the gig economy, what it gives you a chance to do is continue to whittle away at the things you are doing and stand on a pedestal. It allows you, your company, your things to be the absolute best. The gravy, icing or whipped cream on top is when you do both. You use the subcontract base to help you but then you perform as a subcontractor as well in something that gives you upward mobility.
Take some time to write down what you are an expert at. Everyone is expert at something. Everyone knows more than the average Joe when it comes to something. There are a lot of guys like Frank and me that are not the most technically savvy that you could be teaching things to. I’m hiring out kids to make us TikTok videos because I’m clearly not going to be the greatest at that but it’s an unbelievable avenue for us in what we are trying to sell and the growth we are trying to. They are experts at it. You can go out and search.
Don’t be afraid to lean on a big brand to get started. You don’t have to start all on your own as a freelancer or a gig person. As you could start as a driver with Uber, I started with Quora and Medium writing and worked my way up to Forbes, then my own thing. You can start on Upwork and Fiverr. Go peruse different jobs out there. Type in search terms that you are good at and see what jobs are out there. Take a few gigs where you do something for somebody that, so they find value in you, and then they can give you a referral, and maybe you can do a little bit more for them. There are lots of people out there.
Our jingle for this show, Frank did it all himself. He went out and found a voice actor because we didn’t want it to be our voice. He had someone put the music to it and add in some clips. He can put some time in but we outsourced all of it. We didn’t do that ourselves. We don’t know how to make a jingle. We didn’t know how to make a logo. We found a guy on Upwork who used to work at amusement parks and draw the little caricatures of people. We found him on Upwork, and he charges $100. It was cheap. It’s a fun logo, and we liked it. That was enough for us to get going.
We did an entire episode of, “What would I tell myself several years ago?” Ian asked me a bunch of questions. What I would tell myself now, if I could go backward or what I would tell you, dear reader, if you are curious, if you have a group of smart and influential friends or people who are successful, pull them, “What is the one thing I do that if I was going to ask you to write me a $5,000 check for it, you would, and you think you are getting a huge value?”
I had a conversation with someone who has a training course. It’s brilliant. I’m going to do this with several people. I said, “If you were going to call me and I made you pay me $5,000. What would you want me to talk to you about?” I know 6 or 8 people I’m going to survey, and Ian is one of them. If I get enough of the right answers and enough people that tell me, “It’s this thing. I feel like I can do that with relative ease,” I’m going to build it.
If I have 5 or 6 people who tell me that, that’s something that I get to leverage my time on, not too dissimilar from how Ian did. I have already built other programs and made a shitload of money as a consultant. It’s another idea for a product. How do you use that concept in your life? How do you take the people that you know around you? How do you survey that? This is where the gig economy goes from working for you. It’s push versus pull. To me, this is a push. The pull stuff that is harder shit to deal with is driving an Uber, delivering food or working for Gopuff but you can utilize both things and build some momentum.
Fantastic takeaway. I’m outstanding at podcasting. I will not be going to outsource this. At some point, I could see us finding some people that are a little better at generating actual followers and subscribers to a podcast. Maybe at some point, we outsource ourselves. We keep the brand and the equity ownership. We put on Upwork, “Looking for two podcast hosts that people want to listen to.”
My takeaway is you’ve got lucky with Quora. That is over a few years and nearly the views.
I didn’t have someone jacking up all my good content. I blame it all on you. You are the link. You are the problem.
With that, I’m leaving.