Evaluating side projects to improve their returns

6 months into writing this newsletter, I did a self-evaluation to figure out how to increase the ROI of this side project without additional investment

When I started writing this newsletter, I made a personal commitment to myself to stick to it for a year. 6 months later, I’ve invested 175 hours to write 26 consecutive weekly posts, totaling 45,000 words (enough to fill a 150-page book).

On day 1, the biggest risk about this newsletter was whether or not I would be able to keep up publishing every week. I’ve proven that’s no longer a risk, and now the biggest risk is whether or not I’m getting enough of a return on it to continue writing this newsletter long-term.

Side projects like this newsletter are an investment. Just like any investment, I should only continue investing if I’m getting good returns. The 6 hours per week I’ve been investing on this newsletter could be invested in other ways which could have higher returns. Therefore, 6 months in, now is a good time to evaluate the performance of this newsletter as a side project and identify subtle changes I can make to increase the ROI.

In my post, Everyone is an Investor, I boiled down entrepreneurial career-building into optimizing four activities, which are the lens through which I evaluate side projects:

  1. Building investable capital: Building savings or wealth that gives us flexibility and the ability to invest in different ventures.

  2. Building Entrepreneurial Assets: Building (1) Network/Audience, (2) Skills, and (3) Domain expertise which make any investment of our time have a higher ROI.

  3. Portfolio Construction: Constructing a portfolio of investments that maximizes return by creating a personal flywheel.

  4. Maintaining sustainability: Ensuring our portfolio of investments are net energy producing.

I focused on evaluating #2: Building Entrepreneurial Assets for this evaluation to find changes I could make which increase its ROI without much change in investment.

Through this process, I’ve decided to make the following changes to my approach with this newsletter.

  • Change #1: Shift towards applying, stress-testing, and improving the frameworks I’ve created with other entrepreneurs – rather than continuing to create new frameworks.

  • Change #2: Start writing posts that force collaboration (and thus building new relationships) with entrepreneurs, investors with expertise in super early-stage investing, and other experts in the realm of entrepreneurial career-building.

  • Change #3: Start focusing more on building an audience and growth.

I followed the following process to arrive at these proposed changes:

  1. Break entrepreneurial assets down into more discrete parts that can be evaluated

  2. Give each entrepreneurial asset a rating from 1 to 5 on the potential returns I could be getting

  3. Give each entrepreneurial asset a rating from 1 to 5 on the performance of these returns to date

  4. Determine changes that would need to be made in order to close the gap between the performance to date and potential returns.

  5. Distill these potential changes to a few actionable changes I can make.


The Evaluation

In order to evaluate the returns of this newsletter, I need to break the assets down into seven smaller pieces: 

  • Network/Audience → (1) Close relationships, (2) Audience

  • Skills → (3) Writing, (4) Career coaching for entrepreneurs, (5) Audience-building

  • Domain Expertise → (6) Entrepreneurial career-building, (7) Investing in entrepreneurs

Scoring

1) Close relationships

  • Potential: 4. I could be using the newsletter to meet and build relationships with people I admire, strengthening my network

  • Performance: 2. I have only used the newsletter to strengthen existing relationships, not build new ones.

  • Delta (and actions to close gap): -2. To close this gap, I will need to start writing posts that force me to build new relationships (e.g. round-ups, interviews)

2) Audience

  • Potential: 4: I could build an audience of thousands of entrepreneurs.

  • Performance: 2: I have only built an audience of hundreds.

  • Delta (and actions to close gap): -2. To close this gap, I need to start spending time each week focused on growing the newsletter.

3) Writing skills

  • Potential: 4: I can improve as a writer and develop the muscles to write consistently

  • Performance: I have improved as a writer and figured out how to write consistently

  • Delta (and actions to close gap): 0

4) “Career coaching for entrepreneurs” skills

  • Potential: 4: I could become an expert at coaching entrepreneurs through career decisions and create original frameworks for doing so.

  • Performance: 3: I’ve created frameworks which have helped entrepreneurs with career decisions and had spontaneous conversation with them as a result. But I haven’t consistently established this practice and sufficiently stress-tested these frameworks with live ammo.

  • Delta (and actions to close gap): -1: Start consistently coaching entrepreneurial folks on career decisions using the frameworks I’ve created (e.g. 1 per week).

5) Audience-building skills

  • Potential: 3: I could learn how to build a newsletter audience.

  • Performance: 1: I haven’t invested any time focusing on audience-building.

  • Delta (and actions to close gap): -2: Start focusing on building an audience.

6) “Entrepreneurial career-building” domain expertise

  • Potential: 5: I could be shaping the category of “entrepreneurial career-building” and become an expert in it.

  • Performance: 3: I’ve developed some of my own original thinking, but haven’t sought enough diverse perspectives from others with expertise.

  • Delta (and actions to close gap): -2: Start collaborating with others who have expertise entrepreneurial career-building on posts.

7) “Investing in entrepreneurs” domain expertise

  • Potential: 4: Could be learning from experts in super early stage investing

  • Performance: 2: I’ve developed original thinking, but haven’t learned enough from those whose current career is based on finding entrepreneurs to invest in.

  • Delta (and actions to close gap): -2: Start collaborating with others who are experts in investing in entrepreneurs .

Distilling action items into a few changes

To close the gaps between historical return performance and potential returns, I’d need to make the following changes:

1) Close relationships (+2) To close this gap, I will need to start writing posts that force me to build new relationships (e.g. round-ups, interviews)

2) Audience (+2): To close this gap, I need to start spending time each week focused on growing the newsletter.

4) “Career coaching for entrepreneurs” skills (+1): Start consistently coaching entrepreneurial folks on career decisions using the frameworks I’ve created (e.g. 1 per week).

5) Audience-building skills (+2): Start focusing on building an audience

6) “Entrepreneurial career-building” domain expertise (+2): Start collaborating with others who have expertise on posts

7) “Investing in entrepreneurs” domain expertise (+2): Start collaborating with others who are experts in investing in entrepreneurs 

I can distill these down into the following three changes. Through this exercise, I’ve built conviction that if I make these changes, I can drastically increase the ROI of this newsletter without requiring much more of a time investment, making it something I can continue investing in long-term.

  • Change #1: Shift towards applying, stress-testing, and improving the frameworks I’ve created with other entrepreneurs – rather than continuing to create new frameworks.

  • Change #2: Start writing posts that force collaboration (and thus building new relationships) with entrepreneurs, investors with expertise in super early-stage investing, and other experts in the realm of entrepreneurial career-building.

  • Change #3: Start focusing more on building an audience and growth.