The First Economy

One 22-year-old delivers dinner through DoorDash. The app finds the customer, decides which job appears, and largely determines what the work pays.

Another tutors high school students. She finds the parents, decides what she can help with, sets her price, and keeps the client only if they think she is worth paying again.

They are learning two different ways that money gets made.

In most Gen Z research, they are the same person.

In 2024, 26% of Americans ages 18 to 29 said they had done some kind of gig activity in the previous month.

That number gets used to support a familiar story about Gen Z becoming more entrepreneurial.

The same Federal Reserve survey found that, across all adults, selling items was the most common gig activity, and most sellers said they were moving things like used clothing they already owned. The Fed does not break out that composition specifically for 18-to-29-year-olds, but it shows how much very different behavior sits inside the same “gig activity” label.

A strategy deck can turn all of that into one population called “young side hustlers.”

The population is much less coherent than the label.

Who brought the customer?

That question separates two economic experiences that current research usually collapses.

There is reason to think the distinction matters. Researchers looked at about 4,000 adopted kids and compared them against both sets of parents. The household a kid grew up in mattered about twice as much as the genes they were born with when it came to whether they later became entrepreneurs.

Nobody has established how much exposure is enough. A summer selling online cannot be treated as equivalent to growing up around a family business. That uncertainty is a reason to measure the difference properly rather than assume every kind of independent earning teaches the same thing.

Technology unbundled entrepreneurship

Young people have always found ways to make money outside traditional jobs.

A teenager in 1995 could babysit or mow lawns. She could tutor, sell something, or work for a family business.

What changed over the last 15 to 20 years is how much of the economic stack someone has to handle themselves.

A babysitter had to find parents. A kid mowing lawns needed houses willing to pay. A tutor needed students.

Then platforms started supplying pieces of the market.

YouTube began sharing ad revenue with creators in 2007. Uber arrived around 2009. DoorDash followed in 2013. Marketplaces like Etsy let sellers reach buyers without opening their own stores.

A person could now earn outside an employer while outsourcing parts of what independent earning used to require.

The platform could bring the customer and handle payment. It could supply discovery. In some businesses, it also determined which work appeared and what the work paid.

Technology did not simply create more entrepreneurs. It unbundled entrepreneurship.

The lawn-mowing teenager in 1995 handled most of the stack. She found the customer, decided what to charge, performed the work, managed her reputation, and collected the money.

A DoorDash driver gets most of that stack supplied.

An Etsy seller can choose the product and price while Etsy supplies discovery. A creator can decide what to make while an algorithm supplies much of the audience. Another creator can build a direct list and control the relationship herself.

All of them earn independently.

They control very different parts of the system around that earning.

AI expands the middle

Platforms changed where demand comes from.

AI is changing how much capability one person needs around them.

Work that once required several people can increasingly be handled by one person using software for coding, design, research, customer support, marketing, and other parts of operating a business.

Traditional jobs will remain. The more important change is that fewer people and less capital can now be required to produce something worth selling.

Platforms separated earning from employment.

AI separates capability from headcount.

Put those shifts together and the space between employee and entrepreneur gets larger.

Someone can have a job, earn through a marketplace on the side, use AI to build a small product, then start acquiring a few customers directly. That person can move across several economic models without ever having a clean moment where they “became an entrepreneur.”

The labels get weaker as the behavior gets more varied.

And companies care for different reasons depending on what they want from the person.

Sometimes the young person is the customer

A bank, insurer, tax company, payments product, or consumer app may want to sell directly to these young earners.

Then the question is what kind of economic system they operate inside and what that creates for them.

Take two 24-year-olds who each made $10,000 outside payroll last year.

One earned it through delivery apps.

The other has thirty tutoring clients she found herself. She now uses AI to prepare lessons, manage scheduling, and create materials that let her serve more students.

A financial institution can classify both as customers with irregular side income.

That classification hides two product opportunities.

The delivery worker has recurring exposure to income volatility. Expenses can arrive before the next payout. Faster access to earnings, tax help, insurance, and financial products designed around platform cash flow can be highly relevant.

The tutor is moving along another path. As technology increases how many clients she can serve herself, she can begin needing invoicing, payments, customer management, tax structure, credit, and eventually a business account.

One can become a more valuable gig-economy financial-services customer.

The other can become an SMB customer.

Neither is the better customer in the abstract.

The value depends on what you sell.

Current income makes them look alike.

Who created the demand can be a better signal of what the customer will need next.

The same distinction changes marketing. A delivery worker earning another $300 on weekends may respond to speed, flexibility, or financial stability. Someone trying to grow a tutoring business may respond to ownership and tools that help her build.

If both sit inside “Gen Z entrepreneur,” you can target the right age group with the wrong reason to care.

Sometimes the young person is the channel

Other companies are trying to reach Gen Z through someone else.

Then the question changes.

You care less about what the young person needs and more about what they can cause other people to do.

Creators make this easy to see.

Two creators each have 500,000 followers.

One depends heavily on algorithmic distribution. Another built an email list and can reach much of her audience without the platform.

The visible audience can look similar while the economic asset underneath it is different.

If you want impressions next week, algorithmic reach can be extremely valuable.

If you want repeat purchases, event turnout, a membership launch, or a relationship that keeps producing after the campaign ends, the second creator offers something different.

Some creator partnerships compound. Others reset when distribution drops or the spend stops.

Reach can be rented. A relationship travels.

Follower count tells you how many people might see something.

It tells you much less about whether the creator can repeatedly move those people somewhere else.

That distinction matters whenever a company is buying distribution rather than selling directly to the young person.

Sometimes the young person is part of the marketplace itself

There is a third version.

A marketplace may not be trying to sell to the participant or use them as an outside channel. It may need them to make the marketplace work.

Consider two sellers with the same sales volume.

One gets nearly all of her customers from marketplace search.

The other brings customers from her own audience.

The first adds useful supply.

The second adds supply and contributes demand.

Those users create different value for the platform even when the transaction number looks identical.

A marketplace that cannot see the distinction will treat someone who depends on its demand the same as someone who is helping create it.

That affects who you retain, which tools you build, what incentives make sense, and who is most likely to outgrow the platform.

The measurement stops too early

Most surveys record what someone did. They tell you that someone sold something, drove for an app, freelanced, or earned through a platform.

They generally do not tell you who found the customer, who set the price, who chose the offer, who carried the risk, or whether the relationship survives if the platform disappears.

Tax records can show that money moved, but they cannot answer those questions either.

So companies keep getting better counts of independent earning without getting a much better picture of the economic experience underneath it.

Change one question

The last 15 years created many more ways to earn without an employer.

AI is making it easier for one person to do work that once required a larger organization.

That means more young people will occupy the space between employee and entrepreneur.

Sometimes you will want to sell to them.

Sometimes you will want to reach other people through them.

Sometimes your business will depend on what they bring into a marketplace.

And the same person can move between those roles over time.

A static label like “side hustler” tells you very little about any of that.

Start with one question:

Who brought the customer?

It is the fastest way to see which parts of the economic system someone actually controls. From there, you can ask what they price, what risk they carry, and whether the relationship belongs to them or to the platform.

That gives you a better basis for deciding what to sell them, whether to buy their distribution, and how valuable they are to a marketplace.

I went deeper on this in a new PastBehavior research piece, including what the evidence establishes, why standard youth-entrepreneurship statistics blur these behaviors, and what current surveys still cannot measure.

Read The First Economy research →