No man is an island, so if you are going to be wealthy, you will need help— but not always from other people. You need help from the magic of compounding. Find a way to compound all your hard efforts through the power of leverage.
Visualize yourself standing on the edge of a bridge over an unmoving body of water. For every business decision you make, you drop a small pebble into the water, and each expresses your decision. Ripples that appear every time the rock you throw strikes the surfaces are, on the other hand, the influences and consequences of the decision you make.
If the rocks you throw aren’t big, your ripple effects will be small. With leverage, you can transform the ‘small’ pebble into a big boulder, greatly amplifying the impacts of your judgment and decisions.
Leverage can amplify your efforts to make any project effective. The best thing about leverage is that you can get them for free.
Naval Ravikant on Leverage
Naval Ravikant, CEO of AngelList, often talks about the concept of leverage from a career perspective. For Naval, leverage has three fundamental elements:
- Force
- Fulcrum
- Lever
He used the term “force multiplier” to define what leverage is, explained the idea of labor and capital leverage, as well as product and media leverage. He also attests to why product leverage was more egalitarian in his podcast ‘Labor and Capital are Old Leverage,’ and ‘Product and Media are New Leverage.”
The Old Leverage
In a podcast, Naval stated, “The most important part of leverage is the idea of products that have no marginal cost of replication. This is the new form of leverage. This was only invented in the last few hundred years. It got started in the printing press. It accelerated in broadcast media, and now it’s really blown up to the internet with code.”
Naval highlighted the importance of leverage in the world of business and the significance of why people pay more attention to some forms of leverage over others. He expressed that we revolve around labor as our main form of leverage. We used to look at project problems through the eyes of manpower.
For instance, if one person can create a toy in a span of one hour, ten people can produce ten toys at the same given time. The more people we use to accomplish a task, the more successful we can be. This is the reason why successful people tend to associate power with the people they manage.
However, is doubling manpower the truly effective approach?
According to Naval, you can still accomplish a job successfully even while using the minimum amount of labor by taking advantage of other forms of labor.
On the other hand, capital leverage served as the main form of leverage for hundreds of years. Although not all things can be resolved by chucking money, no one will disagree that the more resources and money you have, the more things you can carry out.
However, capital leverage isn’t for everyone. It’s only for those who have the means or available funds and resources. Hence, this type of leverage is often viewed as biased and hit-or-miss leverage.
Children from cash-rich families have the whip hand because of the inheritance they’ll get from their silk-stocking parents.
Now, what’s the best free leverage you can use to lever your business? You have two great options— internet, and product and media leverage.
Internet and Virtual Private Network (VPN)
Every passing day, entrepreneurs seek new and feasible ways to leverage the internet in operating a more efficient and profitable business. If you are a business owner or a digital nomad, mastering different internet strategies would greatly help you succeed in your online marketing efforts.
With the dramatic evolution of the internet, it’s no longer an inexpensive option online isn’t longer an option but a necessity.
Fortunately, because of the rapidly advancing world of innovation, a wide range of strategies and business tools available on the internet that you can use to build your business from the ground up towards greater heights.
Yet, running a business online can be pretty frustrating, especially when you’re abroad and some servers aren’t opening up because of your location. Putting this into consideration, you can leverage a virtual private network (VPN) that will allow you to change your IP address and access servers that are restricted to other countries.
Product and Media Leverage
Naval claims that product and media leverage is probably the best product and media leverage that have no cost for replication. Through the use of online media, you can produce a product and share it with a wide group of people without the need for big capital and manpower.
The podcast that Naval runs is one of the media-related leverage he used to reach out to a lot of people. Instagram, Facebook, Twitter, and other online media platforms have enabled and granted us a powerful tool for leverage.
Examples of Media Leverages at Work
Compared to the previous generations which mostly made their wealth through capital leveraging, today’s millionaires made their fortune from the virtual world. Naming a few, there’s the famous Swedish YouTuber Felix Arvid Ulf Kjellberg aka PewDiePie, and American Twitch streamer and gamer Richard Tyler Blevins known Ninja.
Both PewDiePie and Ninja have generated a net worth of 40 million dollars by using media platforms. Aside from these two streamers, a lot of people nowadays are making an enormous amount of money by leveraging the power of media.
Huda Kattan, who started off her humble journey as a beauty blogger has built her beauty products empire, now having a net worth of $550 million. Without capital and battalions of workers, Huda managed to get to where she is now by toiling for her contents, which she leveraged into a completely new opportunity.
It is important to understand that it is not necessary to be a famous influencer to leverage an opportunity. In fact, you can just ride in the wave that others are making.
American rapper Snoop Dogg took a selfie of his travel in Bogota, Columbia, but post his image on a social media platform, he made a typographical error and typed in ‘Bogata’ instead. He mistakenly tagged a Romanian village in Mureș County.
His unintentional mistake exploded and hyped-up Romanians.
The villagers of Bogata saw the opportunity with the increasing notoriety of their town and take advantage of it. Embracing the mixed-up, the settlers of the village even created a website that promotes their place as a ‘chill travel destination.’ Two years later, Snoop Dogg ended up visiting Bogata in 2018 for a performance.
Never underestimating the power of the internet is probably one of the best lessons that we can take away from this write-up. If you have a particular idea or project in mind that you want to develop, you can leverage the online media.
Always keep in mind this famous inspirational quote, “The best time to start a project was yesterday. The next best time is today.” Start leveraging the power of the internet as soon as you can. Do not delay the things you can do now, or else you’re more likely to lose your chance.
