Creating Leverage
There are 4 ways to create leverage in what we do, especially our earning capabilities
Level 0: Being paid on an effort basis i.e. time and materials. The day we stop working, the income stops. This doesn't mean being paid on an effort basis isn't rewarding. It too can be very rewarding. All it means is that you are & will be compensated for solely your time & effort. It works well for many of us,. including for some of the most highly paid atheletes. But, the atheletes then also benefit from another lever (marketing, detailed below).
Level 1. People -
Greater the number of people we manage, greater the output/ impact you are accountable and incentivised for. Example is progressing in your career. A CEO earns more than a manager who earns more than an junior analyst.
Level 2. Capital
Greater the access to capital, the more scale you can achieve. This is the difference between running a restaurant with 10 seats vs. 1000 seats. Investing is another way of leveraging your capital to generate returns that's not linearly linked to effort.
Level 3. Marketing
Access to people, with an ability to influence. This is what gives some individual influencers the edge even over large & established companies. It enables you to drive the narrative and impact decision making of thousands & millions of people. This is why creating your brand is important, it helps you create your space in an otherwise crowded world.
Level 4. Technology
This is where the product and automation comes in. Software works round the clock, even when we are sleeping. The leverage a great software provides today is immense, it's like a 24/7 perpetual working & earning robot with minimal or even reducing cost of running. Other examples include books (leverage technology to publish and distribute), algorithms (gmaps), SAAS companies etc.
You can look at most cutting edge companies or individuals, and each of them today have at least one of these leverage levers working for them. Those that can enable multiple levers have an even greater momentum.
As individuals, it's important to articulate (to ourselves) which lever are we focusing on and counting on at different stages of our life & profession. There isn't a best answer, but what's best for you that counts.
