The Biggest Form of Leverage
December 14, 2024
Leverage is when you hold the advantage in a situation or a stronger position in a contest, physical or otherwise. It's also defined as getting more for the same input.
The four common forms of leverage are:
- Capital
- Labor
- Code
- Media
As a business owner, you're always on the lookout for ways to employ leverage. Growing from a startup phase into an established company typically happens through the use of leverage and systems.
Ideas are leveraged by capital through investment, which allows for the employment of labor. This labor often leads to code (digital tools like CRMs, automation, emails, etc.). Social media has made media widely accessible to everyone, no matter how small the business.
With increasing access to leverage, we’re confronted with an often invisible form of leverage that most business owners overlook:
Your Personal Operating System (Mindset)
Given the same conditions, access, and time, what will determine the business success of two people in the same industry?
The answer: What do they do with what they have.
Looking at the world, we can see many people have access to similar opportunities, but the outcomes they produce vary dramatically.
So, it isn’t the money, the code, the labor, or the media that determines our success. What matters is how we use them, and what we do is determined by how we see the world and ourselves in relation to it.
A Case Study: Person A vs Person B
Let’s assume two people—Person A and Person B—have access to the same amount of capital, labor, code, and media, and both want to start an investment firm.
Person A believes they must first have a solid business plan with lots of data and analysis before speaking to potential investors or partners. They spend the first 6 months analyzing and preparing the plan.
Person B believes the best way to start the firm is by immediately talking to potential partners and investors, and asking them what they want.
After 6 months:
Person A has a finished plan.
Person B has $20 million in investment and 2 partners for the firm.
The difference in outcome wasn’t external; it was internal.
Given their differing beliefs, Person A and Person B took different actions with the same resources.
There are numerous examples of people in suboptimal conditions producing exceptional results, and people in optimal conditions producing suboptimal results. The determining factor is always the person themselves.
The human brain acts as a filter for reality. Given the structure of that filter (beliefs, assumptions, and interpretations), we either take the appropriate action—or not.
If creating exceptional results were simply about the external conditions and materials, the “follow my systems and be a millionaire” schemes would work. But they don’t.
Because these schemes fail to address the biggest point of leverage there is: How you see what you see.