How can a single human being reach a point of 1 million annual returning revenue? By using leverage.
The principle of leverage is well understood in mechanics, finance, and negotiation. Lately the term gained momentum amongst knowledge entrepreneurs when the always insightful Naval Ravikant put a spotlight on the three most relevant types of leverage (I included some sources on leverage at the bottom of this mail).
- People - for millennia humans thought of clever ways to get other people do work for them. Generally the more people, the more leverage is generated. I'd argue that access to influential people who can "pull some strings" for you, also falls into this category.
- Capital - a modern form of leverage is the use of money to multiply the outcome of your actions. This works well in financial markets but also includes transactions where money is used for amplifying any kind action, e.g. buying advertising, services, or even complete companies.
- Products - in particular digital ones with no marginal cost of replication. This includes media in the form of books, video, audio, and - and this is new - code! Source code in the software you are using. An important particularity of this type is that it is permissionless, so people can do this to a large extent on their own.
I'll include some more sources at the bottom of this mail.
While companies make heavy use of people and capital, it is particularly product leverage that is relevant for knowledge entrepreneurs:
Instead of taking repetitive meetings, they publish YouTube videos. Instead of buying advertising, they grow an audience on social media. Instead of selling via distribution channels, they link to their Gumroad or Stripe checkout
You may find downsides for each of these techniques. After all it may feel nicer to talk to someone directly instead of watching a help video. But the more relevant point is this:
While the best option is hard or even impossible to scale efficiently, the second-best option scales easily!
One well-made step-by-step video can help millions of people, without any more effort on your side. An entrepreneur cannot deliver this in the form of 1-to-1 interactions.
So focus your efforts on scalable digital products and make the best out of it. Use them for your leverage.
Pieter Levels used code, social media, and his blog to leverage his expertise as a digital nomad and indie maker into 1 million annual revenue. There are plenty of other products and media for you to choose from.
Just take your pick.
Prompt :: Where can you apply leverage?
In each newsletter, I include a prompt. Reply with your answer and I'll send you feedback.
Think about an area where you could apply leverage in the form of a digital product. Where could you replace time required from you with scalable digital content? Could you write about your ideas online? Could you record some conversations on audio or video?
Stack :: General purpose automation (Zapier)
In each newsletter, I describe a tool of the Knowledge Entrepreneur Stack. Keep an eye on these tools and use them for leverage.
Zapier is the glue that makes the stack of a knowledge entrepreneur run smoothly. It allows all kinds of different services to trigger actions with each other. Automatically add a new buyer from Gumroad to your newsletter and create a Circle account. Automatically add new subscribers for your newsletter to an Airtable or Google Spreadsheet. Automatically scan your emails for GDPR delete requests and add entries in your task manager. With Zapier you can automate even complex workflows in a univeral and powerful way. You will likely need a paid plan to make most out of the tool but the time and effort you'll save will be worth the investment.
Profile :: Engineering a Notion academy (Daniel Canosa)
In each newsletter, I put a spotlight on a knowledge entrepreneur, so that you can use their journeys as inspiration.
I met Daniel first in the Ness Labs community and noticed how natural he felt on video. Only later I discovered that he recently started the Notion Academy YouTube channel. Having watched quite a few of his videos, I am convinced that he is on a great path. He has clear and valuable expertise, creates frequently good content, pays attention to growing an audience, and is committed to earning a living with it. At the time of this writing, he has 980 subscribers. I predict this number to rise steeply within the year. As Notion is an amazing general purpose tool for Knowledge Entrepreneurs you should follow his work. Did I mention that he quit his job as engineer and now lives in Bali?
Small bites from the web
In each newsletter, I include a few links that I discovered during the week.
- The Age of Infinite Leverage (value.app) is a great illustrated article describing the concept of leverage and Eric Jorgensen compiled a lot of Naval's work in the free ebook The Almanack of Naval Ravikant.
- Thank God for the Nerds by Jon Lajoie (youtube.com) is a tribute to "all the incredibly intelligent, hard-working professionals who've dedicated their lives to becoming experts in their respective fields"