"It doesn't take money to make money; it takes leverage to make money."- Naval Ravikant

In this age of social media, AI, and automation, the opportunity to create wealth through entrepreneurship has never been greater.

As a former founder and now an investor who has interacted with thousands of other founders, most will align with the true goal of creating wealth - not just for financial gain, but - for the freedom it can provide.

Leverage, when used effectively, is key to powering founders to make strategic decisions that lead to their desired outcomes - and unlocking this freedom.

As founders you have finite time in a day, so understanding how businesses compound their efforts for growth and how wealth is created will boost your strategy and decisions.

Last year, I read?The Almanack of Naval Ravikant. You can download the PDF for free?here.

Naval Ravikant offers a thought-provoking framework about Leverage.

In its simplest definition, Leverage is the ability to multiply the output of your inputs. You achieve more with less personal effort.

Leverage has never been more accessible to founders than it is today - but most are unaware of how it works.

Labor or Community Leverage = People Working For Or With You.

Owners can have more compounding power than employees because they have Leverage in the form of labor or community. When they make a decision, they have a team to carry it out, multiplying the impact of their decision. If owners don't have the capital for compensation, sweat equity compensation may be an option.

Capital Leverage = Money Working For You.

Consider Leverage in the financial sense as borrowed money (capital). As a fund manager, your ability to invest this money in productive businesses can significantly enhance investment returns. However, it's important to note that leverage also amplifies losses, so careful risk management is crucial.

Media Leverage = Content Working For You.

Media leverage in today's digital age is a fascinating concept. While it encompasses traditional mass media, much of its power lies in media by the masses - the content you create, which can be scaled via software. This post, for example, is content with a zero marginal cost of reproduction, meaning I only needed to write and post it once, but it can be consumed repeatedly by anyone with an internet connection. I also wasn't required to get anyone's permission to post it. This is how media Leverage works, helping you reach a wider audience, share your message effectively, and potentially monetize it.

Code Leverage = Software, Systems, and Robots Working For You.

Code leverage, my favorite form of Leverage, is cheap and potent. It's the ability to write software, build systems and infrastructure, and command robots. It liberates us to create something from nothing or at a low cost. Unlike capital and labor, you don't need money or permission to build a viable version of a system or software. If you can code or partner with someone who codes, you can build infrastructure to uplift and entire community, link multiple systems, and have robots working for you, compounding the impact of your judgment and decisions.

When your judgment is aligned, Leverage multiplies the value of your outputs.

As with any powerful tool or technology, the impact of leverage is not solely about its use, but about the judgment, purpose, and intention behind it.?

"It doesn't take money to make money; it takes leverage to make money."

Be bold - Giselle