Leverage is good stuff.
For a caveman, a lighter would make you king of the world.
That’s technological leverage.
If leverage is good stuff, technological leverage is great stuff.
The idea that little old me can move more, do more, be more, using proper leverage. In business, leverage allows you to close more deals, bigger deals, and it allows you to close deals while you sleep. I came to this idea from Naval Ravikant who describes leverage as a “force multiplier”, and for me that means it’s something that can increased deal flow and deal size from strategic and scalable inputs.
Felix Dennis, author and magazine publisher, tells a story about scaling Maxum Magazine in the United States using the leverage of technology.
“Obtaining paid magazine subscriptions is a costly business. On average, it can cost between fifty and one hundred dollars to obtain a “live” subscriber—one who will eventually renew their subscription and pay off the cost of having attempted to acquire scores of others. Still with me? So Roger [Dennis Publishing President in the US] goes into overdrive when he finds he can sell subscriptions on the Maxim website. This strategy isn’t working for Guy [Dennis Publishing President in the UK] in the UK, but who cares? It’s working in the USA. So Roger, that thrifty, frugal soul, begins pouring hundreds of thousands of dollars of my money into our American Internet operation, weaving a massive new basket we never knew existed. It must have been painful for him, but it paid off. We were selling subscriptions for pennies instead of fifty or sixty bucks a time.”
Using the internet rather than people and print, he increased deal flow and decreased customer acquisition costs. The hard work with a magazine is the story, the writing, the production. Using technology, they scaled the sales side, build once, sell infinite times, and as a bonus they lowered the costs to produce. No more paper, printing, shipping, and delivery.
The old way. A news stand and door to door sales gets outpaced quickly when you look for leverage.
So, start looking!
It’s not just magazines and news. Think about going door to door with those Cutco knives your mother loves, doing live demos, one family at a time. How does that change with the invention of QVC, and then Amazon and YouTube?
As Naval states, leverage is the “production of products with no marginal cost of replication”, and if you can’t get your cost of replication to zero, let’s damn well try to get it lower. Find some economies of scale. Where can we get the costs down while also selling to infinitely more people, like Maxum Magazine?
First, look at selling one-to-many. Sell big deals. For software and services, this means running from SMB and into enterprise and mass market sales. Why sell 100 licenses when you can sell 100,000? We want to sell milkshake machines to McDonalds rather than every mom and pop diner on the interstate.
Second, sell high margin and repeatable products and services. You can do bespoke work in your retirement. For now, you want to find a product or service you can sell thousands of times. This makes the sales pitch easier for you and delivery easier for your team.
Third, you want to sell while you sleep, through the scale of the internet. No more door to door, you are going directly to their phones with newsletters, blogs, podcasts, and videos that carry your message and build your community.
If you are looking for leverage, you can hit 10 run homers, and that means you quit selling one living room at a time. The only way to win that game is by hiring an army of salespeople under you, and that sounds like a pain in the ass. We’d rather multiply you on the web instead of trying to emulate you on the streets.
Salesperson going door to door with a bespoke product is a 1:1 sales strategy. It works, but it will never scale.
Salesperson using Zoom and a CRM to connect with and manage time and deal flow, using automation and robotics to scale their product, selling SMB products is a 1:100 scale. It works, it scales, but you can do more than just scale your product and deal flow. You can scale yourself.
Salesperson with added technology and media (video, podcast, newsletter, blog, social), selling enterprise & mass market products is a 1000:1,000,000 scale. Leveraging technology, they have scaled the product, customer, and most importantly, themselves.
What are some examples of business using leverage in this way?
Kylie Jenner used television and social media as a lever for Kylie Cosmetics, valued at over one billion dollars.
Gary Vaynerchuk used YouTube as a lever, creating Wine Library to attract buyers to his family liquor store. He was able to 20x revenue in 5 years. He then used his skills in digital media to start and build Vener Media, a digital add agency, to help other companies do the same.
Seth Godin has used blogging as a lever, freely sharing his ideas with a daily post for over a decade. That has helped him build a large audience that buys his books and enrolls in his online workshops, both of which are also high leverage products and services.
Jocko Willink is a retired Navy SEAL and writer who has used podcasting as a lever to turn himself into an entrepreneur, selling supplements, training courses, and clothing. He sells a lifestyle of early mornings, hard work, and no excuses that he can now use to sell almost any product or service he wants.
Are you getting this?
Cosmetics, wine, workshops, supplements. They all could have been done locally, they could have been done at the farmers market, but instead they chose to use technological leverage to scale.
Your boss wants more touches, more activity, more interaction. Put yourself directly into the customers ear hole. Daily or weekly, on demand.
The old way is a newspaper stand; the new way is a web site.
The old way is door to door, the new way is YouTube.
The old way is junk mail, the new way is permission marketing.
The old way is radio ads, the new way is a Podcasting.
The old way is a famous spokesperson, the new way is you are the spokesperson.
You can leverage technology and scale yourself in hundreds of ways.
It can be as easy as starting a wiki at work, so you can leave early.
It can be as simple posting customer FAQs to the website, reducing customer calls, so you can get some sleep.
It can be as basic as Outlook rules, cutting down on manual triage, so you can take a vacation.
Or you can go for it. Website, YouTube, email, podcast.
Every time you have an interaction it’s an opportunity to find some leverage, and opportunity to remove yourself from the process in favor of code, in favor of on demand. Ask yourself how it could have been automated or eliminated. Look for ways to scale it, to replicate yourself, your knowledge, and your ideas.
Once you start looking for leverage, you’ll see opportunities for it all around you.
