Leverage is required to do big things with your small startup

When I’m talking with startup founders, I often use a specific term that requires some explanation.

It’s LEVERAGE.

As in “Where’s your leverage in that area?”

This isn’t financial leverage that multiplies your investment results.

I’m talking about the leverage you get when you do things that create OUTSIZED POSITIVE RESULTS in some area of your business.

Like using a big lever, you do something on one end and a MUCH BIGGER impact happens on the other end.

This is different from doing things that just create positive results.

Positive results are a start. But that won’t grow your business.

Leverage is creating a DRASTICALLY HIGHER IMPACT from a few important things that you concentrate on with your meager startup resources.

Product-market fit means “We found a high-leverage customer type we can sell with high-leverage efficiency!” To the exclusion of the rest. At least for now.

This is hard to see if you haven’t played the startup game for a while. They certainly never teach this in any schools.

This is why “10X” shows up so much in startup talks.

As in “10 times better results than the other thing you tried” or “10 times better than your competitor in that area.”

10 times leverage. That could even multiply on itself.

When author Jim Collins said, “Good is the enemy of great,” he meant that greatness in some areas is required for success, but most of our activities are completely filled up with “just good” stuff that gets in the way.

It’s easy to stop doing the things that never created any results. To stop the marketing activities or sales pitches that didn’t work. To not build the features that nobody asked for.

It’s much harder to stop doing things that are positive but are not creating big leverage in your business. Even when it’s crystal clear, which it usually isn’t.

It’s a core design principle–take away the things that don’t create the HIGHEST IMPACT.

Marie Kondo tells us to remove things from our living spaces that don’t “spark joy.” That aren’t 10X! To remove the good things that fill up our lives to focus on the few things that are great.

  • Try 25 marketing activities to find the one or three activities that create 10x better results than any of the good activities!
  • Sell 10 different types of customers and then focus on the one or two ideal profiles that are 10X happier than any of the others!

Doing big things with small resources REQUIRES this kind of 10x leverage. Early-stage investors know this too.

If you haven’t found it, keep looking. Look for Wow! or crazy good results.

Then stop the other stuff and double down on that.

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