StartupPhd15 Laws of LeverageChristopher Hastings – firstname.lastname@example.org
Why leverage matters.Being effective is about understanding what worksand what doesn‟t.If is about understanding the relationship betweendoing stuff and seeing stuff happen for yourbusiness.And how doing the wrong thing will never get youthe company you want, just because you want it.
What is leverage?Leverage is putting effort into a specific action thatcan have a massive effect in your business.Responding to feedback will be more effective forgetting new customers than changing the font inan advertisement on your website.The font may be ugly, but it hasn‟t stopped peoplefrom coming so far – and people will stop coming ifthey are ignored.Angry customers tell 7 friends about their badexperience. Happy customers tell 3.
Leverage Law#1:Know where you havepower.We have an immense amount of power at ourdisposal. We can decide who we are going to hire,what opportunities we are going to pursue, orwhen we are going to let go.When you are using your power, you feelenergized. You aren‟t waiting. You are takingresponsibility for what you can do and waiting forthe world to come help.Your business is not a victim of a bad economy,your business just hasn‟t changed to reflectchanges in the new economy yet.
Leverage Law #2:Understand the ripple effectof your action.We often confuse the idea of innovation andinvention.The guy that invented the wheel was an inventor.The guy that put the wheel on a cart was aninnovator.An innovation makes a dent in the system. Aninnovation is useful beyond the job it was supposedto perform.The cart made the wheel effective at a task, ratherthan being a novel invention.
Leverage Law #3:Leverage has a range.If you put too little effort in, you won‟t see a result.I remember hearing an anecdote that a companycouldn‟t sell a $4,000 product in the marketplace.No matter how many customers they called, orhow clever their ads, they couldn‟t sell theproduct.Then they raised their prices by 10X. The $40,000product flew off the shelves (so to speak.)Trying a little bit and not seeing a result isn‟t alwaysa good indicator that you aren‟t doing the rightthing.
Leverage Law #4:Impact, not novelty matters.We may think we can make a dent in ourbusinesses using the latest gimmick, psychologicalsales trick or SEO tactic.You may be right.But first, look at other businesses.What is working for them?How did someone running the same business youare in a city similar to yours? Look for the lessons,and look with a wide angle lens.
Leverage Law #5:Timing Matters.Productivity gurus will tell you that you need toorganize your day around the most important thingor the most urgent thing.Or maybe if you do some small things you canbuild momentum to tackle the hard things.The truth is that you are most effective when youdo the right thing at the right time.If you are a writer, you may be better in the quiethours of the early morning, rather than getting allof the „important‟ things finished, and then trying towrite at 10:30 in the morning with the phone ringingand a hundred other things on your mind.
Leverage Law #6:Using leverage buildsmomentum.When you make the right choices, and put effort inthe right places, you get great feedback.You get enthusiasm to go to work. You get insights.You get sales. You get customers. You get profits.There is a reverse trick here too – where you haveenthusiasm can often point to where you haveleverage.
Leverage Law #7:Leverage is offensive anddefensive.One of the oldest uses of leverage is hard work. Inany business, putting more effort into the rightplaces can make a huge impact.And there are plenty of people who don‟t want towork hard, can‟t see the value or can‟t staydisciplined enough.Which means that working hard helps you getbetter, and helps prevent others from beingcompetitors.
Leverage Law #8:Understand your customer‟slife.I was coaching a client who wanted to start abusiness that could help the working poor.He quickly ran into a problem. For more affluentcustomers, you can tell them that using yourproduct will save them X amount of time or Ydollars. And they can justify the “investment”because it gives them more leisure time.The working poor don‟t always have that luxury. Soif you want to make an impact, you have to givethem a product cheaper, or give them a productthat will help them make money.
Leverage Law #9:Using leverage takes time.It may not happen overnight.But it might.One thing is for certain – that with so many hours aday, it will mean that you have to make certainchoices that require focus.Getting leverage means focusing on one thing,more than a lot of little things.It‟s a springboard, rather than a ramp.Like building a great business concept, beforetrying to write a business plan.
Leverage Law #10:Leverage is a law.If you are buying a kayak on Craigslist, you may wantto try several tactics.If you use low-balling, you are trying to use theirdesperation to make the sale.If you use logic about how the product isn‟t worth itbecause of the condition, then you are trying to usefairness.If you send them a link to the kayak being sold fornew for a better price, you are leveraginginformation.And they will find it almost impossible not to changetheir price.
Leverage Law #11:Leverage requiresunderstanding.Remember your high school physics class? Movingthe eraser around underneath the wooden ruler tosee how more effort was needed in one place oranother? Or how to calculate using a pulley?Leverage means that you put effort behind aspecific action or idea. Its not a shot in the dark. Itisn‟t about working harder at the same old thing.More effort into a task that hasn‟t gotten any resultsafter you‟ve given it all you can isn‟t going to bethe breakthrough you are looking for.
Leverage Law #12:Leverage is measureable.If you are using leveraged actions, you are goingto feel better, in your bones.You‟ll sleep better at night.You‟ll see sales coming in faster, more complimentscoming and more opportunities being created.There will be a measurable change.So remember to measure when you try new thingsand see if you get leverage.
Leverage Law #13:Leverage can be increased.You can spend your time putting more effort in, ormoving your focus to the right part of your business.Those are the first steps.You can also make sure that the pulley has somegrease on it. It means that you make it easier forthe work to have its effect because you areconstantly trying to think of how to improve thepulley you are using.Leverage gets easier with time.And a greased pulley in a bad spot with no poweris worthless.
Law of Leverage #14:Leverage isn‟t a mystery.When you are using leverage, it isn‟t a mystery toyou.Leverage is almost never an accident. When wefail where others succeed, it is often because wewere trying to use a different tactic than the onethat would have the best result.Using leverage is an intentional, decided,deliberate act.
Law of Leverage #15:Leverage always changes.Today, you may be having great success. Or greatfailure. What can get you off the ground may beone thing today and another thing in six months.Asking “What do I do now?” is far better thanasking only “Why isn‟t that working?”Unless you ask with curiousity – trying to understandwhat has changed.We‟ve heard that insanity is trying the same thingand expecting a different result. We can never trythe same thing, exactly, because that moment haspassed. So we have to keep listening.