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Leverage

sahillavingia.com

32 pointssahillavingia18 comments

There's a superbly written piece by Xianhang Zhang on Quora, that talks about the same concept. It's titled "Disregard Ideas, Acquire Assets" and presents a really convincing case by citing examples of entrepreneurs that focused on building assets, until as he puts it "they couldn't not do a startup with them". (Leverage could qualify as one of the more important ones, or if you want to look at it another way, acquiring substantial assets equates to earning leverage).

http://www.quora.com/Xianhang-Zhang/Disregard-ideas-acquire-...

This notion runs contrary to the standard approach that most early stage entrepreneurs adopt, namely the "build a laundry list of ideas and filter the top ones out using a combination of a heuristic, common sense and (eventually) customer validation and keep at it until you have traction with a concept that matters" approach.

I'm going to stick my neck out here, and recommend the approach that Zhang proposes - "focus relentlessly on acquiring interesting assets and then execute on the startups that naturally fall out of them". This means you might be pursuing something for the longest time that doesn't remotely resemble a startup. I'd qualify this with one caveat - make sure whatever it is, it's something you love doing.

And I think this is an interesting way to go about becoming an entrepreneur. Maybe you shouldn't dive in the deep end straight away (if you haven't built sufficient leverage / assets). Maybe that's another way deferring gratification, what with how cool just 'being an entrepreneur' has recently become.

Thanks for sharing Zhang's piece. That's the kind of simplistic (yet crucial) thinking that we almost always tend to overlook.

FYI "simplistic" is pejorative

simplistic can be pejorative, but in this case it doesn't seem to be, atleast from my perspective

> http://en.wikipedia.org/wiki/Pejorative > A term can be regarded as pejorative in some social groups but not in others, e.g., hacker is a term used for computer criminals as well as quick and clever computer experts.

downvotes?

For providing a factual statement that the word simplistic isn't always perjorative?

Well, I didn't downvote you, but I feel like I should reply...

Your comment was essentially of the form "Some Xs are Ys, Z is an X, therefore Z is a Y", which is of course wrong. "Simplistic" is not one of those words whose pejorativeness depends on context.

Thanks for the response. I disagree though:)

Simplistic doesn't have to have a negative connotation. Infact the word simplistic can have, and very often does, a very positive connotation.

Perhaps I'm just getting the definition of pejorative wrong?

The dictionary's on my side, but maybe usage is changing.

I agree.

I think the reason why we want to be startup founders is because it offers optimal balance of "direct implementation" vs. "impact."

At a certain scale, it's impossible to directly implement anything anymore. You can have tremendous impact but the more layers in between what's in your head and what's produced can only increase. Bill Gates wrote code that shipping in Microsoft products until the late 1980s[0]. At a certain point, he had to trade off having a bigger and bigger impact by managing the implementers instead of implementing himself.

Except somewhere along the line when you become the guy managing ten engineering departments with ten people each that help ten people write code, then you're not doing anything anymore. You're just enabling people to do things. And it becomes more and more likely they may do things in a way that's not in your head. So you trade implementation for impact, but then eventually the impact you get may not be that impactful to you because it's no longer what you did but what other people did.

In a startup, you have the best of both worlds. Impact and implementation. Eventually you fail because you didn't make enough of an impact, or you stop implementing because it's impossible for you to scale with the impact you're making. But I imagine the ride to that point is extremely fulfilling.

[0] http://www.microsoft.com/presspass/exec/billg/speeches/1997/...

The irony is that Sahil's posts are increasingly about something other than leverage. They are becoming more about stating completely obvious startup/entrepreneur bait. "We love leverage", "pivoting is hard", "think small". We'd do better to actually exercise our leverage rather than continue to read his inane and obvious drivel.

Dude, he's 19. Let him have off-days.

I don't think this is an off-day for me. I also don't think my age is relevant to whether or not he thinks my posts are drivel :)

Upvoted for being honest!

I try to write a lot knowing that some of what I write will be obvious to some people. It's tough to know what is obvious to others or not until you release it.

Derek Sivers puts it nicely: http://sivers.org/obvious

I do know that each of my posts results in a lot of positive emails and tweets. But, I respect your opinion and do agree that building stuff is almost always better than reading my blog posts!

(though hopefully reading my blog posts will help people do that, and anecdotally it has)

BTW, I do hope you continue to work on your blog and, more importantly, on your philosophy of getting stuff done.

"It’s all about leverage to him. He could write code, or he could help ten people write code. Or, he could help ten people manage ten people that write code. Or, he could help companies with ten engineering departments with ten people each that help ten people write code."

To me, this is apples and oranges. I write code. My goal is not "to be influential in the production of as much code as possible." My goal is "to personally build something cool and be able to say 'I built that.'"

Nothing wrong with either job, of course.

Agreed. I actually want less leverage because it means I'm directly in control of my work. I think that's necessary to build high quality stuff. I recognize that I'm working inside a larger framework in which someone is using me as a lever, but to me, the making is the glory.

> We care about impact. It’s the cure to everyone’s mid-life crises.

What does someone do when they feel invisible? When the open-source projects they create aren't having an impact?

Sometimes I feel I have to be the very best to have an impact. If I'm not doing something on the cutting-edge at the right time, it feels like I'm nothing. Whatever I'm working on I feel, "this isn't groundbreaking. This isn't going to have an impact. Somebody already did this or is working on this."

I can't be the only one?

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