Business & leverage.

Building a business was never easy.

Each great brand always achieves its growth slightly differently.

It’s almost as Peter Thiel wrote in his book Zero to One, about how the next Bill Gates won’t build an operating system; the next Mark Zuckerberg won’t create a social network. So, it’s clear that winning in business is a stochastic, unpredictable, and irreproducible phenomenon, in many ways.

The perfect operating model will be unique to your enterprise specifications. The right way for your company will always be hyper-specific to you.

why this is great

Having no right answer leaves infinitely many paths to success. To a win.

In order to see those paths more clearly, understand your brand’s risk profile; this is a nuanced map of your company — the silhouette of your business, both flaws and strengths included. Somewhere in this mapping lies a set of important ideas, the levers by which your business creates value.

I call these key leverage points (KLPs), since they are powerful tools for deconstructing and finding solutions to business problems.

Note: Leverage is used here symmetric to the term financial leverage: something that can really capture outsized value for you, but also leave you at risk of losing it.

exemplifying KLPs

Let’s walk through an example to help you visualize KLPs.

Imagine Apple. One of their KLPs could be interoperability — between products in the Apple ecosystem. Having this universal UX, where devices, features, and apps melt into one another, is a motivator for consumers. I love copying text on my iPhone and immediately pasting it on my MacBook.

That is a key leverage point, the interoperability generally, since it creates high switching costs for Apple users. If it isn’t maintained, over time user attrition will breed as competitors catch up. If it is maintained, even more people will buy Apple devices and existing users will stay, too.

find your own

Trace your own business out. Look at its history and ask:

  • What has been supremely useful for growth?

  • Where were our blindspots? Reduce into smallest set of items.

  • What else in the world could seriously affect us?

After validating one KLP, nurture it across the business — all units, not just ones directly involved. Apple’s interoperability is a great example of how to boil your business down into one of its most important parts.

Older companies suffer in KLP alignment more than younger ones. Winners grow fat and become losers over time. Their KLPs started moving, playing hide and seek, unwittingly burying their insights within lagging, legacy processes. Work becomes misguided, literally, by ancient logic.

don’t get married to anything

Always be willing to admit KLPs have changed.

That’s just accepting that your first-order of thinking was wrong, which is never bad. Just listen and adapt to their shifted locations. Failing to align with KLPs invariably creates problems, since it’s a leveraged position. Strategically, you’re falling short by sweeping issues under the rug and lying to yourself.

On the other hand, you could immediately start engineering new metrics to align with those KLPs. You’re bringing in stakeholders and revising initiatives to reflect those newly leveraged flywheels. You’ll win more business, and do it better, by paying attention to what makes you grow.

final thoughts

Be honest about how you create and capture value for users. Such radical ownership of one’s business helps to safeguard against sudden disaster. It’ll catch broken glass when it breaks, like falling pieces of your business, and reassemble them even better.

In business, nothing is guaranteed forever.

Not your negligible marginal cost, low customer service baggage, happy customers, funding, etc. Nothing will last. Never let yourself forget this and become complacent. It's too easy, since even business is a rollercoaster.

So we enjoy the way down, but don't notice it's taking us down from a peak.

Notice this, that's all.