Seven Legends of Leverage
Jack Butcher illustrates compounding growth
In a recent conversation, I stumbled into an idea. I was trying to show the power of leverage – how doing the right work is more important than the amount of work you do.
Trying to describe this, I said with no proof or evidence whatsoever, “there are people who do the right one month of work, and never have to work again.”
Then, I started trying to figure out if that was actually true.
Overall, the median lifetime earnings for all workers are $1.7 million, which is just under $42,000 per year ($20 per hour). A reasonably epic bar for the classification of “Legend of Leverage” is earning that in ~1 year. Earning $1.7 million in 1 year is an hourly rate of $820, 40x the productivity of the median. That’s the power of doing the right work.
There actually are a few of these extreme cases, and I’ll take you through the examples below:
Fiction author who just presold $24,000,000 of his next series
Real Estate Mogul who bought a career’s worth of real estate in 6 weeks.
The fastest $1B venture-backed exit in history. (280 Days!)
A laid-off hardware engineer built a web3 app worth $1B+ in a year.
A 14-year-old girl who built a site worth $1.5+ million
To be fair, some of these (Author, Real Estate) spend their whole lives building up to these high-leverage months or years. But, it was not the culmination of some 10-year master plan. It was just the result of compounding leverage. I bet some of these people are as surprised as we are about the magnitude of these outcomes.
And critically, some of these examples just found high-leverage work with no previous leverage. (web3 app, 14-year-old). It’s important to see examples both of “most pre-existing leverage” to “least pre-existing leverage.”
Discovering “the right work” is hard. Predicting ahead of time which projects will have massive outcomes is hard.
But it’s NOT hard to focus on continuously building leverage and increasing your exposure to high-upside outcomes. Over time, with enough leverage and effort, you too could have one of these months or years with a lifetime-scale outcome. There are a ton of examples where people do this later in their careers, using the Mountain of Levers they’ve carefully built.
The Leverage of a superstar Author
Brandon Sanderson, a fantasty/sci-fi author just pre-sold $24 million (and counting) of his next book series through Kickstarter. This is possible through a few key levers: his carefully cultivated fan base, his reach on social, and the capital of previously successful books to invest.
The Leverage of a Real Estate Firm
Chris Powers will buy a whole career’s worth of real estate in the next 6 weeks. My rough estimate is that’s $25+ million deployed in 6 weeks. Last year Fort Capital bought $500 million in real estate. This is possible thanks to his team of talented folks running well-honed processes at Fort Capital, a pile of previous successes, an enormous community of friends and investors, and the capital willing to place bets with Chris. (We did a podcast together that explores how he built his real estate empire.)
There are hundreds more examples of people getting their 20th win, built on the mountain of leverage carefully constructed over a whole career. As Felix Dennis said,
“The biggest basket (business) I ever built wasn't my 1st or 2nd, it was my 20th. But if I wouldn't have built my 2nd, I never would have reached my 20th.”
We love the strategy of building leverage with every successive move. It’s the way to ensure you’re always compounding effort and resources, to be sure that you can reach that big win, whether it’s at your 20th shot, your 50th, or your 3rd.
But what about the people that walked out cold at the beginning of their career and hit a grand slam?
The Leverage of a Developer in Web3
Hayden Adams was 26 years old when he was a Junior Hardware Engineer when he was laid off by Siemens. In 2017 now living at home with his parents, he started learning about Ethereum and learning to code. Within a year, he had built the first version of Uniswap. If you don’t know anything about crypto, just know the Market Cap of Uniswap currently sits around $6B.
Put this man on the legendary leverage list
The fastest $1B Exit in Venture Capital history
Oculus, the VR startup founded by Palmer Luckey in 2012. Luckey was 19 years old when he initiated the kickstarter that got the company started. This wasn’t out of nowhere… Luckey had been building VR prototypes in a trailer in his front yard for 2 years by then.
In 2014, they sold to Facebook for $3 billion. 280 Days after the first $16m Series A financing. 2 years from the Kickstarter campaign. That’s wild. Palmer is probably worth $500m - $1B today. Luckey indeed.
But, don’t let these $1B exits and crazy tech stuff psych you out.
While those are all extreme examples, there are examples of people earning 7-figure windfalls (life-changing money!) early in their careers in similar patterns of meandering exploration and ferocious execution.
The bar for life-changing money isn’t $100m bucks. Using leverage to reach even $1-2m in a year can completely change the trajectory of your life with the additional leverage from that capital.
She turned down a $1.5m acquisition at 16 years old
Ashley Qualls was a big winner of the MySpace era. Her website whateverlife.com provided html & css tutorials and templates for customizing MySpace pages. Ah, those were the days!
In her first few months of launch at 14 years old, she’d earned $70,000, and it just kept growing from there. $1 million in earnings by 17. Right place at the right time? Yes, definitely. Benefitted from having a high-leverage business model with a high upside? Yes, definitely. Ashley found the right work to do.
You can’t claim that a 14-year-old had a huge history of building leverage behind her, and she built it up quickly!
Building Equity in Boring Businesses (and Holding them!)
In my podcast episode with him, I dug into Nick’s small business experience in college, and how that led to building his first self-storage facility. He was 24 or 25 at the time. It was a combination of small business operating and fundraising ability that led to building that first storage facility.
That, on it’s own, was a life-changing windfall. Look how it’s grown over the past 5 years:
Of course, he didn’t stop there. Nick has been on a buying spree, purchasing and growing self-storage businesses all over the country. He’s been building his mountain as fast as he possibly can. But it all started with this one huge early level-up in leverage.
(At the end of the podcast episode and in this youtube video Justin and I chat through Nick’s Mountain of Leverage and break down each step.)
Earning $1m+ in high-margin digital products
Jack Butcher skyrocketed to niche internet fame in 2020, and earned a bundle doing it. When we started working together on the Navalmanack, he had about 10k followers. Today, it’s almost 200K personally (and 250K on Visualize Value).
He built leverage incredibly quickly by posting these amazing graphics, adding value, and building relationships with his audience. He felt the power of high-leverage business models after tough years building his own agency.
Then, he started marketing some of his own products, online courses Visualizing Value and Build Once, Sell Twice. Jack is also super transparent about his earnings, which helps people see the power of the tools and tactics in his courses.
This is his April sales, 2019 compared to 2020:
And, conveniently, lets us marvel over the power of compounding Leverage in carefully created digital products (Product Leverage) and audience (People Leverage).
Look how his business has grown over two years:
Not sure where to start building leverage?
Keep reading my posts about Leverage. Start with an introduction to Leverage and 50 First Levers. I also did a ton of Twitter Threads about this.
If you want to get serious and meet other people who are living the life of leverage, Join my Course and Community. I’m planning to do a renovation of the course later this year, and the price will increase for v2. (V1 students will receive v2 upgrade at no additional cost.)