Leverage

Source Note: This complete blog and its words are from Varun Mayya's blog which is currently discontinued, so this serves as an archive of that content.

Leverage

I've been thinking about something important lately. People often ask me what I would do if I were in my twenties again. The usual answer is that I'd do exactly the same things because I needed to make those mistakes to get where I am today.

But that's not the most optimized way of looking at it. The better question is: how would you get to where you are today in two years instead of eight? How do you save time, which is worth more than money?

The answer is leverage.

What Is Leverage?

Leverage means you have something that others don't. It puts you above other people in terms of capability, reach, or resources. It's what allows you to achieve more with less effort, or to command higher value in the market.

But here's what most people don't understand: all leverage has an expiry date.

The Time Limit Problem

Every form of leverage comes with a time limit, like airline miles that expire at the end of the year. You can use them while they're valid, but eventually, they lose their value.

Take coding as an example. If you learned how to code today, you'd have leverage over others because very few people in India know how to code well. You could command whatever salary you want. You're like the popular person everyone wants to hire.

But can you guarantee that knowing how to code will give you that same advantage five or ten years from now? Probably not. Today there might be a hundred thousand good coders in India, but in ten years, that number could be a million. Kids are learning to code from a very early age now.

So coding might give you five to eight years of leverage, which is still pretty good. But it's not permanent.

The Four Types of Leverage

Based on my experience, there are four main types of leverage you can build, each with different time limits and potential returns.

1. Skills (Short-term Leverage: 3-5 years)

Skills are the most basic form of leverage. If you know how to code and others don't, that's leverage. If you know how to sell and others don't, that's leverage. If you know how to write well, design, or any other valuable skill, you have an advantage.

The problem is that skills have the shortest lifespan. Either AI will replace them, or more people will learn them, or the market will change. Skills give you maybe three to five years of leverage before you need to learn something new.

But skills are also the easiest place to start. If you're twenty and just starting out, learning a valuable skill is your fastest path to initial leverage.

2. Distribution (Medium-term Leverage: 10 years)

Distribution is what people often call "content," but content is just the input. Distribution is the output and the real leverage.

Look at someone like Tanmay Bhat. He could sleep for 364 days, wake up on day 365, put out one video, and still get more views than hundreds of thousands of people working regular jobs. That's stored leverage in his channel and personality.

Distribution leverage lasts as long as the platform exists. Based on history, most platforms have about a ten-year lifespan. Facebook was huge, then people stopped using it. Same with MySpace. Instagram is going that route now.

The challenge with distribution is staying relevant. You need to keep reinventing yourself. Look at some of YouTube's first megastars - many of them are forgotten now because they couldn't adapt.

But if you can build distribution early and stay relevant, it's powerful leverage that can last a decade or more.

3. Money (Long-term Leverage: Decades)

Money is the ultimate form of leverage. If you have ten crores in your bank account and let compound interest work, that beats almost everything else. No amount of followers, no skill, nothing beats having serious capital.

Money is hard cash that compounds. It works for you while you sleep. It's the most reliable form of leverage because it doesn't depend on platforms, trends, or staying relevant.

The problem is that if you're twenty and just starting out, you probably can't build significant money leverage without first having other forms of leverage. You need skills or distribution to make the money first.

4. Equity/Team (Ultimate Leverage: Forever)

This is the highest form of leverage, and it's what most people miss. Instead of storing all your leverage in yourself, you shift it to an entity - a company or team.

Think of it like Power Rangers. Each person has their own leverage, but when they combine their "zords," they create a mega-zord that's more powerful than any individual could be.

When you build a company, you're combining different types of leverage from different people. You might have distribution leverage, your co-founder might have technical skills, your team might have various capabilities, and your investors provide capital leverage.

The beauty of equity leverage is that it keeps growing even when you're not actively working. Other people join the company and add their leverage to the mix. The company becomes bigger and more valuable without requiring your constant input.

Quality of Leverage Matters

Not all leverage within the same category is equal. Having 40,000 Twitter followers is more valuable than having 130,000 Instagram followers if the Twitter audience consists of VCs and decision-makers with higher purchasing power.

The platform matters. The audience quality matters. The dedication of your audience matters. Someone with a dedicated English-speaking audience will have more leverage than someone with a larger but less engaged Hindi audience.

Same with money. Ten crores in real estate might give you different returns than ten crores in the right stocks or startups.

The Strategic Sequence

If I were starting over in my twenties, I'd build leverage in this exact order:

First, I'd focus on skills to get initial leverage and start earning. This gives you 3-5 years to figure out the next step.

Then, I'd build distribution while I have income from skills. This extends my leverage to about 10 years and opens up new opportunities.

Next, I'd convert that distribution and skills into capital. Money from skills and distribution gets invested to create compound growth.

Finally, I'd shift from personal leverage to equity leverage by building or investing in companies. This creates the longest-lasting leverage that can work for decades.

The Information Advantage

There used to be another powerful form of leverage: information. If you knew which stock would go 10x, or which industry to get into, or which job to take, that was massive leverage.

The internet has largely equalized this field. When someone shares valuable information online, they're sharing it with thousands of other people. By definition, leverage means you have something others don't, so widespread information loses its leverage value.

This is why exclusive, gated information still has value. If only a few people have access to certain insights, it remains leverage for those people.

Start Where You Are

Most people get stuck because they want to jump straight to the highest form of leverage. They want to start companies or become investors without first building the foundation.

The reality is you need to start with what's available to you now. If you're young and don't have money or a network, start with skills. Use those skills to build distribution. Use distribution to make money. Use money to create equity opportunities.

Each level of leverage helps you access the next level. Skills get you income and credibility. Distribution gets you opportunities and network. Money gets you investment opportunities. Equity gets you long-term wealth.

The Compound Effect

The beautiful thing about building leverage systematically is that they compound each other. Your skills make your content better. Your distribution helps you make more money. Your money opens up equity opportunities. Your equity creates more money and better distribution.

People who understand leverage don't just work harder - they work on building systems that work for them. They create advantages that compound over time instead of just trading time for money.

The goal isn't to work forever. The goal is to build enough leverage that you have options. You can choose what to work on, when to work, and how to spend your time.

That's the real power of leverage - it doesn't just make you more money, it buys you freedom.