THE STARTUP CHAT

[0:00:00]

Steli Efti: Hey everybody, this is Steli Efti.

[0:00:02]

Hiten Shah: And this is Hiten Shah. And today on The Startup Chat, we’re going to talk about effort versus leverage. So, this is just an interesting topic that came up last time that we met in person when we were recording an interview at a conference. Or, not an interview, an episode at a conference. So, why don’t we dive into kind of the difference between effort versus kind of leverage? I think one concept that you mentioned, Steli, about this was that in the beginning, maybe you can’t use leverage in your business or even in your work because you might not have anything to leverage, and you need to spend more effort. I think the big thing on my mind about this is that we’re taught to do hard work and that’s where effort comes in. So, effort to me, the AKA, also known as, is hard work.

[0:01:09]

Steli Efti: Right.

[0:01:10]

Hiten Shah: Well, leverage, the AKA, also known as, is lazy. And-

[0:01:21]

Steli Efti: Wait, is it lazy, or is it…

[0:01:24]

Hiten Shah: Smart?

[0:01:25]

Steli Efti: Smart. I’m not sure.

[0:01:27]

Hiten Shah: It could be seen both ways, right? If you’re… One way to think about leverage, at least one way I think about it, early on in a business or not, is do I have to do this? Is there someone better than me that I can get to do this? Or, something like that. So, that’s what I meant. That’s kind of what’s on my mind about it which is, is there a way that I can get someone else to do this? Possibly someone who can do it better than me.

[0:01:59]

Steli Efti: So, I love that. So, I think one of the reasons we wanted to talk about this, just to give people kind of a window into some of our private conversation, was that we were discussing something. And then we both looked at each other and we went, “Well, we don’t want to do this because this would be a lot of effort and we’d rather use leverage.”

[0:02:20]

Hiten Shah: Yeah.

[0:02:21]

Steli Efti: And then we both laughed, right? And that stuck with me because I thought, I mean, there’s two sides to this, right? One is kind of the psychological one, which you brought up. I think we both have this and many, many founders probably have this. We’ve been brought up with this sense that hard work is good, right?

[0:02:40]

Hiten Shah: Yep.

[0:02:41]

Steli Efti: And putting effort into things is good.

[0:02:44]

Hiten Shah: Yep.

[0:02:44]

Steli Efti: And that’s actually something I constantly have to tell my children, right? My boys, I constantly have to tell them, “Hey, if you want this, going to have to put in the effort, right? You’re going to have to put in the hard work. There’s no shortcuts in life.” But then today, with so many opportunities kind of right in front of us, with so many things that could be worked on and done, we have to be more mindful of where we put our effort. And when we use kind of the leverage that we build up. But I was thinking about the early days and kind of trying to unpack with you if effort and leverage are just two concepts that are independent of the resources you have. The time in your career, the amount of money you have, the amount of just the network that you have. If it’s just a mindset and the way you approach things, or if it is truly something where every new thing you start, you have to kind of break through with effort and build up some momentum with effort. And then later in the process, you could actually use leverage to get to places or to accomplish certain things. I think that’s, to me, something that is confusing. Especially for early founders that are reading some of the stuff that’s out there about being super leveraged and being super smart about how you use leverage and all that. And then on the flip side, they read all these articles or hear all this advice about hard work and putting in effort, and working over time, and just grinding your way and pushing your way through walls. And I could see, I definitely know for me, it was confusing for a long time, too. Which way should I choose and what’s appropriate for me at the early stages?

[0:04:37]

Hiten Shah: Right. Yeah, I think at the early stages you can take this approach, too. You might just not have anybody else to help you, or it might just be a co-founder or somebody like that. At the end of the day, I think this ideology can work in life, can work in early stages, can work any time. And one of the ways that I think about this would be, am I the best person to do this?

[0:05:06]

Steli Efti: Right.

[0:05:07]

Hiten Shah: And really, that’s important. And in our discussion, we were just talking about should we do this, right? And we realized that we don’t have any leverage here, there’s no… and we don’t want to put the effort in. And there’s no way to leverage this so that we don’t have to do it. It’s going to be things that we have to do, at least right now, right? And we made a decision. I think when it comes to doing something and trying to figure out the difference, it’s like you want to do all these things yourself. That’s just usually how things are for most people. They’re not naturally inclined to make other people do things. And so it’s just a good exercise, and sometimes you might realize like we did, we don’t want to do it at all. And so I think it has to do with this idea that you might think you have no leverage, but you probably have more than you do. And one way to think about leverage is just not doing something, or thinking about things that you do and how they can be leveraged so that you can do more. So, early on in a company, I like to think about repeatability. I like to think about, how can some of the acts and things that you do lead to you doing more things, or you getting better at something? So, another version of leverage is, am I leveraging my time so that the next time I do it, it can be done better?

[0:06:30]

Steli Efti: I love that.

[0:06:31]

Hiten Shah: So, there’s a lot of angles on this, right? Because all we know how to do in general is put effort in.

[0:06:38]

Steli Efti: Yeah, yeah. Or, at least to a certain degree, just thinking through, just looking at the world of work through the lens of effort is also a very lazy way of thinking. It’s kind of a very, can be a very habitual way where everything you do, you just attack through pure effort without having to go through the exercise of thinking it through. And thinking it through out of all of the available actions that I could put into, that I could put effort into, which one could have the biggest return, right? Where could I have the biggest leverage? And it’s just that few seconds or minutes of extra thinking before jumping into the world of action can pay huge dividends. But I think for people that have a super strong work ethic and have maybe been brought up or programmed to believe in the power of effort, we’re sometimes too trigger happy to snapping into action immediately and feeling comfortable just doing things and putting effort into things. Versus taking the few uncomfortable minutes or moments to consider where to channel our effort and energy. So, instead of thinking effort versus leverage, maybe it’s effort into the effort and leverage. Effort into things that have leverage, right? And wherever you are, obviously Elon Musk or somebody of that stature might have certain levers available to them that are much larger than the average founder has. But there are things you could do that will have more leverage than other things you could do, and there’s a lot of things that you could do that you shouldn’t do at all, right? And that would kind of save you a ton of energy and effort to channel into things that will pay bigger dividends and bigger returns for your company and startup. But it could be as easy as, we’re going to start blogging. We have no idea about SEO, we’ve never written anything. We’ve never created any video, we’re not great writers. We don’t have any unique stories, but because every other company is starting a blog, we’re going to start a blog and we’re going to write things. And then we’re just going to hope that once we hit publish on our unknown blog, somebody on the web is going to find it. Versus saying, “Okay, let’s go and find blogs that have an audience that we want to reach. Let’s research all the content they are creating, and let’s try to figure out, can we create through effort, through finding writers, through finding great content creators, can we put together super valuable pieces of content that take a lot of effort? And then pitch it as a guest post as a valuable piece of content that came for free for these blog outlets, and kind of use our effort and our extra work, energy, resources, time, money, but then publish it on a site that has a huge audience?” So, we use leverage. It could be the same amount of effort to write the content, but a totally different outcome. And this is just one example, right? Of thinking through where to put your effort in, how to invest your hard work in things that have leverage and could pay the biggest possible dividend from where you are at.

[0:09:58]

Hiten Shah: Yep, yep. That’s the way to think about it.

[0:10:00]

Steli Efti: All right, that’s it from us for this episode. We’ll hear you very soon.

[0:10:03]

Hiten Shah: Later.

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