[sei]

[the genius filter]

How to Build Leverage in an Unfair World

Most people try to win by working harder.

They wake up earlier. Stay later. Grind through weekends. And the math never changes. Double your hours, double your output. Maybe. The relationship is linear, and linear effort has a ceiling. You can only work so many hours. You can only be in one place at a time.

The world is not fair. But it is consistent. The people who build disproportionate outcomes are not necessarily smarter or more disciplined. They understand something most miss: effort is an input, not a strategy. The real advantage comes from force multiplication.

Naval Ravikant, co-founder of AngelList and one of Silicon Valley's most original thinkers, calls this leverage. In his view, leverage is the defining variable that separates those who work hard and stay stuck from those who work smart and compound.

Basically, leverage is what lets a single decision ripple into millions of dollars, or a single piece of content reach millions of people. It is how small inputs create disproportionate outputs.

Without leverage, your earning potential is capped by your time. With it, your judgment compounds into something far larger than any individual effort could produce.

This issue is about identifying leverage, choosing the right type, and positioning yourself where structural advantages can flourish.

[the spark]

Asymmetric Advantage

Naval built AngelList into a platform that reshaped how startups raise money and hire talent. But his deeper contribution is a framework for thinking about wealth itself. His core insight is simple: wealth and impact come from ownership, not effort.

The most powerful forms of leverage today are permissionless. The kind where no gatekeeper has to approve your application, and no manager has to sign off. Code and media allow one person to create something once and distribute it endlessly. A line of software can run for years. A piece of writing can travel farther than its creator ever could. The marginal cost of reaching the next person approaches zero.

Consider two people working equally hard. One trades time for money, earning a wage tied directly to hours spent during the day. The other writes software or creates content that serves customers and community members around the world, asynchronously. Same effort. Radically different outcomes. The first person's income is capped by the clock. The second person's income compounds without them.

Naval calls this the new leverage. It used to require capital or labor. Now it requires a laptop and the willingness to learn. The catch is that leverage amplifies everything, including bad judgment. But for those who develop specific knowledge and think clearly, the asymmetry is staggering.

[the science]

Hard work doesn't scale the way you think.

In 2001, physicists Adrian Drăgulescu and Victor Yakovenko analyzed wealth and income distributions across the United Kingdom and the United States.

They found that outcomes don't follow a normal curve. Instead, about 95% of people cluster in an exponential distribution, where effort and reward track loosely. The top 5% break away entirely, following a power law where a tiny fraction captures the vast majority of results.

This wasn't an anomaly. The pattern held across years, countries, and states. Vilfredo Pareto first observed it in 1897, studying Italian land ownership.

Later, Benoit Mandelbrot (the guy who first described fractals) confirmed that the same structure appears in city sizes, book sales, software adoption, and social reach.

Power laws mean position beats effort. In a normal system, working twice as hard gets you roughly twice the reward. In a power-law system, small structural advantages compound. Two people can work equally hard and land in completely different places based on where they stand in the system.

This is the science behind Naval's claim. Leverage is the force that separates linear effort from exponential returns. Code and media scale without added cost. Labor and hours don't. The math isn't fair, but it's consistent. Structure determines trajectory.

[the takeaways]

​

1) Audit Where Your Output Caps​
​If doubling your effort only doubles your income, you're in a low-leverage system. Tightly coupled effort and reward mean linear returns, not exponential ones.

2) Prioritize Permissionless Leverage​
​Choose systems where no gatekeeper controls your upside. The science shows the top 5% operate in power-law environments.

3) Build Once, Distribute Many​
​Create work that compounds without you. A piece of software, an article, a process—anything with near-zero marginal cost per additional person reached.

4) Build for the Lategame
​Leverage looks unbalanced at first. You build for months with little return, then outcomes accelerate. But power laws reward position over intensity once the system tips.

5) Think in Decades, Not Sprints​
​Leverage favors patience. The distribution data shows the same pattern: sustained structural advantage beats short bursts of effort.