Entrepreneurship is All About Leverage

The key to working reasonable hours, growing a company, and helping your team succeed comes down to one simple concept: leverage.

Early on, most founders trade their time for money directly:

  • Hop on a sales call => Customers purchase your product
  • Build a product => Customers pay for the product
  • Answer a support call => Retain a customer

Eventually, you move to the next stage of leverage: training others to do these tasks for you. This allows 1 hour of your time to translate into dozens of hours for your employees:

  • Hire and train a sales rep => They take calls and prospect 40 hours per week
  • Create a product spec for an engineer => They build and customers use the product
  • Create a support manual => Support team retains hundreds of customers

A lot of entrepreneurs stop here, but this is just the beginning! Next, you gain another order of magnitude more leverage by hiring and training managers. Now you have the ability to hire a single person who can build an entire team of people:

  • Hire a Sales Director => They hire and manage a sales team taking calls 200 hours per week
  • Hire an Engineering Director => They hire and manage engineers to build even more value-adding features
  • Hire a Support Director => They manage a team of support reps and introduce upsells, testimonials, etc.

This might seem obvious, but precious few entrepreneurs get it. Most are too afraid to hire because they "can't afford it" or "don't know how."

Get over it. If you want to scale, you have to get out of the way. You have to create leverage, and the biggest lever you have is paying someone else to do work for you.

Karl Hughes

Startups



Software Engineering


Leadership